Unemployment Claims Spike Again As We Get More Scientific Evidence The Middle Class Is Shrinking

As the U. S. economy slows down, we would expect to start to see evidence of this in the employment numbers, and that is precisely what has begun to happen. During the week before last, initial claims for unemployment benefits jumped by 17,000, which was the largest increase that we had seen in over a year. Well, last week we witnessed an even bigger spike. Seasonally adjusted initial claims shot up 20,000 more to a total of 294,000. Of course it makes perfect sense that more Americans are applying for unemployment benefits, because firms are laying people off at a much faster pace these days. Just a couple days ago I reported that job cut announcements at major firms are running 24 percent higher this year compared to the first four months of last year. So we should fully expect that the number of Americans seeking unemployment benefits will continue to accelerate.
Personally, I am a bit surprised by how quickly these numbers are getting worse. The following comes directly from the Department of Labor…
In the week ending May 7, the advance figure for seasonally adjusted initial claims was 294,000, an increase of 20,000 from the previous week’s unrevised level of 274,000. This is the highest level for initial claims since February 28, 2015 when it was 310,000. The 4-week moving average was 268,250, an increase of 10,250 from the previous week’s unrevised average of 258,000.
For a long time, initial claims for unemployment benefits were running quite low, and this was one of the few bright spots for the U. S. economy.
Unfortunately, that is now changing, and this is just more confirmation that a significant economic slowdown has already started. For many more numbers that back up this claim, please see my previous article entitled ’11 Signs That The U. S. Economy Is Rapidly Deteriorating Even As The Stock Market Soars’.
But whether the economy has been doing good or bad in recent years, the long-term trend of the decline of the middle class in America has continued unabated.
This week, we got even more evidence that the middle class is steadily disappearing from the Pew Research Center…

This post was published at The Economic Collapse Blog on May 12th, 2016.

Investors Piling into Gold; Demand in Record Territory

Gold demand hit near record levels in the first quarter of 2016.
Despite the price rising nearly 17%, the demand for gold surged 21% in the opening quarter of the year. It was the second largest quarter on record, according to the World Gold Council.
Gold demand hit 1,290 tons in Q1. Concerns about economic instability and an uncertain financial landscape drove the increase. Investors flocked to gold, and ETFs saw a huge inflow of the yellow metal. Total investment demand hit 618 tons, up 122% from the same period in 2015:

Inflows into ETFs totaled 364 tons in the quarter – the highest quarterly level since Q1 2009 – compared to 26 ton in Q1 2015. Gold found favor as a risk diversifier due to the negative interest rate environment in Europe and Japan, combined with uncertainty over the Chinese economy, anticipation of slower interest rate rises in the US and global stock market turmoil.’

This post was published at Schiffgold on MAY 12, 2016.

Texas Secession Looms As “Independence Resolution” Nears Vote

If the nationalists get their way, this November might be the last time Texans vote for a US president.
On Wednesday, the Platform Committee of the Texas Republican Party voted to put a Texas independence resolution up for a vote at this week’s GOP convention, according to a press release from the pro-secession Texas Nationalist Movement. The resolution calls for allowing voters to decide whether the Lone Star State should become an independent nation.

This post was published at Zero Hedge on 05/12/2016.

Heretical Thoughts and Doing the Unthinkable

Heresy!
NORMANDY, France – The Dow rose 222 points on Tuesday – or just over 1%. But we agree with hedge-fund manager Stanley Druckenmiller: This is not a good time to be a U. S. stock market bull.
Speaking at an investment conference in New York last week, George Soros’ former partner warned that…
‘…higher valuations, three more years of unproductive corporate behavior, limits to further easing, and excessive borrowing from the future suggest that the bull market is exhausting itself.’
But we promised to return to the scene of our crime today. In these pages, we recently committed heterodoxy…even heresy! We don’t know what got into us and we are deeply sorry for our misdoings, the remembrance of which is grievous unto us…
… but in a moment of weakness (oh, ye gods of democracy, why have you forsaken us?) we dared to question whether voting makes any damned sense. We concluded that it didn’t.
We don’t know the candidates well enough to know who is really better. We don’t have any idea what challenges the next president will face, nor which candidate would be better equipped to deal with them. We don’t know if the candidates believe what they say they believe or whether they will do what they promise to do.
We only know our vote, statistically, won’t make a bit of difference. And that we don’t want the ‘lesser of two evils.’ And that we don’t feel any obligation to play this game! Dear readers canceled their subscriptions… and heated up their irons.
‘What about the ‘social contract’?’ a reader wanted to know. We’ll come back to that in a minute. First, we want to touch on a remarkable statement, by a remarkable candidate, in a remarkable election.

This post was published at Acting-Man on May 13, 2016.

