US Job Growth Rate Hits 28-Month Low

The Bureau of Labor Statistics released new employment data today, and nonfarm payroll employment increased in May be the smallest amount seen in 28 months.
For May 2016, there were 144,592,000 payroll jobs in the US, which was up 1.6 percent, or 2.3 million jobs, from May 2015. (These are all not-seasonally-adjusted numbers)
That’s the smallest year-over-year increase reported since February 2014, when payroll jobs increased by 1.57 percent. The largest year-over-year increase in recent years was reported during July 2015, when it was up 2.18 percent:

This post was published at Ludwig von Mises Institute on June 03, 2016.

Turning Stones Into Bread – The Japanese Miracle

Stuffing the Futon
Our friend Ramsey Su just asked what Haruhiko Kuroda and Shinzo Abe are going to do now in light of the strong yen (aside from perhaps doing the honorable thing). Isn’t it time to just ‘wipe out some debt with the stroke of a pen’?
We will return to that question further below, but first a few words on the new Samurai futon. Apparently the Japanese are becoming more than a little antsy about Kuroda-san’s negative interest rate policy (and the threats of more of the same coming down the pike). Bloomberg informs us of the latest developments in this saga: ‘Manga Worker Stuffs Cash in Futon to Flee Japan’s Negative Rates’:
When the Bank of Japan unexpectedly announced negative interest-rate policies in January, the first thing Tomomi Sato did was withdraw a 10th of the money in her bank account and stash it at home.
‘It made me think of bank runs and shutdowns like I’ve heard there were in the past,’ said the 30-something assistant to manga comic artists, who commutes for two hours from a small apartment in Tokyo’s suburbs. ‘Eventually, I feel like they’ll start charging me to keep my money there. When I think about that, I begin to worry.’
Sato is emblematic of a challenge facing the central bank that rates below zero only deepened:average Japanese aren’t feeling the benefits of more than three years of extraordinary monetary stimulus, and cash withdrawals suggest they are losing faith. About 40 trillion yen ($360 billion) has piled up in homes across Japan, according to a Dai-ichi Life Research Institute estimate – equivalent to about 8 percent of gross domestic product. That’s money banks could be lending on or using to buy bonds.

This post was published at Acting-Man on June 4, 2016.

Helicopter Money Drops on Europe, But Not for ‘Normal’ Folks

And not for small companies either.
Money for nothing, for everyone: This is supposedly the next stage of the treatment program for today’s debt-addicted economic system. Milton Friedman’s hypothetical scenario of giving every citizen direct money transfers in a desperate bid to stoke inflation is gaining traction with growing legions of mainstream economists.
In their theory-addled brains, a massive one-off injection of central bank-conjured money into people’s bank accounts would do wonders for the real economy – in particular a terminally stagnating one like Europe’s. Rather than creating asset price inflation, as QE has done, it would fuel consumer price inflation. This is seen as the solution to the recently created and now unpayable mountain of debt: the central bank would simply erode it away via inflation.
In April, however, the ECB dashed such hopes, at least for the immediate future. ‘It’s not on the table,’ ECB Executive Board member Peter Praet told a bunch of economists who’d been pushing for an answer at a conference organized by the Center for Financial Studies in Frankfurt.
That’s not to say that the ECB is opposed on principle to the idea of showering people with money they’ve done nothing to earn. It just depends what kind of people.

This post was published at Wolf Street by Wolf Richter ‘ June 3, 2016.

Bondholders Stunned As Puerto Rico Finds $4.4 Billion In Outstanding Debt “Unconstitutional”

After Puerto Rico defaulted on its $422 million debt payment in May, governor Padilla begged congress to step in and help out, which happened shortly thereafter when a House committee cleared legislation that provided Puerto Rico with a way forward on restructuring its debt.
As it turns out, on the day the House announced that it planned on taking up the Puerto Rico bill next week, a 17 member audit commission found that two debt issues worth $4.4 billion of the $72 billion in debt outstanding were unconstitutional.
Said otherwise, the government may now just declare the bonds invalid. It’s a handy development for governor Padilla, since the two debt issues were expected to default on July 1. Also helpful is the fact that it would be one less item for Padilla to worry about since he proposed a budget for 2016-2017 that provides for only $209 million of the $1.4 billion in current debt service cost.
As MarketWatch explains

This post was published at Zero Hedge by Tyler Durden – June 3, 2016.

