The End Of The Recovery, In One Chart

One of the questions on analysts’ minds lately is whether stock prices can keep moving up when corporate sales and profits are falling. But the same can be asked about the overall economy. Why would companies hire more people if they’re selling less stuff? The answer is that they probably won’t. As the chart below – put together by good friend Michael Pollaro – illustrates, business sales and employment have tracked closely since at least the 1990s. When sales have fallen, companies have responded with less hiring and more firing.
But for the past year sales have declined while reported employment has risen. Unless this relationship no longer holds, one of these lines will have to change course very soon. And since sales are beyond anyone’s control, it’s a safe bet that employment will be the one to give.

SOURCE

This post was published at DollarCollapse on November 20, 2015.

THE FED INDUCED FARCE

The minutes from the last Fed meeting were released on Wednesday afternoon. The minutes, along with a squadron of jabbering Fed heads lying about the economy doing great, pretty much locked in the most talked about .25% interest rate increase in world history. Evidently the Wall Street titans of greed have convinced the muppets higher interest rates are great for stocks, as the market soared by 250 points. As institutional money exits the market on these rigged up days, the dumb money retail investor buys into the market with dreams of riches just like they did with Pets.com in 2000, McMansions in 2005, and Bear Stearns in 2007.
The Fed has lost any credibility they ever thought they deserved by delaying this meaningless insignificant interest rate increase for the last three years, so they will make this token increase in December come hell or high water. They want to give themselves some leeway for easing again when this debt saturated global economy implodes in the near future. The Fed is trapped by their own cowardice and capture by the Wall Street cabal. If they raise rates the USD will strengthen even more than it has already. The USD is already at 11 year highs. It has appreciated by 25% in the last year versus the basket of world currencies. The babbling boobs on the entertainment news channels authoritatively expound with a straight face about the rise in the dollar being due to our strong economic performance. It’s beyond laughable, as the economy has been sucking wind since the day the Fed turned off the QE spigot in October 2014.

This post was published at The Burning Platform on Nov 19, 2015.

3 Things: Earnings, Profits, Rates

Earnings Recession Deepens
“If you just exclude all the bad stuff, earnings look quite good.”
This has been the primary rhetoric by mainstream analysts during the past quarter’s earnings reporting season. It is true. If we just take out the impact of the rising dollar, falling oil and commodity prices, weak consumer spending, and the inability of rampant stock buybacks to boost bottom line earnings, reports have not been that bad.
However, the reality is that the decline in earnings, and particularly the decline in forward earnings estimates, suggests that something more pervasive is happening in the economy. As noted by Political Calculations this past week:

This post was published at StreetTalkLive on 18 November 2015.

Six Years of Clinton Flim Flam Foundation Tax Errors Were Just Refiled – Here’s What We Know

Earlier this year on April 23, Reuters published findings of a review it performed on the Clinton Foundation’s tax filings.
It was a splash. That same day, Reuters’ story was picked up by The Atlantic, The Huffington Post, NBC, The Hill, and Politico, just to name a few.
The news agency ‘found errors in how [the charity] reported donations from governments,’ raising questions of wrongdoing and a suspicious lack of transparency. Here’s the breakdown of theClinton Foundation tax errors:
The charities’ errors generally take the form of under-reporting or over-reporting, by millions of dollars, donations from foreign governments, or in other instances omitting to break out government donations entirely when reporting revenue, the charities confirmed to Reuters. The errors, which have not been previously reported, appear on the Form 990s that all non-profit organizations must file annually with the Internal Revenue Service to maintain their tax-exempt status. A charity must show copies of the forms to anyone who wants to see them to understand how the charity raises and spends money.
The unsettled numbers on the tax returns are not evidence of wrongdoing but tend to undermine the 990s role as a form of public accountability, experts in charity law and transparency advocates told Reuters.

This post was published at Wall Street Examiner by Tara Clarke ‘ November 19, 2015.

