by ilene - December 18th, 2014 11:20 am
Courtesy of Lee Adler of the Wall Street Examiner
Don’t believe everything you read in the mainstream media. Especially don’t believe anything in the financial news media until you’ve looked at the data yourself. It’s no wonder investors are so often caught flatfooted in the markets. Financial “journalists” feed their readers and viewers a constant stream of misinformation and bad data. Financial reporters are so atrocious at serving their audience I have to believe that they are, wittingly or unwittingly, part of a deliberate and elaborate campaign of disinformation… unless you believe in Coincidence Theory.
Housing starts collapsed in November. They weren’t good, they weren’t even so-so as media reports intimated. The seasonally adjusted annualized number which the paid flacks report is absolute nonsense. It’s fiction.
Actual, not seasonally adjusted single family starts were down by 10,400 units in November to 47,700 units. November is always a down month but this was the worst November performance since 2008, in the teeth of the housing crash. On a year to year basis starts were down by 6.3%. It’s absurd that you can’t find that fact anywhere near the mainstream media headlines. In fact, Bloomberg outright lied about it, “While housing starts declined 1.6 percent…” They used the fictitious data. It’s not ok to use seasonally adjusted data because it “usually” accurately reflects the trend.It is especially not ok to use it when reporting the year to year change, which obviously has NO seasonality.
Multifamily starts fell 10.6% year over year.
A picture tells the story at a glance.
This kind of misimpression happens often enough that it is damaging and dangerous, fooling not only the public and the media which disseminates it, but also the genius clowns who make policy.
by ilene - December 18th, 2014 10:38 am
Submitted by Tyler Durden.
Yesterday, moments before the North Korea "hacking" tragicomedy escalated into full retard mode with Sony pulling The Interview, or a movie that absent the attention would certainly be a flop, Wired released an article titled: "North Korea Almost Certainly Did Not Hack Sony" (title subsequently changed to the one below as can be seen in the URL alias "http://www.wired.com/2014/12/north-korea-did-not-hack-sony-probs"), which however, and for the better, retains its content as it is quite critical in debunking the latest government "certainty."
It is quite clear that someone is lying (we leave it up to readers to decide who). The question is "why"?
by ilene - December 18th, 2014 10:33 am
Courtesy of Pam Martens.
There has been much focus on the fiery speeches that Senator Elizabeth Warren delivered from the Senate floor in an effort to stop the roll-back of a key derivatives provision of the Dodd-Frank financial reform legislation that was slipped into the giant $1.1 trillion spending bill that was signed into law this week by President Obama – who campaigned for passage of the bill despite the weakening of protections against Wall Street abuses. The bill became known as the Cromnibus because it is part Continuing Resolution and part Omnibus spending bill to fund the government through September of 2015. Those who voted against the bill in the Senate are provided here; in the House, here.
But Warren was far from alone in expressing outrage at Citigroup writing most of the provision that was quietly slipped into a spending bill that was critical to pass to avoid a government shutdown. Members of both the House and Senate, from broadly diverse political leanings, not only spoke out against the provision but voted against the spending bill to back up that outrage.
We’ll get to the still festering outrage among members of Congress in a moment, but first a warning for the next member of Congress who might be asked by a slick Wall Street bank lobbyist to try a similar maneuver. The House Rep who slipped the provision into the spending bill, which was effectively written by Citigroup according to Mother Jones and the New York Times, is Kevin Yoder of Kansas.
Yoder is now being viciously assailed on his own Facebook page and held up to public ridicule in Kansas newspapers. On Facebook, a woman identifying herself as Amy Hanks calls Yoder the “lowest of the low” and adds: “Hope you burn in hell.” Another woman calls Yoder “one greedy immoral coward.” OpenSecrets.org shows “Securities and Investment” as the number one industry contributing to Yoder’s campaign committee and leadership PAC.
Citigroup received the largest taxpayer bailout in history during the financial crisis as a result of its unchecked derivatives: $45 billion in TARP funds; over $306 billion in asset guarantees; and more than $2 trillion in low-cost loans from the Fed according to the General Accountability Office. The abject repulsion that the very bank that got the biggest handout and played…
“Q4 GDP Below 2%, December Payrolls Under 200,000″ Markit Warns As Service PMI Crashes To 10-Month Low
by ilene - December 18th, 2014 9:54 am
Submitted by Tyler Durden.
