Just As Predicted, Initial Claims Miss Huge, Yet Magically Improve
Recall what we said less than an hour ago:
"what will most likely happen is a print in the mid to upper 380,000s,
while last week's number will be revised to a 390K+ print, allowing
the media to once again declare that the number was an improvement week
over week. In other words, SSDD." SSDD it is: last week's 386K number
was revised to 389K, meaning the massive miss relative to expectations
of 370K last week just got even worse. This is the 10th week in a row of misses to the weaker side and the 16th of the last 18.
And while this week's miss was whopping as usual, with expectations of
375K being soundly missed after the print came at 388K on its way back
to 400K, the media can sleep soundly because the absolute lack of BLS
propaganda means that the sequential progression is one of, you got it,
improvement. In other words here is what the headlines in the
Mainstream Media will be: "Initial claims improve over prior week." In
fact here it is from Bloomberg: "U.S. Initial Jobless Claims Fell 1,000
to 388,000 Last Week." Absolutely brilliant.No propaganda. No data
fudging. No manipulation at all. Just endless laughter at the
desperation.Today’s Items:
As opposition to austerity measures
mounts across Europe, investors are becoming harder to find. Borrowing
costs for euro zone members will rise, as seen in Spain over the last
few weeks. Central Banks like the European Central Bank and the Federal
Reserve can only buy so much… After that, the purchase of European bonds
will look even more ridiculous.
Here are a few…
1. The level of insider selling of the S&P 500 is the highest in almost decade.
2. Goldman Sachs is projecting that the S&P 500 will fall by about 11 percent by the end of 2012.
3. The head of the IMF says that there are “dark clouds on the horizon” for the global economy.
4. The 9 largest U.S. banks have a total of 228.72 trillion dollars of exposure to derivatives.
1. The level of insider selling of the S&P 500 is the highest in almost decade.
2. Goldman Sachs is projecting that the S&P 500 will fall by about 11 percent by the end of 2012.
3. The head of the IMF says that there are “dark clouds on the horizon” for the global economy.
4. The 9 largest U.S. banks have a total of 228.72 trillion dollars of exposure to derivatives.
James Turk spoke about the longevity of
gold and silver as true money. In addition, he described how people
should be their own central banks by owning physical gold and silver.
Also, when buying, do not look at the volatile price of the metals, in
relation to fiat currency, because they are undervalued.
Whenever an asset’s price, like silver,
is artificially pushed down below its true market price, the resulting
move boomerangs to the upside sooner or later – usually sooner. This is
essentially a “reverse bubble”. Given so many positive factors for
silver, think triple-digit silver not in terms of “if’, but “when”;
therefore, keep stacking.
Much to the displeasure of Obama, the
Supreme Court justices strongly suggested that they are ready to allow
Arizona to enforce part of state law requiring police officers to check
the immigration status of people they think are in the country
illegally. The state law came into being when Federal authorities
refused to follow current federal immigration laws; therefore, the State
of Arizona is merely exercising its 10th amendment rights.
The government is waging war on family
farms; in that, first they went after raw milk and now the children. A
proposal from the Department of Labor to prevent children from doing
farm chores has drawn criticism from rural-district members of Congress.
The average age of the American farmer is now over 50; therefore, who
is going to take over? Monsantos?
Please take a look at this video on how a
group of people could make America fail. The sad conclusion is that it
was ourselves that we need to blame for the failure of America if we
stay on the course we are on.
After a temporary halt and three delay
attempts, trading on the Russian Stock market has suspended indefinitely
due to an emergency situation. First Greece and the rest of the PIIGS,
then the BRICS, and now this. How long will it be till the U.S. Dollar
Dies?
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Secretly Serviced
I
don’t understand the furore around Obama’s secret service handlers
being (ahem) secretly serviced by Colombian hookers. To writers like
myself who specialise in salacious analogies,
the incident was a gift. To the rest of the press, who don’t normally
get to write about such matters, it was an excuse to shoot off pent-up
sexual frustration. So I can understand the press pushing the story
just the way Bill Clinton pushes expensive cigar cases (enthusiastically, by all accounts).