Is Glencore Manipulating The Price Of Oil: Swiss Trader Holds Over 30% Of June Brent Supply

While oil bulls were delighted by yesterday’s DOE news of an inventory drawdown refuting the prior day’s API news of a major build, what was ignored was the build in Cushing storage (more on that shortly), which according to Genscape hit a utilization just shy of 80%, or more than 70 million barrels, a record high since Genscape began monitoring the hub in 2009. To be sure, the risk of running out of land storage has been one we have previously discussed on various occasions and hinted that one way this is being circumvented is with substantial amounts of oil being stored on tankers at sea, mostly by commodity trading companies who take advantage of the oil contango to generate month to month profits as producers choose to keep their product away from the market until prices rise.
As it turns out, not only is this the case, but according to Reuters, one particular energy trader – a name well-known to Zero Hedge readers – Glencore, has built up a massive inventory stake in the Brent market where it now holds an unprecedented 30% position in Brent, which it is holding for offshore storage in its tankers in hopes of pushing the price of Brent, and thus the entire energy complex higher, by limiting supply.
As Reuters details, citing trade sources, Glencore has built up one of the largest positions in part of the Brent crude market which acts as a benchmark for global oil prices since the start of the year.

This post was published at Zero Hedge on 05/12/2016.

MAY 12/GLD ADDS ANOTHER WHOPPING 3.27 TONNES TO INVENTORY DESPITE GOLD WHACKING TODAY/SILVER OI NEAR ITS ALL TIME RECORD OI RISING TO 206,438 CONTRACTS/GOLD OI RISES BY 6113 CONTRACTS TO 585,890 …

Good evening Ladies and Gentlemen:
Gold: $1,270.40 down $4.10 (comex closing time)
Silver 17.09 down 21 cents
In the access market 5:15 pm
Gold $1263.50
silver: 17.00
As soon as our crooked bankers saw the likes of the open interest in gold and silver they knew that they had to whack despite the awful news on the jobless front today. We are now very close at an all time record high OI for silver and yet the price is 32.00 less per oz. Generally, the CFTC state that these things correct themselves. We have now had 5 years of high silver OI with a low price and that destroys their mantra which is in bold as you enter the CFTC offices, namely that the futures market is a price discovery mechanism and that future price discovery of any commodity will lead to the correct price. Obviously our bought and paid for regulators have destroyed their motto with respect to the precious metals.
Expect another raid tomorrow!
Let us have a look at the data for today.
At the gold comex today we had a GOOD delivery day, registering 27 notices for 2700 ounces for gold, and for silver we had 2 notices for 10,000 oz for the non active May delivery month.
Several months ago the comex had 303 tonnes of total gold. Today, the total inventory rests at 235.21 tonnes for a loss of 68 tonnes over that period.
In silver, the open interest rose by 1047 contracts up to 206,438 as the price was silver was UP by 22 cents with respect to yesterday’s trading. In ounces, the OI is still represented by just over 1 BILLION oz i.e. .1.032 BILLION TO BE EXACT or 147% of annual global silver production (exRussia &ex China)
In silver we had 2 notices served upon for 10,000 oz.
In gold, the total comex gold OI ROSE BY 6,113 CONTRACTS UP to 585,890 contracts AS THE PRICE OF GOLD WAS UP $10.70 with YESTERDAY’S TRADING(at comex closing). Yesterday I stated: ‘Again the liquidation of contracts was not to the liking of our crooked banks.’ They did not like the OI in both gold and silver and thus the raid today.
As far as the GLD, we had another huge change in tonnes (despite the gold price being down badly today) a deposit of 3.27 tonnes into the GLD. The new inventory rests at 845.19 tonnes. I have no problem in telling you that the addition was paper gold and not physical as London is having a tough time finding real metal. We had no changes in silver inventory at the SLV. Inventory rests at 335.073 million oz..
First, here is an outline of what will be discussed tonight:

This post was published at Harvey Organ Blog on May 12, 2016.

12/5/16: Leaky Buckets of U.S. Data

Recently, ECB researchers published an interesting working paper (ECB Working Paper 1901, May 2016). Looking at the U. S. data that is released under the embargo, they found a disturbing regularity: across a range of data, there is a strong evidence of a statistical drift some 30 minutes prior to the official time of the release. In simple terms, someone is getting data ahead of the markets and is trading on it in sufficient volumes to move the market.
Let’s put this into a perspective: there is a scheduled release for private data that is material for pricing the market. The release time is t=0. Some 30 minutes before the official release, markets start pricing assets in line with information contained in the data yet to be released. This process continues for 30 minutes until the release becomes public. And it moves prices in the direction that correctly anticipates the data release. The effect is so large, by the time t=0 hits and data is made publicly available, some 50% of the total price adjustment consistent with the data is already priced into the market.
“Seven out of 21 market-moving announcements show evidence of substantial informed trading before the official release time. The pre-announcement price drift accounts on average for about half of the total price adjustment,’ according to the research note.
Pricing occurs in S&P and U. S. Treasury-note futures and data sample used in the study covers January 2008 through March 2014.
Here is the data list which appears to be leaked in advance to some market participants:

This post was published at True Economics on May 12, 2016.

