Thursday, November 15, 2012

Initial Claims Soar To 439K, Non-Seasonally Adjusted Surge By Whopping 104,548 In One Week

Get ready for the "it's all Sandy's fault" barrage, because the post-reelection status quo sure will desperately need it today. The latest initial claims data posted a multi-year high 104,548 surge in weekly NSA claims from 361,800 to 466,348, and even the Seasonally adjusted number soaring from 361K to 439K on expectations of a 375K print. In other words, a complete disaster for any economic data bulls. What is truly amusing is that the same Wall Street "experts" who set expectations were unable to foresee the Sandy effect that every "macrotourist" on Twitter apparently is so very aware of. Also, it is apparently also "Sandy's fault" (now that the Bush excuse is back in retirement) that the prior week's claims were revised from 355K to 361K. Basically, just as we said 3 weeks ago, ignore every negative data point: it is Sandy's fault. However, for the snapback, when there actually is good news to be had, well, "four more years." Finally, to all the Sandy apologists: is the logic here that: if Hurricane, then Fire everyone? Because that is what is implied. To summarize: a hurricane is good for GDP (lots of broken windows), but any actually negative news (surge in firings) is perfectly expected.

Prominent Hedge Fund Q3 Buys And Sells

This is what the most brand name US hedge funds bought and sold in the third quarter.

Did Politicians Kill 'Buy-And-Hold' Dreams?"

While in the short-term the equity markets are falling, we are told again and again that if only we look just beyond the horizon, all will be unicorns and rainbows. The 'buy-and-hold'/invest-for-the-long-term mantra is what pays most of Wall Street's bills and keeps your wealth manager in his Hawaii vacation home. However, while the current jitteriness is ascribed (potentially wrongly as we noted yesterday) to the 'fiscal cliff', as Morgan Stanley notes, "A near-term fiscal cliff resolution won’t remove politics from the investing calculus, far from it. Developed-economy governments have significant negative net worth, which means that the public sector will ultimately impose a cost on the private sector. The political process will determine when and how the private sector bears the cost. This political uncertainty seems likely to remain a persistent and potentially critical factor for investors over the medium term. At a minimum, it will likely affect, detrimentally, the valuation of risky assets." Must read.

The Election Is Over And Philly Fed Plunges

Let's see if Bush Sandy can be blamed for not only the Empire Fed, whose employment and expectations components plunged, for the Initial Claims, which soared and missed expectations by the second most in the past 13 years, but also for the Philly Fed, which just plunged from 5.7 to -10.7, far below consensus of 2.0, the 6th miss of the last 8 (except for last month of course), and returning to solidly negative territory after last month's "miraculous" pre-election surge. And while virtually all subcomponents plunged, the one that stood out to the upside was Prices Paid, as the margin collapse is set to ravage all companies not only in the greater Philadelphia region but everywhere else soon as reality, deferred for the duration of the Obama reelection campaign, slams everyone in the stomach.

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BTFD...Gold and Silver are On Sale Today...

Gold Tumbles As Same Dedicated Seller Reemerges

For the third day in a row, gold and silver are being monkey-hammered at the open of the US equity market day session. Whether this is margin calls mounting or a dedicated 'hedger of client portfolios' is unclear, but fool me once - shame on you, fool me twice - shame on me, fool me thrice - ask Janet Yellen...

2013-14: A Slowdown Is Coming

Admin at Jim Rogers Blog - 15 minutes ago
America is going to have a slowdown in 2013-14, there will be fewer jobs, more unemployment and turmoil in oil and currency markets. - *in Economic Times * *Jim Rogers is an author, financial commentator and successful international investor. He has been frequently featured in Time, The New York Times, Barron’s, Forbes, Fortune, The Wall Street Journal, The Financial Times and is a regular guest on Bloomberg and CNBC.* 

Markets Are Not Going Down Because of the Fiscal Cliff

Admin at Marc Faber Blog - 23 minutes ago
I don’t think the markets are going down because of the fiscal cliff because there won’t be a fiscal cliff. The market is going down because corporate profits will begin to disappoint, the global economy will hardly grow next year or even contract, and that is the reason why stocks, from the highs of September of 1,470 on the S&P 500 Index, will drop at least 20 percent, in my view. - *in Business Insider* Related: iShares MSCI Emerging Markets Index ETF (EEM), SPDR SP 500 ETF (NYSE:SPY), Apple (AAPL) *Marc Faber is an international investor known for his uncanny predictions of the... more » 

