More Fake News From Washington

this time it is about employment
The US government continues to lie about everything, not just Russia, Syria, Iran, and China. The US government is incapable of telling the truth about something as straightforward as employment. According to the government, March produced only 98,000 new payroll jobs, an insufficient amount to reduce unemployment, but the unemployment rate fell from 4.7 to 4.5 percent.
How did that happen? Not because the unemployed found jobs. The unemployment rate fell because the government did not count as unemployed large numbers of unemployed people who did not look for a job during the four week period prior to the survey. The US has a low unemployment rate, because the government does not count the unemployed.
The government knows the reported unemployment rate is wrong, because other data are inconsistent with the low rate. For example, the labor force participation rate consistent with a 4.5% unemployment rate is 67%, whereas the current participation rate is a low 63%, which implies a much higher rate of unemployment than 4.5%.

This post was published at Paul Craig Roberts on April 8, 2017.

Oil Bust No Problem: It’s Good to Be an Energy CEO

The oil price rout that sent several hundred U. S. oil and gas companies under seems to be largely over, and in a somewhat surprising turn of events, some chief executives of companies that filed for bankruptcy protection in the last two years are doing better than they did when oil traded at over $100 a barrel.
A Wall Street Journal analysis cites the CEO of Ultra Petroleum, for example, who received a portion of 7.5 percent of new shares, to be issued after the company emerges from bankruptcy protection. In absolute terms, this translates into about $35 million – a tenfold jump on Michael Watford’s annual salary in the pre-crisis years.
Another chief executive, Seventy Seven Energy’s Jerry Winchester, got a stock package of 440,000 shares that were worth $6.6 million when the company emerged from bankruptcy last August, which have now swelled to $16 million, thanks to the $1.76-billion acquisition of Seventy Seven by Patterson-UTI Energy.

This post was published at Wolf Street by Irina Slav ‘ Apr 8, 2017.

Optimist’s Burden Of Proof – Are Bonds “Distracted” Or “Depressed”?

Authored by Jeffrey Snider via Alhambra Investment Partners,
The idea that interest rates have nowhere to go but up is very much like saying the bond market has it all wrong. That is one reason why the rhetoric has been ratcheted that much higher of late, particularly since the Fed ‘raised rates’ for a third time in March. Such ‘hawkishness’ by convention should not go so unnoticed, and yet yields and curves are once more paying little attention to Janet Yellen. When Mohamed El-Erian wrote in what was I guess an oped in the Financial Times on Monday that bond investors were ‘distracted’, it was his subtle way of attacking them as wrong.
In that way, we are truly back to late 2013 and early 2014 all over again. But back then the Fed’s positivity side, thus bad for bonds, had a whole lot more going for it (even if it was in total still a thin catalog). Recovery at that point was at least plausible under the undetermined guidance of QE3 (and 4), whereas today not even Fed officials talk that way or even bring themselves to mention QE.
This isn’t to say that the bond market or eurodollar futures have everything right, far from it. As I argued earlier this week, these very markets were way off at several points and for several years. Treasuries as well as eurodollar futures were firmly within the camp of higher interest rates and monetary policy support until 2011. In other words, bond investors then were wrong, and even though it took several years to fully appreciate the implications of the con job that was QE, the bond market and eurodollar futures curve have been far more right than wrong since then (the noted exception being late 2013).

This post was published at Zero Hedge on Apr 8, 2017.

Week in Review: April 8, 2017

After months of calling for trade wars, more military spending, and a more aggressive drug war, the Trump administration has now followed up his administration’s expanding use of drone strikes in several countries with an escalation of military force in Syria.
It’s difficult to see where all this will lead, but it is sure to lead in part to more government debt, more spending, and more demands for increased government power, increased taxes, and increased inflation of the money supply.

This post was published at Ludwig von Mises Institute on April 8, 2017.