The Stunning Visualization Of The World’s 3 Billion Barrel Oil Glut

While talk of record backlogs of supertankers and an unprecented 3 billion barrels of crude oil stock-piles sound impressive – and are weighing on crude prices – the following stunning image provides some context for just what this means…
If the 3 billion barrels of crude oil gluttiness was put into tankers, the line would reach a stunning 530 kilometers…

This post was published at Zero Hedge on 11/19/2015.

Gold Daily and Silver Weekly Charts – Gresham’s Law, Mispricing of Risk, & the Synthetic Gold Carry Trade

“Gold is unique among assets, in that it is not issued by any government or central bank, which means that its value is not influenced by political decisions or the solvency of one institution or another.”
Salvatore Rossi, Central Bank of Italy, 30 Sept 2013
Real gold does not fear examination or the furnace.
Chinese Proverb
“Gold has worked down from Alexander’s time. When something holds good for two thousand years I do not believe it can be so because of prejudice or mistaken theory.”
Bernard M. Baruch
“You have to choose between trusting to the natural stability of gold and the natural stability and intelligence of the members of the government. And with due respect to these gentlemen, I advise you, as long as the capitalist system lasts, to vote for gold.”
George Bernard Shaw
“Those entrapped by the herd instinct are drowned in the deluges of history. But there are always the few who observe, reason, and take precautions, and thus escape the flood. For these few gold has been the asset of last resort.”
Antony C. Sutton
Gresham’s law is an economic principle that states: When a government overvalues one type of money and undervalues another, the undervalued money will leave the country or disappear from circulation into hoards, while the overvalued money will flood into circulation.
And this is why gold is flowing from West to East.
There was a fairly lengthy intraday commentary on gold and silver which you might wish to read here. It covers quite a few topics related to the precious metals.
Surprisingly enough there was an actual delivery of silver at The Bucket Shop yesterday as Nova Scotia stopped 43 contracts for its ‘house account.’
Otherwise it was the same old, same old with price going down or nowhere in the highly leveraged, synthetic markets of New York, and with physical bullion slowly leaking out of the warehouses.

This post was published at Jesses Crossroads Cafe on 19 NOVEMBER 2015.

House Passes HR 3189 Fed Oversight Reform Bill, Obama Sure To Veto (Green Man!)

The US House passed passed H. R. 3189 (Fed Oversight Reform and Modernization Act) by a vote of 241-185. The bill would make changes to how the Fed conducts monetary policy and regulatory activities and would direct the Fed to take a rules-based approach to interest rate decisions, require audits of more Fed functions such as monetary policy and place restrictions on its emergency lending powers.
If you are a big fan of The Federal Reserve system, fear not. President Obama is almost certain to veto the bill.

This post was published at Wall Street Examiner by Anthony B. Sanders ‘ November 19, 2015.

The Fed Has Made A “Policy Mistake” And The Inevtiable Result Will Be A Recession, BNP Warns

Going into the September FOMC meeting, it was pretty clear that the Fed was boxed in.
Beijing’s August 11 ‘surprise’ deval had exacerbated an already precarious situation for EM, characterized by depressed demand from China, slumping commodity prices, and the incipient threat of a Fed hike. The risk for Janet Yellen was that hiking would cause a kind of super taper tantrum, accelerating EM capital outflows and exacerbating the EM FX bloodbath.
On the other hand, it was also possible that by continuing to delay liftoff, the Fed was contributing to uncertainty in the emerging world and that uncertainty was actually contributing to the very same outflows the Fed feared a hike would trigger. That is, the argument was that it’s not a symbolic 25 bps hike that EM fears, but rather being left constantly in the dark about when or even if the FOMC plans to move.
As you can see, that’s a Catch 22. Hike and risk triggering an EM meltdown as the dollar soars, or don’t hike, and risk creating still more uncertainty and thereby contribute to continual, if less acute, flows out of EM (call it ‘death by a thousand non-cuts’).

This post was published at Zero Hedge on 11/19/2015.

