by Phil Davis - July 3rd, 2014 7:36 am
Happy Birthday America!
The markets are closed tomorrow and today is a half day but the trend is certainly our friend on the S&P as we haven't been below the 200 day moving average since December of 2011 (except a couple of very brief dips). Though the average volume is about 30% lower than it was back then – it's still an impressive feat.
Of course, if 10% of the market was manipulated before and the manipulators haven't left (they certainly haven't) – even if the level of manipulation remained the same, 30% of the 90% that wasn't manipulated (retail investors) did leave (possibly BECAUSE of the manipulation) and that means now manipulators control 10% of the remaining 70%, a 42% increase in manipulation! Of course we know it's much worse than that because now the Central Banksters perform their own brand of market manipulation. As noted by Salient Partners in a great article about PBOC Manipulation:
The explicit purpose of recent monetary policy is: to paper over anemic real economic growth with financial asset inflation. It’s a brilliant political solution to the political problem of low growth in the West, because our political stability does not depend on robust real economic growth. So long as we avoid outright negative growth (and even that’s okay so long as it can be explained away by “the weather” or some such rationale) and prop up the financial asset values that in turn support a levered system, we can very slowly grow or inflate our way out of debt. Or not. The debt can hang out there … forever, essentially … so long as there’s no exogenous shock. A low-growth zombie financial system where credit is treated as a government utility is a perfectly stable outcome in the West.
So China has indeed learned the most valuable lesson of Capitalism – that money is a meaningless contstruct that can be freely manipulated to fit whatever narrative the Government wishes to spin and that debt is not to be feared, but embraced, especially by our Corporate Masters – because our National Debt becomes their Private Profits!
by Phil Davis - May 22nd, 2014 7:58 am
Look at this chart:
LOOK AT IT!!!! This is America, damn it! We peaked out in earnings in 2000 and it's been downhill ever since. Even worse, this is America AFTER the Federal Reserve spent $4 TRILLION to boost the economy. This is America AFTER our Government plunged another $6 TRILLION into debt – supposedly to save jobs and support the economy.
This is a DISASTER! If this were the chart of a company you owned – you'd be selling. If there were a board of directors, we'd be looking to make changes, right? Actually, there is a sort of board of directors and, as is often the case with Corporate Management – they're the only ones making any money!
Only in Washington DC and Dick Cheney's Wyoming are people in this country still making as much money as they were in the good old days (Clinton years). The rest of the country is in various states of decline – some of it fairly drastic – and in big states like Ohio, Michigan and Illinois, where people are earning about 20% less now than they did 14 years ago.
Our standard of living is in decline, especially when you consider that inflation is chewing into those lower wages from the other end as well. How much more evidence can we possibly need that the Bush Tax cuts were a complete and utter policy failure? Yet you will hear none of that in the MSM. What TV station owner or newspaper & magazine publisher is going to tell you that they should be paying 20% more taxes than they are paying now?
There's a reason that, despite the BS Employment Numbers put up by the Administration, that the #1 concern of US voters is JOBS! People may HAVE jobs (actually 20% of the families in our country have NO ONE employed at the moment) but, clearly, from an economic perspective – the jobs suck! Even people lucky enough to keep their jobs through the crisis haven't had raises in a decade but, of course, they are too afraid to leave because we all know people who lost their jobs and didn't find…
by ilene - May 9th, 2011 2:37 pm
Courtesy of Mish
Every month the government posts the unemployment rate yet few know where the unemployment rate comes from, how it is determined, and the relationship between the unemployment rate and the monthly reported jobs total.
For a quick recap, the unemployment rate comes from a "Household Survey" while the reported headline jobs total comes from the "Establishment Survey". The former is a monthly phone survey, the latter is a sample of actual business employment.
The reason for the "Household Survey" is that it will pick up new business formation, especially small businesses that might not be on the radar of the "Establishment Survey" sample. Even if the "Establishment Survey" sample size was 100%, unless duplicate names were weeded out, it would double-count those holding multiple jobs.
The "Household Survey" attempts to determine five key items.
- Do you have a job?
- Is so was it full or part-time?
- If not, do you want a job?
- If you do not have a job and want a job, did you look for a job in the last 4 weeks?
- Are you in school, on leave, etc.
The BLS does not ask the questions like that, instead the BLS attempts to determine those answers by a detailed list of questions.
For a discussion of exactly what questions the BLS asks to determine the unemployment rate, please see Reader Question Regarding "Dropping Out of the Workforce"; Implications of the Falling Participation Rate
Definition of Unemployed
Logically, one might think one would be unemployed if they want a job and do not have a job.
