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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Phil's Favorites

Momentum Monday - Liquidity, Liquidity, Liquidity...The Startup Multiplier Effect and The SPAC is Back?

 

Momentum Monday – Liquidity, Liquidity, Liquidity…The Startup Multiplier Effect and The SPAC is Back?

Courtesy of Howard Lindzon

Good Monday morning everyone.

I will get right to it…here is this weeks Momentum Monday episode with Ivanhoff and I talking markets and momentum. We share a few new ideas – take a look at $JAMF (Apple has finally come for the Fortune 1000) and $EBAY (the long tail winner of collectibles boom) and let us not forget Tesla back at all-time highs. You can watch/listen to thi...



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Zero Hedge

German Official Warns Risk Of Electric Vehicle Fires Is "Completely Unaddressed" 

Courtesy of ZeroHedge View original post here.

Last month, a massive fire broke out at a German bus depot, destroying 20 electric buses. First responders weren't prepared nor properly trained in extinguishing lithium-ion fires. The fire prompted one German official to question the zero-emissions vehicles as the "spontaneously" combustion of the batteries "is completely unaddressed," according to RT News

"The risk of these fires, including in other locations ...



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Politics

Trump wants the National Archives to keep his papers away from investigators - post-Watergate laws and executive orders may not let him

 

Trump wants the National Archives to keep his papers away from investigators – post-Watergate laws and executive orders may not let him

Nixon resigned after tapes he had fought making public incriminated him in the Watergate coverup. Bettmann/Getty

Courtesy of Shannon Bow O'Brien, The University of Texas at Austin College of Liberal Arts

The National Archives is the United States’ memory, a repository of artifacts that includes everything from half-fo...



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Biotech/COVID-19

An infectious disease expert explains new federal rules on 'mix-and-match' vaccine booster shots

 

An infectious disease expert explains new federal rules on ‘mix-and-match’ vaccine booster shots

Discuss with your doctor whether or not you need a booster – and if so, which vaccine will work best for you. Justin Sullivan/Getty Images News via Getty Images

Courtesy of Glenn J. Rapsinski, University of Pittsburgh Health Sciences

Many Americans now have the green light to get a COVID-19 vaccine booster – and the flexibility to receive a different brand than the ori...



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Digital Currencies

Bitcoin: why its value has rocketed once again

 

Bitcoin: why its value has rocketed once again

Shutterstock/rzoze19

Courtesy of Andrew Urquhart, University of Reading

Bitcoin’s journey into mainstream finance has reached another major milestone – and another record price. The cryptocurrency was trading at US$66,975 (£48,456) following the launch of an exchange traded fund (ETF) in the US w...



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Chart School

Price and Volume Swing Analysis on Bitcoin and Silver

Courtesy of Read the Ticker

Many take guidance from news, pundits or advisors. Well sometimes the swings of price and volume are a better measure of what happens next.

The big boys do not accumulate or distribute in single 1 second trade, they build positions over weeks, months and years. They use price swings in the market to build or reduce positions, and you can see their intent by studying swings of price and volume and applying Tim Ord logic as written in his book called 'The Secret Science of Price and Volume: Techniques for Spotting Market Trends, Hot Sectors, and the Best Stocks'.

Tim Ord is a follower of Richard Wyckoff logic, his book has added to the studies of Richard Wyckoff, Richard Ney and Bob Evans.

Richard Wyckoff after years of...

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Promotions

Phil's Interview on Options Trading with TD Bank

TD Bank's host Bryan Rogers interviewed Phil on June 10 as part of TD's Options Education Month. If you missed the program, be sure to watch the video below. It should be required viewing for anyone trading or thinking about trading using options. 

Watch here:

TD's webinar with Phil (link) or right here at PSW

Screenshots of TD's slides illustrating Phil's examples:

 

 

&n...



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Kimble Charting Solutions

Crude Oil Cleared For Blast Off On This Dual Breakout?

Courtesy of Chris Kimble

Is Crude Oil about to blast off and hit much higher prices? It might be worth being aware of what could be taking place this month in this important commodity!

Crude Oil has created lower highs over the past 13-years, since peaking back in 2008, along line (1).

It created a “Double Top at (2), then it proceeded to decline more than 60% in four months.

The countertrend rally in Crude Oil has it attempting to break above its 13-year falling resistance as well as its double top at (3).

A successful breakout at (3) would suggest Crude Oil is about to mo...



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ValueWalk

Managing Investments As A Charity Or Nonprofit

By Anna Peel. Originally published at ValueWalk.

Maintaining financial viability is a constant challenge for charities and nonprofit organizations.

Q4 2020 hedge fund letters, conferences and more

The past year has underscored that challenge. The pandemic has not just affected investment returns – it’s also had serious implications for charitable activities and the ability to fundraise. For some organizations, it’s even raised doubts about whether they can continue to operate.

Finding ways to generate long-term, sustainable returns for ...



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Mapping The Market

Suez Canal: Critical Waterway Comes to a Halt

 

Suez Canal: Critical Waterway Comes to a Halt

Courtesy of Marcus Lu, Visual Capitalist

The Suez Canal: A Critical Waterway Comes to a Halt

On March 23, 2021, a massive ship named Ever Given became lodged in the Suez Canal, completely blocking traffic in both directions. According to the Suez Canal Authority, the 1,312 foot long (400 m) container ship ran aground during a sandstorm that caused low visibility, impacting the ship’s navigation. The vessel is owned by Taiwanese shipping firm, Evergreen Marine.

With over 2...



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The Technical Traders

Adaptive Fibonacci Price Modeling System Suggests Market Peak May Be Near

Courtesy of Technical Traders

Our Adaptive Fibonacci Price Modeling system is suggesting a moderate price peak may be already setting up in the NASDAQ while the Dow Jones, S&P500, and Transportation Index continue to rally beyond the projected Fibonacci Price Expansion Levels.  This indicates that capital may be shifting away from the already lofty Technology sector and into Basic Materials, Financials, Energy, Consumer Staples, Utilities, as well as other sectors.

This type of a structural market shift indicates a move away from speculation and towards Blue Chip returns. It suggests traders and investors are expecting the US consumer to come back strong (or at least hold up the market at...



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Lee's Free Thinking

Texas, Florida, Arizona, Georgia - The Branch COVIDIANS Are Still Burning Down the House

 

Texas, Florida, Arizona, Georgia – The Branch COVIDIANS Are Still Burning Down the House

Courtesy of Lee Adler, WallStreetExaminer 

The numbers of new cases in some of the hardest hit COVID19 states have started to plateau, or even decline, over the past few days. A few pundits have noted it and concluded that it was a hopeful sign. 

Is it real or is something else going on? Like a restriction in the numbers of tests, or simply the inability to test enough, or are some people simply giving up on getting tested? Because as we all know from our dear leader, the less testing, the less...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

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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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Ilene is editor and affiliate program coordinator for PSW. Contact Ilene to learn about our affiliate and content sharing programs.