30/8/2014: Both Unemployment and Participation Rates Fell in Q2 2014

In the previous post, I covered duration of unemployment across age cohorts data for Q2 2014. This time around, let’s take a look at labour force participation rates and unemployment rates. As noted earlier, there are some good news in the latest QNHS data. And this theme continues with unemployment rate statistics. Official unemployment rate has declined from 12% in Q1 2014 to 11.5% in Q2 2014 (seasonally-adjusted basis). Thus, Q/Q unemployment rate dropped by a substantial 0.5 percentage points, which is faster than the 0.2%points decline in Q1 2014 compared to Q4 2013. It is worth noting that in Q2 2013, Q/Q decline in seasonally-adjusted unemployment rate was shallower 0.1 percentage points. Overall, over H1 2014, unemployment rate declined by 0.7 percentage points compared to the end of 2013. Over the same period of 2013, decline was 0.6 percentage points. Without seasonal adjustment, things are slightly different. Y/Y Q2 2014 unemployment rate is down 2.1 percentage points and in Q1 2014 the same decline was 1.7 percentage points. These rates are faster than the rates of y/y declines in unemployment for the same period of 2013. All of which is good news as illustrated by the chart below:

This post was published at True Economics on Saturday, August 30, 2014.

And Why Is That?

Gee, Fox News, the obvious is worth a report?
Fifty years after the ‘war on poverty’ was first waged, there are signs a new offensive is needed.
Newly released Census data reveals nearly 110 million Americans – more than one-third of the country – are receiving government assistance of some kind.
The number counts people receiving what are known as ‘means-tested’ federal benefits, or subsidies based on income. This includes welfare programs ranging from food stamps to subsidized housing to the program most commonly referred to as ‘welfare,’ Temporary Assistance for Needy Families.
A new offensive is needed eh?
How about actually launching one instead of pretending?
I’m quite serious.
See, I count some $2,239 billion as spent welfare and other social spending in the last year’s Federal budget (this year is not quite done yet, but I suspect it will be higher by a hundred billion or two.) CATO says that in many states sitting on one’s ass pays as well as a $20/hour job. The left says that if we raised the minimum wage then people would work instead of sit on their ass (really?)
As millions still rely on government assistance programs, technology and automation have eliminated jobs many Americans used to do with a high school diploma. The challenge for policymakers is helping the economy adjust.

This post was published at Market-Ticker on 2014-08-30.

Recovery? 3 “Uncomfortable Truth” Charts

Presented with little comment aside to suggest one scratch beneath the thinning veneer of record nominal stock prices every once in a while to take the temperature of the ugly reality that no one is talking about…
1) Stocks are at record highs because global growth is ‘improving’…

FACT: There is a record divergence between the ‘market’ and plunging growth expectations

This post was published at Zero Hedge on 08/30/2014.

Bank of Japan Refrains From Deepening Stimulus

Every year, top global financial policymakers gather in Jackson Hole, Wyoming for a summit. Bank of Japan (BOJ) Governor Haruhiko Kuroda was there, and delivered a disappointing message to those who were waiting for a ramp-up of the bank’s money printing. Although he allowed for future re-evaluation, he said he believed that Japan was on target to reach its 2 percent inflation goal by 2015, and finally break out of its long ‘deflation trap.’
Kuroda Disappoints At Jackson Hole

Some outside analysts don’t agree. By its own admission, the BOJ sees inflation tracking down to 1 percent by December of this year. Morgan Stanley researchers point out that to reach the inflation target, Japan’s core CPI would have to hit 2 percent by April 2015 and stay there through year-end.
[See Related: Detlev Schlichter – Euthanasia of the Japanese Rentier] Reporters at Jackson Hole peppered Mr. Kuroda with questions about possible additional efforts beyond the BOJ’s bond purchases – such as price-level targeting (which would involve a deliberate inflation overshoot to compensate for previous inflation that was below target) or nominal GDP targeting (which would push easing until a nominal GDP target was reached). He demurred, saying that the current program was enough and would stay in place, although he wouldn’t rule anything out for the future.
Abenomics Hits a Wall Japan has never recovered from its early 1990s economic and financial market bust, languishing in sub-par growth for over two decades. In 2012, Japanese Prime Minister Shinzo Abe took office promising ‘three arrows’ to hit the target of economic revival.

