Economic Edge

Has It Comes Down To this - Is Greece About To Become The Eurozone's First Vassal State ?

noreply@blogger.com (fredw) — Sat, 28 Jan 2012 01:25:00 +0000

(Reuters) - Germany is pushing for Greece to relinquish control over its budget policy to European institutions as part of discussions over a second rescue package, a European source told Reuters on Friday.

"There are internal discussions within the Euro group and proposals, one of which comes from Germany, on how to constructively treat country aid programs that are continuously off track, whether this can simply be ignored or whether we say that's enough," the source said.

The source added that under the proposals European institutions already operating in Greece should be given "certain decision-making powers" over fiscal policy.

"This could be carried out even more stringently through external expertise," the source said.

The Financial Times said it had obtained a copy of the proposal showing Germany wants a new euro zone "budget commissioner" to have the power to veto budget decisions taken by the Greek government if they are not in line with targets set by international lenders.

"Given the disappointing compliance so far, Greece has to accept shifting budgetary sovereignty to the European level for a certain period of time," the document said.

So , what's involved here ? First , Understand unless Greece submits , there is NO second bailout ! Second , what must Greece submit to - a) they must submit legally to commit absolute priority to future debt ! Now we see why the Troika is seeking further guarantees from the political parties to kiss the Troika rings. Stat revenues first and foremost has to go to debt payment- only then can the poor Greeks spend money elsewhere ! 2) Greece must relinquish control over its national budget to a Troika selected stooge ! Unbelievable stuff. and when , not if the Greeks don't comply ( as judged by the Troika ) , the Budget Commissioner of Greece has the power to tommy hammer Greece silly - think Greece has seen austerity up to this point ? It's just getting started friends. and this is the path that Portugal , Ireland , Spain and Italy will travel in the fullness of time. After the PIIGS , the next group of vassal states will be identified ( you can see which ones have the bullseye on their backs already ) , until the Troika runs the entire show ! One by one - watch the countries drop , falling under the control of the Troika - until the dream of the EU Super State has been achieved !

Sadly , are the Greek political parties in a uproar over the Troika edicts ? Heck , you know lapdog PM L- Pap is part of the Troika plan. But what about the Pasok , New Democracy and LAOS parties - have we heard their loud and angry voices yet ? There has been a symbolic gesture ( the reform Article to deregulate the Pharmacies failed ) , we have seen the typical political blustering , but what will these pols do when it comes down to the rubber hitting the road ? Is saving Greece more important than winning the April 8th election ( assuming it occurs on that date anyway and have the parties considering what they might be presiding over anyway ) , what will these parties agree to for their hotly sought after election to be held on time ) but rest assured , L- Pap is about to crack heads to achieve his masters' mission ! As noted below :

Prime Minister Lucas Papademos is due to meet Saturday with the leaders of the three parties in his coalition government as he attempts to obtain agreement on the demands for reforms made by the European Commission, European Central Bank and International Monetary Fund, commonly known as the troika.
Papademos will attempt to obtain a clear commitment from PASOK’s George Papandreou, New Democracy’s Antonis Samaras and Popular Orthodox Rally (LAOS) chief Giorgos Karatzaferis on the measures requested by the troika.
The failure of some PASOK and ND deputies to fully back a reform bill earlier this week has caused concern that Papademos will have trouble passing the legislation the troika has requested. The 10-page document distributed on Thursday calls for extra cuts worth 2.2 billion euros, 150,000 firings in the civil service as well as a series of structural reforms.
Papademos is due to take part in the European Union leaders’ summit on Monday and wants to travel to Brussels convinced that he has the backing of all three party leaders. There is considerable pressure on Greece to show a clear commitment to the steps being requested so that Athens can receive a second bailout, currently slated to be 130 billion euros.
“Greece has not only to commit itself, Greece has to deliver. Not all of the commitments have been fulfilled. That is one of the critical issues to confidence,” German Finance Minister Wolfgang Schauble said at the annual World Economic Forum in Davos Friday.
However, there were signs Friday that Papademos could face a tough task in extracting support from all three party leaders. Speaking in Parliament, Karatzaferis made it clear that he would not sign any written commitments if they were requested.
Speaking to Reuters Friday, Papademos indicated he was hopeful that talks with the troika could be concluded soon. “The aim is to complete the discussion with the troika by the middle of next week at the latest,” he said, adding that Greece had made some positive steps. “Much more has been achieved than sometimes appears to the public. There is some slippage in the implementation of the fiscal adjustment program and the reforms but internal devaluation is already taking place.”
Papademos added that the 2011 budget deficit would come in at about 9.5 percent of GDP and that there might be modest growth next year.

Things that make you go Hmm....... And a a Break From Greece !

noreply@blogger.com (fredw) — Fri, 27 Jan 2012 12:39:00 +0000

Well , good morning All ! Just another day , waiting like Godot to see what Plan 12 from Outer Space gets put forth for Greece's neverending PSI debt swap and eternal bailout . A few hours to kill before US GDP - have to love a good piece of fiction , right ? Anyway , just as a open post , here are a few things that made me go hmm today ! First up , anyone buying the notion that 35 pounds of cocaine ( street value about $ 450,000 ) allegedly sent by a mexican drug cartel went to a dummy address .... did the wrong dummies screw up the intended transaction ? Nice bribe perhaps , hard to understand why send the dope to the UN rather than some other NYC address - last time I checked , there's much more security in place at the UN than a Brooklyn bodega.

1) Two forged diplomatic pouches containing a total of 35 pounds (16 kilos) of cocaine were delivered last week to the UN headquarters building in New York, according to a UN official speaking on condition of anonymity.

The packages, delivered to the mail room, were singled out Jan. 16 by security staff during a scan, according to the official, who was not authorized to discuss the matter publicly.

No recipient was identified on the shipment, which was sent from Mexico City, and the badly forged UN logo on the parcels was an effort to get the shipment across the border, the official said.

“Two suspicious mail bags were intercepted by the Security and Safety Service at United Nations headquarters in New York,” according to a statement released by the UN spokesman’s office, which declined to describe the contents.

“The United Nations nor anyone located in the United Nations was the intended recipient of this delivery and the bags were not UN bags, diplomatic or other,” according to the statement.

Well , I guess that's the story and the UN is just going to stick with that one - until someon figures how to get the coke from the NYPD ! Second item that made me go hmmm..... I see the UN Security Council is set to debate a draft resolution supporting the Arab League plan for Assad to relinquish power..... Russia still stands firmly against it for now. Say what you like about Syria , this appears to be the Libya movie all over again. Consider the state of Libya today after the power grab there.

Russia says it cannot support the current version of a joint Arab-Western draft U.N. resolution on Syria because it “does not take into account” Moscow's positions on how to end the 10-month-old political crisis.

2) U.N. Security Council to hold closed talks on Syria situation

By the CNN Wire Staff

updated 11:20 PM EST, Thu January 26, 2012

Pillay: Tracking Syrian deaths diffiicult

(CNN) -- The U.N. Security Council will hold closed-door talks Friday afternoon on the situation in Syria, the British and French delegations reported Thursday night on their respective Twitter feeds.

The discussion -- set to start at 3 p.m. -- comes as members weigh a draft U.N. resolution on Syria, obtained by CNN this week, that calls on "all states" to take steps similar to Arab League sanctions imposed in November.

Arab League Secretary-General Nabil el-Araby and Qatar's prime minister, Sheikh Hamad bin Jassim al-Thani, will travel to New York for talks with the United Nations on Monday, an Arab League official said Thursday. They will meet with the Security Council during the visit, said the official, who cannot be named because he is not authorized to speak to the media.

The 22-member Arab League has called on al-Assad's regime to stop violence against civilians, free political detainees, remove tanks and weapons from cities and allow outsiders -- including the international news media -- to travel freely in Syria. On Wednesday, Syria's government agreed to a one-month extension of the league's monitoring mission there.

The third item was a piece on Iran that struck me as just a tad too pat , smacking of hubris.....

3) Citing a number of officials and reports, the New York Times said that estimates that a strike on Iran’s nuclear facilities “would set off a catastrophic series of events” is considered by some to be “partly a bluff,” and that these estimates are accepted at the top levels of the Israeli government.

Israeli officials and academic experts think that Iran’s threats of retaliation to a possible strike against it are a bluff, the New York Times reported on Friday.

The newspaper said it had spoken with eight current and recent top Israeli officials, and that these conversations suggest that “since Israel has been demanding the new sanctions, including an oil embargo and seizure of Iran’s Central Bank assets, it will give the sanctions some months to work; the sanctions are viewed here as probably insufficient; a military attack remains a very real option; and postattack situations are considered less perilous than one in which Iran has nuclear weapons.”

One retired official told the New York Times that based on past scenarios including threats from Saddam Hussein to “burn half of Israel,” and threats from Hezbollah which resulted in limited harm to Israel, “If you put all those retaliations together and add in the terrorism of recent years, we are probably facing some multiple of that.”

Dear Mr. Secretary - You Have Been Invited To A Care To Explain Yourself Soiree !

noreply@blogger.com (fredw) — Fri, 27 Jan 2012 02:56:00 +0000

You Have Been Invited To A Soiree ! Happy Thursday !

noreply@blogger.com (fredw) — Thu, 26 Jan 2012 12:23:00 +0000

http://www.telegraph.co.uk/finance/debt-crisis-live/9040103/Debt-crisis-live.html

It's hard to separate all of the EuroGroup Fin min meetings from the other hastily scheduled EuroGroup meetings , which meetings are Super Summits versus Informal Summits . is today a Merkozy special meeting or teleconference or are we waiting for the while smoke to arise after a Merkel - Sarkozy - Monti meet and greet tomorrow ? Do any of these sessions produce anything other than the assurances more meetings will follow ? So let's just have a Soiree - after all , the host of all hosts ( Mr Rompuy ) , is pulling out all of the stops !