The worry, apparently, is the potential to compromise the President’s
security. Rep. Peter King, chairman of the House committee that
oversees the Secret Service, says the key question is whether the
prostitutes could have accessed “any data or information that could have
compromised the president of the United States or made an enemy force
aware of the practices and procedures of the Secret Service.” But
surely this applies to all sexual relationships, not strictly ones for
money? Surely prostitutes are absolutely the safest kind of
liaisons? After all, why would a foreign agent trying to sequester
intelligence information try and charge the American agent for sex? If
you were setting a honey trap, why would you create some barrier to
entry, such as a fee? There’s playing hard to get, and then there’s
playing easy to brush off, and that would be the latter.Stock Market Rally Confirmed By CFNAI
Eric De Groot at Eric De Groot - 2 hours ago
As long as the national activity index and equities remain in gear, no long-term negative divergences between them, probabilities favor higher stock prices. This interpretation becomes strong with positive confirmation from other intermarket and money flow readings/analysis. Chart: Chicago Fed National Activity Index (CFNAI) and S&P 500 Average Source: ... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]
Chart(s) Of The Day: Follow Where The Money Was, Is, And Will (Not) Be
There is no shortage of money in the world. Thanks to global Central Banks' extreme activism money supply has exploded.
Since August 2011, the Fed has been less of a full-time player in this
effort but in passing the baton, the rest of the world did not let them
down with most notably the ECB having taken over with its own version
of free-money printing for much of the first quarter - driving the
ratio of outside (central-bank-driven) money relative to inside (the
bank themselves creating money via credit) to record highs as a stealth
nationalization of credit is underway (though as we noted earlier this
morning - the transmission mechanism is not working). So where oh where is all that hard-earned free-money going?
The story bifurcates here. In the US, non-financial corporates have
grown their war-chests as high as they have ever been (and continue to
do so) after being burned by short-term financing stresses and knowing
(despite all outward media appearances) that the next abyss is
potentially around the corner (given real-life growth estimates becoming
more and more binary/extreme as opposed to normalized with a range).
In Europe, the 'excess' has flowed to the core driving, as Sean
Corrigan notes, what some surveys suggest is a consumer and housing
boom (read mal-allocation of capital once again) in
the decade-long stagnant German real-estate market. All that extra
cash, however, while helping revenues and margins for non-financial
corporates in the US has left wage growth languishing. So the sad
reality of the Keynesian 'multiplier' dogma is that rather than
garbage-in, garbage-out - it is freshly printed money-in,
nothing-out-to-the-real-economy as each actor in the game becomes
increasingly driven by a sense of self-preservation. Is it any wonder
that energy/raw materials prices (as evidenced most recently by
Whirlpool's comments this morning) are rising when firms are awash in
cash? But of course, as the old-saying goes, a-biflation-a-day-keeps-the-Fed-hawks-at-bay.H.L. Mencken Was Right
H.L.
Mencken was a renowned newspaper columnist for the Baltimore Sun from
1906 until 1948. His biting sarcasm seems to fit perfectly in today’s
world. His acerbic satirical writings on government, democracy,
politicians and the ignorant masses are as true today as they were then.
I believe the reason his words hit home is because he was writing
during the last Unraveling and Crisis periods in America. The
similarities cannot be denied. There are no journalists of his stature
working in the mainstream media today. His acerbic wit is nowhere to be
found among the lightweight shills that parrot their corporate masters’
propaganda on a daily basis and unquestioningly report the
fabrications spewed by our government. Mencken’s skepticism of all
institutions is an unknown quality in the vapid world of present day
journalism.H.L. Mencken understood the false promises of democracy 80 years ago:
“Democracy is also a form of worship.
It is the worship of Jackals by Jackasses. It is the theory that the
common people know what they want, and deserve to get it good and hard.”
We deserve to get it good and hard, and we will.The Bailout Of The US Postal Service Begins: Cost To Taxpayers - $110,000 Per Union Vote "Saved Or Gained"
A
week ago, when reading between the lines of what had heretofore been
considered an inevitable USPS episode of austerity in which hundreds of
thousands of labor union workers would lose their jobs but in the
process would streamline a thoroughly outdated and inefficient US Postal
Office bureaucracy, we asked if a US Postal Service bailout was
imminent, focusing on the following: "Enter Ron Bloom, Lazard, and the very same crew that ended up getting a taxpayer funded bailout for GM.