This post was published at FinancialSense on 08/28/2014.

A Rare Glimpse Inside The NY Fed’s Favorite ‘Quote-Stuffing’ Hedge Fund: Citadel

As regular readers are well aware, when it comes to “more than arms length” equity market intervention in New Normal markets, the New York Fed’s preferred “intermediary” of choice to, how should one say, boost investor sentiment aka “protect from a plunge“, is none other than Chicago HFT powerhouse, Citadel. Recently we discovered that the true culprit behind the May 2010 Flash Crash was not Waddell & Reed, but quote stuffing. The most recent revelation for Citadel is that quote stuffing is not just some byproduct of some “innocuous” HFT strategy, as none other than the Nasdaq has now stated on the record, that the most leveraged hedge fund (at 9x regulatory to net assets), and the third largest after Bridgewater and Millennium, used quote stuffing as a “trading strategy.” The following 2 clips give a sense of what goes on from day to day inside the firm that trades more volume than the NYSE every day…
HFT in action…


This post was published at Zero Hedge on 08/30/2014.

Consumer Sentiment Bounces Back for August

The Final University of Michigan Consumer Sentiment for August came in at 82.5, a bounce back from the 79.2 preliminary reading and its highest level since the April final. Today’s number topped the Investing.com forecast of 80.1.
See the chart below for a long-term perspective on this widely watched indicator. I’ve highlighted recessions and included real GDP to help evaluate the correlation between the Michigan Consumer Sentiment Index and the broader economy.

To put today’s report into the larger historical context since its beginning in 1978, consumer sentiment is now 3 percent below the average reading (arithmetic mean) and 2 percent below the geometric mean. The current index level is at the 40th percentile of the 440 monthly data points in this series.
The Michigan average since its inception is 85.1. During non-recessionary years the average is 87.4. The average during the five recessions is 69.3. So the latest sentiment number puts us 13.2 points above the average recession mindset and 4.9 points below the non-recession average.

This post was published at FinancialSense on 08/29/2014.

Taupe: It’s Not Just For The Oval Office Anymore

Submitted by Mark St. Cyr,
Whether it’s politics or business one thing remains the same: if you are designated or perceived as the leader, everything you say or do is viewed with an eye searching for obvious and hidden meanings. While at the same time the higher the level or more commanding the position, that search goes from the naked eye to one looking via an electron microscope.
Words matter, the way they are said can matter even more, yet what is just as important is the posture, and yes – that can include even your choice of attire.
Leadership can be very symbolic in its application for consumption. We hear all the time the running line ‘they wrap themselves in the flag’ and so forth to describe politicians and others. So is it any wonder that when the leader of the free world takes to the podium during what by all credible standards is a world on the edge of unrest shows up wearing not the traditional dark suit and red or blue tie but – light tan, people from all walks say, ‘What the ____ is up with that?’
The reaction was near instantaneous across social media channels. The knee jerk over whelming first responses were (to be kind) a projection of weakness. The contrast between the surrounding stage set used in the press room and the tan suit was glaring. So much and so out-of-place did it seem that one couldn’t help to think of anything else but, why? Was this just some fashion faux pas? Personally I don’t think so.
If people will remember one of the first highly visible changes of note made for all the world to take notice, was the complete gelding of the oval office and all its symbolic tones of color with a complete overhaul to neutral. i.e., Taupe.
It can’t be underestimated just how much of a message is being intentionally sent when one of the first acts is to take what is considered the most powerful and important office in the world, and completely change or strip away any essence of it and replace it with muted tones of taupe.

This post was published at Zero Hedge on 08/30/2014.

Precious Metals Continue To Show Weakness With One Exception

U. S. markets and leading stocks continue to show strong and positive action, mostly early in the week. It really has been a great August, and that is rare, but it just shows that you must always be paying attention to things and can’t rely wholly on historical or past norms.
Does this mean the usually strong fall period will be weak, or does it mean it will be extra strong? Only time will tell and I will be keenly watching for the answers.
As for the precious metals, gold and silver tried to move higher a couple times this past week only to reverse and resume the dominant trend, which remains lower.

This post was published at Gold-Eagle on August 30, 2014.

