Two Charts that Show Why So Many Americans Are So Angry About the Economy

Last week we got the ‘good news’ that wages are rising. It has been a recurring story over the past several months. The headlines said that hourly wages rose by 0.3% in July on a seasonally adjusted basis. Annualized that works out to just under 3.7% on a compound basis. However, as usual, a bit of perspective is helpful.
Over the past 12 months, the average hourly wage of production and non-supervisory workers, which is most people, rose by 2.7%. Sounds decent but most of that gain came last year. Over the last 6 months, wages rose just 0.2%.
Likewise, the argument that wage growth has recently begun to outpace inflation does not hold water. Compare wage gains to CPI. Over the last year CPI rose by just 1%, but only because CPI was weak in the second half of 2015. Over the past 6 months CPI has risen by 1.9% while average earnings rose by 0.2% and we know that that inflation is understated by perhaps a full percentage point.

This post was published at Wall Street Examiner by Lee Adler ‘ August 8, 2016.

In First Autopilot Crash In China, Tesla Model S Driver Crashes In Beijing With Autopilot Engaged

Just two months after Elon Musk was engaged in major damage control over a scandal involving a Tesla Model S which crashed while in self-driving mode, killing its driver, China Daily reports that a Tesla Model S crashed in Beijing on August 2, while the car had its autopilot on and the driver had both hands off the steering wheel.


This post was published at Zero Hedge on Aug 8, 2016.

US Treasury Yields Go Negative Everywhere But Here

Negative interest rates are an existential threat for insurance companies, pension funds and other financial entities that need positive investment returns to survive.
As rates on government bonds have gone negative in Europe and Japan, the above companies have been big buyers of US Treasury bonds, which still (for some reason) continue to offer positive yields.
But according to a Bloomberg analysis published today, Treasuries’ positive yield has recently evaporated when the cost of hedging currency fluctuations is included. Here’s an excerpt:
Bond Market’s Big Illusion Revealed as U. S. Yields Turn Negative
For Kaoru Sekiai, getting steady returns for his pension clients in Japan used to be simple: buy U. S. Treasuries. Compared with his low-risk options at home, like Japanese government bonds, Treasuries have long offered the highest yields around. And that’s been the case even after accounting for the cost to hedge against the dollar’s ups and downs – a common practice for institutions that invest internationally.
It’s been a ‘no-brainer since forever,’ said Sekiai, a money manager at Tokyo-based DIAM Co., which oversees about $166 billion.
That truism is now a thing of the past. Last month, yields on U. S. 10-year notes turned negative for Japanese buyers who pay to eliminate currency fluctuations from their returns, something that hasn’t happened since the financial crisis. It’s even worse for euro-based investors, who are locking in sub-zero returns on Treasuries for the first time in history.

This post was published at DollarCollapse on AUGUST 9, 2016.

Pokemon Go Claims Its First Fatality

We recently posted a light-hearted piece highlighting a Chinese public service announcement on the public dangers of playing Pokemon Go (see: “China Unveils ‘Pokemon Go Danger’ Public Service Announcement“). Turns out we didn’t take the warning seriously enough. According to reports from San Francisco the popular game has claimed its first fatality. College student Calvin Riley was shot in the back while playing the game at around 10pm in a park near San Francisco’s Fisherman’s Wharf. According to the New York Daily News:

This post was published at Zero Hedge on Aug 8, 2016.

Why A Special Circle Of Student Loan Hell Is Reserved For College Dropouts

Just in case it wasn’t already bad enough to be a recent Millennial college graduate in the US with tens of thousands in student debt (recall that of those lucky enough to have a job after graduation, roughly half live paycheck to paycheck; as for those without a job, well… our condolences), it turns out there is a special circle in student loan hell reserved for those who never manage to graduate. Because as Bloomberg reports, when it comes to collecting on student loans, the U. S. Department of Education treats college dropouts the same as Ivy League graduates: They just want the money back.
But that’s only part of the bad news. It will come as no surprise that when it comes to wage potential, dropouts are in a category of their own. The dead last category. Unlike peers who earn degrees, dropouts generally don’t command higher wages after leaving school, making it harder for them to repay their student debt. The typical college dropout experienced a steep fall in wealth from 2010 to 2013, figures from the Federal Reserve in Washington show, and an 11 percent drop in income – the sharpest decline among any group in America.

This post was published at Zero Hedge on Aug 8, 2016.

Will the Bubble Pop Even if the Fed Never Raises Rates?