However, the official definition of unemployed is you do not have a job, you want a job, and crucially, you have looked for a job in the last 4 weeks.
Every month the government reports "alternative" numbers but even though many of the alternate numbers are a more accurate representation of the unemployment rate, the media focuses on the headline number, ignoring millions who have "dropped out of the labor force" simply because they stopped looking for work.
Millions more are in "forced retirement", which I define as someone over 60 whose unemployment benefits ran out so they retired to collect Social Security even though they really want a job.
244,000 Jobs Added Last Month, So Why Did the Unemployment Rise?
Ping-Pong Seasonal Madness In Weekly Jobs Claims; How to Predict Whether the 4-Week Moving Average Will Rise or Fall
by ilene - January 29th, 2011 3:17 pm
Courtesy of Mish
Weekly unemployment claims have been all over the map recently. Here are the seasonally-adjusted Weekly Unemployment Claims totals for the last 5 weeks.
Jan 27, 454,000
Jan 20, 403,000
Jan 13, 447,000
Jan 06, 411,000
Dec 30, 388,000
The first three numbers above are from the current report. I calculated the January 6, number. The December 30 number is from the archives.
The reported seasonally-adjusted number on January 6 reporting was 409,000. It was revised up but no one saw that revision.
The reason no one can easily spot revisions is the weekly report only gives the latest 3 weeks. I calculated January 6th number from the 4-week moving average, now reported as 428,750.
A similar calculation looking at the January 20 Weekly Claims Report shows that December 30, was revised up from 388,000 to 391,000. These are small revisions but even large ones would be hard to spot if you do did not do the math or go to the archives.
Computing the Missing Number and Hidden Revisions
The 4-week moving average is constructed from the current 4 weeks. However the report only shows 3 weeks. To compute the week not shown, take the 4-week moving average (SA) and multiply by 4. Subtract the last three weeks shown on the report. What remains is the hidden 4th week used to compute the 4-week moving average.
Moreover, the difference between that number and was was originally reported for that number is a hidden revision.
Gaming the 4-Week Moving Average
If you want to pace a bet on whether the 4-week moving average will rise or fall, you need to know the number to beat and how to calculate it.
The number to beat is the missing number (as described above), about to roll off. In this case, 411,000.
Assuming no revisions, a number higher than 411,000 will cause next week’s 4-week moving average to rise. A number below 411,000 will cause next week’s 4-week moving average to drop.
My guess is the 4-week moving average will rise next week and fall the following week when the January 13 of 447,000 rolls off the report.
Clearly, if you are attempting to predict such numbers, it is critical to look at the number about to roll off.
What’s With The Ping-Pong?
Charting America’s Transformation To A Part-Time Worker Society, Following 6 Straight Months Of Full Time Job Declines
by ilene - December 13th, 2010 7:46 pm
It is surprising that over the past several years very little has been said in the popular media about the fact that America is slowly (but surely) transforming from a full-time to part-time employed society. And while much has been said about the temporary and now past impact of census hiring, and government jobs on the workforce, there are still few mentions in mainstream media that since the depression started in December 2007, America has lost 10.5 million full time jobs, offset by a 2.8 million increase in part time jobs. Two recent mentions of this extremely troubling phenomenon were those by David Stockman, who characterized the recent unjustified economic (and naturally market) euphoria in terms that could have come straight from David Rosenberg‘s mouth, and, more recently, Van Hoisington. And since the Teleprompter in Chief has now made it a monthly pilgirmage to extol the NFP number no matter how manipulated by Birth-Death and seasonal adjustments, perhaps next time someone can ask him why the US not only lost 478k seasonally adjusted full time workers in November but has lost full time jobs for 6 months in a row, for a total of 1.6 million job losses! And since it is now clear that Americans only watch cartoons when it comes to financial reporting, and, at worst, demand a chart, here is, straight from the BLS’ table A-9, the historical change of the US labor force.