Keiser Report: Fast Food Tax Evasion (E647)

The following video was published by RT on Aug 30, 2014
In this episode of the Keiser Report, Max Keiser and Stacy Herbert discuss Burger King, yet another company fleeing America for yet another ‘free’ healthcare nation, Canada. Meanwhile, back in America naked incidents are on the rise and, in Europe, suicide tourism rises four-fold. In the second half, Max interviews Trace Mayer about bitcoin, central banking and geopolitics.

The Eurozone Is a Growing Problem for U.S. Economy

The 18-nation euro-zone is the largest economy in the world, eclipsing that of the U. S. The euro-zone is the largest trading partner of the U. S. (the largest importer of U. S. goods, the largest exporter of goods to the U. S.). The euro-zone is in an economic crisis. Its recovery from the 2008 global financial collapse has been as anemic as that of the U. S., in fact more so. The euro-zone already slid back into recession once. And its economy was barely positive in the first quarter of this year, growing only 0.2%. It slowed further to 0.0% quarter-over-quarter in the second quarter.
Worse, Germany, the euro-zone’s largest and previously strongest economy, unexpectedly saw its economy contract to negative -0.2% in the second quarter. France, the second largest euro-zone economy, saw its growth slow to 0.0% for the quarter. Italy, Europe’s fourth largest economy, slid back into recession, its GDP at negative 0.8% in the second quarter, its second straight quarterly contraction.
Reports this week indicate the problems are worsening in the third quarter.
Retail sales in Germany plunged 1.4% in July, after declining 0.4% in the second quarter.
Germany’s Ifo business confidence index fell in August for the fourth straight month, to its lowest level since July 2013. Market research group GfK reported its German consumer expectations index ‘collapsed’ in August to its most pessimistic level since 1980. Perhaps for good reason, since the overall euro-zone’s unemployment rate remained in double-digits at 11.5% in July, just 0.5% lower than its peak of 12% in 2013.

This post was published at FinancialSense on 08/29/2014.

Enter in the fall housing market: Shopping in Santa Monica with a $900,000 budget. Expectations running high before the fall season hits.

You can smell the end of the summer real estate season as some drunk sellers are pulling properties off the market since they are unable to obtain their ridiculous prices. Funny how expectations work. Some sellers drink the Kool-Aid and suddenly think their home is worth some optimistic appraisal or what a manic market will pay. You even see this in the real estate ads where sellers try to throw in their best curveball on what otherwise is a glorified closet. But hey, prices will only go up so buy with all the confidence in the world and never mind the carrying costs, opportunity costs, or other factors that make buying a more intricate process. The fall housing market always slows down. Now, with foreclosures making a smaller portion of sales, we should expect to see a bit more seasonal changes. However, I just love seeing some of the old neighborhoods where old properties are being sold as if they were newly built quality homes. We are seeing this in places like Pasadena for example. Let us go shopping in Santa Monica and see what we can get with $900,000.
The Republic of Santa Monica and L. A. County
L. A. County is the most populated county in the state of California. More than 10,000,000 people call this area home. The majority of households rent. Yes, that other four letter word. And this trend has only grown since the housing bubble popped. If you want to buy in today’s market, expect to find tight inventory and sellers high on believing that real estate is somehow some golden ticket to prosperity. Even with inventory rising and prices stalling out, people are still on the real estate meth of 2013. The 1,000,000 foreclosures since the crisis hit in the state seem to now be a distant memory. Flippers are out in fashion and cable producers are trying each and every way to figure out how they can repackage the idea of selling a piece of shelter. These aren’t people creating ground breaking companies, scientific breakthroughs, or reshaping our economy. No, basically handing over a home which is essentially shelter to another person and skimming cash off in the process. That is probably why the allure remains for real estate. Everyone can understand it. Everyone can understand the process of prices going up. It doesn’t take a genius to understand a house has a roof, bathrooms, rooms, kitchen, and living room. With a few cable shows under your belt, you suddenly are an expert on recessed lighting, hardwood floors, granite countertops, and stainless steel appliances. You learn about staging, the plastic surgery of home sales. In other words, real estate is the bread and circus for the public. Good luck trying to get the public to understand derivatives, options, high frequency trading, or how the bond market works. For a public that doesn’t know Ben Bernanke from Ben Hur, it is understandable how people can get swept up in the winds of mania. Real estate is tangible and not complicated. Yet to make it seem like a no brainer (which it was for a couple of generations) is now out the window especially in high priced markets.
L. A. County continues to grow but at a much slower pace:

This post was published at Doctor Housing Bubble on August 30, 2014.