Morgan Stanley: “Wage Growth Is Leveling Off, May Be Slowing”

While Friday’s headline payrolls print – the lowest since May – was disappointing even to the biggest economic optimists, many found refuge in the sharp drop in the unemployment rate, which ticked lower to 4.5%, the lowest print in a decade. And yet there was a problem: with the unemployment rate tumbling, at least in theory indicating even less slack in the labor market, wage growth barely hit consensus estimates. Instead, if indeed the growth narrative is accurate, and if more people were employed, wages should be rising. However, it was this weakest link of the entire reflation/recovery narrative that disappointed once again.
In fact, it was even worse: as Morgan Stanley’s Robert Rosener write overnight, “wage pressures in March were supported almost entirely by a massive jump in earnings in Professional & Business Services. Outside of this bright spot, wages in other industries were muted, and suggests wage growth in a broad range of industries may be leveling off, or even slowing.”

This post was published at Zero Hedge on Apr 8, 2017.

Commercial Bankruptcies Spike, Consumer Bankruptcies Jump for First Time since 2010, but Don’t Blame the Oil Bust

The Great Debt Unwind, right here, right now.
Commercial bankruptcy filings, from corporations to sole proprietorships, spiked 28% in March from February, the largest month-to-month move in the data series of the American Bankruptcy Institute going back to 2012. They’re up 8% year-over-year. Over the past 24 months, they soared 37%! At 3,658, they’re at the highest level for any March since 2013.
Commercial bankruptcy filings skyrocketed during the Financial Crisis and peaked in March 2010 at 9,004. Then they fell sharply until they reached their low point in October 2015. November 2015 was the turning point, when for the first time since March 2010, commercial bankruptcy filings rose year-over-year.
Bankruptcy filings are highly seasonal, reaching their annual lows in December and January. Then they rise into tax season, peak in March or April, and zigzag lower for the remainder of the year. The data is not seasonally or otherwise adjusted – one of the raw and unvarnished measures of how businesses are faring in the economy.

This post was published at Wolf Street by Wolf Richter ‘ Apr 8, 2017.

For Sale On The Dark Web: Your Tax Refund And Social Security Number

After death, and taxes, we can now add a third ‘certainty’ to life – identity theft.
Amid the business of tax season, it’s not just accountants that are toiling hard to collect their fees. As Bloomberg reports, tax season is hog heaven for cybercriminals. The thought of all that personal data just sitting around, unmolested in tax documents, inspires a torrent of creepy scammer creativity.
The Krebs on Security blog provided a glimpse earlier this year of how our tax data is bought and sold, and what scammers charge other scammers for our data.
Founder Brian Krebs came across something he hadn’t seen before on the Dark Web: Bulk sales of W-2 forms.

This post was published at Zero Hedge on Apr 7, 2017.

What’s Left To Drive The Recovery? Not Much

US growth, such as it is, has lately been driven by a handful of hot sectors. Car sales have set records, high-end real estate is generally way up, and federal spending – based on last year’s jump in the national debt – is booming.
But now the private sector part of that equation is shifting into low gear. Cars in particular:
Economy Will Miss That New-Car Smell
(Wall Street Journal) – The annual pace of light-vehicle sales fell to a seasonally adjusted 17.2 million in the first quarter from 18 million. That the decline has come despite generous incentives from car companies and still-low gasoline prices suggests that sales are past their peak.
The upshot is that the deferred purchases that helped bolster business coming out of the recession have been made, and it will be up to replacement demand and a slowly growing population of registered drivers to fuel auto sales. If car makers are lucky, sales might stay on their recent level. If they aren’t – and the recent drop in used-car prices raises that prospect – the trend could be lower. In either case, autos might count as a negative for consumer spending and the industry, a big driver of economic growth, could be an outright drag on the economy for the first time since 2009.

This post was published at DollarCollapse on APRIL 7, 2017.

Credit Contraction Episodes

Approaching a Tipping Point
Taking the path of least resistance doesn’t always lead to places worth going. In fact, it often leads to places that are better to avoid. Repeatedly skipping work to sleep in and living off credit cards will eventually lead to the poorhouse.
The same holds true for monetary policy. In particular, cheap credit policies that favor short-term expediency have the effect of layering society up with an abundance of long-term mistakes. Artificially suppressed interest rates via central bank asset purchase schemes are not without consequences.
What’s more, once set in motion these consequences don’t stop until they’ve fully run their course. The booms of plentiful credit must always be followed by the busts of unserviceable debt. As more and more debt drifts into arrears the debt structure breaks down. Yet when the actual tipping point is crossed is often unclear until after the fact.

