Friday, March 9, 2012

But Do The "Estimates" Make Sense?

"Americans are feeling wealthier now, they're borrowing more money now (Some dope on Good Morning America)
There's no doubt the the second part of that statement is true.  The latest consumer credit report showed that consumer debt rose substantially in January.   The source was primarily credit cards and non-revolving credit - student loans and [Government-subsidized] auto loans.  Can't find a job?  Enroll at the University of Phoenix and get a robo-stamped student loan.  Then the Government can remove you from the labor force statistics and a reduce the number of people not working or in the labor force.  The debt to personal income ratio is rising quickly again.  It's even worse if you remove Government transfer payments from the personal income LINK.  Does it make sense to make that particular adjustment?  Yes, because that's taking money from your pocket and giving it to someone who feebly qualifies for Government assistance.   We know the Government is borrowing more and more everyday - at an accelerating rate.   The Government spending deficit hit an all-time record in February:  
The Congressional Budget Office predicts a federal budget deficit of $223 billion for February, 2011, the largest monthly budget deficit ever recorded, according to the Washington Times.
We know the BLS payroll is - to be blunt - a complete fraud.  But do the manipulated results even make sense?  We saw in 2008 and 2009 that several monthly reports would show increases in financial sector and construction workers, despite the fact that Wall Street and the construction/housing market went into a freefall.

What about the numbers being reported to today?  To begin with, the birth/death model, which "models" theoretical employment based on estimates of new businesses started vs. new businesses closed.  Anyone know anyone who is starting a new business?  I know of quite a few who are closing down their businesses, many of them directly correlated with basic economy activity (construction, retail, etc).  Today the birth/death "adjustment" added 91k to the payroll report.  Does this make any sense?

Let's see the categories where the Government claims there was job growth.  Professional and business services added 82,000 jobs in February - BUT just over half of the increase occurred in temporary help services (+45,000).  In financial analyst lingo, this is a very low quality statistic in terms of analyzing the strength of the statistic.  Hired someone to help you close down your business?  We'll call it "jobs gains."  But the overall number does not make sense either.  We know that on an real inflation-adjusted basis, the economy is declining.  This category of jobs represents the "feeder" sector of the economy, which "feeds" off of growth of "host" businesses.  I'm sorry, but this number is not reliably justified.

How about "Heath care and social assistance."  In this category employment was estimated to have risen by 61,000.  In one sense, this does make sense.  Per the above Govt record spending deficit, we know that Government spending is hitting new records.  Healthcare and social assistance businesses are "private sector businesses" primarily funded by the Government (medicare, medicaid, social security disability, etc).  This employment growth, to the extent that it's real, is of very low quality because it requires record spending deficits and record Government debt issuance to sustain.  It's not low quality - it's disastrous.

How about the job growth in manufacturing?  Is it bona fide and does it make sense?  Metal fabrication and transportation jobs added 19k of the 31k BLS-reported jobs.  If it's true, this would primarily be from the auto industry, which is being subsidized with Government money, especially the loans and leases financing the "sales."  Last month the nationwide dealer inventory hit a new all-time high.  These are cars that are shipped from the manufacturer to the dealers but reported as auto sales.  The money for financing this inventory and GM and Chrysler is coming from Government supported financing.  The cars that do actually get sold to end users are primarily financed with Government subsidized loans and leases.

I think everyone gets the idea with this.  Here's the report if you would like to look at the details:  LINK
The employment number is not only manipulated to the point outright fraud, but the manipulated results just do not make sense to anyone dissecting them with thought and rationality (which excludes the shit for brains on CNBC).

Now for the biggest and most important question of the month, maybe the year:   Where will Peyton Manning end up?   Have a great weekend!


  1. USAGOLD News and Views » Blog Archive
    » Grant: A New Fed Bond-Buying Plan Would Be Market Manipulation

  2. Denver Broncos in the Super Bowl Baby!!! That is with Peyton, of course.

  3. I'm all in on that if they sign Manning!!!

  4. Temp Professional and business services (45,000).

    Hmmm, lets see, 4.5 temp tax preparers per WalMart equals 45,000.

    Sounds good to me!

  5. $223 billion in debt for February-and February is the shortest month of the year!

    Here is an idea as to how they are justifying the birth/death model-they are including Zombies in the workforce! (They fit in perfect with zombie banks). Maybe they think that by including the undead working in dead end brain dead jobs unemployment numbers will look better, unfortunately zombies make lousy consumers, they don't want electronics or cars (though zombies might spend all of their money on zombie food, namely brains, namely the brains of the governors of the federal reserve. I mean, the fed heads are not using their brains so might as well put them to good use...)