Well , Ben Bernanke had his two day regularly scheduled meet and greet with his Fed Reserve Comrades - and when the smoke cleared , what did we learn ? First , we learned ZIRP will now continue until the end of 2014 ( guess that's when the cows actually come home ) or maybe what the Fed meant we really aren't ever going to end ZIRP - why didn't they just say the end of 2020 ? In that way , we could have seen ZIRP end , Greece see its debt fall to 120 percent of GDP and Santa come down the chimney all in the same timeframe ! Second , we learned the Fed won't set specific long term goals for employment - well , that's good i guess after we saw how central planning worked out with the Soviets with their five year plans. By the way Ben , fixing the Fed Fund rate at artificially low levels for eternity doesn't lead to productive active , jobs or stability - just saying. Finally , the Fed says its not inflation targeting ( I guess some stuff just happens ) with its QE Lite or otherwise programs . On the otherhand , while not targeting inflation , 2 percent inflation is a " goal " Will the Fed shoot and so , will they score ? Just remember that we're only experiencing that 2 percent inflation consistent over the longer run when you fuel up or buy food !

And could we truly have a soiree without the latest Greek PSI rumor de jour ? Today " news " is the private investors will now accept a 3.75 coupon ( down from their no less than 4 percent demand ) all would be joyful - except the participation of the public sector creditor ( including the ECB ) seems to be a pre-condition. So while Germany and the UK Bourses are rip roaring presently , i expect this will be dashed as time goes on. Stay tuned and enjoy the show while it last ! One news item below and your invitation to Rompuy's Soiree set for below .....

09.58 Now I'm confused. After reports that the ESM won't be on the agenda at the upcoming EU summit, here is EC President Herman Van Rompuy's invitation letter to the event, which states that it is:

rompuy

The Edifice is Crumbling ! Greece version on Side A , European antics on Side B !

noreply@blogger.com (fredw) — Thu, 26 Jan 2012 01:40:00 +0000

Things fall apart - generally at the wrong times , perhaps they just fall apart when the supporting pillars no longer can withstand the load placed upon them ! Note the following news from Greece !

Employers and labor unions found some common ground during the first day of wage talks on Wednesday but it appears that neither side is willing to agree to Prime Minister Lucas Papademos’s suggestion that private sector workers’ salaries should be reduced.
Papademos had indicated that lower wages would help Greece become more competitive but union and employer representatives agreed that the minimum wage of 751 euros gross and the two extra monthly salaries that many private sector workers receive each year should not be reduced or scrapped.
“We are on the right track,” said Vassilis Korkidis, the head of the National Confederation of Greek Commerce (ESEE). “The social partners agree that the minimum wage is not to blame for the recession and businesses closing down.”
Yiannis Panagopoulos, the head of Greece’s private sector umbrella union GSEE, criticized the government for suggesting that it might force a law through Parliament that adjusts salaries if it is not happy with the outcome of union and employer talks.
“We cannot have a dialogue under the threat of decrees that are reminiscent of years gone by,” he said, adding that the apparent pressure from the European Union and the International Monetary Fund for wage reforms was not helping either.

http://ekathimerini.com/4dcgi/_w_articles_wsite1_31460_25/01/2012_424198

Apart from the Greek Commerce Organization and the GSEE Union finding common ground against the Troika demands on the minimum , did you see Merkel's sad face at Davos ? The dour warning ( shrilly warning the sky is falling once again ) from Lagarde , the usual Rehn and Barraso bleatings - this time for more guarantees from Greek pols who everyone knows have NO INTENTION of keeping them ! Missed the squawking , take a gander below :

In an interview with six European newspapers, Merkel expressed doubts about the outlook for Greece, which she called “a special case.” “Despite all the efforts that have been made, neither the Greeks themselves nor the international community have yet managed to stabilize the situation,” she said.
Lagarde, in comments to French radio station Europe 1, said the EU must build a fire wall to contain Greece’s crisis. “In case of contagion, one needs to be able to stop it. Greece, for example is in an extremely difficult situation, let’s be realistic,” she said.
In Brussels, European Economic and Monetary Affairs Commissioner Olli Rehn and EC President Jose Manuel Barroso joined the chorus, insisting that more rescue funding would not be released unless the leader of the two main parties in Greece’s coalition -- socialist PASOK and conservative New Democracy -- clearly commit to reforms.
Prime Minister Lucas Papademos is expected to seek such guarantees from party leaders ahead of Monday’s EU summit.

But how do we know the edifice has truly begun to crumble ? Dig the story below - everyone wants to play the role of the sharpie these days. Well , here we go :

Germany's Bild tabloid buys Greek debt

Germany’s Bild newspaper said on Wednesday that it has bought two Greek bonds.
Bild revealed that it invested just over 10,000 euros in Greek debt, buying the bonds at less than 50 percent of their face value.
One note matures on March 20, the other on May 20, 2013.
If Greece succeeds in agreeing on a voluntary haircut with its bondholders, then Bild could be among those who hold out and force Athens to pay the full value of the bonds.
This would mean the German daily could more than double its money.

ekathimerini.com , Wednesday Jan 25, 2012 (19:58)

Morning update - Wednesday Edition !

noreply@blogger.com (fredw) — Wed, 25 Jan 2012 12:41:00 +0000

Well , we have reached January 25th , the Eurogroup Fin min meeting has come and gone with no Greek PSI deal in sight ! What seems to be the case is that the so called private investors have dug the heels into the ground and are attempting to hold the haircut line at 50 percent - which would reflect the deal reached on the Greek haircut from way back in October. In contrast , the IMF and EU have pushed hard for a much deeper haircut - one which would require a haircut much closer to 75 - 80 , once the coupon on the bond and duration is taken into account. With time eroding away , a mexican standoff has been reached - of course until one side blinks. well , pit this in the category of a possible trial balloon , it seems the public sector creditors MAY be prepared to take part in the haircuts after all ! Consider the excerpt from Greece's Kathimerini below :

European economy and finance ministers continued to push for a compromise by private holders of Greek debt on Tuesday during the Ecofin meeting in Brussels, but it appears that the European Central Bank will have a key role in the restructuring process.
“The current state of the negotiations with the private creditors is that we are a bit short of where we want to be,” German Finance Minister Wolfgang Schaeuble told reporters after the Ecofin meeting. “As long as we do not have debt sustainability, there will not be a new program,” he added, effectively playing the Greek default card.
However Kathimerini understands that although no such decision has been made by the ECB yet, Monday’s Eurogroup meeting decided in favor of the lender’s participation in the haircut as the only way for talks on the debt restructuring not to fail.
An indication of this came in a statement by Finance Minister Evangelos Venizelos, who argued that among the topics discussed was the search for an indirect way of increasing the participation of the so-called “official” sector -- the Greek government, the European Union, International Monetary Fund and ECB -- in a way that would not entail an increase in loans to Greece.
Although he stopped short of saying it in clear terms, the only such way is the ECB’s participation in the 50 percent haircut. At the moment, the ECB holds 45-50 billion euros in Greek bonds and its participation in the haircut would signify a benefit of 10-12 billion euros for Greece.

Now the reason I describe this as a trial balloon is based on the report in today's The Telegraph live blog that the ECB remains opposed to losses on its Greek debt holding despite pressures to restructure them - might the position of the ECB just be another example of " comments in the bazaar " , to paraphrase German FM Schauble's apt description of negotiating positions subject to change ? In that regard ( and if one really , really wonders where the pressure might be coming - also consider which nations outside Europe hold the largest quotas at the IMF ) , note Christine Lagarde's comment / warning that if a haircut on private sector debt is not enough ( it isn't of course ) , public holders of debt will have to participate in renegotiation - adding that equilibrium between private and public sector in Greek debt renegotiation is a " concerning question ". Yes Christine , if one is a private investor , why the ECB gets a pass probably is a concerning question !

Meanwhile GDP in the Uk slipped 0.2 percent in Q4 2011 , construction sector output decreased 0.5 percent in Q 4 2011 and output of the production sector fell 1.2 percent in Q 4 2011 - this makes the call from the Bank of Canada governor that Europe is already in recession plausible , especially Europe Ex- Germany. The contraction of the UK economy follows yesterday's announcement that the debt of the UK exceeded one trillion for the first time ! The combination of expanding public debt and a contracting economy makes PM Cameron's position dicey regarding any expansion of doling taxpayer money to the IMF or agreeing to any Financial Transaction Tax which may further hamper a weakening UK economic picture.

The most important question up to this point has been will Germany continue to be the paymaster of the Eurozone ? A more subtle question is has Germany lost its sway of morale persuasion over the Eurozone and greater 27 Country European Union ? In that regard , consider the following commentary , sourced from Der Spiegel , The Guardian and Naked Capital - and wonder whether Germany has lost its perceived leadership role in guiding europe though the present dark days :

With Spain also struggling and Italy under increasing pressure, the continuation of contagion appears to be taking its toll on the politics of Europe with Germany’s ability to control the situation diminishing. As Spiegel reports:

Berlin has been unflinching it its efforts to both increase fiscal discipline in the euro zone and to avoid throwing more money at the European debt crisis. Increasingly, though, Germany’s EU partners are unwilling to play along. Chancellor Merkel now finds herself confronted with powerful opponents
….
A large alliance of the finance ministers, heads of government and central bankers from almost all of the 17 euro-zone member states has been calling for the European Stability Mechanism (ESM) to be enlarged — significantly. The permanent euro backstop fund, which will go into effect this year and will ultimately replace the temporary European Financial Stability Facility (EFSF), needs to encompass fully €1 trillion ($1.3 billion) instead of the planned €500 billion, Italian government officials have told their German counterparts.
At the same time, widespread resistance in Brussels to German plans for a new system of financial regulation within the EU is becoming more assertive. Merkel’s proposal for all EU member states to pass balanced budget initiatives — known in Germany as a “debt brake” — has been torpedoed as has the idea to allow the European Commission to bring countries that stubbornly violate deficit rules before the European Court of Justice.
…
Indeed, the balance of power in Europe has shifted. As long as Italy was ruled by a clown like Silvio Berlusconi, it hardly had any voice in efforts to save the euro. But ever since Monti, a respected financial expert, took over, the front of Merkel opponents is stronger than ever, all the more so because quite a few experts endorse Monti’s position.
….
Sarkozy is now getting the support of prominent economists from around the world. Christine Lagarde, the head of the International Monetary Fund (IWF) is calling for more money for the euro backstop fund as is Mario Draghi, the president of the European CentralBank (ECB), who has been in regular contact with his compatriot Monti. In a Monday appearance in Berlin, Lagarde said “we need a bigger firewall.”