This post was published at Acting-Man on April 8, 2017.

APRIL 7/DOUBLE WHAMMY!!: POOR JOBS REPORT/USA TOMAHAWKS SYRIAN AIRBASE/STOCKHOLM THE SCENE OF ANOTHER TERRORIST ATTACK/

Gold: $1254.30 UP $4.00
Silver: $18.13 DOWN 10 cents
Closing access prices:
Gold $1254.45
silver: $18.00!!!
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
SHANGHAI GOLD FIX: FIRST FIX 10 15 PM EST (2:15 SHANGHAI LOCAL TIME)
SECOND FIX: 2:15 AM EST (6:15 SHANGHAI LOCAL TIME)
SHANGHAI FIRST GOLD FIX: $1278.75 DOLLARS PER OZ
NY PRICE OF GOLD AT EXACT SAME TIME: 1268.20
PREMIUM FIRST FIX: $10.55
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
SECOND SHANGHAI GOLD FIX: $1274.90
NY GOLD PRICE AT THE EXACT SAME TIME: 1264.10
Premium of Shanghai 2nd fix/NY:$10.80

This post was published at Harvey Organ Blog on April 7, 2017.

IMF Issue Working Paper on Eliminating Cash

The International Monetary Fund (IMF) in Washington has published a Working Paper on ‘de-cashing’ the economies and the implications. This paper clearly demonstrates that this is the direction we are headed into. It provides advice to governments who want to join in the latest thing – abolishing cash. IMF-Analyst Alexei Kireyev recommends in his conclusions:

This post was published at Armstrong Economics on Apr 8, 2017.

Boring Equity Action Masks “Devastating Eurodollar Unwinds” After Dudley Speech

On the surface, and in equities, it was a painfully boring day.
Stocks tumbled overnight after yesterday’s Syrian airstrikes, then as it emerged that the conflict will likely be contained, futures ground higher and not even the worst jobs report in nearly a year managed to put a damper on today’s rebound, as the narrative shifted to the drop in the unemployment rate, which dropped to 4.5% on the back of a 400K increase in employment according to the BLS’ Household Survey.
A sharp bounce in the dollar/USDJPY/treasury yield complex during Bill Dudley’s speech around noon tried – and failed – to inspire a levitation in the S&P …

This post was published at Zero Hedge on Apr 7, 2017.

Ted Butler Quote of the Day 04-08-17

Friday’s COT report will help clarify where we stand in the developing COMEX positioning drama. As of yesterday’s cutoff, total open interest rose for the reporting week in COMEX silver by more than 17,000 contracts and fell by nearly 22,000 contracts in COMEX gold futures. I still believe the big changes in total open interest in gold were spread related and that also may be the case in silver to a certain, but different degree. Prices were steady to slightly higher in silver, compared to gold, in the reporting week just ended, but not excessively so, although silver prices remained and closed above the 200-day moving average barrier, but have yet to do so in gold. Thinking like a technical fund (if possible), I imagine I would have been a buyer in the past reporting week.

While I can’t put firm numbers on it, the focus will be on what the managed money longs did in each market. The possibility of a price take down still exists, due to the managed money longs that have been recently added getting flushed out (assuming any newly added managed money longs are of the technical fund variety). However, considering the lopsided nature of the risk/reward equation in silver presently, I am still convinced that, at least for me, it is not worth the chance of sidestepping a temporary market detour lower and risk not being fully aboard a long term upward journey that could begin at any time.

A small excerpt from Ted Butler’s subscription letter on 05 April 2017.

  More precious metals news & information available at
Ed Steer’s Gold & Silver Digest.

US Credit Card Debt Rises Above $1 Trillion For The First Time In A Decade

Unlike last month’s unexpectedly week consumer credit report, which saw a plunge in revolving, or credit card, debt moments ago the Fed, in its latest G.19 release, announced that there were few surprises in the February report: Total revolving credit rose by $2.9 billion, undoing last month’s $2.6 billion drop – the biggest since 2012 – while non-revolving credit increased by $12.3 billion, for a total increase in February consumer credit of $15.2 billion, roughly in line with the $15 billion expected.