From the WSJ: "The Postal Service's proposal to close thousands of
post offices and cut back on the number of days that mail is delivered "won't work" and
would accelerate the agency's decline, according to the six-page
report by Ron Bloom, President Barack Obama's former auto czar, and
investment bank Lazard Ltd., LAZ who were hired by the union in October." That's right: after all the huffing and puffing about "sacrifice" and austerity, the labor union took one long look at the only
option... and asked what other option is there." The other option, it
turns out courtesy of news from AP, is the first of many incremental
bail outs of the US Postal Office, better known in pre-election circles
as hundreds of thousands of unionized votes up for the taking, and which could be bought for the low low price of $11 billion in taxpayer money, or $110,000 per vote! And so the latest bailout of yet another terminally inefficient and outdated government entity begins.LTRO #Fail 2: European Credit Supply And Demand Fading Fast
While
the LTRO was heralded as a success for a month or so with the implicit
money-printing-and-sovereign-reacharounds involved at the cost of
senior unsecured bondholders, the sad reality is that not only are the
effects of LTRO now almost entirely gone in both sovereign and
financial funding costs but the massive 'injection' of freshly printed
encumbrance did nothing for the real economy. In fact, as Barclays notes
in these charts from the ECB bank lending survey, not only is
demand weaker for credit (i.e. the consumer is pulling back in classic
balance sheet recessionary style) but the banks themselves are
tightening credit conditions (reducing supply) - the exact opposite of
what the ECB had in mind. There is one exception to this
vicious cycle - German real estate loan demand picked up modestly - we
assume reflecting their flat housing market for the last 15 years and
extremely low rates). Oh well, we are sure the next ECB action will be
different in its banking reaction.Translating "Growth" Into European
Pretend, from now on, that when you see this word it is written in Moldavian and needs to be translated. France and the periphery nations are screaming this word now while almost all of Europe is in recession and one that we believe will be much deeper than forecast. Consequently “growth” does not mean “growth” and the correct translation is “Inflation.” We have long said it would come to this in Europe and here we go. The troubled countries are going to beg and plead for Inflation and Germany, Austria, the Netherlands and Finland are going to resist. With Hollande the most likely next President of France you are going to see a stand-off between the socialist and the centrist countries so that a log jam will develop and the consequences of its uncoupling are anyone’s guess except that it will be likely violent and an extreme series of events. The governance of Europe on May 5 will not be what is found on May 6 and preparation for this should be high upon everyone’s list.Overnight Sentiment: Overbought, Underconfident
After rising in the overnight session following the overbought momentum chasing yesterday's hawkish tone by the Fed (don't ask), futures, European stocks, and sovereign spreads took a turn for the worse following the big miss in European confidence and sentiment, all of which posted material declines, and slid to two and a half year lows. And while the traditional upward stock levitation will resume once the European market close is in sight, only one thing can spoil the party and derail the most recent pseudo-hawkish statement out of the Fed: initial claims, which are expected to decline to 375-380,000 from 386,000 last week. Instead what will most likely happen is a print in the mid to upper 380,000s, while last week's number will be revised to a 390K+ print, allowing the media to once again declare that the number was an improvement week over week. In other words, SSDD.Frontrunning: April 26
- Fed Holds Rates Steady, But Outlooks Shift (Hilsenrath)
- Has Obama Stacked the Fed? Not Really (Hilsenrath)
- High Court Skeptical of Obama’s Use of Power as Campaign Starts (Bloomberg)
- Europe Seen Adding Growth Terms to Budget Rules as Focus Shifts (Bloomberg)
- China Reaches Out to Its Adversaries Over Rare Earths (WSJ)
- Iran Says It May Halt Nuclear Program Over Sanctions (Bloomberg)
- Europe Shifts Crisis Focus to Growth as Merkel Backs Draghi Call (Bloomberg)
- Merkel Wants Rules for Raw Material Derivative Trade (Reuters)
- Evercore Profit Falls 62% as Investment Banking Expenses Rise (Bloomberg)
European Confidence Tumbles To November 2009 Levels, Euro-Wide Double Dip Inevitable
Following
this week's ongoing battery of abysmal economic news out of Europe it
will hardly come as a surprise that yet another indicator has been
released and is pointing to a multi-year low in the deleveraging
(elsewhere called incorrectly austere) continent, namely the Euro-area
wide confidence index which just slide to the lowest leve since 2009,
missing every single estimate and declining sequentially across the
board... And with the UK, Greece, Italy, Portugal, Ireland, Belgium,
Denmark, Holland, Czech Republic, and Slovenia now in re-recession, and
Spain a definitive shoo in next week, the kicker is that German GDP
will almost certainly now report a second consecutive GDP print in a
few days, thus pushing the entire European continent in a double dip. 
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