  6. Why aren't more people fumed over this?

    Goldman Sachs Raises Conflicts to a High Art

    Right after a Delaware state judge issued his ruling last week in a shareholder lawsuit contesting Kinder Morgan Inc.’s purchase of El Paso Corp. (EP), the public finger-wagging aimed at Goldman Sachs Group Inc. (GS) began.

    Goldman, some pundits wrote, had emerged as the biggest loser of the bunch. The bank’s conflicts of interest in advising El Paso on the deal had been castigated by an esteemed jurist as breathtakingly over the top. Once again, Goldman had sullied its precious reputation. And so on, critics said.

    While it’s always fun to fantasize about Goldman losing at anything, one gnawing question stands out: What exactly did the company lose? The answer is nothing, as far as I can tell. Actually, it won big.

    They were aware that Goldman had every incentive to maximize its own investment and fleece El Paso’s shareholders.

  7. Biderman’s Daily Edge 3/9/2012: Rigged Market Conventional Wisdom

  8. This time of year one of the large wealth transfer systems kicks in as 6.5 million people receive an average of $6,000 from the EITC. This comes in a lump check and is paid to people who have never successfully managed their front pocket money. They get these thousands of dollars and piss it away in a few weeks or less. This props up the market as used cars are sold, vacations taken, junk bought at the big box stores, etc. For most eleigible for EITC they go to the cheap tax preparers as soo as they have their W2's so most get their money in February and March. When the money is gone the little "boom" we are seeing in retail sales will end and the small bright spot in our depression will disappear.

  9. Bill Black: US Promotes Flawed Economic Dogma that Encourages Fraud and Needlessly Perpetuates a Pattern of Recurring and Intensifying Financial Crises

    On the natural tendency of unregulated capitalism to evolve into crony capitalism: Pure capitalist systems do not exist anywhere - for very good reason; they throw lots of humanity into the ditch, and they produce elite criminals. Unregulated capitalism tends to evolve into crony capitalism. Conservative economists like Adam Smith have recognized this from the beginning. They always emphasize that government must be there. And they always emphasize one key role for government: Enforcing the law against fraud. Even Ayn Rand emphasized that the government is essential to stop businesses from using fraud.

    On how Americans and Europeans are being treated: They think we are children. They think they can lie to us and that they can be really clumsy in their lies - and we'll just think, "OK. We guess these banks are really healthy now. What brilliance!" They don't think we are bright enough to put it together. They think we have lost any capacity for outrage.

  10. The NYPD Tapes Confirmed
    The report police hid for nearly two years that corroborates a Voice investigation — and vindicates a whistle-blower the NYPD tried to destroy

    In the wake of our series, NYPD commissioner Raymond Kelly ordered an investigation into Schoolcraft's claims. By June 2010, that investigation produced a report that the department has tried to keep secret for nearly two years.

    The Voice has obtained that 95-page report, and it shows that the NYPD confirmed Schoolcraft's allegations. In other words, at the same time that police officials were attacking Schoolcraft's credibility, refusing to pay him, and serving him with administrative charges, the NYPD was sitting on a document that thoroughly vindicated his claims.

  11. For the children? How about force feeding this crap to the attendees of the next Jackson Hole congregation? Wonder how this fits into the cpi?

    70% of all Ground Beef Contains "Pink Slime" ... and USDA Bought 7 Million Pounds of the Stuff for School Lunches

    pink slime leftovers from BGH steroid feed cows, who eat GMO corn which turns their insides to diseased, rot infected organs which causes high infertility rates, high rates of premature death, severe behavioral and mental issues (literally "mad cows"). and the USDA decides it's ok for people, for schools to feed the leftovers to kids and for McDonald's and Wal-Mart to sell it to the general public with the label 100% pure beef...

    and people wonder why 50% of the population is on some form of synthetic poison medication, and our children are halving more mental and psychical health issues, why MR/DD diagnoses are exploding in our younger population.

    you are what you eat. and pink slime is only the tip of the poisoned food iceberg...

  12. An Open Letter to Jamie Dimon

    Through my role as the co-founder of the Commodity Customer Coalition and pro bono counsel for some 8,000+ customers whose property it looks like your institution may be holding without their consent, I have loudly advocated for JPMorgan Chase to return this property. In response to this, rather than doing the right thing, you closed all of my personal and corporate bank accounts and my personal credit card. I have been told by multiple members of the media that JPMorgan Chase has called them and stated that if their media outlet has me on television again, that JPMorgan Chase will pull their advertising from the offending network.