Germany also appears to be losing support from even its strongest allies. Last week the Dutch central banker Klaas Knot gave an interview blaming Germany for the failure of the EFSF in which he stated:

The most important obstacle lies in Germany, not in the Netherlands, we haven’t moved in the right direction and it’s also clear that measures needed are happening too slowly and are too limited in size.

To add to that, Luxembourg’s new foreign minister gave an interview with German media yesterday in which he called the fiscal compact a ‘waste of time and energy’.

Is the failure of austerity-centric policy finally taking its toll on Germany’s ability to steer Europe’s response to the financial crisis? This would certainly explain why Mario Monti seems so sure that his country will be receiving the fiscal and monetary backstops. The outcomes from next week’s EU summit will provide more clues.

http://www.nakedcapitalism.com/2012/01/germany-loses-its-grip.html Germany loses its Grip

http://www.spiegel.de/international/europe/0,1518,811155,00.html Merkel's Fiscal Pact a Waste of Time and Energy

http://www.guardian.co.uk/world/2012/jan/25/angela-merkel-greece-financial-meltdown merkel cast doubt on saving Greece from financial meltdown

Morning Update - Tuesday Edition !

noreply@blogger.com (fredw) — Tue, 24 Jan 2012 13:28:00 +0000

Good morning all ! We 're seeing a risk off start - european Bourse are off notably , in particular CAC and DAX. Shanghai and Hong Kong closed for the Lunar holidays but Australia was open - and was off more than one percent and a quarter percent. US Futures off somewhat , US ten year bond three bps better , oil off mildly and gold off 12. Risk of is the word of the morn.Let's examine some reasons that may be the case today ! first item to consider , from ZH focuses on Greece , bit surprise that imminent deal is not exactly imminent after all

EURO ZONE FINANCE MINISTERS REJECT OFFER OF GREEK PSI REACHED WITH PRIVATE BONDHOLDERS, ASK NEGOTIATORS TO CONSIDER COUPON ON NEW GREEK BONDS BELOW 4 PCT-EURO ZONE SOURCES - RTRS

What should we take from this ? First , let's walk through the sequencing of events. The Greece PSI talks have been dragging on for months - recall the first " deal " was for a 21 percent haircut last July , which then changed to a need for a 50 percent haircut , then 50- 60 percent , now it is clear the private investors will have to accept a haircut closer to 80 percent. Last week , we heard the so called negotiator for the Banks , Charles Dallara say on Friday a deal was imminent , there was the predictable ramp up on the hopium or lies - pick your poison. then on saturday , good ole Charles suddenly flew out of town without a deal being reached ! Of course the spin was talks were continuing , a technical team remained in place , Charles was participating by phone - blah , blah , blah.

Now of course we find out a tentative deal was reached between Greece and Dallara , however , said deal was rejected out of hand by the EuroGroup Financial ministers as insufficient to reduce Greece's debt meaningfully by 2020. So , Dallara's position is that the the offer put forth last weekend ( 4.25 coupon was the offer , compared with EU's demand that any coupon over 3.5 percent would not be accepted ) represented the last opportunity to achieve a " voluntary " deal , the EU veto could set the stage for a Greece default on March 20th as paying the 14.5 billion euro debt maturing on that date simply isn't feasible. Speaking of deadlines , once again they're falling away - the final PSI deal was to be completed by January 30th , now we hear Greece hopes to present its best and final offer to private investors by Febuary 13th ! Any day now expect more rumbling of Collective Action clauses ! By saying an official offer won't be tabled until F

ebuary 13th ( if then ) , there simply won't be time to secure meaningful participation as the process to obtain participation by and between the various private holders of Greek debt is one which takes weeks. Get ready , a default ( most likely a hard one ) is coming.

PetroPlus, Largest European Refiner By Capacity, Files Bankruptcy

Another odd item , considering the timing of the oil embargo just announced , one would think Governments in Europe would have " encouraged " the banks who had cut of the credit lines of PetroPlus ( which just happens to be the largest refiner by capacity in europe ) , to find a way to resolve these credit line issues - after all , didn't the Banks receive about 600 billion in a three year LTRO and isn't lending actually what Banks are supposed to do ? Well , i guess the real name of the game still remains deleveraging and seizing assets if you're a bankster ! Of course , just looking at the European Banks involved ( BNP Paribas , Soc Gen , Natixis , Credit Suisse , Deutsche Bank , Rabobank, ING and Comerzbank - one understand the need to delever and seize assets as said banks are troubled , to be kind ! So at the end of the day , what's good for the banksters is good for europe , unless one works at the refineries closed or wants to buy liters of gasoline in Europe ! Final piece to ponder , check the item below ! Just simply wow !

India to pay gold instead of dollars for Iranian oil. Oil and gold markets stunned
DEBKAfile Exclusive Report January 23, 2012, 5:57 PM (GMT+02:00)

Tags: India China sanctions Iranian oil European Union

Iranian oil for India

India is the first buyer of Iranian oil to agree to pay for its purchases in gold instead of the US dollar, DEBKAfile's intelligence and Iranian sources report exclusively. Those sources expect China to follow suit. India and China take about one million barrels per day, or 40 percent of Iran's total exports of 2.5 million bpd. Both are superpowers in terms of gold assets.

By trading in gold, New Delhi and Beijing enable Tehran to bypass the upcoming freeze on its central bank's assets and the oil embargo which the European Union's foreign ministers agreed to impose Monday, Jan. 23. The EU currently buys around 20 percent of Iran's oil exports.

What else needs to be said other than China , India , Turkey are blowing off the Iran boycott and continuing to advance their national agendas - and India isn't being very shy or diplomatic in rebutting the desires of the US and EU. Russia and China continue to provide support and assistance to Iran , therefore other than crush the economies of Greece and Italy , the EU oil boycott of Iran has already been neutered - watch Japan and south korea also work around the embargo as they will take the position that their economies shouldn't suffer when other countries they compete with globally thumb their nose at the boycott . How long will Israel play the game of waiting and watching Iran proceed with it progress in the nuclear arena ? my fear is not too long. Can you say " Other Events " ? Good morning and God speed !

Morning Update/ Market Thread 1/23

noreply@blogger.com (Nathan A. Martin) — Mon, 23 Jan 2012 13:49:00 +0000

Good Morning,

Equity futures are close to even this morning despite failure once again for a Greece deal (default) to be consummated. The Euro is much higher, dollar lower, bonds rolling over like the Costa Concordia, oil higher, gold & silver higher, and food commodities continuing to strangle those on the margins.

Remember WHO the “private” bondholders are that will take the haircut on any Greek default… they are primarily the large banks who created the money they used to “buy” the bonds from nothing. Any “deal” will only cause a paper loss which will be immediately replenished by more money from nothing deals. A true default would wipe the slate clean, but not here, no, they are talking about only wiping the debt to the 120 laughable percent of GDP level – which means the country is still beyond the macroeconomic debt saturation level. So this will set precedent for the rest of the countries who will then also have to be defaulted down to 120% of their GDP. LOL, it’s all a joke meant only to enslave the majority of the nation, strip it of its assets, and keep the private bankers in power.

No meaningful economic data today, quite a bit later in the week though, with the first whack at deceiving the masses with 4th quarter GDP being the highlight of the week this Friday. The complicit expectation is for a whopping 3.1% growth, up from the current Q3 lie of 1.8%. Whatever the current lie, look for it to be subsequently lowered, and overstated by at least 40% in the real world.

I’ll be working two boat shows over the next two weeks, and therefore this will be my last post until the second week of February. Fred will be posting on occasion and will have an open thread posted each morning where I know you will update one another on the latest data and events, thank you for that.

The shows will be interesting as the Sportsman’s Show in Puyallup is supposed to begin setup today, but as of last night was still without electricity from the ice storms that devastated trees and power lines in that area. I understand it looks like a war zone, there was so much damage.

Speaking of war zones, the EU has just imposed more restrictions on Iran following the U.S. sailing an aircraft carrier up the Straight of Hormuz yesterday. This does sound like baiting to me… just remember that desperate people do desperate things, and those in power will do desperate things to hold onto that power – thus other events are coming.

Regarding what's left of the "market," the VIX closed below the lower Bollinger Band on Friday and it looks like it will close back above it today. If so, that is an entire market sell signal - for what it's worth in this manipulated, money from nothing, end of empire stage:

I hope everyone has a good couple of weeks, if you get the chance come visit me at the Seattle Boat Show, Century Link Field through February 5th.

I, Nathan Martin, no longer consent to the lies.

Looking At Public Debt in Europe , Understanding Why European Pols all Seem Like Jerry Lewis

noreply@blogger.com (fredw) — Mon, 23 Jan 2012 12:05:00 +0000

European public debt at a glance

July 21, 2011 -- Updated 1318 GMT (2118 HKT)

Weekend Open Thread...

noreply@blogger.com (Nathan A. Martin) — Sat, 21 Jan 2012 14:52:00 +0000

Trial Balloon floated ?

noreply@blogger.com (fredw) — Sat, 21 Jan 2012 14:17:00 +0000

http://www.haaretz.com/news/international/uproar-after-jewish-american-newspaper-publisher-suggests-israel-assassinate-barack-obama-1.408429

NEW YORK - The owner and publisher of the Atlanta Jewish Times, Andrew Adler, has suggested that Israeli Prime Minister Binyamin Netanyahu consider ordering a Mossad hit team to assassinate U.S. President Barack Obama so that his successor will defend Israel against Iran.

Adler, who has since apologized for his article, listed three options for Israel to counter Iran’s nuclear weapons in an article published in his newspaper last Friday. The first is to launch a pre-emptive strike against Hamas and Hezbollah, the second is to attack Iran’s nuclear facilities and the third is to “give the go-ahead for U.S.-based Mossad agents to take out a president deemed unfriendly to Israel in order for the current vice president to take his place and forcefully dictate that the United States’ policy includes its helping the Jewish state obliterate its enemies.”

