Santelli On Propaganda And Ostrich Economics

Everyone's favorite Chicago-ite, Rick Santelli, once again presents himself as the truth-teller-in-chief on the propaganda channel. This morning's dismal jobs data but utopian reporting of the improvement in the headline unemployment rate appears to have hit a nerve. Santelli takes on just how bad the employment picture really is, how mainstream media practices 'Ostrich Economics', and finally how nothing is deemed important to most politicians except who is to blame. One of Rick's best as perhaps CNBC has been looking at its ratings and realizes investors want the truth not the spin.

"Shattering The American Dream": The US Government’s Ponzi Scheme

While Larry Kotlikoff was markedly pessimistic in the past (as we noted here just over a year ago), it seems it was a dress-rehearsal to his latest evisceration of what he now calls the US Government's Ponzi Scheme. In a recent VoxEU article on America's "fiscal child abuse", Kotlikoff and two colleagues demolish the idea of sustainability of government finances and how well off younger generations will be compared with their parents. The game is close to over and for today's children, the American dream will be just that - a dream!

Debt Serfdom In One Chart

Bottom line: financialization and substituting debt for income have run their course. They're not coming back, no matter how hard the Federal Reserve pushes on the string. Both of these interwined trends have traced S-curves and are now in terminal decline: Those hoping the economy is "recovering" on the backs of financial speculation/ legerdemain and ramped up borrowing by the lower 95% will be profoundly disappointed when reality trumps fantasy.

Commodity Sector Continues to Reel

Trader Dan at Trader Dan's Market Views - 9 minutes ago

Today's pathetic payrolls number brought on more of the risk aversion or "slowing growth" trades with the result that it has now sent the commodity sector down to levels last seen in September 2010. The 50 week moving average is coming perilously close to crossing down below the 100 week, further confirming the downward trend. If the Fed indeed was hoping to see commodity prices weaken to avoid the fallout from their little episode of money creation, so far they have gotten their wish. The problem they have however is if stock prices continue to swoon lower, which they DO NOT WANT. ... more » 

 

Gold Chart and Comments

Trader Dan at Trader Dan's Market Views - 1 hour ago

Today's payrolls number was just as rotten, if not more so, than most traders and analysts had been expecting. The numbers coming out of the private firms were indicating this and they were very accurate. The problem is that the jobs number was even worse than nearly anyone had anticipated so we did get a very strong reaction in the equity markets with bulls running to the hills sending up smoke signals (this one is for that famous native American running for the Senate in Mass.) for Mr. Bernanke and company to come and save them. Alas, Mr. Bernanke must have been over sipping some... more » 

 

Hey Gold Share Investors, Smoke Doesn't Always Mean Fire

Eric De Groot at Eric De Groot - 2 hours ago

Ignite a smoke grenade and scream fire in crowded movie theater and patrons will run first and ask logical questions second. This is exactly what's going on the gold shares, except substitute smoke grenade with paper supply and fire with "head and shoulders top". I rarely show this chart, but I must to support the following point. Compare multi-decade breakout of 1961 with that of 2010. If... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] 

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ETFs Part 2: The Next MF Global or Trigger For a Broader Collapse - But Timing Is Everything

 

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The Non-Farm Payroll Catastrophe

Dave in Denver at The Golden Truth - 2 hours ago

*Give me control of a nation's money and I care not who makes the laws* - Mayer Amschel Rothschild As a self-proclaimed Talmudic scholar and student of history, there is no question that Ben Shalom Bernanke is eminently aware of this famous quote from Mayer Rothschild. He is even more aware of the significance of it, as Chairman of the Federal Reserve. For those who don't know, please understand that the Fed is NOT part of the Government, none of the officials are elected and it does NOT represent the interests ... more » 

 

Ritholtz: An Uncompromised View of Contemporary American Politics and Economics

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The Problem With Chinese Stocks

Admin at Marc Faber Blog - 3 hours ago

I am not so interested in Chinese stocks, because I think there is a lot of fraud among Chinese companies. - *in a recent video interview * *Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.*

Everything You Know About Monetary Policy Is Wrong... And Why This Is Very Bad News For Europe

"In a financed financial system, collateral is money"
 

Charlie Munger: "Civilized People Don't Buy Gold"; Only Pre-Holocaust Jews Sew It Into Their Garments

While Becky Quick's CNBC interview with the Charlie Munger has a little for everyone to love and hate (from Keynesian doctrine to easy-living Greeks and Bad trading robots), Buffett's right-hand was particularly eloquent in his views (at around 9:08) on Einhorn's distrust of the Fed and buying Gold: "gold is a great thing to sew onto your garments if you're a Jewish family in Vienna in 1939 but civilized people don't buy gold - they invest in productive businesses."

