Posts Tagged ‘Jesse’s Americain Cafe’

The Marriage of Mercantilism and Corporatism: When Free Trade Is Not ‘Free’

The Marriage of Mercantilism and Corporatism: When Free Trade Is Not ‘Free’

Courtesy of JESSE’S CAFÉ AMÉRICAIN

"The consequences of this policy are also stark and simple: in effect, China is taxing imports while subsidizing exports, feeding a huge trade surplus. You may see claims that China’s trade surplus has nothing to do with its currency policy; if so, that would be a first in world economic history. An undervalued currency always promotes trade surpluses, and China is no different." Paul Krugman

And he is exactly right. As regular readers know this matter of Chinese mercantilism and its toleration and acceptance by the West has been a key observation and objection here since 2000. Any economist who does not understand that devaluing and then maintaining an artificially low currency peg with a trading partner distorts the nature of that trade should review their knowledge of algebra.

And yet it was in 1994 during the Clinton Administration that China was permitted to obtain full trading partner "Most Favored Nation" status, while vaguely promising to float their recently devalued currency some day, and address the human rights issues that were endogenous to their non-democratic, totalitarian government.

"From 1981 to 1993 there were six major devaluations in China. Their amounts ranged from 9.6 percent to 44.9 percent, and the official exchange rate went from 2.8 yuan per U.S. dollar to 5.32 yuan per U.S. dollar. On January 1, 1994, China unified the two-tier exchange rates by devaluing the official rate to the prevailing swap rate of 8.7 yuan per U.S. dollar." Sonia Wong, China’s Export Growth

This served Mr. Clinton’s constituents in Bentonville quite well, and has some interesting implications for the Chinese campaign contributions scandals. It supported the Rubin doctrine of a ‘strong dollar’ while facilitating the financialization of the US economy and the continuing decline of the middle class wage earners, under pressue to surrender a standard of living achieved at great cost. "How I Learned to Stop Worrying and Love the Currency Collapse." and China’s Mercantilism: Selling Them the Rope

Not to limit this, George W. ratified the arrangement when he took office, and so it has gone on for almost fifteen years…
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Note to Mish: The BLS Added About 145,897 Imaginary Jobs to the Non-Farm Payrolls Headline Number

Note to Mish: The BLS Added About 145,897 Imaginary Jobs to the Non-Farm Payrolls Headline Number

Courtesy of JESSE’S CAFÉ AMÉRICAIN

I like Mish Shedlock. He has intellectual integrity, and even when we occasionally disagree, as I recall over the inevitability of deflation and some of its particular consequences and manifestations, I listen to his arguments carefully. He draws conclusions that are difficult to fault. Most of the time we seem to be in agreement.

In his most recent blog, he indirectly poses an interesting question.

"Hidden beneath the surface the BLS Black Box – Birth Death Model added 145,000 jobs. However, as I have pointed out many times before, the Birth/Death numbers cannot be subtracted straight up to get a raw number. It contributed to this month’s employment total for sure, but the BLS will not disclose by how much."

Mish Shedlock, Jobs Decrease by 125,000

Here are the Imaginary Jobs added to the Non Farm Payrolls from the Birth Death Model of the BLS. As Mish reminds us, (thank you Mish. I have been nagging bloggers about this for years), the Imaginary Jobs are added to the unadjusted payroll numbers, which are dramatically impacted by the seasonal adjustments, which are sometimes quite significant.

I include this second chart show the Birth – Death numbers over time to show the historical trend. It is remarkable how ‘regular’ this number has been over the past six years despite an epic recession that devastated small businesses, which is purportedly what this model tracks.

Here is a visual depiction of the Seasonally Adjusted and the Unadjusted Non-Farm Payroll Numbers. As you can see, the adjustment is sometimes very significant. Remember, the Birth Death imaginary jobs are added to the unadjusted number, which is indicated in maroon on this chart.

So obviously one can calculate the ‘seasonality factor’ using a simple formula

Seasonality Factor (SF) = Seasonally Adjusted Number (SA) / Non-Seasonally Adjusted Number (NSA)

I do this each month in the Payrolls Spreadsheet that I maintain. I like to see if the BLS changes its calculations and assumptions over time, especially when they do major revisions.

And although I have never shown it in this blog before, it is relatively…
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Keiser Report No.19: Markets! Finance! Scandal! – And Karl Denninger

Keiser Report No.19: Markets! Finance! Scandal! – And Karl Denninger

Courtesy of JESSE’S CAFÉ AMÉRICAIN

Although I don’t always agree with them, obviously, I am always interested, informed, and entertained by what madcap Max Keiser and his cerebral colleague Stacy Herbert have to say on The Keiser Report. As you may know, Max is the latest American in Paris, having left the States after selling his Hollywood Stock Exchange to Cantor Fitzgerald of Wall Street. Perhaps some day we can have a drink at the Ritz and philosophize, as expatriates are often wont to do, about the tragic transience of empire. The Ritz. Alas, when I was a visiting student at ESSEC I could not afford it, and now that I can, I do not get out much anymore. But who can tell what the future may bring.