First , i posted the link - not just so everyone could read the entire article , but so it could be clear the source was a leading newspaper of Israel - not a far fringe speculative blogspot. Second point , at a time when relations between the US and Israel are at a nadir , the idea this has been floated seems like curious timing. Third , we can feel some type of other event is in the offing - apart from being on Carrier transit watch , one has to consider an other event of some type closer to home. Fourth , in era where useful idiots can be influenced to do horrible things , the timing of this again seems curious. Fifth , the Op Ed was penned on January 15th - the same day the joint US - Israel Austere Challenge 12 was postponed and just days before General Dempsey was scheduled to travel to Israel for critical talks concerning Iran - again the timing is curious. stay tuned for other events and don't be surprised what or where they may occur !

Happy Saturday - Pondering The End Of The Dollar Based Global Trading System !

noreply@blogger.com (fredw) — Sat, 21 Jan 2012 13:00:00 +0000

Asian Nations Start Currency Reforms to End their Use of Dollars

http://www.financialsense.com/contributors/dan-collins/2012/01/19/the-world-continues-preparations-for-the-end-of-the-global-dollar-based-ecosystem

On December 25, 2011 it was reported that the world’s second and third largest economies will open currency swap lines in a move to side-step the U.S dollar and conduct trade in their own currencies. In a meeting between Japanese Prime Minister Yoshihiko Noda and Chinese Premier Wen Jianbao they officially announced their governments' intentions to conduct bilateral trade in yuan-yen without using U.S. dollars. The Japanese government said direct yen-yuan settlement should reduce currency risks and trading costs. Japan also announced it will start buying Renminbi bonds to hold as a reserve currency.

China and Japan, long time adversaries who disagree on most issues with regards to foreign policy can agree on one thing…to stop using dollars. Japan also topped off a busy week by signing a currency swap agreement with India with the same stated goal of moving bilateral trade between the two countries out of the USD.

Fascinating the above news item was announced on December 25th - a perverse Christmas gift one might cynically say ! But rather than a radical break , this just represents a trend that includes Russia and China trading with Iran in currencies other than the dollar. And just yesterday , india announced it would buy oil from Iran in rupeees - so much for following the West's oil embargo demands !

The move away from the dollar mirrors a similar trend we have seen - the fleeing of investors from stocks as the game has begun to viewed as rigged beyond rational participation. Stock volumes ex HFT trading have been dropping over the past 18 months or so ( following the infamous flash crash in May of 2010 ) , retail investors have withdrawn funds from domestic mutual funds over the same timeframe and with the advent of the MF Global debacle for investors - revulsion has moved to the CME as well after all , once bitten , twice shy - losing 1.2 billion in customer accounts has a funny way of making the corruption clear .

So is it really a surprise to note that during the timeframe where retail investors have fled the broken hovels called markets , that a grand uptick in color revolutions have bloomed . " MENA " came into the lexicon last year and as the New Year as begun , Syria and Iran adventures stand in the on deck circle - just waiting for their turn at bat. Does the media even discuss the ongoing chaos of Militia rule in Libya anymore , how often do you read anything about the NTC , Is Saif ( Gaddafi captured son ) still alive and who holds him captive again ? When push comes to shove , what will Russia and China do regarding any mass destruction campaign directed toward Iran - how long before we see / read or hear about some type of incident is the Strait of Hormuz? To the last point , recall Iran warned when the USS John C..Stennis left the Gulf at the end of December , the advice from Iran's Army chief Salehi was " I recommend and emphasize to the American carrier not to return to the Persian Gulf.We are not in the habit of warning more than one time. " While a date has not yet been announced , US officials expect the next transit of a carrier to be routine - and they are probably correct. But what if Iran chooses to start a War at the time and place of its own choosing ? Any predictions as to where such an other event might take us would depend the reaction of numerous nations , whose agendas aren't aligned with the West.

As Iran gears up for its latest Great Prophet exercise in Febuary , let's see if the next Carrier transit occurs during that same timeframe - and then we shall see what happens next !

Morning Update/ Market Thread 1/20

noreply@blogger.com (Nathan A. Martin) — Fri, 20 Jan 2012 14:06:00 +0000

Good Morning,

Equity futures are slightly lower, no wait, HFTs must have suckered in all they can… now shooting higher this morning with the dollar higher, bonds lower, oil lower, gold & silver lower, and food commodities slightly higher.

Stocks have now run up to a key long-term resistance line beginning at the ’07 top. Today the DOW sits almost exactly on it, and the S&P 500 is just below it as you can see in the 5 year weekly SPX chart below, heavy blue down slopping line:

I won’t be surprised either way – the markets could turn down from that line, or the criminal element who own the markets and make money from nothing could choose to run futures over that line on the weekend. Truly a casino not worth playing in, as it only enriches those on the wrong side of a proper rule of law.

Of note, the Baltic Dry Index broke through support on its latest plunge, setting a new low from one year ago:

BDI:

The very conflicted liars at NAR (National Association of Realtors), who like to make numbers up, report that Existing Home Sales for November, NOVEMBER, jumped 4.3% to 4.61 million from 4.42 million, of course the prior month revised lower and besting expectations. Sorry, not a believer for many reasons, completely bogus… huge increases in sales do not occur from the month of October to November, and thus you have number juggling from already admitted number jugglers. Bogus.

Want to hear a self-interest statement from someone so corrupted they cannot speak the truth? I know, all you have to do is turn on your television... but this one is a prize winner:

Lawrence Yun, NAR chief economist, said these are early signs of what may be a sustained recovery. “The pattern of home sales in recent months demonstrates a market in recovery,” he said. “Record low mortgage interest rates, job growth and bargain home prices are giving more consumers the confidence they need to enter the market.”

Then there's this from the NAR President:

NAR President Moe Veissi, broker-owner of Veissi & Associates Inc., in Miami, said more buyers are expected to take advantage of market conditions this year. “The American dream of homeownership is alive and well. We have a large pent-up demand, and household formation is likely to return to normal as the job market steadily improves,” he said. “More buyers coming into the market mean additional benefits for the overall economy. When people buy homes, they stimulate a lot of related goods and services.”

LOL is really all one can say to that. The only true pent-up demand is from people underwater on their mortgages whose only dream is that they could actually sell their home to escape the nightmare that's been foisted upon them. I'd throw them both in prison if I could, and I would certainly prohibit the NAR from making unaudited economic reports on their own industry.

I, Nathan Martin, no longer consent to the lies.

News Items From The Would Be Euro Super State - The Trend Is Not Your Friend !

noreply@blogger.com (fredw) — Fri, 20 Jan 2012 11:22:00 +0000

Good Morning and yes , the trend is not your friend - not in Europe at least ! The push for the Super State is on the move , not pausing for a minute. Imagine where else bit in a Nanny state where the remedy for breaching a balanced budget rule would be fining the violators - thus pushing the violators further in breach of the rule , right ? Of course , that follows the EU once again beseeching Germany ( and the balance of the not broke yet nations ) to step up their transformation into formally broke ( and broken ) nations !
In response , Germany naturally demurs on rushing to join the formally broken nation Club - its not quite ready to speed up payments for the presently unratified ESM , the current excuse being all participating countries should be onboard first. Not quite what the German finance Schauble said just a couple of weeks ago about Germany bringing its ESM payments considerably - but we know things change !
The focus presently is all Greece , all the time - but keep in mind Portugal is waiting in the wings. the time for its " insolvency " close up " is nearing. Just note the sharp ramp in the borrowing costs for Portugal and the apparent lack of ECB support ( where is that SMP Program to buy some of the debt of Portugal ? ) Get another Troika Team ready for a road show - destination Portugal.
Finally , as a closing thought , for once Greece Finance Minister Venizelos is right. Now is the critical time for the Final Battle . My questions to the FM - are you aware what War is being fought and who your enemies actually are ?

10.51 The EU's highest court will be able to fine any country that does not adopt a balanced budget rule in its constitution with a penalty of up to 0.1pc of GDP, shows the latest leaked draft treaty. That cash would be ploughed back into the ES

09.15 Greek Finance Minister Evangelos Venizelos has been speaking this morning about the negotiations on a debt haircut for private investors and over the next round of bail-out cash.

Not a long statement, by any means, but quite dramatic...

Now is the critical moment for the final battle.

08.45 There are negotiations aplenty in Greece today, with talks being held with the country's private creditors and the troika, which holds the purse strings on the much-needed bail-out cash.

08.20 Hungary has abandoned its planned merger of its central bank and its financial markets regulator, says PM Viktor Orban. The plan was causing a great deal of conflict between Hungary and the EU.

" Curses are like a bird that returns again to his own nest !

noreply@blogger.com (fredw) — Fri, 20 Jan 2012 01:33:00 +0000

Stated another way - chickens coming home to roost ! First example is Croatia - why for the life of me would any country - fully observant of the austerity and draconian measures presently imposed upon Greece by the Troika , willing ask why do I sign up for membership ? Well Croatia seems to be willing to take the plunge and their commerce will suffer. Chicken farmers will be the first to see the chickens come home to roost but may find the chickens roosting come from italian producers. and welcome to EU rules and regulations which will increase the costs for Croatian farmers . Yet the Croats still probably will vite yes - I say don't complain for something you've willing signed up.

http://globaleconomicanalysis.blogspot.com/2012/01/chickens-come-home-to-roost-in-croatia.html

http://www.athensnews.gr/portal/11/52430

Thanks to massive propaganda, Croatia is foolishly about to join the EU. Chicken farmers (Croatians in general) are about to pay a steep price.