"Another bumper month of non-farm payroll growth looks unlikely in December, with private sector payroll growth unlikely to breach the 200,000 mark," warns Markit after The US Services PMI plunged to 53.6, missing expectations of 56.3 by the most on record. This is the 6th straight month of declines. Job creation slumped to 8-month lows. The Composite (Services & Manufacturing) PMI plunged to its lowest level since October 2013. Still exuberant? Still hopeful? Here's Markit's summary, "A sharp slowing in service sector activity alongside a similar easing in the manufacturing sector takes the overall rate of economic expansion down to the weakest since October 2013. The extent of the slowdown suggests that economic growth in the fourth quarter could come in below 2%"
All the mid-year exuberance, demolished in its cyclically adjusted reality…
As Employment plunges…
Commenting on the flash PMI data, Chris Williamson, chief economist at Markit said:
“A sharp slowing in service sector activity alongside a similar easing in the manufacturing sector takes the overall rate of economic expansion down to the weakest since October 2013. The extent of the slowdown suggests that economic growth in the fourth quarter could come in below 2% which, with the exception of the downturn caused by adverse weather in the first quarter, would be the worst performance for two years.
“The slowdown is linked to weaker growth of new business as customers becoming increasingly worried about the economic outlook both at home and abroad, with the prospect of higher interest rates cooling demand alongside side rising global geopolitical concerns. Across both manufacturing and services, new business grew in December at a pace well below the rates of expansion seen earlier in the year.
“Job creation has also slowed sharply alongside the cooling of demand, and payroll numbers across both sectors showed the smallest rise for eight months. Another bumper month of non-farm payroll growth looks unlikely in December, with private sector payroll growth unlikely to breach the 200,000 mark.”
by ilene - December 18th, 2014 1:07 am
Courtesy of Marc to Market
by ilene - December 17th, 2014 10:00 pm
Courtesy of Robert Reich
This is the time of year when high school seniors apply to college, and when I get lots of mail about whether college is worth the cost.
The answer is unequivocally yes, but with one big qualification. I’ll come to the qualification in a moment but first the financial case for why it’s worth going to college.
Put simply, people with college degrees continue to earn far more than people without them. And that college “premium” keeps rising.
Last year, Americans with four-year college degrees earned on average 98 percent more per hour than people without college degrees.
In the early 1980s, graduates earned 64 percent more.
So even though college costs are rising, the financial return to a college degree compared to not having one is rising even faster.
But here’s the qualification, and it’s a big one.
A college degree no longer guarantees a good job. The main reason it pays better than the job of someone without a degree is the latter’s wages are dropping.
In fact, it’s likely that new college graduates will spend some years in jobs for which they’re overqualified.
According to the Federal Reserve Bank of New York, 46 percent of recent college graduates are now working in jobs that don’t require college degrees. (The same is true for more than a third of college graduates overall.)
Their employers still choose college grads over non-college grads on the assumption that more education is better than less.
As a result, non-grads are being pushed into ever more menial work, if they can get work at all. Which is a major reason why their pay is dropping.
What’s going on? For years we’ve been told globalization and technological advances increase the demand for well-educated workers. (Confession: I was one of the ones making this argument.)
This was correct until around 2000. But since then two things have reversed the trend.
First, millions of people in developing nations are now far better educated, and the Internet has given them an easy way to sell their skills in advanced economies like the United States.
by ilene - December 17th, 2014 9:42 pm
Interest rates, oil prices, earnings, GDP, wars, peace, terrorism, inflation, monetary policy, etc. — NONE have a reliable effect on the stock market
By Elliott Wave International
You may remember that after the 2008-2009 crash, many called into question traditional economic models. Why did they fail? And more importantly, will they warn us of a new approaching doomsday, should there be one?
This series gives you a well-researched answer. Here is the conclusion of this 10-part series.
Myth #10: "Central banks and government policies control the markets."
By Robert Prechter (excerpted from the monthly Elliott Wave Theorist; published since 1979)
Virtually everyone believes this statement; certainly most economists do. Keynesians and monetarists believe that authorities can control the money supply and interest rates, and most neo-Austrians believe that the Fed is all-powerful when it comes to inflating: Whatever inflation rate it wants, it simply manufactures.
Not long ago [in late 2008 -- Ed.] the U.S. government announced that it will fully back the debt of the mortgage companies it created (Fannie Mae, Freddie Mac); it pledged to use taxpayers' money and borrow unlimited amounts to fund banks that it deems "too big to fail," while pledging that the FDIC will fund shortfalls at all other banks. At the same time, the world's top central banks offered unlimited credit at near-zero interest rates, in other words, free money.
According to the exogenous-cause model, these historic pledges and bailouts should have had immediate results. Take a look at Figure 20. Can you tell where on this graph of stock prices authorities took these actions?
According to the economists' beliefs, the only rational place for them to have taken place would be at the bottom of the market. The minute the authorities began flooding the market with liquidity is the minute it should have turned up.
Figure 21 shows that in fact these actions took place in the early portion of the biggest stock market decline in 76 years. These actions did not push stock prices back up. The market finally bottomed months later, at a time when nothing…
by ilene - December 17th, 2014 9:11 pm
Courtesy of Mish.
Not only is torture against international law, it also produces no useful intelligence. Common sense is enough to prove that statement.
If someone threatened to rape your sister, kill your mom, or shackled you until you were half-dead while feeding you up your anus, you would say nearly anything to ease the pain. So would I, and so would everyone else. Anyone who disagrees is either a liar or a fool.