Why European Bank Stocks May Have At Least 40% More Downside

Last week we noted how up to 90% of the European banking system's equity market capital (or ultimate risk buffer) would be wiped out if they were forced to transform (and price risk appropriately) their mis-marked asset base. The market itself has already started to adjust for this possibility (just look at Italian and Spanish bank stocks recently) but it is the similarity of Europe's bursting bubble of credit extension and current balance sheet recession that brings Japan to mind, and, as Barclays notes, if European banks follow the same trajectory as Japanese banks did from their peak in 1993 (as Europe has been since their peak in 2006), then Europe's banks market cap as a percentage of the total market is likely to drop from the current 11% to around 6% within the next year. Combine that with reality with Deutsche Bank's note that Spanish and Portuguese banks (and less so Italy for now) appear perilously short of ECB-eligible collateral, and is it any wonder things are shifting from bad to worse over there as bank recap plans are critical.

And You Thought American Unemployment Was Bad...

Say what you will about the massaged and manipulated US unemployment rate, record warm winter stimulated monthly NFP print, composition and (lack of) quality of jobs, at least (and we use the term very loosely as this is only thanks to trillions and trillions in fiscal and monetary stimulus) the cumulative jobs trend is one of increase. In the US. Europe is a different matter. Because while even at 100,000 jobs added every month, as the chart that some have dubbed the "scariest chart in the world" shows, the US is adding jobs - why: look at this chart and all shall be made clear. Yes, adding debt at a breakneck speed is helping, but all this is doing is delaying the inevitable pain at the end, but in a world where everyone is only focused on the here and now, that is all that matters. Which, however is more than can be said for Europe. Sadly, while the US is slowly converting jobs gained (at a 2% GDP growth rate, in exchange for a public debt rising at double+ that pace), Europe is about to see the cumulative job loss number since the GFC slide to the the lowest since the crisis hit, and then go bidless. At that point it will merely be a question of how long until Europe is swept up in one massive revolution as the people say "no more" to prudent fiscal strategy and demand more, more, more of the debt heroin that is making their neighbors across the Atlantic appear so healthy on the surface, if projected to be 75% obese by 2020.

Norway Sovereign Wealth Fund Purges All Insolvent Eurozone Debt Holdings, US Hedge Funds Buying

One month later the purge is over: "Norway’s sovereign wealth fund sold all its Irish and Portuguese government bonds after rejecting the Greek debt swap and warned that Europe faces considerable challenges." Wait, what's that? The Eurozone's political strongarming (think Steve Rattner and GM) was unable to force the world's most powerful sovereign wealth fund into agreeing to what was essentially extortion when bank after bank noted how delighted they are to be bent over and take an 80% writedown on their Greek holdings. Stunning. But at least we now know who will be suing Greece shortly in an attempt to recoup par value of their strong law bonds: grab the popcorn - Norway vs Greece will be quite a spectacle. As for their dump of Irish and Portuguese bonds, no surprise there: fool me once (in perpetuity) shame on me, fool me twice, shame on Dan Loeb... who was buying everything Norway was selling. We wonder who ends up right.