U2′s Bono Warns Fiscal Cliff Cuts Will Hurt World’s Poor

Eric De Groot at Eric De Groot - 25 minutes ago
Sunday Bloody Sunday hell! Bono is worried about the fiscal cliff. And here I am teetering on my micro soapbox suggesting that the fiscal cliff would most likely be a non-event. Don't tell Bono, and I'm not proud to suggest this either, but the world's poor will take a colossal beating after 2015 regardless of the size of the band aid applied to the fiscal cliff either in... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] 

Anti-austerity marches turn violent across southern Europe

Eric De Groot at Eric De Groot - 1 hour ago
In the 30's, a global economic contraction paved the way for today's socialism. Ironic how today's global economic contraction will destroy that which it helped create. While the signs are everywhere, few see them through the daily distractions. Headline: Anti-austerity marches turn violent across southern Europe MADRID/LISBON (Reuters) - Demonstrations turned violent in Spain and... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] 

Poll shows Americans want deal to avert fiscal cliff

Eric De Groot at Eric De Groot - 2 hours ago
While Americans want to avert another fiscal cliff, 99% of them also want to have one's cake and eat it too. Americans, in general, don't want higher taxes. Let the other guy foot the bill has to be the preferred household slogan. Perhaps Americans understand the fiscal cliff better than the politicians. The fiscal cliff is so large that even if income is taxed... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] 

How 'Fiscal Cliff' Could Affect Mortgage Interest Deduction

Eric De Groot at Eric De Groot - 2 hours ago
Nothing will boot the middle class in bum faster than reduction or elimination of mortgage interest deduction. Many within the gold community forget that real estate, not gold (or silver), is a huge determinant of wealth for the middle class. Americans rarely buy homes in cash; they use credit. Millions realize the American Dream through the miracle of leverage, most often the 30-year... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] 

Ron Paul's Farewell Speech on the Floor of the House of Representatives

Trader Dan at Trader Dan's Market Views - 13 hours ago
All lovers of liberty should take the time to listen to Dr. Paul's final speech on the floor of the US House of Representatives. I sincerely doubt I will ever see his likes again but one can always hope against hope. His commitment to liberty is indisputable. Perhaps his son will pick up the banner in 2016. I cannot but feel a deep sense of loss at a principled man who served his country and his citizens and somehow managed to keep alive his principles in the midst of that moral cesspool on the Potomac. You may not agree with all of this views but at least you knew exactly where he... more » 

Of VIX Compression, Stock Bounces, Bond Flows, And Show Trials

Until recently, the only question traders had to ask themselves was "how much more to buy?" The last week or so has left traders across the market now suddenly plagued by numerous questions. Will an Obama speech continue to be the catalyst for selling pressure to resume? Why is VIX 'low' when all around is asunder? When do the BTFD crowd step back in? Where's the 'wall of money' flowing now? From new issue demand to Italy's ratings agency trials and from bounce-buyers waiting for Godot to VIX's complacency, FBN's Michael Naso and Mint's Blain cover some of the conundra.

In Advance Of The Retaliation: Gaza Missile Range Infographic

ith Israel having launched the biggest Gaza escalation in years, the waiting game now turns to the Gaza retaliation, which if the rhetoric is any indication, will be substantial. So what can Gaza do, and how far can its rockets penetrate, assuming they can bypass the Israeli "Iron Dome" defense shield? The following infographic from Stratfor explains it. The ranging is particularly relevant in the context of the Dimona nuclear power plant, which at least at first blush appears unreachable - after all, if Gaza really wanted to unleash the gates of hell on Israel, it would focus all of its firepower precisely on this one spot.

The Hopium Is Now Depleted

  Hope - it appears - peaked at the start of the year in the US, following the global coordinated central bank pump which ramped it from lows to highs within a few months. All that hope - and then some - has now apparently faded. The General Business Conditions expected six months forward dropped to its lowest level since March 2009. What is perhaps worse, given the focus on jobs jobs jobs, is that for the first time since April 2009, the employment outlook for employment turned negative - suggesting firms are looking to reduce employees at the fastest rate in over three-and-a-half years. The hopium seems to have been depleted...