Even Napoleon recognized that fact.
Warning: This is a very long post. Please allow adequate time to read and digest what follows. I sincerely appreciate your effort to reading this post in entirety. Thanks.
From a Napoleon Letter to Louis Alexandre Berthier in November 1798: "The barbarous custom of having men beaten who are suspected of having important secrets to reveal must be abolished. It has always been recognized that this way of interrogating men, by putting them to torture, produces nothing worthwhile. The poor wretches say anything that comes into their mind and what they think the interrogator wishes to know."
"I'd Do It Again in a Minute"
Regardless of the complete futility and illegality of torture, former vice president Dick Cheney Pushes Back on Torture Report: 'I'd Do It Again in a Minute'.
"I'd do it again in a minute," Cheney told Meet the Press's Chuck Todd, offering an unqualified condemnation of the Senate Intelligence Committee's investigation into the Bush administration's post-9/11 interrogation methods used at foreign "black sites," which many regard as torture.
When asked about rectal feeding, which the Senate torture report said at least five detainees were subjected to, Cheney acknowledged that it was not approved as part of the program and said he believed it was done for "medical reasons." The Senate report said there is no evidence medical need was a factor for rectal hydration.
Cheney also didn't blink when asked about the report's findings that at least 26 of 119 detainees were wrongfully held, including two former CIA operatives and a mentally challenged man.
"I'm more concerned with the bad guys that were released than the few that were, in fact, innocent," said Cheney, adding that the man who became ISIS's leader, Abu Bakr al-Baghdadi, was held in custody by the U.S. military in Iraq before being released in 2004.
No Concern for Innocents…
by ilene - December 17th, 2014 7:27 pm
Courtesy of Robert Reich
A few years ago, hedge fund Level Global Investors made $54 million selling Dell Computer stock based on insider information from a Dell employee. When charged with illegal insider trading, Global Investors’ co-founder Anthony Chiasson claimed he didn’t know where the tip came from.
Chiasson argued that few traders on Wall Street ever know where the inside tips they use come from because confidential information is, in his words, the “coin of the realm in securities markets.”
Last week the United States Court of Appeals for the Second Circuit, which oversees federal prosecutions of Wall Street, agreed. It overturned Chiasson’s conviction, citing lack of evidence Chaisson received the tip directly, or knew insiders were leaking confidential information in exchange for some personal benefit.
The Securities and Exchange Act of 1934 banned insider trading but left it up to the Securities and Exchange Commission and the courts to define it. Which they have – in recent decades so broadly that confidential information is indeed the coin of the realm.
If a CEO tells his golf buddy that his company is being taken over, and his buddy makes a killing on that information, no problem. If his buddy leaks the information to a hedge-fund manager like Chiasson, and doesn’t tell Chiasson where it comes from, Chiasson can also use the information to make a bundle.
Major players on Wall Street have been making tons of money not because they’re particularly clever but because they happen to be in the realm where a lot of coins come their way.
Last year, the top twenty-five hedge fund managers took home, on average, almost one billion dollars each. Even run-of-the-mill portfolio managers at large hedge funds averaged $2.2 million each.
Another person likely to be exonerated by the court’s ruling is Michael Steinberg, of the hedge fund SAC Capital Advisors, headed by Stephen A. Cohen.
In recent years several of Cohen’s lieutenants have been convicted of illegal insider trading. Last year Cohen himself had to pay a stiff penalty and close down SAC because of the charges, after making many billions.
SAC managed so much money that it handed over large commissions to bankers on
by ilene - December 17th, 2014 5:12 pm
Courtesy of Mish.
Sanctions and embargoes don't work. And in the case of Cuba, it took the US 52 years to partially realize that.
In 1962, President John F. Kennedy singed into law a Cuban trade embargo. I have long known how foolish Kennedy's decision was (and the decision of every president since). But I did not know until today how blatantly hypocritical Kennedy's action was.
A clip from Cigars All Around in the Financial Times explains:
The day before Kennedy signed the law, "Kennedy ordered an aide to buy him 1,000 Petit Upmanns cigars. It was only after Kennedy got word that his request had been carried out that he authorised the new regulations that banned Cuban imports and would have made the purchase illegal."
For 52 years, the US embargo poisoned he Cuba-US relationship. What good did it do? Did it drive Casto out of power? Or did it help keep Castro in power?
I suggest the latter.
Free trade is always beneficial and always better that war or cold war. US goods flowing into Cuba and tourists with money would have done more for a regime change than pressure.
Hopefully it won't take 52 years for the US to realize the stupidity of sanctions on Russia. Don't hold your breath.
Cuba's Support of Terrorism
The Financial Times notes "Obama ordered a six month review of Cuba’s designation as a 'state sponsor of terrorism'. Even the State Department no longer attempts to justify this label, which devalues Washington’s word on international terrorism issues and triggers international financial sanctions against Cuba."
[Picture via Pixabay]