And here is the sequential change in both full and part-time jobs. Note that after peaking in April and May, full time jobs have declined for 6 straight months:
In a nutshell: in December 2007 there were 121.7 million full time jobs, while 24.8 million Americans were part-time workers for economic reasons; fast forward to November 2010 where we find that 111.1 million employees are now full time, while the rank of the part-times have increased to 27.6 million. And it is not rocket science, that converting a population to part-time workers has a disastrous impact on wealth. As Stockman presented previously, discussing part-time employment "with an average wage of $20,000 a year, that is not a breadwinning job, you can’t support a family on that, you can’t save on that. Those jobs will not…
by ilene - December 9th, 2010 6:40 pm
Courtesy of Michael Snyder at Economic Collapse
Has the Federal Reserve become the Central Bank of the World? That is what some members of Congress are asking after the Federal Reserve revealed the details of 21,000 transactions stretching from December 2007 to July 2010 that totaled more than $3 trillion on Wednesday. Most of these transactions involved giant loans that were nearly interest-free from the Federal Reserve to some of the largest banks, financial institutions and corporations all over the world.
In fact, it turns out that foreign banks and foreign corporations received a very large share of these bailouts. So has the Federal Reserve now become a completely unaccountable global bailout machine? Sadly, the truth is that we would have never learned the details of these bailouts if Congress had not forced this information out of the Fed. So what other kinds of jaw-dropping details would be revealed by a full audit of the Federal Reserve?
It is important to try to understand exactly what went on here. Banks and corporations from all over the globe were allowed to borrow gigantic piles of money essentially for free. Yes, when you are getting interest rates such as 0.25 percent, the money is essentially free. These loans were not available to everyone. You or I could not have run over to the Federal Reserve and walked away with tens of billions of dollars in loans that were nearly interest-free. Rather, it was only the megabanks and megacorporations that are friendly with the Federal Reserve that were able to take advantage of these bailouts.
In this way, the Federal Reserve is now essentially acting like some kind of financial god. They decide who survives and who fails. Dozens and dozens and dozens of small to mid-size U.S. banks are failing, but the Federal Reserve does not seem to have much compassion for them. It is only when the "too big to fail" establishment banks are in trouble that the Federal Reserve starts handing out gigantic sacks of nearly interest-free cash.
Just think about it. Which financial institution do you think is in a better competitive position – one that must survive on its own, or
by ilene - December 3rd, 2010 4:54 pm
Courtesy of Jesse’s Americain Cafe
Reality briefly penetrated the fog of appearance this morning as US Non-Farm Payrolls came in at 39,000, a significant miss from the expected 150,000. Unemployment ticked up higher from 9.5% to 9.8%.
An analysis of the data showed a slight indication that the recovery has stuttered and stopped, but it will take a few more months data to confirm this.
The adjustments seems to dampen the potential headline number but are within bounds of the prior six years. The Birth Death Model actually came in negative which was a bit of an outlier but certainly a refreshing nod to reality.
Looking at the historical Oct-Nov growth in the unadjusted numbers for the past six years shows a clear downward trend from the high in November 2005, with the low coming in November 2008. The growth as it stands in 2010 is roughly the same as it was in 2004, although the 2010 numbers will likely be revised in the next two reports.
Stocks and the Dollar initially plunged on the news while gold rallied threatening to take out psychological resistance at 1400. I guess we now know why gold and silver were obviously hit by sharp manipulative selling yesterday, in order to take the prices down below breakout levels. Be on watch for shenanigans in the markets today, especially the SP futures markets.
There can be no sustained economic recovery until the median wage and employment improve and this requires specific reforms and programs to repair the damage caused by twenty years of irresponsible monetary, regulatory, and fiscal policy and a growing imbalance in the balance sheets of the middle class. Repairing the status quo merely restores the unsustainable.
The Fed’s approach to quantitative easing is nothing more than an adjunct to the trickle down, supply-side approach. Provide money to the banks and the people will borrow; provide subsidies and tax cuts to those who have the most already and the condition of the many will improve. Trickle down, supply side, and efficient markets hypothesis are at best mistaken economic theories, and at worst coldly calculated propaganda by the same people who co-opted the political process and brought forward the control frauds that led to the financial crisis.
by ilene - December 3rd, 2010 3:56 pm
Tyler Durden presents Rosie’s Must Read On A Hope-Based Rally Now, Followed By Shock Therapy Later. This is practically in answer to Joshua Brown’s depiction of a lonely, frustrated bear searching the world for negative data. Frustrated, perhaps; lonely, not so fast. – Ilene
Courtesy of Zero Hedge
Now that his relentless skepticism, following today’s abysmal data release (orchestrated or not), has been fully validated, much to the chagrin of top ticking flippers such as Goldman and other sundry blog sites, Rosenberg comes out with a must read essay on the state of the economy now versus later, entitled very appropriately "Hope-Based Rally Now, Shock Therapy Later." This is certainly one Rosie’s better pieces out there and a must read for those who refuse to be led by the propaganda machine into believing lies and manipulation: "This has become such a hope-based market that the Dow jumped over 100 points earlier this week on a Reuters news story in Brussels, which reported that the U.S.A. would back an even greater financial commitment to Europe! Quick — get Sarah Palin on the line." Incidentally, if there is any confusion where Zero Hedge stands, we suggest rereading our post from last night which made it all too clear that we still refuse to drink the hopium (and self-aggrandizement) that seems to have gotten straight to the head of such a broad (literally and metaphorically) cross-section of the financial punditry.