And how could we miss Greece when considering chickens roosting back at the ole homestead ? While the ongoing imminent conclusion to negotiations ( maybe Monday they say now ) that have gone on and on for months , chickens may be coming home to those opportunistic hedgies ! As noted in the piece below , the IMF wants the coupon on the new bonds to not exceed 3 percent - well below the interest sought by the IIF ! And at 3 percent coupon ( which would assist Greece somewhat in lightening its debt load - of course the IMF and ECB could REALLY help Greece by throwing their Greek bonds into the haircut pot , but that's not presently on the table .) With hedgies stating they won't settle for a haircut exceeding 50 percent , how does Greece avoid forcing agreement with a Collective Action Clause being retroactively imposed by law ? Well , hedgies might just get to try out that human rights argument , as their gambit to buy bonds and seek full payment might come home to roost !

http://www.ekathimerini.com/4dcgi/_w_articles_wsite2_13139_19/01/2012_423290

Late on Thursday Venizelos and Prime Minister Lucas Papademos met again with the head of the Institute of International Finance (IIF), Charles Dallara, for the completion of the agreement.
Sources said Dallara discussed his new proposal that provides for an average interest rate of 4.25 percent for the new bonds Greece will issue to replace the old ones, leading to 68 percent losses in net present value terms for bondholders.
The IIF proposed a coupon of 3 percent for bonds maturing until 2014, 4 percent from 2015 to 2020, and 4.5 percent for after 2020. For the latter, the proposal includes a rate surplus based on the country’s growth rate. Bondholders are also asking for European Union guarantees for the new bonds.
Before his meeting with Venizelos and Papademos, Dallara told journalists that he hoped the negotiations would quickly lead to an agreement.
Bank officials noted that there have been some substantial and in-depth negotiations in the last few days, and expressed their optimism for an agreement. However, they added that for a deal to be reached, the International Monetary Fund and the eurozone, and Germany in particular, will have to accept interest rates that can support the voluntary character of the agreement.
The IMF, sources say, is firmly insisting that the new bonds’ rate not exceed 3 percent, so that the haircut can lead to a substantial lightening of the debt load for Greece.

And in italy , we see chickens coming homeward bound - as italians pay the price for allowing their country to fall under the control of a Troika installed puppet ! How long before Italy falls totally under the control of the Troika - who knows for sure but the chickens are clucking softly in the distance - soon those sounds will be much closer. Petrol shock as service station managers close their stations doors for ten days , meanwhile Troika puppet Monti tries to peddle Austerity chicken pot pie !

http://www.corriere.it/economia/12_gennaio_19/sciopero-benzinai-dieci-giorni_90bdfd28-42a2-11e1-8207-8bde7a1445db.shtml

http://www.corriere.it/economia/12_gennaio_18/monti-fisco-euro_93deedaa-41d0-11e1-9408-1d8705f8e70e.shtml

Finally , as we count the chickens coming home and wonder which " other event " will occur next , just note that Special Forces Operatives are operating in the gulf - near Iran. In light of the present tensions , various exercise have taken place , planned to occur ( by both Iran and Israel / US forces ) , throwing more tension into a strained situation could be another bunch of chickens walking around clucking..... we can assume Special Forces are in hot spots around the globe - but why advertise this fact ? Be careful what you agitate for is what I suggest.

http://www.wired.com/dangerroom/2012/01/jsotf-gcc/

Tensions between the U.S. and Iran are at a high point, as the Islamic Republic threatens to close off a vital waterway and two U.S. aircraft carrier battle groups sit in the seas off the Iranian coast. But across the Persian Gulf, the U.S. has a previously unacknowledged weapon in reserve: a new special operations team.

Danger Room has confirmed with the U.S. Special Operations Command that a new elite commando team is operating in the region. The primary, day-to-day mission of the team, known as Joint Special Operations Task Force-Gulf Cooperation Council, is to mentor military units belonging to the U.S.’ oil-rich Arab allies, who collectively are known as the Gulf Cooperation Council. Those Arab states consider Iran to be their primary foreign threat.

Chickens clucking all around , looking for their nests. Be vigilant as things are moving faster than they appear.......

Morning Update/ Market Thread 1/19 - FRAUD, Deception, Depression Edition…

noreply@blogger.com (Nathan A. Martin) — Thu, 19 Jan 2012 13:57:00 +0000

Equity futures continue higher this morning with billions in fraudulent “earnings” from Bank of America coupled with fraudulent economic data, they make quite the couple. The dollar is lower, bonds are lower, oil is higher of course, gold & silver are higher, and food commodities bounce a little following yesterday’s losses.

The fraudulent CPI was reported flat for December, here’s Econofraudpusher:

Highlights
Consumer price inflation was nonexistent in December at the headline and core levels. The consumer price index in December was unchanged for the second month in a row with lower energy costs playing a key role. The December figure was lower than market expectations for a 0.1 percent rise. Excluding food and energy, the CPI decelerated to a modest 0.1 percent increase after gaining 0.2 percent in November. Market expectations were for a 0.1 percent rise.

By major components, energy dipped 1.3 percent after declining 1.6 percent in November. Gasoline fell 2.0 percent, following a 2.4 percent decline in November. Food price inflation firmed to 0.2 percent after rising 0.1 percent the prior month.

Within the core, upward pressure was seen in medical care, recreation, and rent. Declines were seen in used cars & trucks, new vehicles, and apparel.

Year-on-year, overall CPI inflation posted at 3.0 percent, compared to 3.4 percent in November (seasonally adjusted). The core rate edged held steady at 2.2 percent on a year-ago basis. On an unadjusted year-ago basis, the headline number was up 3.0 percent in November versus 3.4 percent in November. The core was up 2.2 percent, matching November's rate.

The latest CPI report continues to give the Fed leeway for continued loose monetary policy. Between favorable jobless claims, housing starts & permits, and low inflation, equity futures are moderately positive.

And here’s John Williams with something a little closer to reality, try tripling the fraud number for starters:

And just look at how the data has diverged since 1980. This divergence is at the root of much of the fraud in economic reporting today. It affects all statistics that are first measured in dollars and then made “real” by correcting for supposed inflation – things like GDP, manufacturing data, retail sales, and so on.

And is there any wonder that with trillions in swap lines, phony money, and massive leverage that both Jamie Dimon and Lloyd Blankfein come out on the same day and basically tell you that markets are going higher? Gee, do they have something they want to sell you, or are they confident in their ability to print? Perhaps herein lays a clue?

M1:

There’s your real unadulterated inflation, right there. Sure, “markets” are going to go up… but not nearly as fast as your food and energy costs, so we’ll just ignore those little goodies and report “inflation” without them.

Housing Starts fell to 657,000 in December, a depression era level, from November’s 685,000, a depression era level. Here’s Econofraudpurveyor:

Highlights
New residential construction slipped in December but remains somewhat healthy after the jump the prior month. Permits are encouraging. Started declined 4.1 percent, after surging 9.1 percent in November. December's annualized pace of 0.657 million fell short of market expectations for 0.678 million units and is up 24.9 percent on a year-ago basis. The dip in the latest month was led by a 20.4 percent drop in the multifamily component, following a 23.0 percent boost in November. The single-family component advanced 4.4 percent after rising 3.0 percent the month before.

By region, the decline in starts was led by a 41.2 percent drop in the Northeast. Other regions showing decreases were the West, down 17.6 percent, and the South, 3.0 percent. The Midwest rebounded a sharp 54.8 percent. Seasonal factors are large this time of year and small unadjusted changes can lead to hefty seasonally adjusted changes.

Homebuilders remain modestly optimistic. Housing permits held steady, nudging down a mere 0.1 percent, following a 5.6 percent advance in November. The December rate of 0.679 million units annualized came in essentially equal to the consensus forecast for 0.680 million. Permits in November are up 7.8 percent on a year-ago basis.

The November ease in permits was led by a 3.7 percent decrease in multifamily permits after a 13.0 percent boost the month before. Single-family permits rose 1.8 percent, following a 1.9 percent increase in November.

Given that November was unexpectedly strong, the December dip in starts still reflects a recent and modest uptrend. And yesterday's NAHB housing market index gain adds to the view of modest upward momentum. Nonetheless, it still appears to be mainly in the multifamily component as the year-ago gain is stronger there-up 78.1 percent versus up 11.6 percent. And there is still plenty of supply for single-family homes.

Okay, “…somewhat healthy?” Really? “…modest uptrend?” Really… when the number is going down?

Why just look at that chart, you could almost spin that into an uptrend, couldn’t you? Well, let’s see you spin this piece of reality into an uptrend:

Housing Starts:

Gee, hard to see the “uptrend” there. Think I’ll stick with depression… unless you prefer ka-splat!

Weekly Jobless Claims dropped by 47,000 to 352,000 in the prior week, following the 399k report that was revised, of course, to 402k. This report is for a holiday week, but is supposed to be seasonally corrected. Personally, I think the bias and fraud inside of these reports is out of control. Still, it takes numbers under 350k to actually show job creation, so at best when taken at face value this is flat. Here’s Econocomplicit:

Highlights
A very large weekly drop in initial jobless claims offers a splashy, but not definitive, indication of rising strength in the jobs market. Initial claims fell 50,000 in the January 14 week to 352,000 for the biggest drop since September 2005 when economic expansion was in full gear (prior week revised to 402,000). But weekly data early in the year are often choppy, the result of shortened holiday weeks. The 4-week average, down 3,500, points to less strength with the level of 379,000 not convincingly lower than the mid-December level of 380,750.

Continuing claims likewise show huge improvement, down 215,000 to 3.432 million. Here the 4-week average is down 34,000 to a recovery low of 3.576 million. While declines in initial claims point to an easing in layoffs, declines in continuing claims represent a mix of new hirings and new drop outs from the jobs market. The unemployment rate for insured workers slipped one tenth to 3.2 percent.

Today's report is certain to support the stock market, though questions over holiday factors will likely limit its impact. Yet should this improvement hold in next week's report, expectations for strong monthly employment data would really begin to build.

Would you like a side of deception to go along with your fraud, sir? Perhaps a little Prozac for dessert will help with that depression?

The Philly “Fed” Survey is released at 10:00 Eastern this morning.

No, I’m sure there’s never been a better time to buy than with the markets overbought, negative divergences everywhere… “but if I don’t get in I may miss it!” Don’t forget that Dimon and Blankfein say the market is going higher, and your government says that their “markets” are a great place for your retirement money. Or perhaps I can interest you in a government job, maybe one where you are asked to possibly sacrifice your life for your oil, err, I mean country (of course little Timmy Geithner will “borrow” it to keep the government running, is that okay with you?).