The Entire Economy Is All Smoke And Mirrors, Prepare For The Economic Collapse – Episode 988a

The following video was published by X22Report on Jun 3, 2016
Huge miss for jobs, the US only added 38,000 jobs in May worst since 2010. The unemployment rate dropped to 4.7% on horrific data. More waiters, waitresses and bartenders were added as manufacturing jobs disappear. There are over 100,000,000 people that the government does not count, who want a job but just can’t find one. Service sector imploded. Obama wants to give more Social Security benefits to the people as the country collapses. Corporate defaults are exploding higher.

Bread and Circuses

Preposterous Initiative
BALTIMORE – No whining and kvetching about the Deep State today. Instead, we sit at its feet, admire the cut of its jaw, and sing its praises. We are grateful to it… and not just as a source of amusement. In short, we delight in its incompetence.
What brings this to mind is a small item in the news, which, like a pool ball careening across a felted table, knocked two or three others in their pockets before coming to rest. We had to go pluck each one out of its hole and examine it. And what a marvelous fraud each one is! Democracy! Central banking! Welfare statism!
We think of the Swiss as prudent, careful people. They have their feet on the ground and their heads screwed on straight. But they have undertaken a pathetic and preposterous initiative, one so hopelessly ill-conceived, it is worthy of American economists… or French intellectuals.
Specifically, next week the Swiss will vote on a proposal to give a ‘basic income’ to all Swiss residents, whether they work or not: a guaranteed annual income of $30,000. You may have the same reaction we did: This is crazy!
If you can earn $30,000 a year without working, it will be hard for anyone earning less than $60,000 (about the same as $30,000 after taxes in many places) to get up in the morning and put on his overalls. Why bother?
The waiters will abandon us at our tables, our glasses unfilled and our dirty dishes still in front of us. The valet parkers will drive off in their own new cars. The burger flippers will leave their hot patties in midair as they head home. All the low-paying jobs, and more than a few middle-income posts, too, will be vacated.

This post was published at Acting-Man on June 4, 2016.

Social Insecurity

In the United States, Federal programs to relieve poverty and unemployment first went into effect on a large scale in the Great Depression. The argument was that they were needed only during the emergency. Since then the nation has enjoyed a return of prosperity, an enormous growth in national income, a fall of unemployment to record low levels, and a sharp decline (by any consistent definition) in the number and proportion of the poor. Yet relief, unemployment insurance, Social Security, and scores of other welfare programs have expanded at an accelerative rate.
In a 1935 message to Congress, President Franklin D. Roosevelt declared: “The Federal Government must and shall quit this business of relief…Continued dependence upon relief induces a spiritual and moral disintegration, fundamentally destructive to the national fiber.”
The contention then made was that, if unemployment and old-age insurance programs were put into effect, poverty and distress would be relieved by contributory programs that did not destroy the incentives and self-respect of the recipients, and that relief could gradually be tapered off to negligible levels.
Let us look first at what has happened to Social Security itself. Since the original act of 1935 there have been constant additions and expansions of benefits. As early as 1939, both the benefit and tax provisions of the basic act were overhauled. The 1939 package added survivors’ benefits.
In 1950, coverage was broadened substantially to include about 90 per cent of the employed labor force. (Initially it had been only about 60 per cent.) The length of working time required to qualify for coverage was sharply reduced.
In 1954 and 1956 there were further liberalization of coverage. Disability benefits were added. The 1956 amendment dropped the minimum retirement age required for women from 65 to 62.
In 1958, benefits for dependents of disabled workers were added. In 1961 the retirement age for men was also reduced to 62, though with a lower level of benefits than was payable at 65.
The 1965 legislation added Medicare for some 20 million Americans over 65. It made a host of other expensive changes. To the traditional Social Security program it added a 7 per cent across-the-board increase in cash benefits to retired workers.
In addition to other changes, the scale of benefits was increased in 1952, 1954, 1958, and 1965.

This post was published at Ludwig von Mises Institute on June 03, 2016.