Inflation, Unemployment Soar As Brazil Remains Trapped In Stagflationary Nightmare

On Wednesday evening, we brought you the latest economic data out of Brazil.
It was a disaster.
For anyone who missed it, we got a look at the IBC-Br monthly real GDP indicator yesterday and to quote Barclays, output is in ‘free fall mode.’ In annual terms, economic activity declined 6.1% Y/Y in September. It was the worst print in series history.

This post was published at Zero Hedge on 11/19/2015.

The Latest Bearish Jobs – & Recovery – Signals

Live and learn! I just found out about a new source of government data on the American employment scene! It’s called the Business Employment Dynamics series, and it measures on a quarterly basis the gross jobs gains in the private sector, gross jobs losses, and thus the net change. And from the chart on the first page of this new report, it’s clear that the numbers look like they’re pointing to another recession.
According to these statistics from the Labor Department, the difference between the gross gains and losses for the first quarter of this year (meaning that these reports are somewhat backward looking) produced a net gain of 226,000. That’s the smallest since the third quarter of 2010, when it stood at 237,000. Moreover, it was keyed by the biggest quarter-to-quarter drop in gross job gains (711,000) since the first quarter of 2009 (820,00) – at the depths of the last recession. (That decline was bigger on a percentage basis, though.)
And the shrinking gap between gross job gains and losses could be flashing recession because when the lines on the chart start converging, the chart shows that a downturn is near, or at least that the economy is performing very weakly. In fairness, this data series only goes back to 1992, but that’s exactly what happened before the recession that lasted from March through November, 2001, and the much worse downturn that began in December, 2007.

This post was published at Wall Street Examiner by Anthony B. Sanders ‘ November 19, 2015.

OFFICIAL RELEASE: World Silver Deficits -12 Years Running

According to the recently released Silver Institute 2015 Interim Report, the world experienced annual silver net deficits for 12 years running. This is surprising as the Silver Institute actually reported a small net surplus of silver in 2014. However, the small silver surplus turned into a deficit when 2014 mine supply and total demand figures were revised.
If we look at the chart below (using last year’s data), annual silver deficits were reported until 2013 and then turned into a surplus in 2014:

This post was published at SRSrocco Report on November 18, 2015.

Printing Money without Borrowing

In Trinity of Truth, my last article, I showed how under our current system it is impossible to simply ‘print money’; rather (Fiat) currency must be borrowed into existence. This leads to the conclusion that it is impossible under our system to inflate away debt by printing; every new unit of currency printed must be balanced by a matching unit of new debt, else the books of the bank of issue (Central Bank) will not balance.
The CB indeed creates new currency out of ‘thin air’… but only against an offsetting asset. Normally, the asset is a treasury bond; the treasury borrows, and the CB prints against the treasury borrowing. This is called monetization when the CB does it; it is called check kiting if anyone else does it. Sovereign debt and currency supply grow hand in hand.
Some people suggest we change the system so government can simply print currency, without borrowing, without involving a CB. At first sight, this seems like a good idea; after all, why not eliminate the middle man, why create debt along with ‘desperately needed’ new currency? The answer is threefold, and as always involves The Whole Truth.
First, history clearly shows that printing without borrowing has been tried, over and over again, with inevitably disastrous results. Ancient China ran on a Silver standard. The Chinese government, the emperor, ran short of funds… like all governments everywhere… and the Chinese Emperor decided to issue paper ‘chits’ and decree that these chits were money, money as good as Silver. The Emperor had power to enforce this policy… at the point of a spear… and soon paper chits flooded China.
The chits started to depreciate as soon as they were issued. The holders of the chits, the people, were impoverished… and impoverishment led to bloody revolution and overthrow of the emperor’s dynasty. This scenario happened so often that the Chinese wrote laws outlawing paper currency. Nevertheless, Chinese dynasties continued to print ‘money’… without borrowing… and dynasties continued to collapse.
When Marco Polo completed his famous journey, he brought back Chinese gifts… among other things, paper money. Western kings and the Pope were so shocked by the idea of using paper as money, they decided this must be the work of the Devil… and burned the paper. Nevertheless, in a few hundred years, Western powers embraced paper… but in a different form.