WTI Crude Oil & Base Money:

Hmmm… believe what you want.

I, Nathan Martin, no longer consent to the lies.

Jumping the Shark !

noreply@blogger.com (fredw) — Thu, 19 Jan 2012 11:51:00 +0000

If you are of a certain age , you'll understand the expression. You may recall the episode on Happy Days where " The Fonz" jumps the shark - which over the years has become a part of the lexicon. In short when you jump the shark , you break from your established norm and just fly off into Never Never Land , so to speak ! Maybe you have felt it - something hasn't felt right , there is a sense the morale compass has been misplaced. My first inkling of the shark being jumped probably came from following the events of the Iraq War ( number two ) , it wasn't so much that we basically invaded Iraq under completely false premises - the jump the shark moment came from the total lack of reaction from the average Joe and Jane to that fact that this had occurred !

Apart from foreign policy , the idea of investing has jumped the shark as well ! The quaint concept of researching stocks , buying and holding them and benefitting from fundamental growth intrinsic to said companies has become transformed. Markets have become casinos - when the average length that a stock is held has dropped to 22 seconds due to high frequency trading and exotic algo trading program , we aren't talking about jumping the shark..... we're talking about jumping up and down on that shark ! Investing has become gambling , the rules change during the game and the so called Regulators look the other way when the proverbial " fast one " gets pulled. Ponzi schemes galore , MF Global looting of customer accounts , reality show quality investment programs on mainstream television all lead to the general huckerism - yet once again , the average Joe and Jane snore away , not to be concerned.

So , with this theme as a " jumping off " point ( pun intended ) , let's look at some items of the day !

Hedge funds have been known to use hardball tactics to make money. Now they have come up with a new one: suing Greece in a human rights court to make good on its bond payments.
According to New York Times, the tactic has emerged in conversations with lawyers and hedge funds as it became clear that Greece was considering passing legislation to force all private bondholders to take losses, while exempting the European Central Bank, which is the largest institutional holder of Greek bonds with 50 billion euros or so. ( So says the NYT )

Is this a jump the shark moment ? At first blush , the answer might seem yes - however , in Europe the approach legally is different than in the US. In that regard , investors may be able to argue that a change in the law by Greece wherein the terms of their bonds are changed ( so that the investors receive less than they are owed ) , actually could be viewed as a property right violation. the kicker being property rights in Europe are viewed as human rights ! Imagine the novel concept of property rights being viewed as human rights being applied in US Courts ! Imagine how investing might change if investors' property rights were treated as human rights - how refreshing might would it be ? Wouldn't that be a boost to the investor psyche if your hard earned funds were treated as human rights when a MF Global steals your allegedly protected accounts ? Wouldn't a Chrysler or GM bondholder have felt better about the system if their rights as bondholders weren't trampled by a manipulation of bankruptcy rules to satisfy a government agenda ? Wouldn't the average investor feel more secure if he or she believed their face can't get ripped off with impunity - while Regulators looked the other way ? In sum , perhaps property rights should be viewed as an intrinsic human right to salvage investor confidence and vindicate the rule of law. Let's consider another topic....

And Scene...Kodak Files For Chapter 11 Bankruptcy

Th headlines tell the grim story - another American Icon bites the dust , is forced to file bankruptcy and is reduced to monetizing its intellectual property. My question to ponder is why was manufacturing allowed to jump the shark - when did the policy makers decide it was a great move to allow the established norm of american manufacturing leading our global growth , to just wither away ? The death of manufacturing has led to the withering away of former great cities such as Flint and Detroit , has impacted state revenues and employment across the country and has shifted financial strength from the West to Asia . When may this be addressed seriously ? Will it take losing auto manufacturing entirely to China before the eyes of the politicians focus on the hollowing out of America ? When you go to work today , would anyone even comment or notice Kodak has died quietly ? Would it take the death of a Company such as Microsoft to cause the average Joe or Jane to say " There goes the Fonz over the Shark " ! One final item to ponder..... there's that IMF story from yesterday

The Washington-based lender is aiming to increase its resources after identifying a potential need for $1 trillion in financing in coming years, an IMF spokesman said in a statement. The IMF is studying options and will not comment further until it has consulted its members, the fund said. To incorporate a cash buffer, the lender is seeking a total $600 billion.

IMF Managing Director Christine Lagarde said yesterday her staff is looking at ways to expand the fund’s war-chest, which currently has about $385 billion available. While euro-region nations have already pledged to contribute 150 billion euros ($192 billion), the U.S. has said it has no plans to make new bilateral loans and leaders of Group of 20 nations ended last year at odds over the issue.

If borrowing money to attempt to address a debt problem isn't jumping the proverbial shark , i don't know what is ! But we see the US wildly borrowing like mad , Europe borrowing like mad , the IMF borrowing like mad - just because it hasn't worked up to this point , is besides the point. But the incessant borrowing our way collectively into deeper debt has become a global norm - print faster , spend faster , go into debt faster. All things come to an end and the debt party will as well. At some point , folks will realize the shark has been jumped and we shall start on the path to returning to the norm. Pray that day comes before it's too late to salvage what we still have !

Morning Update/ Market Thread 1/18 - Narcissistic Fantasy Land Edition…

noreply@blogger.com (Nathan A. Martin) — Wed, 18 Jan 2012 13:52:00 +0000

Good Morning,

Equity futures are about even this morning as the IMF begs for half a trillion more. This is all fantasy, of course, as the IMF acts as if it is getting actual money from other countries, but in fact all of it is just created for the charade (please tax your people and then pay it back in gold, thank you). Bonds are higher (as if there’s actually any room up there), the dollar is lower, oil is flat, gold & silver are off a little, and food commodities are being drawn back down to that very large H&S neckline.

Meanwhile, way out on the fringes of Narcissistic Fantasy land, the morally challenged Mortgage Broker’s Association continues to crank out wild numbers with as much meaning as a fist full of IMF loans. Get this, not a typo, their one week supposed gain in the Purchase Index is 10.3%! And if that’s not crazy enough, the claim is that in one week the Refinance Index jumped 26.4%, moving the Composite index up 23.1%! In just one week! LOL! Now, you could say that it’s just unadjusted noise, but that is not the case. The nut jobs at the MBA intentionally no longer release the actual figures and only report this noise in order to make following their trail more difficult, and to intentionally deceive the public. The truth, of course, is that all these figures are at or near modern day lows, certainly not jumping 23%+ in the span of one week. Completely worthless is an understatement, and the MBA are the poster boys for what should be future legislation prohibiting unaudited self-reporting of major economic data. Here’s Econostupid:

Highlights
An adjustment for New Years Day clouds what are enormous weekly gains for mortgage application data. The purchase index jumped 10.3 percent in the January 13 week to recover recent losses with the index back to where it was in mid December. The four-week average is up 2 percent. The refinancing index rose 26.4 percent and returns to its best level since August. The four-week average for refinancing is up 7 percent. Rates keep moving lower with the average 30-year conforming loan at 4.06 percent, down five basis points in the week. Next data on housing will be the monthly housing market index later this morning at 10:00 a.m. ET

Not calling them out is complicit.

The total trumped up PPI came in at -.1% for December. Less food and energy, which obviously nobody needs or uses, it was .3% positive. Year over year it is still hot, but vastly understated, coming in at +4.8%, which is down from +5.7%. This data too, is losing its meaning – people should be screaming about these levels, much less the actual levels that are at least twice as high as reported if not three times higher:

Highlights
At the producer level in December, inflation was tugged down by gasoline and food costs but the core was warmer than expected. Producer prices edged down 0.1 percent after rebounding 0.3 percent the prior month. The latest number posted lower than market expectations for no change.

By major components, energy declined 0.8 percent, after nudging up 0.1 percent in November. Within energy, gasoline fell 2.3 percent, following a 0.1 percent dip in November. Food cost inflation eased to a 0.8 percent decline after jumping 1.0 percent the month before.

At the core level, the PPI firmed 0.3 percent after rising a modest 0.1 percent in November. A big part of this acceleration was due to reduced discounting for motor vehicles by dealers. Leading the core up were passenger cars, light trucks, pharmaceuticals, and tobacco.

For the overall PPI, the year-ago rate in December was 4.8 percent, compared to 5.9 in November (seasonally adjusted). The core rate in December edged up to 3.0 percent from 2.9 percent the month before. On a not seasonally adjusted basis for December, the year-ago headline PPI was up 4.8 percent versus 5.7 percent in November. The core firmed to 3.0 percent from 2.9 percent on an NSA year-ago basis.

Impossible math, even at these under reported rates. The waves move up and down, but the overall trend is the destruction of value and loss of confidence in your “money” (debt).

Industrial Production numbers improved and were better than expected, coming in at .4% in December, up from the -.2% in November. Again, these figures are closer to money production than to actual production of goods, as these production figures are first measured in dollars and then incorrectly adjusted for a fantastical rate of supposed inflation. I take a positive number here to mean not falling as fast as it was, oh, and the Capacity Utilization numbers are still crazy low – more like depression numbers, but in this case we’ve been shedding capacity for so long that it’s mind boggling that it’s still so low. Here’s Econocomplicit, baffling with BS:

Highlights
Industrial production in December posted a healthy gain but the manufacturing component was even more robust. Overall industrial production rebounded 0.4 percent after dipping 0.3 percent in November. The latest number came in slightly lower than the consensus forecast for a 0.5 percent jump. By major components, manufacturing made a 0.9 percent comeback, following a 0.4 percent drop in November. The market median forecast for the manufacturing component was for a 0.5 percent gain. Econoday has added this component to its consensus forecasts. In December, utilities fell 2.7 percent while mining output expanded 0.3 percent.