Desperate To Cut Costs And Increase Efficiency, WalMart Turns To Drones

Ever since WalMart decided to increase its minimum wage and then give all employees a 2% pay raise, it has beenforced to slash guidance and move forward with mass layoffs in order to cut costs (it had to offset the multi-billion dollar short-term PR investment somehow). The next phase of the cost cutting efforts will now be to replace workers with drones.
At a recent demonstration of how a drone will be utilized in WalMart distribution centers, it was noted that the drones could help catalog in as little as a day what it now takes employees about a month to accomplish.
From the NYT
Walmart, the country’s largest retailer, is testing the use of flying drones to handle inventory at its large warehouses, which supply the thousands of Walmart stores throughout the nation. In six to nine months, the company said, the machines may be used in one or more of its distribution centers.

This post was published at Zero Hedge by Tyler Durden – Jun 3, 2016.

Billionaire George Soros Dumps 37% of Stocks To ‘Buy Up Massive Amounts of Gold’ But Why?

Perhaps the point of collapse has arrived.
The suggestion seems to be that a point of no return is coming for the stock market system of illusion and usury. The Fed’s great bubble is getting ready to burst. It is playing out on a time frame decided, undoubtedly, by those closest to the inside.
Worse, the end of the U. S. petrodollar is playing out, with plenty of geopolitical drama as currency wars threaten to undo the foundation that the nation has been resting upon.
When the music stops, the economy will shatter and collapse in a devastating wave that will catch the vast majority of Americans off guard. It isn’t the first time Soros’ positions haveserved as a stark warning.
Soros is shifting towards gold because he understands what is coming, and likely has several tricks up his sleeve.
According to the experts, fear of the dollar is driving his gold purchases.
via Sputnik News:


This post was published at shtfplan on June 3rd, 2016.

That Didn’t Take Long: Fed’s Brainard Goes Full Dove One Week After Yellen’s Hawkstravaganza

Last Friday, stocks soared as Yellen dropped hawkish hints that The Fed would raise rates “because it was appropriate” implying everything is awesome.
One week later – following a terrible Fed-narrative-imploding jobs print – Hillary Clinton-donor and Fed member Lael Brainard goes back to full dove-tard:
*BRAINARD: U. S. JOBS IN MAY REPORT SUGGESTS LABOR MKT HAS SLOWED *BRAINARD SEES BENEFITS TO FED WAITING FOR ADDITIONAL DATA Nothing would surprise us less to see stock go green today on this dovish news – just as they did last Friday on hawkish sentiment. If (Fed speaks) THEN (Buy).
Additional headlines/excuses are…

This post was published at Zero Hedge by Tyler Durden – Jun 3, 2016.

It’s Probably Nothing: JPMorgan Recession Indicators Surge To New Cycle Highs

As the economy stalls out with dismal GDP and employment data, it is no surprise that JPMorgan is now seeing its recession indicators hitting new highs.
JPM says that the probability of a recession beginning within 12 months has moved from 30% on May 5th, to 36% today…
Our preferred macroeconomic indicator of the probability that a recession begins within 12 months has moved up from 30% on May 5 to 34% last week to 36% today (Table 1, bottom row and Figure 1, blue line). This marks the second consecutive week that the tracker has reached a new high for the expansion.

This post was published at Zero Hedge by Tyler Durden – Jun 3, 2016.

JUNE 3/GLD HAS A MASSIVE 10.71 TONNES ADDED TO ITS INVENTORY (PAPER DEPOSIT) AND SLV ADDS 1,560,000 OZ/AT THE COMEX THE FRONT JUNE CONTRACT ADDS 7800 OZ TO THE AMT STANDING/NOW WE HAVE A MONSTROU…