The most recent broadcast of the Keiser Report has an added attraction in its second half, Karl Denninger. Karl is probably more familiar to our American patrons as theoutre financial commentator from The Market Ticker.

Karl always has something interesting to say, spoken plainly, and without the kind of courtly manner towards corporate America that is so fashionable among the journalists in the mainstream media who are members of the Wall Street demimonde.

Mr. Denninger is particularly effective, when he gets it right as he frequently does, in describing complex transactions because he is not an economist or a financial professional, but a computer engineer, an honest technical sort, who brings some formidable analytical skills to a relatively unfamiliar subject. He often gets ‘nit-picked’ by the pros who play word games with their jargon, but more often than not he is directionally correct.

And he occasionally admits it when he is wrong, and changes tack, a refreshing trait amongst the greater universe of financial commentators. But if you post on his chat board, be prepared for ideological frisking, and little patience for deviation from the local standards and fundamental assumptions. A weakness perhaps, from the perspective of ideological diversity, but more common than most moderators care to admit.

Enjoy.

 

Bonus post by Jesse at the Cafe, 

How Bad Can It Get?

They have our money. What more can they want?

 


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Alternative View: Housing Prices Have Fallen Significantly Towards the Trend

Update by Jesse at the Cafe regarding housing prices. Glad to see I’m not the only person who struggled with the flu vaccine dilemma. To avoid the mercury, there’s FluMist, with the added attraction of delivering the (attenuated) virus via the natural route, through the respiratory system, rather than injected directly into the blood. It’s not recommended for those with asthma, however. Currently, the swine flu vaccine is not available in my city, but I did manage to track down the seasonal vaccine for a couple loved ones. The seasonal flu vaccine appears to afford some protection against swine flu. Nothing available for me, however, making my indecision rather besides the point for the time being. 

Best wishes for a speedy recovery with no notable residual brain damage, Jesse.  - Ilene

Alternative View: Housing Prices Have Fallen Significantly Towards the Trend

Courtesy of Jesse’s Café Américain

Here is the graph associated with a view of the deflating housing bubble that shows we have appreciably fallen, further than the 25% in the blog entry from yesterday.

For the details on this view read here.

It appears that both sets of numbers, the ones above and the ones from yesterday, have been adjusted somewhat.

The numbers from yesterday are Indexed to 1980 = 100, and are therefore a percentage of increase.

The numbers above are nominal prices, and then adjusted for inflation using some governmental measure presumably.

One appears to be based on median prices, and the other on total transactions.

I have not yet reconciled the two views, as I am rather tired and ‘under the weather,’ compliments of the children’s propensity to bring home their sniffles and sneezes at this time of year, the head colds that seem to linger endlessly, despite the repeated application of vitamins, chicken soup, sudafed, ibuprofen, and the occasional sip of Beaujolais Noveau. But for today at least I am, like Mr. Buffett is to the economic recovery, ‘all in.’

And yes, I did finally break down and listen to the spouse, obtaining a swine flu vaccination. Perhaps the mental slowness is merely due to my mercuy addled brain. Perhaps it will help me think like a Fed banker and figure out their gameplan. lol.

 


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Long Term Weekly Gold Chart Targets 1275

If you missed my enlightening interview with Jesse, click here. – Ilene

Long Term Weekly Gold Chart Targets 1275

Courtesy of Jesse’s Café Américain 

Now that gold seems to have successfully broken out from its continuation pattern (ascending triangle or inverse H&S) we should be able to chart its targets more precisely than the chart from 24 September that at least successfully projected the breakout.

If there is a major liquidation event, such as an equity market dislocation, gold will likely be hit as well, but will provide an exceptionaly buying opportunity and would historically rebound more sharply than equities and most other investments.

As always, this is a forecast with some probablities of success, rather than a prediction. It will therefore be subject to change, and will meet with a variety of success, or not.

Basically, the ascending triangle calls out 1275 and an inverse H&S targets 1300ish. A confirmed breakdown below 1000 deactivates the formations. We will know more about the first pullback when we see how far this current leg goes. It has moved much more quickly so far than most have imagined, but the short term trend is quite apparent on the chart.

gold chart

 


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Zero Hedge

Cord Cutting Apocalypse: More Households Now Subscribe To Streaming TV Than Cable

Courtesy of ZeroHedge. View original post here.