Dan Loeb And The Portugal Connection

UPDATE: We can't help but see the symmetry between the Norwegain Sovereign Weath Fund selling all its Portuguese debt and Dan Loeb's biggest winner in Portuguese bonds as we suspect he was wrappping these purchases in the basis trade.
Portuguese bonds imploded this week with 10Y spreads rising over 70bps, which given its recent performance, got us wondering. For the last few weeks we have commented on the improvements in the Portuguese bond market's yields and spreads - specifically how this seemed much more about the CDS-Bond basis (on cheap carry and renewed confidence in CDS trigger events via ISDA) than simple risk appetite. It was especially surprising given the rest of Europe's sovereign bonds were deteriorating gradually in a somewhat range-bound market. Today we get some insight - courtesy of Dan Loeb's Third Point hedge fund's month-end performance details. The Dapper-Don notes Portuguese Sovereign Bonds as among its top-winners for the month of April - which overall was a poor month for the fund. A quick glance at the chart below tells the story of a Portuguese bond market very much in a world of its own relative to the rest of Europe this last month - and perhaps now we know who was pulling those strings?

Is EURUSD Volatility About To Explode?

With the end of Operation Twist's USD volatility repression, fading LTRO benefits, and various event risks (from elections to sovereign refinancings and bank downgrades/collateral calls) occurring, the gap between EURUSD implied volatility and European equity implied volatility is becoming excessive. FX volatility is extremely low (complacency high) but relative to equities it seems to offer a low-cost-long-vol bet on the chance of a risk-flare occurring. The last two times this has occurred (in the last year), EURUSD implied vol has rapidly caught up to equity's risk - why not third time the charm?

The Gift That Keeps On Taking: Bank Of America Facing $6.2 Billion Collateral Call

There is hardly any more long-suffering investor in this market than anyone who has held the stock of that worst of breed American bank: Bank of Countrywide Lynch (BAC), which following the worst M&A transaction in history, namely its purchase of Countrywide, has found out that one does not pay billions for hundreds of billions in contingent liabilities, which will manifest themselves in tens of billions in putback claims against the underreserved bank over time. But all that is now known, grudgingly, after being pointed out here back in 2010, and when all is said and done, BofA will be finished, with the contingent liability pool spun off in a special purpose entity which files for bankruptcy, while the equity remaining at the successor entity will be worth pennies on the dollar. The question is what are the catalysts that get the bank there. Luckily, yesterday the bank itself highlighted what the key driver to put events in motion may be, after it disclosed that should the bank be downgraded, which it will be as Moody's has warned, it would need to post up to $6.2 billion in collateral: an amount which would cripple the bank's liquidity,  and send its stock plunging as visions of AIG resurface, and concerns about a toxic downward spiral emerge.

“We are Preparing for Massive Civil War,” Says DHS Informant

by Dominique de Kevelioc de Bailleul, Beacon Equity Research:
In a riveting interview on TruNews Radio, Wednesday, private investigator Doug Hagmann said high-level, reliable sources told him the U.S. Department of Homeland Security (DHS) is preparing for “massive civil war” in America.
“Folks, we’re getting ready for one massive economic collapse,” Hagmann told TruNews host Rick Wiles.
“We have problems . . . The federal government is preparing for civil uprising,” he added, “so every time you hear about troop movements, every time you hear about movements of military equipment, the militarization of the police, the buying of the ammunition, all of this is . . . they (DHS) are preparing for a massive uprising.”
Read More @ BeaconEquity.com

Yes, The Re-Education Camp Manual Does Apply Domestically to U.S. Citizens

The time for denial is over
by Paul Joseph Watson, Infowars:
RELATED: Leaked U.S. Army Document Outlines Plan For Re-Education Camps In America

A shocking U.S. Army manual that describes how political activists in prison camps will be indoctrinated by specially assigned psychological operations officers contains numerous clear references to the fact that the policies do apply domestically to U.S. citizens.

Despite the fact that the manual is well over 300 pages long and would take hours to read properly, within minutes of posting our story yesterday a minority of commenters were claiming that the policies outlined in the document only pertained to foreign combat operations and did not apply domestically to U.S. citizens.

This is similar to the denial witnessed prior to the passage of the NDAA when some argued that the indefinite detention provisions did not apply to American citizens despite numerous legal analysts asserting they did and President Barack Obama himself acknowledging they did when he signed the bill.