There is no ready-made answer in Austrian business cycle theory (ABCT) to the multi-trillion dollar question now looming over the global economy and markets. Is the present virulent asset price inflation disease likely to enter any time soon its final phase of bust and recession? Will this happen even though the Federal Reserve has flip-flopped on even token steps toward policy normalization and leading foreign central banks (i.e., the Bank of Japan, ECB, and Bank of England) to pursue experiments with negative interest rates and novel forms of mega-balance sheet expansion?
Rate Hikes Usually Come Before Crises
In the small sample size of modern business cycles and especially those featuring severe asset price inflation, there is no unambiguous example of transition into the crash and recession phase without a prior significant tightening of monetary conditions. The closest is the 1937 crash and subsequent Roosevelt recession. But the Fed’s attempt to normalize monetary conditions via three hikes in reserve requirements through late 1936 and early 1937 – barely three years on from when the monetary base started to explode under the influence of huge gold inflows from Europe – blurs any lessons which might be drawn.
By contrast, the Fed is now past its sixth anniversary of launching massive monetary base expansion and even wilder monetary experimentation has been occurring abroad. The Yellen Fed has flip-flopped in its program of ‘rate lift off’ on any sign that the S&P 500 might be seriously retreating from present highs. Implicitly, today’s monetary experimenters appear to assume that they can at will exercise a series of ‘Greenspan (or Yellen) puts’ to prevent any serious pull back in market prices until an economic miracle emerges which will justify in fundamental terms presently inflated asset prices.
Many investors around the globe – suffering from interest income famine – are inclined to give the Federal Reserve the benefit of the doubt. Asset price inflation is characterized by the transitory flourishing of speculative stories unchecked by normal rational scepticism which has been numbed by yield desperation. The ‘success’ of The Grand Monetary Experiment has become the biggest speculative story of all.

This post was published at Ludwig von Mises Institute on Aug. 8, 2016.

US Government Recovery Statistics Are No Longer Matching The Collapsing Economy – Episode 1043a

The following video was published by X22Report on Aug 8, 2016
As the Greek economy collapses exports decline dramatically. Retail slows in July. The job numbers look like they were created by a computer algorithm. Many indicators that the government is producing does not match the reality of the economic environment. A new report is out that shows the next generation will be poorer than their parents. Fannie and Freddie just failed the stress test, if there is an economic crisis they will need a bailout. The people in Venezuela are so desperate they are stocking up on diapers.

Trump Vows To “Jump Start” Economy With “Tax Revolution”; Is Interrupted At Least 14 Times

Donald Trump says his economic plan represents "biggest tax revolution" since Reagan era — ABC News (@ABC) August 8, 2016

In his first comprehensive speech laying out his vision for the US economy, Donald Trump presented a tax-slashing agenda which would seek to cut regulations, while blaming Hillary Clinton for America’s economic woes in a highly touted address Monday at the Detroit Economic Club. ‘Americanism, not globalism, will be our new credo,’ Trump declared, saying his plan represents the “biggest tax revolution” since the Reagan era. “I want to jump-start America,’ the GOP presidential nominee added in another line that brought both applause and boos from the crowd.

This post was published at Zero Hedge on Aug 8, 2016.

Why Morgan Stanley Still Expects The 10Y Treasury To Drop To 1%, In 4 Charts

While most sellside strategists take the recent rebound in US Treasury yields as the latest confirmation that the global rates rally is on its last legs (even as corporate bond issuance is approaching never before seen records, as the global chase for yields comes to the US), one bank refuses to change its long-term forecast on the 10Y, and still sees the benchmark US security reaching 1.00% in the not too distant future.
This is what Morgan Stanley’s bleak forecast for the future is:

This post was published at Zero Hedge on Aug 8, 2016.

Lending Club Tumbles After CFO Resigns “To Pursue A New Opportunity”

While moments ago troubled peer-2-peer lender Lending Club announced that it missed consensus EPS expectations of -0.02, reporting a steeper than expected decline of -$0.09 on an operating loss of $81 million compared to $4.1 million a year ago, the reason why the stock is tumbling after hours is that just months after its CEO departed the company in a scandal that has thretened to potentially engulf such prominent board members as John Mack, the company just announced that its CFO, Carrie Dolan, is also stepping down in what the market sees as a clear warning sign that the company’s troubles are nowhere near done despite it having successfully concluded a debt securitization in the past week, which to some suggested that LC has finally managed to move on beyond its troubles.
From the statement:

This post was published at Zero Hedge on Aug 8, 2016.

“Zika Zone” Turns Into Ghost-Town As Planes Spray Neurotoxic Insecticide Over Florida Residents

According to shop owners and managers in the town of Wynwood, Flordia – also known as the ‘Zika Zone’ – the area has been noticeably empty of the usual crowds that form to see the local murals and shop at local businesses.
The slow down in pedestrian traffic coincides with the intensified effort by the state of Florida to combat the mosquitos which carry the Zika virus by blanketing the town of Wynwood with insecticide.


This post was published at Zero Hedge on Aug 8, 2016.