    1. Everyone knows but the LAW doesn't care....

      MF Global Case Rattles World of Futures

  13. as we have noticed now everything is gold bearish - europe, greece default, ecb meetings, fomc meetings, boe printing, boj printing -

    so what's left to make gold bullish - nothing

    its over.

    1. The last man standing - even Jim Sinclair is now creating a panic, intimating SELL.


      Please help us get support from mining companies and World Gold Council

      Now that even some gold fund managers and newsletter writers have started to get suspicious about surreptitious intervention in the gold market by central banks --

      -- maybe it's time to try again to get the support of mainstream gold and silver mining companies.

      Yes, these companies are especially vulnerable if they start complaining about suppression of precious metals prices. Governments, the instigators of the price suppression, control mining licenses, royalty payment requirements, and enforcement of environmental regulations. And as mining is the most capital-intensive business, miners usually need financing by the biggest investment banks, the agents of central banks that implement the price suppression scheme.
      Painful as it was for precious metals investors, the recent smashdown in the gold and silver markets, so incongruous and counterintuitive, so obviously intended only to knock prices down at a strategic moment for the world financial system rather than to maximize profits on a long position (see the comments by Ross Norman of Sharps Pixley at, may have been a Pyrrhic victory for the central banks. For it gave their game away.

    3. Suppression~Immoral suasion...???

      Financial Repression Back to Stay: Carmen M. Reinhart

      As they have before in the aftermath of financial crises or wars, governments and central banks are increasingly resorting to a form of “taxation” that helps liquidate the huge overhang of public and private debt and eases the burden of servicing that debt.

      Such policies, known as financial repression, usually involve a strong connection between the government, the central bank and the financial sector. In the U.S., as in Europe, at present, this means consistent negative real interest rates (yielding less than the rate of inflation) that are equivalent to a tax on bondholders and, more generally, savers.

      In the past, other measures also included directed lending to the government by captive domestic entities (such as pension funds or banks), explicit or implicit caps on interest rates, regulation of cross-border capital movements, and (generally) a tighter coordination between governments and banks, either explicitly through public ownership of some institutions or through heavy “moral suasion” by officials.

      ...what gets me is that people could deny these scumbags WOULD NOT resort to crony manipulation as if they cared about the general welfare of the masses.

  14. actually anonymous, sinclair clarified his statement on his website last night. he was referring to a his father as a market-maker, not an investor. market-makers take positions from making markets and sometimes they get caught short. he was saying that as a trader you don't want to get caught short this market.

    you see the huge drop in o/i and short-positions of the commercials in gold and silver from 2 weeks ago to last friday? you better take a look. one of the biggest drops in short positions in gold by commercials that i can remember in nearly 11 years of doing this sector

  15. The political elite and crony capitalists have done a fine job of destroying the morale of the country!

    Why the American Empire Was Destined to Collapse
    Author and social critic Morris Berman says the fact that we're a nation of hustlers lies at the root of our decline.

    Several years after the Wall Street-ignited crisis began, the nation’s top bank CEOs (who far out-accumulated their European and other international counterparts) continue to hobnob with the president at campaign dinners where each plate costs more than one out of four US households make in a year. Financial bigwigs lead their affluent lives, unaffected, unremorseful, and unindicted for wreaking havoc on the nation. Why? Because they won. They hustled better. They are living the American Dream.

    This is not the American Dream that says if you work hard you can be more comfortable than your parents; but rather, if you connive well, game the rules, and rule the game, your take from others is unlimited. In this paradigm, human empathy, caring, compassion, and connection have been devalued from the get-go. This is the flaw in the entire premise of the American Dream: if we can have it all, it must by definition be at someone else’s expense.

  16. Well on a day where Gold should be a better performer - it is the worst performer together with Silver. Everything else is holding quite well. The Greece default was expected for a long time now.

    And you want to tell me Gold is a safe haven. And also tell me that this time the crises will be different to 2008. Keep on dreaming.

    1. Kyle Bass Says Gold Is Going a Lot Higher

  17. 12 March 2012
    MF Global: Mark Melin Interviews Haar And Koutoulas On What Really Happened


    2. The Audacity of Bonuses at MF Global

      Monday, March 12, 2012 at 12:45PM

      In the spirit of George Orwell’s Animal Farm commandment: “all animals are equal, but some animals are more equal then others” comes the galling news that bankruptcy trustee, Louis Freeh, could approve the defunct, MF Global to pay bonuses to certain senior executives. This, despite the fact that nearly $1.6 billion of customer funds remains “missing” or otherwise partially accounted for, yet beyond the reach of those customers, perhaps forever, since before the firm declared bankruptcy on October 31, 2011.