Mergers Collapse, Bubble Deflates, Debris Hits Hedge Funds

The ‘arbs’ got caught on the wrong side of the M&A collapse.
Hedge funds are getting bloodied in one of their favorite games, after years of a giddy boom in mergers and acquisitions with ever sillier valuations, made possible by an endless flow of easy money from yield-starved investors and fee-hungry banks, under the eyes of regulators who’d conveniently fallen asleep.
But that M&A bubble is now collapsing. And many hedge funds that were into merger arbitrage got caught on the wrong side of the bet.
Merger arbitrage is a bet that an announced acquisition gets completed. With the announcement, the share price of the target company shoots up to somewhere near the bid. If there’s hope that the bid will be raised, the share price might overshoot the bid. Once the target company agrees to be taken over, shares usually trade slightly below the acquisition price until the acquisition is completed. These price differentials can be exploited by merger arbitrage.
These can be huge, leveraged bets on what are expected to be minor price differences. Risks are thought to be low – unless the merger collapses. That’s when these ‘arbs’ can get their heads handed to them.

This post was published at Wolf Street by Wolf Richter ‘ May 12, 2016.

The US Gov & The Central Bank Are Out Of Time, The Economy Is Done – Episode 969a

The following video was published by X22Report on May 12, 2016
The Economic growth across the 19 country Euro zone has been revised lower. Initial jobless claims have soared and is now reflecting reality in the job market. US import prices have fallen 21 months. Baltic Dry Index is at 579 points. US demonizing gold saying criminals and terrorist use it. Obamacare is now looking for states to bailout the failed exchanges. Judge Rosemary Collyer rules cost sharing is unconstitutional for Obamacare. The economy is deteriorating quickly and the US Government and Central Banks are out of time.

REAL MINIMUM WAGE IS $0: WENDY’S TO ROLL OUT IDIOCRACY-STYLE SELF-SERVICE KIOSKS THIS YEAR

Progressives just don’t understand the fact (not science fiction) that robots are about to take over the majority of jobs (and especially low-paying jobs) in the coming decades.
That, and the real minimum wage is actually $0.00.
Now look what’s happened:
Wendy's will make self-order kiosks available nationwide as minimum wage hikes hit $WEN $MCD pic.twitter.com/XgiPydYKWy
— Ed Carson (@IBD_ECarson) May 11, 2016

This post was published at The Daily Sheeple on MAY 12, 2016.

Exposing The Job Market Reality – Only Purple Squirrels Need Apply

Today’s dismal jobless claims data, combined with last week’s dismal-er payrolls print, makes one wonder what “everything is awesome” narrative-confirming data point will be used next by the talking heads. As ECRI’s Lakshman Achuthan explains, with job openings at near-record highs, according to the JOLTS data, some see an extraordinarily tight labor market. While that may be the positive spin everyone is looking for, what they seemed to have missed amid the euphoric headlines was the drop in actual hiring.
As the chart shows, the difference between the number hired and the number of job openings dropped to about half a million shortly before the start of the last two recessions (shaded areas). It then surged, peaking a little below two million soon after those recessions ended.

This post was published at Zero Hedge on 05/12/2016.

“We Are Unsure Whether To Wear A Helmet Or A Diaper” – Merger Arb Funds Crushed

2015 was the year of M&A: some $5 trillion in global merger and acqusition deals were announced, the highest level ever, topping even pre-crash 2007. In fact, last year there were more mega-deals, those valued at $20 billion or above, than ever. In all, there were 17 deals at or above that value compared with 35 such deals in the five years from 2010 through 2014. Such was the cheap debt-fuelled boom in large deals that the average size of all M&A valued at $500 million or above was $3.3 billion, up from $2.2 billion in 2014.
However, as Bloomberg observes, this year M&A is hitting a more dubious record: deals gone bust as some 10%, or $504 billion, of all deals announced last year have been terminated following a furious crackdown by the US Treasury on tax inversions which killed what would have been the biggest M&A deal ever, Pfizer’s acquisition of Allergan, as well as numerous other deals found to have been anti-competitive by the FTC.
Wednesday was especially bad for bankers as two mergers valued at a combined $21 billion collapsed. The latest cancelled deals mean 2015 has been stripped of its title as the biggest year for dealmaking, dropping to $4.06 trillion compared with 2007’s $4.09 trillion.

This post was published at Zero Hedge on 05/12/2016.

Pension Systems Pushing Some States Toward Bankruptcy: Where Does Your State Rank?