City of London Office Values Plunge 6% in One Month

‘Global Economic Uncertainty,’ Brexit meet UK Commercial Property Bubble.
In July, a sharp mechanism started working: one of the hottest commercial real estate markets in the world, and one of the most expensive, began to deflate. And the hiss is deafening.
Capital values for offices in the City of London – the financial district of London – plunged 6.1% in July, from June, real estate firm CBRE reportedtoday. In its monthly index, ‘capital value’ represents the probable prices that would have been paid at the date of valuation.
And it extended beyond London: In the UK office values dropped 4.1% from June. Commercial property values overall – including office, retail, industrial, and other – dropped 3.3%, which chopped year-over-year growth to 0.4%.
‘Capital value growth was always expected to falter at some point during 2016, as global economic uncertainty cast doubt on … strong growth seen in previous years persisting for much longer,’ explained Miles Gibson, Head of Research at CBRE UK. ‘The Brexit vote has now crystallized that expectation, though it is not the only driver of it.’
Commercial rental value remained flat in July, and for the moment, given ‘this heightened uncertainty,’ that’s ‘reassuring,’ Gibson said.

This post was published at Wolf Street by Wolf Richter ‘ August 8, 2016.

Our Economic Malaise Is Impacting Young Workers the Most

In the wake of the 2007-2009 recession, 78 months passed before employment returned to where it had been before the crisis. This was, by far, the longest period needed to recover from job losses in decades. The second-longest period needed to recover jobs occurred after the 2002 recession when about 50 months were needed to recover lost jobs:

This post was published at Ludwig von Mises Institute on Aug. 8, 2016.

OLYMPIC SHOOTER KIM RHODE CRITICIZES CALIFORNIA’S INSANE GUN LAWS

Normally, Olympic athletes try to avoid making political statements. After all, the Olympic games are supposed to be an apolitical event. But Kim Rhode, a skeet shooting champion and three-time gold medal winner, had a lot to say about California’s new gun laws when she was interviewed by The Guardian. ‘I’m definitely becoming more vocal because I see the need.’
‘We just had six laws that were passed in California that will directly affect me. For example, one of them being an ammunition law. I shoot 500 to 1,000 rounds a day, having to do a background check every time I purchase ammo or when I bring ammo out for a competition or a match – those are very, very challenging for me.’ She also criticized laws that would make it impossible for certain firearms to be inherited from deceased family members.

This post was published at The Daily Sheeple on AUGUST 8, 2016.

Gold Daily and Silver Weekly Charts – Marking Time In a Dollar World

It certainly seems as though some entities with real clout have had the markets in a virtual lockdown since Brexit.
Gold and silver continue chopping sideways in a relatively tight range, with exceptions for the usual shenanigans, and stocks have been trading in less than 1% moves daily.
The ‘deliveries’ for gold on the Comex continue, with little action in silver this month, and the usual playing with their food in the precious metals warehouses.
I know, it is a bit boring. I could just make things up, and maybe one of them would be right.
Or I can skip the legendary predictions game and just say that the metals look quiet, but are continuing to coil, perhaps winding up for a move out of these chart formations. It is worth watching.

This post was published at Jesses Crossroads Cafe on 08 AUGUST 2016.

AUGUST 8/GOLD AND SILVER HOLD/GOLD/SILVER EQUITY SHARES PERFORM BETTER/CHINA’S TRADE REPORT AWFUL AND THUS A GOOD GLIMPSE INTO HOW THE GLOBAL ECONOMY IS PERFORMING!/OIL PERFORMS WELL/HUGE WITHDRA…

Gold:1335.40 down $1.00
Silver 19.77 down 1 cent
In the access market 5:15 pm
Gold: 1336.00
Silver: 19.71
For the August gold contract month, we had a good sized 395 notices served upon for 39,500 ounces. The total number of notices filed so far for delivery: 11,276 for 1,127,600 oz or tonnes or 35.073 tonnes
In silver we had 1 notice served upon for 5,000 oz. The total number of notices filed so far this month: 210 for 1,050,000 oz.
Let us have a look at the data for today.
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In silver, the total open interest FELL BY A LARGE 5,722 contracts DOWN to 217,762 YET STILL CLOSE AN ALL TIME NEW ALL TIME RECORD AS THE PRICE OF SILVER FELL BY 63 CENTS WITH FRIDAY’S TRADING. In ounces, the OI is still represented by just over 1 BILLION oz i.e. 1.088 BILLION TO BE EXACT or 155% of annual global silver production (ex Russia &ex China).
In silver we had 1 notice served upon for 5,000 oz
In gold, the total comex gold FELL BY A CONSIDERABLE 13,004 contracts as the price of gold FELL by $22.40 ON FRIDAY. The total gold OI stands at 577,490 contracts.
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With respect to our two criminal funds, the GLD and the SLV:
GLD
we had a huge change to our gold inventory, /a withdrawal of 6.54 tonnes
Total gold inventory rest tonight at: 973.80 tonnes
SLV
we had no changes in the SLV, the SILVER INVENTORY AT THE SLV
rests at 350.815 million oz.
First, here is an outline of what will be discussed tonight:

This post was published at Harvey Organ Blog on August 8, 2016.