      These people are apparently so special that despite incompetence, negligence or potential malfeasance in diverting customers’ funds away from their rightful spots, their expertise is critical to the bankruptcy proceeding. In that realm, their ‘job performance’ will help Freeh "maximize value for creditors of the company”. Translation: it will ensure banks like JPM Chase keep their cut, since customers are not creditors. Again, plain wrong.

      But forget simple matters of right and wrong for a moment. After all, this is Big Finance: what's most important is what’s not necessarily what’s legal or illegal, but more practically, what you can get away with and what you can’t. In that regard, the sheer impotence of regulators, the Department of Justice, and the FBI are enabling factors in perpetuating financial crimes.

  18. Fed To Take Propaganda To The Schoolroom: Will Teach Grade 8-12 Students About Constitutionality Of... The Fed

    Most importantly, the "Listening Platform" should be able to "Handle crisis situations, Continuously monitor conversations, and Identify and reach out to key bloggers and influencers." While it is unclear just how successful the Fed has been in eavesdropping on various critical blogs, and divining "sentiment", it now appears that the propaganda masters at the Office of Central Planning have decided to go for young American minds while they are still pliable. It appears that as part of its reenactment of Goebbels "economic education" curriculum, the Fed will now directly appeal to K 8-12 student, in which it will elucidate on the premise of "Constitutionality of a Central Bank." You know - just in case said young (and soon to be very unemployed) minds get ideas that heaven forbid, the master bank running the US is not exactly constitutional - you know, that whole thing between Andrew Jackson and the Second Bank of the United States...

  19. Gold Resource Corporation to Launch Gold and Silver Dividend

    COLORADO SPRINGS, CO--(Marketwire -03/12/12)- Gold Resource Corporation (the Company) (AMEX: GORO - News) is pleased to announce the scheduled launch of its innovative gold and silver dividend program. Gold Resource Corporation is a low-cost gold producer with operations in the southern state of Oaxaca, Mexico. The Company has paid 20 consecutive monthly dividends since declaring commercial production totaling over $41 million returned to shareholders.

    Gold Resource Corporation is scheduled to launch its gold and silver dividend program April 10th, 2012. The default company dividend will continue to be in cash, but this unique option will give shareholders the ability to convert their cash dividends into physical gold and/or silver.

  20. Guy gets no traction....

    David Stockman on Crony Capitalism

    Moyers & Company explores the tight connection between Wall Street and the White House with David Stockman, former budget director for President Reagan.

    Now a businessman who says he was “taken to the woodshed” for telling the truth about the administration’s tax policies, Stockman speaks candidly with Bill Moyers about how money dominates politics, distorting free markets and endangering democracy. “As a result,” Stockman says, “we have neither capitalism nor democracy. We have crony capitalism.”

  21. everything to you people is a fraud and manipulation. when change of thinking is necessary its hard to do. positive news everywhere but no acceptance of it. gold goes from headline to headline to meeting to events then you know its getting weak. fundamentals are not in play anymore - cause they are changing.

    and miners still cannot be lifted eventhough everyone says they are cheap. all this supposed physical offtake has no impact.

    only a trader with no physical at all seems to be making money, Gary Savage.

    and comex silver delivery once again a damp cloth. when do you realize that all this smoke under the hood, aka harvey etc, is just stupid.

    turk also - constant imminent explosion. kingworld is a pumping machine. to buy physical silver must be nuts, you need a rise of at least 35% before you are even - with sales taxes, delivery, selling price, premiums, storage. the most idiotic investment. and not to mention the risk. only if you had bought at the real bottom. natural gas is the place to be now.

  22. And with all this positive news around -Silver can't even get traction. Don't tell me it has rises blah blah since Dec. Take another time period - any other since the bubble burst.

    Gold "investors" are the only traders nothing else and if you had chosen any other resource company who paid dividends already in 2008 you would have been better off today. So in the next crises that will be the same.

    Great for the people who got into gold at the bottom but that is all this was about. The people getting in now are just suckers.

    1. When you smoke pot, you must exhale at some point, no?

      Consequences Of Infinite Liquidity

      Chart 3 (Federal Debt Held by Foreign & International Investors As a % of GDP (FDHBFINGDPR) and the London P.M. Fixed Price of Gold (GOLD)) reveals that there is no plan other than infinite liquidity and debt generation. This system, however, can absorb only so many debt to income (GDP) spikes before it implodes. The latest spike (magenta circled) represents acceleration within an accelerating trend. If that setup doesn't raise some hairs on the back of your neck, then nothing will. Capital "knows" the assumption of infinite has a nasty habit of turning finite when confidence disappears suddenly.