Within manufacturing, durable goods rose 0.9 percent in December. Wood products, primary metals, and machinery registered gains of more than 2 percent. Some weakness was seen in nonmetallic mineral products, aerospace and miscellaneous transportation equipment, and furniture. Nondurable goods advanced 0.8 percent in December. Textile & product mills, petroleum & coal products, chemicals, and plastics & rubber products all gained 1.0 percent or more. Paper and apparel & leather fell.

Overall capacity utilization rebounded to 78.1 percent from 77.8 percent for November. Market expectations were for 78.1 percent.

The manufacturing sector appears to have regained some momentum and it is broad based.

The traditional non-NAICS numbers for industrial production may differ marginally from the NAICS basis figures.

Speaking of whatever, TIC Data (Treasury International Capital) for November came in with a big increase that Econocomplicit attributes to flight to safety to the U.S.. I think all the numbers that come from the Treasury or the Fed are garbage designed to throw people off the trail of their swaps, money printing, and backroom deals. Literally not worth the paper it’s printed on, it’s all Narcissistic Fantasy Land to me.

I, Nathan Martin, no longer consent to the lies.

Absurdity meet Insanity .......

noreply@blogger.com (fredw) — Wed, 18 Jan 2012 10:26:00 +0000

This would be absurdity .....

And since it has worked once, in the eyes of central planners it should work again, until it fails. Which it naturally will, just like the first LTRO iteration from 2008. But first, it will be expanded to a very ludicrous level, which will lead to the one outcome that Germany wants more than any other - send the euro plunging (remember - the primary correlation of 2012 is the ratio of ECB to FED assets), at least until the Fed steps right back into the currency devaluation fray, which it likely will as soon as March. So just how large will the next LTRO be? "Market talk is focusing on an even bigger amount to be borrowed at the next 3-year longer-term refinancing operation (LTRO) due on 29 February.GREED & fear has heard guesstimates of up to €1tn!" That's right - it is possible that in its quanto monetary diarrhea (but at least it's not printing, so the Bundesbank will be delighted), the ECB is about to increase its balance sheet from €2.7 trillion to € €3.7 trillion, or a €1.7 trillion ($2.2 trillion) expansion in 8 months! And gold is where again?

http://www.zerohedge.com/news/shocking-%E2%82%AC1-trillion-ltro-deck-clsa-explains-why-massive-quanto-easing-ecb-may-be-coming-next-m

But here , here my friends comes Insanity ! Again from ZH...

http://www.zerohedge.com/news/10-trillion-ltro-coming-credit-suisse-hunkers-down-ahead-european-endgame

February’s second 3-year LTRO looks set to be extremely large. Really extravagant claims (we have heard reports of €10 tn) are probably wide of the mark because this will not be a complete collateral free-for-all (unless NCBs choose to make it so, which for some of them is admittedly an open question; again, see rational player section below). But the idea of path-finder lightning springs to mind (High-speed cameras reveal that lightning evolves “bang BANG”, essentially); the last LTRO has removed any stigma, making managements who do not exploit the value on offer arguably careless at best. This is, on the face of it, very cheap protection indeed against any possibility of a liquidity crisis for three years.

What to take from this talk ? First , there won't be a 10 trillion LTRO , I hardly believe you see a 1 trillion LTRO either. but that's not really the point. What did we saw happen with the first LTRO of 489 billion ? Were the billions borrowed by the banks taking the money at one percent from the ECB lent to businesses , did we see an increase in lending to each other in the interbank market ? No , what we have seen is an increase of funds deposited at the ECB in exchange for .25 percent interest - the sums at the ECB now exceed 500 billion ? And while the LTRO has allowed sovereigns to sell debt of very short duration , the question remains can they sell debt longer than 5 years , which would fall outside the ambit of the LTRO ? If the banks are as badly fractured as many surmise - zombies desperately trying to patch holes in their balance sheets and roll hundreds of billion in bank debt coming due in 2012 , will providing another 489 / 600 billion change the pattern of hoarding ? I think the answer is no , but let's see what happens Feb 29th when the second LTRO happens.

The real hidden message of someone floating a huge LTRO is that Greece just may be allowed to hit the wall Which means the banks ( and pension funds and insurers ) holding Greek , Irish , Portuguese , spanish , Italian , French ( you get the point ) debt are going to get tommy hammered when the default occurs and hard landing becomes reality - thus the LTRO is going to be the bailout to beat all bailouts . Imagine perhaps a trillion to a trillion and one half dispensed to the banks by the LTRO process in just a couple of months , in just two fell swoops to boot ! Europe will make TARP look like child's play and they also have the ongoing SMP buying spanish , italian and probably irish debt - why should the euro stay over a range 1.10 to 1.20 with such a level of debasement coming down the line ?

So , as the sums being looted from the taxpayers of europe soar to Mars and austerity is jammed down the throats of the newly poor to pay for this , simply understand things are going to get worse before they truly get worst ..... And that's a wrap !

Suspended Animation as we wait for the Greece fire !

noreply@blogger.com (fredw) — Wed, 18 Jan 2012 09:26:00 +0000

Good morning ! Welcome to the Greece fire ! Another day - more austerity , more greek families abandoning their children because they simply can't afford to care for them any longer and more greek suicides. Greece has been on a slow walk to hell over the past two years but the end appears to be coming into view - that being the March 20th cliff for the big bond redemptions. It appears clear that as things presently stand , the country can't make the 14.5 billion euros payment due on that date. It doesn't appear that the can to be kicked further ( as the can has been kicked to date. ) It seems unlikely as things stand now that Greece has any further possibilities for movement past a resolution of the bond redemption ( payment ) or default by March 20th. So , where do things stands today ? Let's go around the horn briefly .....

From The Telegraph: Greece prepares to give way to banks to secure debt deal
From The NYT: Greek Premier Says Creditors May Be Forced to Take Losses
From Fredw : Do you believe any of the spin , lies and jibber jabber ?
Taking direct aim at hedge funds and other private holders of Greece’s debt, Prime Minister Lucas Papademos says he will consider legislationforcing the creditors to take losses on their holdings if no agreement can be reached in critical negotiations scheduled to resume Wednesday.

Now , pay attention to the last point , this is critical to understanding the extent of the problem. PM L-Pap is threatening to seek passage of a law which in essence of a Collective Action Clause which would cram down what could amount to an approximately 70 percent loss on private investors if they don't "eat their peas " by Wednesday. While the private investors are told to eat their peas , the IMF and ECB want to take nary a loss at all ! And since hedge funds have replaced european ( one exception being Greek ) banks to a meaningful degree - as far as holding greek debt , there is a serious question as to whether the hedgies will bite on such a deal.

Meanwhile , time rolls on , this Friday will be the 20th and it would probably take a good six weeks to complete the debt swap. That assumes a deal can be reached , the hedgies and banks play ball , litigation doesn't ensue and everything else lines up perfectly. In other words , don't hold your breath !

However , the sad fact remains as long as the ECB and IMF refuse to take losses on the holdings , the private investors would need to take a 100 percent loss to give Greece meaningful relief - have we heard any noises from the ECB or IMF that they will truly help Greece ? Of course not - so , while the focus remains on the private debt swap , just consider that without ECB and IMF participation at the same level as the private investors , Greece will still take it in the pants .

Morning Update/ Market Thread 1/17 - Meet the New Boss, Same as the Old Money Grubbing Boss…

noreply@blogger.com (Nathan A. Martin) — Tue, 17 Jan 2012 14:24:00 +0000

Good Morning,

Equity futures are higher this morning despite S&P downgrades for France, the European Bailout Bozos, and much the rest of Europe. Of course it means the math gets worse with higher interest rates which deepens the spiral of impossible math, more printing, even more impossible math and so on… each event quickening the pace of events. Phony bond auctions where “success” is due to the creation of money to make them “successful” leads only to higher numbers for the things people on the planet need to live.

Equities are thus higher, bonds are close to even, the dollar is weaker, oil is back over $100, and food commodities are higher too. Notice how the weekends are used to ramp over resistance? Complete control by those who make money from nothing, own the exchanges, and use that money to create an artificial marketplace designed to suck in the productivity of people who are truly productive, unlike them.

The “Fed’s” Empire State Manufacturing Index picked up to 13.48 in January, up from 9.53, and thus beating expectations. Here’s the spin from Econocomplicit:

Highlights
Manufacturing activity in the New York region is picking up nicely so far this month with growth back at a healthy hum. The Empire State index rose more than 5 points to 13.48 with the 6-month outlook up nearly 10 points to 54.87. Levels, after sinking in an 8-month hole, are now back where they were during the first half of last year.

Details show strength in new orders and, in a stand out result, strength in employment. Shipments are strong and inventories are being rebuilt. Contraction in delivery time points to plenty of spare capacity to be drawn on should activity continue to pick up steam. Negatives in the report are continuing declines in the sample's backlog orders and a jump higher in the cost of inputs, one that's likely tied to rising energy prices. But today's report is on balance very positive and, in what is the calendar's first look at January, points to building momentum for the manufacturing sector.

Oh, is manufacturing still a sector in our economy? I nearly forgot as it’s so small it’s hardly worth mention, unless you like counting military hardware and hamburgers.

Of course all of Europe and much of the developing world are re-entering recession as austerity is foisted upon them while trillions are funneled to the bankers. Here in the U.S., we are just liars and self-delusional Prozac junkies unable to acknowledge reality. The talk here is that the economy is “growing” and looking up, LOL. And if that’s true, then why, oh why, is the BDI sliding into the Abyss, Part III?

BDI:

BDI Recent:

Oh yeah, manufacturing is growing, sure. That’s why shipping rates are plummeting.

It’s a so-so week for economic data, we’ll see CPI and Existing Home Sales later in the week. It seems the sport has become watching the size of the auctions and overnight deposits grow, like the record setting 501.9 billion Euros the ECB took in last night.

Bill Still sees reality for what it is and gives a good lesson in how those who create money from nothing use that money to buy both sides of the political spectrum, thus completely capturing our government! This is exactly why nothing will change until other events force the people to separate money from politics. Good video Bill!

I, Nathan Martin, no longer consent to the lies.