Read More @ Infowars.com

Suspicious Activity Reporting Line Officer Training Video

from Public Intelligence:



The following video was made by the Bureau of Justice Assistance and the International Association of Chiefs of Police.  It is designed to inform law enforcement “line officers” of standards for reporting suspicious activity in furtherance of the Nationwide Suspicious Activity Reporting Initiative (NSI).  The video and transcript were obtained from the website of the Department of Public Safety in New Mexico.  Interestingly, the transcript includes multiple paragraphs at the end referring to the role of fusion centers and the Joint Terrorism Task Force (JTTF) in the suspicious activity reporting cycle that are not mentioned in the video.
Read More @ PublicIntelligence.net

 

France May Be Losing Its Head… Europe Soon To Follow?

Peter Schiff, Euro Pacific Precious Metals Gold Seek:

According to the European Central Bank, the Italian banking industry now holds more government debt than the banks of any of the major European economies: nearly €324 billions worth of shaky bonds. The Spanish banking sector is also heavily overweight in government paper, at a new record high of €263 billion.
This bond-buying spree was caused by the “Sarkozy Trade,” or the wild printing of euros by the ECB, which French President Nicolas Sarkozy hoped would relieve France’s own public debt problem. As a result of his campaigning, any European bank can get all the euros it wants at the low, low price of 1% interest for 3-year loans – and instantly convert it into its own government’s bonds. Italian and Spanish 10-year bonds pay above 5.5%, yielding a 4.5 percentage point return for doing nothing (though whether this is a winning trade in the long-term depends on what happens after the first three years).
Just as in the US, private investors can no longer be counted on to purchase all the bonds that European governments would like to issue. So, the ECB is printing the euros to buy them – and thinly disguising the process by funneling it through the banking sector.
Read More @ GoldSeek.com

Is an Economic Deluge Nigh?

By David Galland Casey Research:

If history has taught one certain lesson, it is that the less fettered an economy, the better humankind is able to do what it does best: run from trouble and run toward opportunity. In this way mistakes are quickly resolved and progress assured.
Conversely, the deeper the muck of regulation, mandates, taxes, subsidies and other bureaucratic meddling, the slower we humans are in following our natural instincts until the point that progress is slowed or even stopped.
Read More @ CaseyResearch.com

CME Group, BNYMellon CEO’s Resign

from Silver Doctors:

The CME Group’s CEO Craig Donohue has retired effective Thursday, 7 months ahead of schedule when his contract expired in December, and Bank of NY Mellon’s CEO Robert Kelly resigned late Wednesday amid accusations the firm shortchanged (fleeced) clients when conducting currency exchange transactions.
Pardon us if this seems like the rats are suddenly in an extraordinary hurry to leave the sinking ship?
Is the sudden exodus of the execs coincidence, or are tin hatters Bix and Fulford on to something?
Read More @ SilverDoctors.com

  

PRECIOUS-Gold edges into positive territory after U.S. data

* Non-farm payrolls rise less than expected in April
* Euro wilts ahead of French, Greek elections
* Silver falls to 3-1/2 month low below $30/oz
* Gold at most expensive vs silver since mid-January
by Jan Harvey, Reuters:

LONDON, May 4 (Reuters) – Gold prices edged back into positive territory on Friday after a report showed the U.S. economy added fewer jobs than expected last month, fuelling speculation the Federal Reserve may turn to further monetary easing to boost growth.
Read More @ Reuters.com

Even His Trillions Couldn’t Save Him: Edmund Leopold de Rothschild Dead at 84

from American Kabuki:
I am not sure why this took so long to get into the major papers considering he died on April 19th, 2012, and he was such a prominent figure but here’s what I’ve found so far.
Most of the obituaries are making him out as a musical philanthropic and miniature train enthusiast. They say very little about his banking activities in Latin America and his funding deep involvement in the CO2 caused Global Warming scam.
The only really good photo I could find was one with him in a train engineers hat, so I created his composite above. He was involved in far more than orchestras, choirs, and minature scale railroading. He appears to have never married.
Read More @ AmericanKabuki

SHOCKED? Nope. “CFTC Said to Delay Derivatives Exchange Rule Opposed by CME”