It’s Settled: Central Banks Trade S&P500 Futures

Based on the unprecedented collapse in trading volumes of cash products over the past 6 years, one thing has become clear: retail, and increasingly, institutional investors and traders are gone, probably for ever and certainly until the Fed’s market-distorting central planning ends. However, one entity appears to have taken the place of conventional equity traders: central banks.
Courtesy of an observation by Nanex’s Eric Hunsader, we now know, with certainty and beyond merely speculation by tinfoil fringe blogs, that central banks around the world trade (and by “trade” we meanbuy) S&P 500 futures such as the E-mini, in both futures and option form, as well as full size, and micro versions, in addition to the well-known central bank trading in Interest Rates, TSY and FX products.
In fact, central banks are such active traders, that the CME Globex has its own “Central Bank Incentive Program”, designed to “incentivize” central banks to provide market liquidity, i.e., limit orders, by paying them (!) tiny rebates on every trade. Because central banks can’t just print whatever money they need, apparently they need the CME to pay them to trade.

This post was published at Zero Hedge on 08/30/2014.

Is There Capitalism After Cronyism?

The more the Status Quo pursues the same old Keynesian Cargo Cult script of central planning and free money for financiers, the more self-liquidating the system becomes.
Judging by the mainstream media, the most pressing problems facing capitalism are:
2) the failure of laissez-faire markets to regulate their excesses, a common critique encapsulated by Paul Craig Roberts’ recent book The Failure of Laissez Faire Capitalism.
These critiques (and many similar diagnoses) reach a widely shared conclusion: capitalism must be reformed to save it from itself.
The proposed reforms align with each analyst’s basic ideological bent. Piketty’s solution to rising wealth inequality is the ultimate in statist centralization: a global wealth tax.
Roberts and others recommend reforming capitalism to embody social purpose and recognize environmental limits. Exactly how this economic reformation should be implemented is a question that sparks debates across the ideological spectrum, but the idea that capitalism can be reformed is generally accepted by left, right and libertarian alike.
Socio-economist Immanuel Wallerstein asks a larger question: can the current iteration of global capitalism be reformed, or is it poised to be replaced by some other arrangement?

This post was published at Charles Hugh Smith on SATURDAY, AUGUST 30, 2014.

29/8/2014: Stability… of Negative Growth: Euro Area in Historical Perspective

Washington Post has a nifty chart plotting the demise of Europe…That’s not just ‘periphery’ up there in black. It’s the entire euro area, with the stellar performer Germany, solid Austria and exports-rich Belgium and the Netherlands, competitiveness-leading world superstar Finland, the best-educated country in the solar system Ireland, and on… and on…

This post was published at True Economics on Friday, August 29, 2014.

Precious Metals Markets: China vs US

In anticipation to the launch of the Shanghai Gold Exchange international board, that presumably will start shifting gold pricing power from West to East, in this post we’ll examine the historical trading volumes of the Shanghai Gold Exchange (SGE), the Shanghai Futures Exchange (SHFE) and the COMEX. By charting the weekly volumes we get a clear view of the size of these exchanges. (In the London Bullion Market most likely the largest volumes are traded, but because this is an OTC market that doesn’t disclose much data we can’t use it in our West – East comparison.)
From now on I will publish the trading data of all three exchanges after every trading week to closely monitor if the gold market’s center of gravity is moving to Asia.
The largest precious metals futures exchange in the world is the COMEX located in the US. This exchange started trading silver futures in June 1963 and gold futures in December 1974. Futures are a derivative of an underlying asset, in this case precious metals, as they are traded on margin. Through futures traders can take on positions in precious metals but only deposit a fraction, the margin, of the total cash value in advance. This provides leverage; price movement is magnified relative to the margin on deposit. Futures can be used, for example, to hedge or speculate. Historically the COMEX has been the dominant futures exchange in the world and plays a significant role in the pricing of precious metals.