This post was published at Zero Hedge on Apr 7, 2017.

Iron Ore Prices Plunge Into Bear Market Amid Record China Glut

Just a week ago we warned of China’s record glut of Iron Ore (enough to build 13,000 Eiffel Towers), and following warnings from Barclays and RBA of a likely pullback, futures in Dalian sank to lowest since November as steel sags.
Bloomberg reports that iron ore is getting beaten back down in a told-you-so rout after a procession of analysts, Australia’s central bank and miners themselves delivered warnings that gains were unsustainable, with the latest blow landed by the world’s top shipper saying prices are set to revisit the $50s.

This post was published at Zero Hedge on Apr 7, 2017.

Atlanta Fed Drops Q1 GDP Forecast To Just 0.6%, Lowest In Three Years

After today’s job report of only 98,000 jobs added in March, I was waiting to see if the Atlanta Fed would drop their Q1 GDP forecast from 1.2%.
Indeed they did! But it wasn’t just a surprisingly lame jobs report.
The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2017 is 0.6 percent on April 7, down from 1.2 percent on April 4. The forecast for first-quarter real GDP growth fell 0.4 percentage points after the light vehicle sales release from the U. S. Bureau of Economic Analysis and the ISM Non-Manufacturing Report On Business from the Institute for Supply Management on Wednesday and 0.2 percentage points after the employment release from the U. S. Bureau of Labor Statistics and the wholesale trade release from the U. S. Census Bureau this morning. Since April 4, the forecasts for first-quarter real consumer spending growth and real nonresidential equipment investment growth have fallen from 1.2 percent and 9.7 percent to 0.6 percent and 5.6 percent, respectively.

This post was published at Wall Street Examiner by Anthony Sanders ‘ April 7, 2017.

Perth Mint’s monthly gold sales dip in March, silver sales rise

The Perth Mint’s sales of gold products fell in March to the lowest since August last year, while silver sales increased, the mint said in a blog post on its website on Thursday.
Sales of gold coins and minted bars slipped about 12 percent in March to 22,232 ounces from 25,257 ounces a month earlier, the mint said on its website. Silver sales climbed about 43 percent in March to 716,283 ounces from 502,353 ounces in February, according to the blog post.
The Perth Mint runs the only gold refinery in Australia, the world’s No. 2 gold producer after China. Gold prices edged up on Thursday on a weaker dollar and as appetite for risky assets such as equities waned ahead of a potentially tense meeting between U.S. President Donald Trump and his Chinese counterpart Xi Jinping.

This post was published at India Times

Saudi Arabia: An Oil Giant Is Still Burning Through Its Cash Pile

It was meant to be a given that a rebound in oil prices would slow the depletion of Saudi Arabia’s foreign-currency reserves. That hasn’t happened yet, and economists are wondering why.
Net foreign assets held by the Saudi central bank have fallen by an average $6.5 billion a month over the past year, and now stand at just over $500 billion – having peaked at $737 billion in 2014 when oil prices were above $100 a barrel. The drop in January and February was $11.8 billion and $9.8 billion respectively, the latest data show.
‘The burn rate is a cause of concern because it shows no sign of abating,’ said Mohamed Abu Basha, a Cairo-based economist at EFG-Hermes. ‘It can’t be explained by government spending alone. They haven’t sold domestic bonds, so that could be a reason, but on the other hand, they have had more revenue because of the increase in oil prices.’
As Saudi Arabia’s long-term plan to wean the kingdom off oil takes a toll on growth, officials are trying to strike a balance between stimulating the economy and keeping enough savings to prevent speculation about a currency devaluation. While the government has said that it will finance its budget deficit by drawing on reserves as well as by issuing debt, it doesn’t explain monthly movements in net foreign assets or predict the pace of decline.
Policymakers are also trying to avoid financing the deficit with domestic bonds due to last year’s banking liquidity squeeze, according to Monica Malik, chief economist at Abu Dhabi Commercial Bank.

This post was published at bloomberg