Rah, Rah, Rah And The European Cheerleaders

Listening to Rehn, Van Rompuy, Juncker and their cohorts is rather like listening to the cheerleaders at the football game and their advice on financial matters is probably right in-line with the knowledge of the cheerleaders; but then I don’t want to insult the cheerleaders. Everything is always “good, fine, hailed, welcomed” and the sunrise is always moments away. Europe officially entered into a recession it was just announced this morning. The economy in Europe is so bad now that a picture is only worth two hundred words. The Europeans blame everything on the ratings agencies lately. There is some wisdom to this. “Moody” is how they are feeling and “Standard & Poor” is what they will be feeling soon. Recently in Spain it was reported that a teacher asked one of her students what his father did for a living. The little boy said his father did a striptease in one of the clubs in Madrid. The teacher was shocked and asked if this was true. The young fellow said, “No, he is the head of corporate credit for Bankia but I am too embarrassed to tell anyone.”

Gold Investment Demand Up As QE Fears Grow – ETF’s Rise 56% In Q3

The World Gold Council issued a report “Global gold demand reflects challenging global economic climate: ETFs up 56% and India up 9% in Q3 2012”  which showed that global gold demand fell 11% in the three months to September from record levels seen during the same period last year, which was curbed by a sluggish Chinese economy and stronger Indian demand limited the drop. In Q3 2012, gold investment demand (total bar and coin demand plus ETFs and similar products) was 429.9 tonnes down 16% from Q3 2011. Although the year-on-year snapshot for investment demand suggests falling interest, this is not the case. Rather, it highlights the strong demand seen in Q3 2011. Interestingly, demand for ETFs rose 56% to 136t, compared to Q3 2011. Demand for gold-backed ETFs in Q3 grew significantly in the quarter partially due to institutions responding to the additional QE measures in the US and Europe. At 87 tonnes, Q3 2012 investment demand for gold surged from 78 tonnes in Q2, a rise of 12%. Examining this over the longer term, Q3 represents the first quarter-on-quarter increase in Indian investment demand since Q2 2011.

Frontrunning: November 15

  • Wal-Mart misses topline expectations: Revenue $113.93bn, Exp $114.89bn, Sees full year EPS $4.88-$4.93, Exp. $4.94, Unveils new FCPA allegations; Stock down nearly 4%
  • China chooses conservative new leaders (FT)
  • Eurozone falls back into recession (FT)
  • Moody’s to Assess U.K.’s Aaa Rating in 2013 Amid Slowing Economy (Bloomberg)
  • Another bailout is imminent: FHA Nears Need for Taxpayer Funds (WSJ)
  • Hamas chief vows to keep up "resistance" after Jaabari killed (Reuters)
  • Obama calls for rich to pay more, keep middle-class cuts (Reuters)
  • Obama Undecided on FBI's Petraeus Probe (WSJ)
  • Battle lines drawn over “growth revenue” in fiscal cliff talks (Reuters)
  • Rajoy’s Path to Bailout Clears as EU Endorses Austerity (Bloomberg)
  • Zhou Seen Leaving PBOC as China Picks New Economic Chiefs (Bloomberg)
  • Russia warns of tough response to U.S. human rights bill (Reuters)
  • Japan Opposition Leader Ups Pressure on Central Bank (WSJ)
  • Zhou Seen Leaving PBOC as China Picks New Economic Chiefs (Bloomberg)