American consumers are plagued with First World problems. There appear to be too many online streaming platforms for consumption. The average consumer now subscribes to three streaming video services, and for the first time, more households are subscribing to streaming TV than to traditional cable, according to a new report from Deloitte.

...



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Phil's Favorites

Federal Regulator: Wall Street Stock Trading Plunged 88.6 Percent in Q4

Courtesy of Pam Martens

By Pam Martens

The Office of the Comptroller of the Currency (OCC), the Federal regulator of national banks, which includes the largest banks on Wall Street, quietly issued its quarterly report on trading in cash instruments and derivatives on Friday. The report contained a shocker: stock (equity) trading had plunged 88.6 percent in the fourth quarter of 2018 versus the fourth quarter of 2017 on a consolidated basis at the bank h...



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ValueWalk

Micron this week was the poster child for this "bull-trap" lunacy

By Jacob Wolinsky. Originally published at ValueWalk.

From Crescat Capital

Thursday had the feel of a blow-off top for the bear market rally. We are near historic valuations for US stocks across at least eight fundamental measures and at a record late stage in the business cycle. Equity markets appear more stretched relative to underlying deteriorating fundamentals than ever.

Micron this week was the poster child for this “bull-trap” lunacy. Investors bid Micron’s stock up 10% on Thursday after the company released earnings. The move sent the semiconductor index to a record high on Thursday. The truth was that Micron gave terrible forward guidance on the conference call forcing analysts to slash estimates for revenues, earnings, and free cash flow for 2019 and 2020.

Friday the market start...



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Chart School

Palladium Action Review

Courtesy of Read the Ticker.

Palladium is near its peak, or at least a consolidation. Russia and South Africa are the producers of palladium, and it looks like Putin has been able to play US Futures market for a lot of Russia gain! Which metal is next?


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Fundamentals are important, and so is market timing, here at readtheticker.com we believe a combination of ...

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Kimble Charting Solutions

NYSE Index Suggesting The Top Is In, Says Joe Friday

Courtesy of Chris Kimble.

Is a very broad stock index suggesting that a top is in play? What this index does to close this week should go a long way to answering that question!

This chart looks at the NYSE Index on a weekly basis over the past 4-years. Over the past 15-months, it has created a series of lower highs and lower lows inside of the shaded falling channel. It hit strong support around Christmas at (1) and a counter-trend rally started. The rally now has it testing the top of the falling channel at (2).

Joe Friday Just The Facts Ma’am- The NYSE index could be cre...



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Insider Scoop

10 Biggest Price Target Changes For Friday

Courtesy of Benzinga.

  • Buckingham cut the price target for Trinity Industries Inc (NYSE: TRN) from $32 to $26. Trinity Industries shares closed at $22.96 on Thursday.
  • Canaccord Genuity lowered the price target for Biogen Inc (NASDAQ: BIIB) from $396 to $275. Biogen shares closed at $226.88 on Thursday.
  • H.C. Wainwright cut the price target on Conatus Pharmaceuticals Inc (NASDAQ: CNAT) from $8 to $1.50. Conatus Pharmaceuticals shares closed at $2.91 on Thursday.
  • Wedb...


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Biotech

Marijuana is a lot more than just THC - a pharmacologist looks at the untapped healing compounds

Reminder: We are available to chat with Members, comments are found below each post.

 

Marijuana is a lot more than just THC - a pharmacologist looks at the untapped healing compounds

Assorted cannabis bud strains. Roxana Gonzalez/Shutterstock.com

Courtesy of James David Adams, University of Southern California

Medical marijuana is legal in 33 states as of November 2018. Yet the federal government still insists marijuana has no legal u...



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Digital Currencies

Facebook's cryptocurrency: a financial expert breaks it down

 

Facebook's cryptocurrency: a financial expert breaks it down

Grejak/Shutterstock

Courtesy of Alistair Milne, Loughborough University

Facebook is reportedly preparing to launch its own version of Bitcoin, for use in its messaging applications, WhatsApp, Messenger and Instagram. Could this “Facecoin” be the long-awaited breakthrough by a global technology giant into the lucrative market for retail financial services? Or will...



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Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...



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Mapping The Market

It's Not Capitalism, it's Crony Capitalism

A good start from :

It's Not Capitalism, it's Crony Capitalism

Excerpt:

The threat to America is this: we have abandoned our core philosophy. Our first principle of this nation as a meritocracy, a free-market economy, where competition drives economic decision-making. In its place, we have allowed a malignancy to fester, a virulent pus-filled bastardized form of economics so corrosive in nature, so dangerously pestilent, that it presents an extinction-level threat to America – both the actual nation and the “idea” of America.

This all-encompassing mutant corruption saps men’s souls, crushes opportunities, and destroys economic mobility. Its a Smash & Grab system of ill-gotten re...



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OpTrader

Swing trading portfolio - week of September 11th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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