This post was published at GoldSilverWorlds on November 19, 2015.

Auto Originations Hit 10-Year High, Subprime Loans Fuel Growth; Party About Over?

A New York Fed study notes a huge surge in subprime auto loans after taking into account a newer, more accurate methodology.
The new approach takes into consideration new originations as opposed to new accounts. The result was an upward shift in the volume of newly originated auto loans by 25 to 30 percent.
Newly Originated Loans

A credit score of 660 is the generally acknowledged line between good and poor credit. Scores below 620 are outright awful.
With those numbers in mind, let’s see how things stack up.

This post was published at Global Economic Analysis on November 19, 2015.

Recession Watch: Turning Point in Unemployment Claims?

A new era has begun for the US and global economy, trashing the simple rules of the post-WWII era. Instead of the business cycle (the ‘clock’ analogy found in textbooks), we have secular stagnation interrupted by frequent bubbles alternating with bouts of debt deflation that are fought by massive government stimulus programs.
Since we have no playbook for this new economic regime, investors must watch the data. Bulls look at signs of strength; bears focus on signs of weakness. Survivors look at broad indicators, showing the net effect of the many cross-currents affecting the economy. The number of new claims for unemployment is among the best: close to real-time (weekly), hard data, and a leading indicator.
Because it’s so ‘noisy,’ the weekly data itself tell us little. Today’s data shows that seasonally adjusted initial claims fell by 5,000 from last week to 271,000; the less noisy 4-week moving average rose by 3,000 to 270,750.
But we want to see the change in the trend, which will show us inflection points. Here is the percent change year-over-year in the seasonally-adjusted four-week moving average.

This post was published at Wolf Street by Larry Kummer ‘ November 19, 2015.

Philly Fed Slightly Positive After Two Months of Contraction, but New Orders and Shipments Negative, Workweek Collapsed

In what likely amounts to a bit of economic noise, the Philadelphia Fed regional manufacturing report posted a rise of 1.9, slightly beating the economic consensus of 0.
Unlike Monday’s Empire State report which is pointing to out-and-out weakness for the November factory sector, the Philly Fed’s November report is no worse than flat and points to little month-to-month change for a sector, however, that continues to struggle. The Philly Fed index ended two months of contraction with a small gain of 1.9 which is near enough to the Econoday consensus for no change. But new orders are not in the plus column, at minus 3.7 for a second straight negative score. Shipments are also in the wrong column, at minus 2.5 for what is also a second straight negative month. The average workweek is down very sharply in the Mid-Atlantic factory sector, at minus 16.2 which doesn’t point to strength ahead for employment.

This post was published at Global Economic Analysis on November 19, 2015.

House Passes Fed Transparency Bill; Obama Will Veto

Now think about this: A private bank cartel CREATED by Congress doesn't want Congress to authorize the GAO to audit them.
— Rudolf E. Havenstein (@RudyHavenstein) November 19, 2015

Moments ago, the in a 241-185 vote, the House passed passed H. R. 3189, aka Fed Oversight Reform and Modernization Act. The bill would make changes to how the Fed conducts monetary policy and regulatory activities and would direct the Fed to take a rules-based approach to interest rate decisions; require audits of more Fed functions such as monetary policy; and place restrictions on its emergency lending powers. In other words, everything that the banks that are direct and indirect stakeholders in the Fed would fight to the death to prevent.
The new House speaker promptly applauded the passage. From Paul Ryan:
Today, the House passed H. R. 3189, the Fed Oversight Reform and Modernization Act. The bill would require the Federal Reserve to explain publicly its monetary policy, specifically how it sets interests rates and the country’s money supply. In response, House Speaker Paul Ryan (R-WI) issued the following statement:

This post was published at Zero Hedge on 11/19/2015.