Good evening Ladies and Gentlemen:
Gold: $1,240.10 UP $30.30 (comex closing time)
Silver 16.34 up 34 cents
In the access market 5:15 pm
Gold $1244.20
silver: 16.41
i) the June gold contract is an active contract and the second biggest delivery month of the year following December. Friday night, the bankers first day delivery issuance to our longs to be settled on June 1 was huge: the number was 3,508 gold notices for 350,800 oz or 10.9 tonnes of gold. On day two, we had another huge number of gold notices filed at 2281 for 228100 oz or 7.09 tonnes of gold. On day 3, YESTERDAY, we had another whopper of 1969 notices for 196,900 oz or 6.12 tonnes. TODAY, we had another huge 1026 notices filed for 102600 oz (3.19 tonnes) Thus in 4 days a total of 8,784 notices have been filed for 878,400 oz or 27.32 tonnes. WHAT IS MORE FASCINATING WAS THE FRONT JUNE MONTH INCREASED IN NET OI BY 678 CONTRACTS YESTERDAY. TODAY IT INCREASED BY 78 CONTRACTS OR 7800 OZ. THE ENTITY STANDING DOES NOT WANT FIAT AND IT SURE LOOKS LIKE A SOVEREIGN (CHINA) IS STANDING FOR GOLD. As I stated yesterday: ‘there is no question that the bankers have uttered these words to one another: ‘Houston, we have a problem in gold.’
Let us have a look at the data for today.
Several months ago the comex had 303 tonnes of total gold. Today, the total inventory rests at 269.31 tonnes for a loss of 34 tonnes over that period
In silver, the total open interest FELL by 1912 contracts DOWN to 195,605 DESPITE THE FACT THAT THE PRICE OF SILVER WAS UP by 9 cents with respect to YESTERDAY’S trading. In ounces, the OI is still represented by just under 1 BILLION oz i.e. 0.978 BILLION TO BE EXACT or 139% of annual global silver production (ex Russia &ex China)
In silver we had 0 notices served upon for nil oz.
In gold, the total comex gold OI FELL by a CONSIDERABLE 5,698 contracts DOWN to 481,096 as the price of gold was down $2.10 with YESTERDAY’S trading(at comex closing).
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With respect to our two criminal funds, the GLD and the SLV:
Two biggies!! in GLD
a)We had a good size deposit in gold inventory at the GLD at 4.46 tonnes late last night and no doubt that this was a paper deposit. The inventory rested early this morning at 875.20 tonnes. .
b) then late tonight a massive paper deposit of: 6.25 tonnes/Thus GLD rests this weekend at 881.44 tonnes/ TOTAL GAIN TONIGHT: 10.71 TONNES
And now for SLV
We had a gigantic deposit of 1,560,000 oz in silver inventory at the SLV/Inventory rests at 337.299 million oz. No doubt that this is also a paper entry of a deposit.
Both the GLD and SLV are massive frauds as they have no metal behind them!
First, here is an outline of what will be discussed tonight:

This post was published at Harvey Organ Blog on June 3, 2016.

Another 100,000 Ounces of Gold Get ‘Delivered’ at 1,209 Yesterday

Over 100,000 ounces of gold were claimed on delivery yesterday at the bargain price of 1,209.80.
That bring the total ounces taken in the first few days of the June gold 100 oz contract delivery to a record 878,400 ounces.
The big takers are a JPM mystery customer and their house account, and the house account at Nova Scotia.
But in all reality this is relatively peanuts compared to what the ‘exceptionally well-informed’ were able to make on the movements in the bond markets this morning, given the size and leverage of the position in that casino. And a casino it surely has become.
But every little bit helps when one is attempting to sustain the unsustainable.
In the second chart I show the annual deliveries of gold in ounces on the Comex.
So for example, in all of last year there were about 1.5 million ounces delivered.

This post was published at Jesses Crossroads Cafe on 03 JUNE 2016.

Oil Tumbles After Rig Count Surges By Most Since Dec 2015

Just as we expected, based on lagged oil prices, the US oil rig count rose this week. The oil rig count rose 9 to 325 – the biggest increase since Dec 2015. This is the second week in a row with no decline in rigs as the market’s self-defeating fears of a production resurgence drive oil prices lower on the news.

This post was published at Zero Hedge by Tyler Durden – Jun 3, 2016.

Goldman Slaughters Its Clients Again: Chinese Yuan Surges Most In Five Years Day After Goldman Says Sell

Goldman just did it again.
In fact, the bank whose FX recommendations have become so notoriously terrible they are on par with those of Dennis Gartman, has absolutely outdone itself this time because less than 24 hours after Goldman said to sell the Yuan, the Chinese currency just had its biggest one day move in over 5 years!
Recall that it was just last night when we presented not only Goldman’s (largely accurate) RMB-FOMC Monetary Policy Loop, which merely showed the reflexive relationship between the Fed, the dollar, the PBOC and the Yuan (and everything else inbetween)…

This post was published at Zero Hedge by Tyler Durden – Jun 3, 2016.