HOPE-BASED RALLY NOW, SHOCK THERAPY LATER
I’m on the way back from a two-day business trip in London, U.K. with a few of my Gluskin Sheff colleagues. It’s been a good year-and-a-half since I was last there (the next best thing to old New York), and the first time I can remember it snowing this early — a few centimetres almost shut down the city (enough to make a Torontonian chuckle).
While we continue to refrain from hyperventilating as others throw in the towel, it is completely understandable that investor sentiment has improved. Moreover, the incoming economic data, at least when benchmarked against the double-dip fears that prevailed in July and August, currently look “green shooty” in nature. But is the U.S. economy really out of the woods? Hardly.
by ilene - December 3rd, 2010 3:31 pm
Courtesy of Bondsquawk
The November employment report came in weaker than expected with a 39k gain in payrolls after an upward-revised 172k increase in October. Private hiring increased 50k after a 160k gain, the weakest reading since the spring although it would appear there are some seasonal adjustment issues as retail hiring rose 13k in October and dropped 28k in November. The October reading appears to have been firmer than the underlying trend while the November reading is likely below trend, smoothing through this the 3-month average of private hiring slowed to 107k from 138k but has been tracking just above 100k since August. The report also highlights some of the seasonal adjustment problems that have led to a downtrend in initial jobless claims. These difficulties have meant that claims have been providing unreliable signals throughout this year. The household survey has been considerably weaker than the payroll survey showing a loss of 173k jobs in November after a 330k loss in October. With labor force participation steady at 64.5% the job loss in the household survey led the unemployment rate to jump to 9.8% from 9.6%, the highest since April highlighting the underlying slack in the economy that motivated the Fed to initiate QE2. The U6 unemployment rate held steady at 17.0%. Average hourly earnings were flat leading the annual pace to slow to 1.6% from 1.7% and aggregate hours worked ticked up 0.1% after a 0.4% gain suggesting slower gains in wage and salary income. The report highlights the headwinds facing the US economy as the boost from inventories fades and other sectors are slow to pick up the slack.
Courtesy: BNP Paribas
20 Statistics That Prove That Global Wealth Is Being Funneled Into The Hands Of The Elite – Leaving Most Of The Rest Of The World Wretchedly Poor
by ilene - November 30th, 2010 10:07 am
Michael Snyder provides "20 Statistics That Prove That Global Wealth Is Being Funneled Into The Hands Of The Elite – Leaving Most Of The Rest Of The World Wretchedly Poor." He argues that what we have now is a world dominated by a small group of ultra-wealthy elitists. The larger group of "middle managers" do their bidding and are paid well for it. Then we have workers, a larger group, but by far the largest group is the several billions of "useless eaters." - Ilene
Courtesy of Michael Snyder at Economic Collapse
Today global wealth is more highly concentrated in the hands of the elite than it ever has been at any other point in modern history. Once upon a time, the vast majority of the people in the world knew how to grow their own food, raise their own animals and take care of themselves. There weren’t many that were fabulously wealthy, but there was a quiet dignity in having land you could call your own or in having a skill that you could turn into a business. Sadly, over the past several decades an increasingly growing percentage of agricultural land has been gobbled up by big corporations and by corrupt governments. Hundreds of millions of people have been pushed off their land and into highly concentrated urban areas.
Meanwhile, it has become increasingly difficult to start a business of your own as monolithic global corporations have come to dominate nearly every sector of the world economy. So more people than ever around the world are forced to work for "the system" just to make a living. At the same time, those at the very top of the food chain (the elite) have spent decades rigging the system to ensure that increasing amounts of wealth will continue to flow into their pockets. So now in 2010 we have a global system where a few elitists at the top are insanely wealthy while about half the people living on earth are wretchedly poor.
There are very few nations around the world that have not been almost entirely plundered by the global elite. When the elite speak of "investing" in poor countries, what they really mean is taking control of the land, water, oil and other natural resources. In dozens of nations around the world today, big global corporations are stripping fabulous amounts of wealth out of the…