Recently, we reported on the rapid collapse of pension systems, both public and private, across the United States. This is not only jeopardizing Americans’ retirement. Failing government pension systems are pulling several states down into a black hole with them.
When we talk about government debt, we tend to focus on the US national debt. But a lot of states are deep in the red as well. A George Mason University study highlighting the most bankrupt states reveals an interesting commonality – a pension crisis. Topping the list: California, Kentucky, New York, Connecticut, Massachusetts, New Jersey, and Illinois.

This post was published at Schiffgold on MAY 11, 2016.

Gold and Silver Market Morning: May-11-2016 — Gold and Silver deciding direction today!

Gold Today -Gold closed in New York at $1,277.70 up from Tuesday’s$1,266.40. On Thursday morning in Asia it fell to $1,272.65, as the Yuan continued to weaken against a dollar that held at yesterday’s levels, before the LBMA price setting in London.
LBMA price setting: $1,268.30 down from Wednesday’s $1,271.80.
Yuan Gold Fix
The Gold Fixing in Shanghai’s morning was just under $8 lower than New York’s close. London’s opening was higher than Shanghai’s afternoon Fix initially telling us that physical demand in China caused the price to stay at levels of the day before. We need a few days of price disparity to see who’s leading whom.
We are also watchful to see if London stays higher than Shanghai as we do in time expect both higher London prices and much more price volatility as liquidity decreases.
Today, again, sees currency exchange rates more or less the same as yesterday leaving gold to show itself almost independently of currencies. We do need more volatility in the gold price to see this clearly, but the Technical picture is showing a narrowing trading range, as it moves to balance above support.

This post was published at GoldSeek on 12 May 2016.

Peak Economy – The Failure Of Fed Policy Exposed In 5 Painful P&G Charts

If one steps back and simply looks at the accuracy of the world’s prominent PhD economists and market pros’ predictions over the past 7 years one can’t help but shake one’s head. And I believe investors have become wise to their ignorance. We’ve seen a record 15 consecutive weeks of net selling of equities despite these expert pundits continuing on in their attempt to deceive investors into believing we are just one or two quarters away from that (now) proverbial recovery.
For several years now I’ve been explaining exactly where these post 2008 crisis policies are inevitably taking us. In 2014 in my first Zerohedge piece I explained why interest rates cannot rise. I also explained that negative interest rates are a certainty. People called me all kinds of wonderful names in an attempt to convince me the Fed was about to ‘normalize’ monetary policy and interest rates would soon be back to historical averages. I held my ground because truth rather than hope was baked into my analysis. Now I don’t want interest rates to be low forever, and I think people mistake my views as my wishes, they are not. My views are based only the realities not the hopes. And this, I believe is where the pundits go wrong.
But I’m not here to say I told you so about so many aspects of the economy and markets. I want to show you that what is taking place in the macro economy is a true demand death spiral and this can be seen very clearly by using Proctor & Gamble’s microeconomic context as a representative model. I’ve explained ad-naseam that the macroeconomic policies implemented in 2008 & 2009 all but guaranteed economic contraction and this is because they incentivize contractionary microeconomic strategies that when applied on a macroeconomic scale perpetuate demand destruction.
Such contractionary microeconomic strategies can only be successful in the short term and on a microeconomic scale as a way to delay value destruction for individual firms while demand is revived at which point expansionary strategies can be re-implemented. But such contractionary strategies cannot be successful when they are applied on a macroeconomic scale (i.e. when all firms are using them). This is because demand can then never be revived and the contractionary strategies continue to realize contraction across the broad economy forcing the continuation of the contractionary strategies across all firms. You can see the circularity or what I call the death spiral of demand.

This post was published at Zero Hedge on 05/12/2016.

Two More Energy Companies Go Bankrupt: Linn Energy, Penn Virgina File Chapter 11

According to data compiled by Haynes and Boone, in just the first four months of 2016 there had already been double the amount of bankrupt energy debt than in all of 2015, with the total secured and unsecured defaults rising to $34 billion, double the $17 billion total for all of 2015.
We can now add two more major names succumbing to the Saudi onslaught against marginal shale producers when overnightfirst Linn Energy announced a prepackaged Chapter 11 deal, followed by Penn Virginia defaulting just hours later.
In the first case, oil and gas producer Linn Energy LLC filed for chapter 11 bankruptcy after reaching a deal with lenders to restructure its $8.3 billion debt load and obtain $2.2 billion in fresh financing. In its bankruptcy filing press release, Linn announced that the holders of more than 66% of its credit facility have agreed to the ‘broad terms’ of a debt restructuring but didn’t provide further details. The lenders also agreed to let Linn Energy spend the cash securing their debt, known as cash collateral, and to help fund a new $2.2 billion term loan.

This post was published at Zero Hedge on 05/12/2016 –.