[Ed. Note: Don't think for a minute that Jamie Dimon didn't personally demand the CFTC to stand down. READ: Jamie Dimon led Wall Street bosses in a closed-door meeting to personally lobby the Fed about softening proposed reforms that might crimp their profits.]
By Silla Brush, Bloomberg :
The U.S. Commodity Futures Trading Commission will delay a final vote on a rule governing derivatives exchanges amid internal dissent that it may restrict CME Group Inc. (CME), owner of the world’s largest futures exchange, according to four people briefed on the matter.
The rule, proposed in 2010, sought to require at least 85 percent of a contract’s trading to occur on a central market. The agency will meet on May 10 to approve a series of other exchange requirements, the CFTC said. The commissioners will delay the provision setting percentage levels, said the people, who spoke on condition of anonymity because the rulemaking process is not public. Under the proposal, an exchange would be forced to de-list a contract if it didn’t meet the 85 percent level.
The proposed rule would restrict CME’s ClearPort service, which acts as a clearinghouse for swaps traded outside of the company’s central market, Chicago-based CME said last year.
Read More @ Bloomberg.com

Anxious Japan prepares for life without nuclear power

by Justin McCurry, The Guardian:
Japan has 54 nuclear reactors, but as of Saturday, not one of them will be in operation – how will the country cope?
This weekend Japan will begin a bold experiment in energy use that no one had thought possible – until the Fukushima Daiichi power plant suffered a triple meltdown just over a year ago.
On Saturday, when the Hokkaido electric power company shuts down the No3 reactor at its Tomari plant for maintenance, the world’s third-largest economy will be without a single working nuclear reactor for the first time for almost 50 years.
The closure of the last of Japan’s 54 reactors marks a dramatic shift in energy policy, but while campaigners prepare to celebrate, the nationwide nuclear blackout comes with significant economic and environmental risks attached.
Read More @ Guardian.co.uk

Investors Blindsided, Cause of the next Rally, Markets, Gold, Oil and More

from KingWorldNews:
Peter Schiff: CEO & Chief Global Strategist of Euro Pacific Capital & Successful Author (NEW BOOK “The Real Crash: America’s Coming Bankruptcy — How to Save Yourself and Your Country”) - Peter Schiff has over 20 years of experience as a financial professional and a respected figure whose advice is highly sought after by all media outlets. He appears regularly on CNBC, CNN, Fox News, FBN and Bloomberg. He has also been quoted in many of the nation’s leading newspapers, including The Financial Times, The Wall Street Journal, Barron’s, Investor’s Business Daily, The New York Times, etc..
Listen Now @ KingWorldNews.com

The Sorrow of the 49er: How Price Manipulation Breaks the Spirits of the Silver Investor

from Silver Vigilante:
The silver chart, by T.F. at T.F. Metals Report, during the April-May Drive By Shooting in 2011.
The silver market has been battered by the psychological warfare of command-and-control economics. This economic warfare has been psychologically exhausting for the silver investor as silver remains a no-news market with short-term bearish price movements. Over the last year, however, the silver investor has become hardened or acclimated to a market without new buyers or new sellers and little legitimate price action. Instead, they’ve watched as banks colloquially known as “commercial hedgers” bluff a long, long position in physical silver with shorts exceeding three-times the yearly supply at any given time.  What’s likely is these banks do not own any a position of physical silver anywhere near this amount.
For the 49er (those who bought silver in the 40s), who entered into the market in March-April of 2011, the price of silver has been a source of discomfort if not inner-turmoil.
Read More @ SilverVigilante.com

The Importance of Free Minds

by Scott Lazarowitz, Lew Rockwell.com:
I have sworn upon the altar of God, eternal hostility against every form of tyranny over the mind of man. ~ Thomas Jefferson
Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the government for a redress of grievances. ~ United States Constitution, First Amendment
The above-quoted words reflect sentiments so essential to a condition of liberty that they are at the forefront of the history of American political thought. Jefferson’s quotation as well as the first of the listings in the so-called Bill of Rights, represent a theme carried over from the Revolutionary War period: minds should be free to explore and express whatever is of concern to them. If one reads the First Amendment closely, it becomes evident that this provision was intended to prohibit government intrusions upon the then-known means and settings for free thought.
Read More @ LewRockwell.com

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In The News Today

May 4, 2012, at 10:39 am
by Jim Sinclair 

Dear CIGAs,

Young Italians are flocking to become shepherds. The pay is poor and the hours are long, but there is job security, fresh air and as much pecorino cheese as you can eat.