This post was published at InGoldWeTrust on August 30, 2014.

Rob Kirby: Capital Markets Hallucinating Off Low Interest Rates

The following video was published by WallStForMainSt on Aug 28, 2014
Wall St for Main St interviewed Rob Kirby from Kirbyanalytics.com. In this podcast, we touched on the subject of repos and reverse repos and the effect it has on the capital market. Also, we went in depth on the Federal Reserve and what is their purpose in the market and economy.
Then, we talked about leveraged buy outs and what impact Burger King acquisition of Tim Hortons will have for future M&A. Finally, we talked about the current state of the gold and silver market.

CFR Recommends Policy Shift that is Very Bullish for Gold

The ‘Foreign Affaird’ publication of the influential and policy-setting Council of Foreign Relations made an announcement that could have huge ramifications for monetary policy going forward. In an article titled ‘Print Less but Transfer More: Why Central Banks Should Give Money Directly to the People,’ the authors argue that the current quantitative easing and debt monetization is not generating broad-based stimulus to the economy.
To some extent, low inflation reflects intense competition in an increasingly globalized economy. But it also occurs when people and businesses are too hesitant to spend their money, which keeps unemployment high and wage growth low. In the eurozone, inflation has recently dropped perilously close to zero. And some countries, such as Portugal and Spain, may already be experiencing deflation. At best, the current policies are not working; at worst, they will lead to further instability and prolonged stagnation.
Governments must do better. Rather than trying to spur private-sector spending through asset purchases or interest-rate changes, central banks, such as the Fed, should hand consumers cash directly. In practice, this policy could take the form of giving central banks the ability to hand their countries’ tax-paying households a certain amount of money. The government could distribute cash equally to all households or, even better, aim for the bottom 80 percent of households in terms of income. Targeting those who earn the least would have two primary benefits. For one thing, lower-income households are more prone to consume, so they would provide a greater boost to spending. For another, the policy would offset rising income inequality.
This is a huge announcement because it would lead to a major increase in the velocity of money. While a tremendous amount of money was created following the financing crisis, it has yet to result in significant inflation as a good amount of it remains parked in excess reserves and in corporate accounts. This has brought the velocity of money to the lowest levels in decades.

This post was published at GoldStockBull on August 27th, 2014.

Gold And Silver – Elite’s NWO Losing Traction. Expect [More] War

The lies and deceit coming from Western governments continue unabated, whether it is [Pollyanna] economic news that is non-reflective of existing reality or more false flag ‘war’ news that is also non-reflective of existing reality. Whether it be Obama, Cameron, or Merkel, supposed leaders of their countries but totally failing to provide leadership, each can best be described as pimps for the banking elites.
No one, not even [non-existing] Weapons-of-Mass-Destruction Bush Jr, has been more hell-bent on starting wars throughout the world than Nobel Peace Prize winner, [cough, cough], Obama. Cameron has nothing positive to contribute, coming from a country that produces nothing, just running on spent debt fumes. He just announced his idea of more sanctions against Russia by kicking them out of the SWIFT program, the elite banker’s Society for Worldwide Interbank Financial Telecommunication.
How have all of those other sanctions been working, David? There simply is no right way for doing stupid things, but he and Obama continue to try to disprove stupidity with the same proven results.
Merkel, the one who has the best opportunity to defy the elites and take Germany forward into the new world’s developing economic order, primarily China and Russia, leaders of BRICS and its fast-growing associated countries, [new members not currently allowed] Instead, Merkel keeps Germany rooted as the step-child satellite country of the federal United States.

This post was published at Edge Trader Plus on August 30, 2014.

PM End of Week Market Commentary – 8/29/2014

On Friday gold was down -2.00 to 1288.00 on moderately light volume, while silver was down -0.02 to 19.51 on light volume. Silver had yet another failed rally although this one was more modest than the last, while gold generally just moved lower within a trading range. For whatever reason, traders did not look particularly eager to pick up gold or silver futures contracts before the holiday weekend.
Over the past week, gold has managed to move higher, but without much enthusiasm. Still the price is now back above the 200 MA, which is certainly better than being below it.

This post was published at PeakProsperity on Sat, Aug 30, 2014 –.