China's New Government; Europe's New Official Stagflationary Recession

The main overnight event, if not very surprising, was the formal announcement of the power moves at the top of China from the now concluding 18th Communist Party Congress, which occured largely as expected. To summarize: "Xi Jinping took the helm Thursday of a new, trimmed down Communist Party leadership that insiders said was shaped less by the daunting economic and political challenges facing China over the next decade than by bitter personal and factional rivalries within a secretive Party elite.  In a surprise move, Mr. Xi replaced outgoing Party chief Hu Jintao as head of the powerful Central Military Commission, which controls the armed forces, making Mr. Hu the first Communist Chinese leader to cede all formal powers without bloodshed, purges or political unrest. But the new leadership lineup did not include the two figures with the strongest track record on political reform, dimming prospects that a new generation of rulers is committed to tackling vested interests within its own ranks." In other words and just like after the US elections - to quote the announcement during every 2:15 FOMC release from now until eternity - "no change, repeat, no change" (and the SHCOMP closing down 1.22%, and the Hang Seng down by over 1.5% more or less confirmed this). An interactive infographic of who's the new who in China can be found here, while a summary of what this means and what to expect are here and here.  Elsewhere, the other main event was the formal announcement that, as everyone certainly expected, Europe officially is now in a recession. The euro-area economy slipped into a recession for the second time in four years, with GDP falling 0.1 percent in the third quarter. The official start date of Europe's recession is now Q3 2011. And with October Eurozone CPI pushing at a perky pace of 2.5%, one can add stagflation to the official list of terms haunting Europe.

The Unabridged Ron Paul Guide To Being A Libertarian

Presented with little comment since whatever we say would likely be superfluous to this all-encompassing speech. The full Ron Paul 'Farewell to Congress' speech and transcript.
...To achieve liberty and peace, two powerful human emotions have to be overcome.  Number one is 'envy' which leads to hate and class warfare.  Number two is 'intolerance' which leads to bigoted and judgmental policies.  These emotions must be replaced with a much better understanding of love, compassion, tolerance and free market economics. Freedom, when understood, brings people together. When tried, freedom is popular.

The best chance for achieving peace and prosperity, for the maximum number of people world-wide, is to pursue the cause of LIBERTY...
If nothing else, read the five greatest dangers that the American people face today that impede the goal of a free society.

Today’s Items:

BRICs Miracle Over?
Members of the US Conference Board believe the economic boom, by the BRIC countries, is now over and that there will be a drastic slowdown over the next decade.    They went on to report that a lack of demand lies behind the current global malaise, but the fading technology cycle may prove a greater threat over the long-term.   Guess a small example of the fading technology cycle would be what is happening with Apple.

US Budget Deficit Soars
In the month of October, the US government budget deficit rocketed up $304.3 billion.    This is the third biggest October monthly increase in spending for the government ever, which trailed the 2008 and 2009 increases due to government spending reactions to the initial 2008 fiscal crisis.   The October deficit spending was going down slightly; however, we have turned the corner and not in a good way.

Top Government Snooper
At 7969 requests for user data in the last six months, the US government tops the list for government snooping according to Google – who complied with 90% of the requests.   It’s interesting that Google only handed over 90%.   What criteria did they use to decline the remaining 10%?

Nullification Goes Mainstream
As the federal government gradually assimilates the nation, a few states are fighting back; in regards to Obamacare. Missouri and Kansas will not be able to implement a key provision of Obamacare.   Both Idaho and Virgina passed legislation nullifying Obamacare within their states.   In short, more states are enforcing the 10th amendment of the U.S. Constitution; however, it is unlikely that a lawless Washington will observe state’s rights.

Will Texas Nullify Both NDAA and TSA?
The Texas legislature, following the example set by Thomas Jefferson when he drafted the Kentucky Resolution of 1798, will take up a bill to prevent the perverts at the TSA from feeling up people without probable cause.   Another bill to be brought up is one that would block any attempt to indefinitely detain people.   This has a good chance of success; due to the 10th amendment.

Why Texas Could Probably Secede
While a source of amusement for many, particularly in the White House, Texas may be able to successfully secede because of the following reasons…
1. Texas has one-quarter and one-third of the county’s oil and natural gas reserves respectfully.
2. Texas gets only 80 cents back for every dollar sent to Washington.
3. Texas is the only state with its own state-controlled power grid.
4. Texan citizens are well-armed.
5. Texas has twice seceded.   Once, from Mexico, in 1836 and during the American Civil War.
Something to think about.

Survival Sanitation
If the grid goes down, do you know how to deal with human waste?   No, I am not talking about any politican; however, I easily understand.    Anyway, please review this article from forced flushing to cat holes.

Finally, please prepare now for the escalating economic and social unrest.   Good Day!

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