Traditionally the preserve of older men, shepherding has recently attracted 3,000 young Italians, according to the Italian agricultural body.


Jim Sinclair’s Commentary

Think about the value of the HUI declining 35% while gold is trading in the $1600s. That defies logic, and screams manipulation.

The MOPE about higher costs is, as always, a tool of the manipulators.

Chart comment compliments of CIGA Luis Ahlborn Sequeira.

Jim Sinclair’s Commentary

Financial TV just said to ignore the employment numbers as the changes are diminutive or too small to consider.

Employers in U.S. Added Fewer Jobs Than Forecast in April
By Shobhana Chandra – May 4, 2012 5:43 AM MT
Employers in the U.S. added fewer workers than forecast in April and the jobless rate unexpectedly declined as people left the labor force, underscoring concern the world’s largest economy may be losing speed.
Payrolls climbed 115,000, the smallest gain in six months, after a revised 154,000 rise in March that was more than initially estimated, Labor Department figures showed today in Washington. The median estimate of 85 economists surveyed by Bloomberg News called for a 160,000 advance. The jobless rate fell to a three-year low of 8.1 percent and earnings stagnated.
A slowdown in hiring as corporate optimism cools may restrain the wage growth needed to fuel consumer spending, which accounts for about 70 percent of the economy. Federal Reserve policy makers view unemployment as “elevated” and plan to hold borrowing costs low through late 2014.
“The labor market isn’t improving all that much,” Mark Vitner, a senior economist at Wells Fargo Securities LLC in Charlotte, North Carolina, said before the report. “Layoffs have slowed but hiring hasn’t really picked up. The next couple of months are going to be challenging. The Fed’s caution is well-placed.”
More…

 

 

Jim’s Mailbox

May 4, 2012, at 10:34 am
by Jim Sinclair 

Jim,
Unemployment drops to 8.1%. This is pure MSM MOPE fiction.
CIGA Tom





The 86 million invisible unemployed By Annalyn Censky @CNNMoney May 3, 2012: 5:06 AM ET


NEW YORK (CNNMoney) — There are far more jobless people in the United States than you might think.
While it’s true that the unemployment rate is falling, that doesn’t include the millions of nonworking adults who aren’t even looking for a job anymore. And hiring isn’t strong enough to keep up with population growth.
As a result, the labor force is now at its smallest size since the 1980s when compared to the broader working age population.
"We’ve been getting some job growth and it’s been significant, but it hasn’t yet been strong enough that you start to get people re-engaging in the labor market," said Keith Hall, a senior research fellow at the Mercatus Center and former commissioner of the Bureau of Labor Statistics.
A person is counted as part of the labor force if they have a job or have looked for one in the last four weeks. Only about 64% of Americans over the age of 16 currently fall into that category, according to the Labor Department. That’s the lowest labor force participation rate since 1984.
It’s a worrisome sign for the economy and partly explains why the unemployment rate has been falling recently. Only people looking for work are considered officially unemployed.
Jason Everett, for example, wouldn’t be counted.
Out of work for nearly three years now, Everett has given up his job search altogether.
Instead, the unemployed plumber and Air Force veteran takes a few community college courses and looks after his two children while his wife is the primary breadwinner.
More…





Jim,
Most people will read the bullshit MSM headlines. Others will delve onto the Internet to get the real story. Read the two versions below.
People laugh when told MSM is nothing but Goebbels like propaganda. It gets far worse. Read the last story at the bottom on re-education camps!

U.S. economy adds 115,000 jobs in April; unemployment rate dips to 8.1% 05/04/2012 08:31:07 AM
By Jeffry Bartash, MarketWatch
WASHINGTON (MarketWatch) — The U.S. economy created just 115,000 jobs in April as hiring slacked off for a second straight month, according to the government’s latest employment figures.
The unemployment rate edged lower to 8.1% from 8.2%, but it fell because more people stopped looking for work. Some 342,000 people dropped out of the labor force to mark the second decline in a row, the Labor Department said Friday.
“The unemployment rate is falling for all the wrong reasons,” said Ryan Sweet, senior economist at Moody’s Analytics. The end of extended jobless benefits in many states may have contributed to the decline, he said.
More…

   

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