The Baltic Dry Shipping Index Just Collapsed To An All-Time Record Low

I was absolutely stunned to learn that the Baltic Dry Shipping Index had plummeted to a new all-time record low of 504 at one point on Thursday. I have written a number of articles lately about the dramatic slowdown in global trade, but I didn’t realize that things had gotten quite this bad already. Not even during the darkest moments of the last financial crisis did the Baltic Dry Shipping Index drop this low. Something doesn’t seem to be adding up, because the mainstream media keeps telling us that the global economy is doing just fine. In fact, the Federal Reserve is so confident in our ‘economic recovery’ that they are getting ready to raise interest rates. Of course the truth is that there is no ‘economic recovery’ on the horizon. In fact, as I wrote about yesterday, there are signs all around us that are indicating that we are heading directly into another major economic crisis. This staggering decline of the Baltic Dry Shipping Index is just another confirmation of what is directly ahead of us.
Overall, the Baltic Dry Index is down more than 60 percent over the past 12 months. Global demand for shipping is absolutely collapsing, and yet very few ‘experts’ seem alarmed by this. If you are not familiar with the Baltic Dry Shipping Index, the following is a pretty good definition from Investopedia…
A shipping and trade index created by the London-based Baltic Exchange that measures changes in the cost to transport raw materials such as metals, grains and fossil fuels by sea. The Baltic Exchange directly contacts shipping brokers to assessprice levels for a given route, product to transport and time to delivery (speed).
The Baltic Dry Index is a composite of three sub-indexes that measure different sizes of dry bulk carriers (merchant ships) – Capesize, Supramax and Panamax. Multiple geographic routes are evaluated for each index to give depth to the index’scomposite measurement.
It is also known as the ‘Dry Bulk Index’.
Much of the decline of the Baltic Dry Shipping Index is being blamed on China. The following comes from a Bloomberg report that was posted on Thursday…

This post was published at The Economic Collapse Blog on November 19th, 2015.

NOV 19.ANOTHER 5 TONNES OF GOLD LEAVE THE COMEX VAULT OF JPMORGAN/JPMORGAN HAS ONLY 10 TONNES OF GOLD (ELIGIBLE AND REGISTERED)/OI FOR SILVER RISES TO 172,000 DESPITE THE LOW PRICE FOR SILVER/BAS…

Gold: $1078.00 up $9.20 (comex closing time)
Silver $14.24 up 16 cents
In the access market 5:15 pm
Gold $1078.10
Silver: $14.28
First, here is an outline of what will be discussed tonight:
At the gold comex today, we had a very poor delivery day, registering 0 notice for nil ounces. Silver saw 43 notices for 215,000 oz.
Several months ago the comex had 303 tonnes of total gold. Today, the total inventory rests at 205.20 tonnes for a loss of 98 tonnes over that period.
In silver, the open interest surprisingly rose by a huge 1,282 contracts despite silver being down by 9 cents in yesterday’s trading (and gold battered). The total silver OI now rests at 172,003 contracts In ounces, the OI is still represented by .860 billion oz or 122% of annual global silver production (ex Russia ex China).
In silver we had 43 notices served upon for 215 oz.
In gold, the total comex gold OI was pummeled by a huge 10,802 contracts to 424,574 contracts despite gold being down by only $0.10 in yesterday’s trading. It seems the modus operandi of the bandits is to try and liquefy gold/silver OI as we approach first day notice on Monday, November 30. It seems it is working in gold but not silver. The bankers get very nervous when OI is rising despite awful prices for the metals. We had 0 notices filed for nil today.
We had no change in gold inventory at the GLD / thus the inventory rests tonight at 661.94 tonnes. The appetite for gold coming from China is depleting not only gold from the LBMA and GLD but also the comex is bleeding gold. Our 670 tonnes of rock bottom inventory in GLD gold has been broken. It looks to me that China has taken the last amounts of physical gold from the GLD. I guess the only place left for China to receive physical gold, after they deplete the GLD will be the FRBNY and the comex. In silver, we had no change in silver inventory to the tune of / Inventory rests at 317.256 million oz.
We have a few important stories to bring to your attention today…

This post was published at Harvey Organ Blog on November 19, 2015.