Changes at Economic Edge…

noreply@blogger.com (Nathan A. Martin) — Tue, 17 Jan 2012 04:18:00 +0000

It’s my privilege to introduce a new writer to Economic Edge, FredW, who will now be making regular contributions to this site. Fred keeps a very level keel about him while gathering pertinent information from around the globe and commenting on its relevance. He has provided that service for me for quite some time, even prior to becoming a regular commenter here. I trust and respect his judgment, I value his opinion and his time, and think his updates provide a valuable service that you’ll appreciate as well.

Fred has been in the legal profession for many years, primarily taking on cases where he feels he is helping others, and I know that is what motivates him to do this as well. Working by day, look for Fred’s posts to come fast and furious in the early morning hours, some evenings, and on weekends. His inputs will make Economic Edge the go to place to stay abreast of REAL economic news and world events!

I’ll keep making posts as able, and will use the morning post as the Daily Market Thread. On days I’m not able to post the Market Thread, Fred will designate one of his posts for the day’s running commentary. Please feel free to comment on other posts as well, we ask that you please try to keep comments pertinent to the post, otherwise post all other comments inside of the Daily Market Thread.

Please give Fred a big welcome and be sure to thank him for his time!

Nate

Weekend Open Thread...

noreply@blogger.com (Nathan A. Martin) — Sat, 14 Jan 2012 19:03:00 +0000

Morning Update/ Market Thread 1/13 - Calm Before the Storm Edition...

noreply@blogger.com (Nathan A. Martin) — Fri, 13 Jan 2012 14:13:00 +0000

Good Morning,

Equities are down sharply this morning with the dollar higher, bonds higher, oil back below $100, gold & silver lower, and food commodities tumbling (thank goodness).

First I want to comment that there are many indicators suggesting that a pretty major top in equities is either in or approaching. I posted comments from McHugh inside of today’s Daily thread for those who are interested, keep in mind that the markets are NOT real, they are a manipulated illusion with the rule of law no longer enforced.

JPMorgan met earnings expectations but income was down 23%, poor bastards, they “only” “earned” (stole) $3.7 Billion! Not enough, their stock is down sharply, LOL. What a screwed up game.

More talk about downgrades coming, that is also pressuring sentiment. Of course that’s all just a racket of self-interest too, completely devoid of reality.

The Trade Deficit for November came in larger than expected. That will drag on GDP calculations, and notably it was our exports that were weak… tie that piece of information with Export Prices which just fell by .5%, and you can see that there’s trouble brewing, not that Econodream can see it:

Highlights
In November, the U.S. trade deficit widened sharply in November due largely to a jump in oil imports but also due to a dip in exports. The trade gap grew to $47.8 billion from $43.3 billion in October (originally $43.5 billion). The latest shortfall was much more negative than the consensus forecast for $45.0 billion. Exports declined 0.9 percent after dipping 0.7 percent in October. Imports rebounded 1.3 percent in November, following a 1.0 percent decline the prior month.

The worsening in the trade gap was led by the petroleum gap which expanded to $27.6 billion from $24.2 billion in October. The nonpetroleum goods deficit widened to $34.8 billion from $33.2 billion the month before. Several factors were behind this, including a drop in exports of nonmonetary gold and a boost in automotive imports. The services surplus was slightly improved at $15.4 billion from $15.3 billion in September.

On a not seasonally adjusted basis, the November figures show surpluses, in billions of dollars, in part with Hong Kong $3.2 ($3.0 for October), Australia $1.5 ($2.1), and Singapore $1.0 ($1.0). Deficits were recorded, in billions of dollars, in part with China $26.9 ($28.1), the European Union $9.7 ($8.0),OPEC $9.1 ($8.3), Japan $6.2 ($6.2), Mexico $5.5 ($5.3), Germany $4.7 ($4.3), and Canada $3.0 ($2.2).

Today's report is moderately complex. You cannot attribute the huge worsening to any one fact. Due to special factors, it is very likely that the November number will be partially reversed soon and significantly. Exports of nonmonetary gold have been volatile recently. The surge in oil imports cannot continue at that pace. And the jump in auto imports probably was just American auto companies taking delivery of production in Canadian facilities outside of Detroit. So, economists will be shaving their forecasts for fourth quarter GDP but underlying trends appear to be changed only very slightly with weakness in exports to Europe likely real but not that significant.

Import and Export Prices for December are both negative, and the year over year figures are still high but coming down. Here’s Econoclueno:

Highlights
A monthly dip in petroleum prices helped pull down import prices by 0.1 percent in December. Excluding petroleum which helps smooth out monthly distortions, import prices rose a very mild 0.1 percent following 0.2 percent declines in the prior two months. Price pressures of imported finished goods rose but only slightly to still subdued monthly rates of 0.2 percent for both imported capital and imported consumer goods. Prices for imported vehicles rose only 0.1 percent.

There's also no trouble on the export where prices fell a steep 0.5 percent in the month following a 0.1 percent gain in November and a 2.0 percent fall in October. Prices of agricultural exports swung lower in December after swinging higher in November and lower in October.

The strengthening dollar, strength tied to investor demand for safety, is helping to subdue import price inflation. Today's report points to mild readings for next week's producer and consumer price reports.

Waves of inflation, waves of deflation, but the overall trend is inflation. We may see another bought of deflation here, but yes, it will be met with more… bigger numbers, more frequent and significant other events.

Again, let’s look at the Shadowstats “Growth” chart… this time I want to point out the waves – waves of inflation, waves of deflation. In this case, however, the trend is for lower growth, that is due to macroeconomic debt saturation:

Again, I will post a chart of M1 – just exponential math creating a parabola of increasing numbers, this is what cements the power for those who wrongly are allowed to produce money from nothing:

...And I know, it's been coming for some time...

I, Nathan Martin, no longer consent to the lies.

Morning Update/ Market Thread 1/12 - Retail Sales Debunked Hype Edition...

noreply@blogger.com (Nathan A. Martin) — Thu, 12 Jan 2012 14:09:00 +0000

Good Morning,

Equities are mixed this morning after an overnight spike that appears to be a manipulated attempt to force the market over key resistance… that attempt has so far failed. The dollar is lower, bonds are flat, oil is higher, gold continues its impressive move higher, and unfortunately food is moving higher as well.

Weekly Jobless Claims rose right back to the 400k level, reported at 399,000 for the past week, a 7.3% jump from the prior 372k. Note how Econoday says this was a 24,000 jump, when in fact it was an increase of 27,000 over the prior report… here they subtract the 3k revision higher to make it sound better than it was, but they do the exact opposite when numbers are in the other direction, always trying to make it sound better than it actually is:

Highlights
The long sweep of improvement in initial jobless claims hit a bump in the January 7 week, up a very steep 24,000 to 399,000. The goods news is that claims are still under 400,000 for a ninth time in 10 weeks. But otherwise the data, which the Labor Department stresses is free from special factors, point to a step backward for the jobs market with the four-week average, up a sizable 7,750 to 381,750, ending five straight weeks of improvement (prior four-week average revised to 374,000). Details also include a 3,000 upward revision to the December 31 week to 375,000.

Continuing claims also rose, up 19,000 in data for the December 31 week to 3.629 million. Here the four-week average is unchanged at 3.605 million with the unemployment rate for insured workers also unchanged, at 2.9 percent.

Though the data are clean from special factors, the first week of the year is typically the highest week for claims. This factor brings into play seasonal adjustment questions. Still, today's report is a disappointing start to the January employment picture.

As if any of the jobs numbers are even close to reality… they aren’t.

The Retail Sales report disappointed as well, coming in at .1% in December versus the .2% prior month and .4% expected. First, let me ask you how that .1% increase compares to all the massive hype around the Christmas shopping season? Remember all those supposed records set? Mobs breaking down doors with people running each other over? Was that reality or just spin?

Here’s the spin:

Highlights
December retail sales advanced but less than expected but part of the slowing was due to upward revisions to November and October. Retail sales in December edged up 0.1 percent, following a 0.4 percent rise in November (originally up 0.2 percent) and 0.7 percent gain in October (previously up 0.6 percent). The December figure came in lower than the consensus forecast for 0.4 percent. Excluding autos, retail sales actually fell 0.2 percent in December after increasing 0.3 percent in November (originally up 0.2 percent) and increasing 0.5 percent in October (previously up 0.6 percent). The market median forecast was 0.4 percent. Gasoline sales dropped 1.6 percent after a 0.9 percent increase in November.

Sales excluding autos and gasoline in December were flat, following a modest 0.2 percent increase in November (originally up 0.2 percent). Econoday's survey panel now includes a consensus for this series which was 0.4 percent for December. Within the core (excluding autos and gasoline), gains were led by building materials, clothing, and food services & drinking places. Weakness was led by a drop in electronics & appliance stores.

Retail sales on a year-ago basis in December posted at up 6.5 percent, compared to 7.0 percent in November. Excluding motor vehicles, sales were up 6.0 percent on a year-on-year basis, compared to 6.8 percent the prior month.

Today's report is disappointing but hardly a disaster. Consumers are still spending and front loaded a bit in November. But some subsectors apparently did a bit of price discounting (likely electronics among others) and we may see that in quarterly earnings.

On the news, equity futures dipped somewhat as initial jobless claims also were a little higher than expected.

Retail Sales are massively overstated. Raw Retail Sales are measured in dollars. Retail Sales measure sales only at stores open for the past year – they fail to account for stores that have closed. These two errors are huge.

Once again for a picture of reality we turn to Shadowstats where John Williams has produced the following chart correcting for true inflation – the reality is so far from the hype it’s not even funny. What it is is sad, embarrassing, and pathetic. Real Retail Sales, according to his corrections, have been negative since about 1992, 20 years ago! And his chart doesn’t account for substitution bias which makes this even worse:

Once again, money printing/ credit creation do not equal productivity or employment once you are past the debt saturation point. Yes, you can make dollar denominated statistics appear as if they are moving higher, and you can also lie and fail to account for all the printing in your statistics… but the disconnect between reality and the spin is growing massively by the day. So much so, that I think there are very few who believe it anymore, and that is exactly what loss of confidence is all about – it follows the breakdown of the rule of law.

I, Nathan Martin, no longer consent to the lies.