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Our House of Cards
Our House of Cards
As John Williams (shadowstats.com) has observed, the payroll jobs reports no longer make any logical or statistical sense. Ask yourself, do you believe that retailers responded to the very disappointing Christmas season by rushing out in January to hire 46,000 more retail clerks?
Perhaps those 46,000 retail jobs is the BLS telling us that they have to come up with new jobs to report whether or not there are any.
As we have reported on a number of occasions, whenever the price of gold in the futures market starts to rise, massive uncovered shorts are suddenly dumped on the market. As the shorts dramatically increase the supply of future contracts all at once, the supply overwhelms demand, and the price of gold is driven down despite the fact that the demand for gold in the physical market is strong. (Remember, the price of gold is determined in the futures market in which contracts are largely settled in cash and seldom in gold. The physical market is where gold bullion is purchased, not paper claims on gold for speculation.)
…click on the above link to read the rest of the article…
BEIJING WE’VE GOT A PROBLEM « The Burning Platform
BEIJING WE’VE GOT A PROBLEM « The Burning Platform.
The Chinese stock market hit a four year high today at 3,020. This is up 53% since the middle of 2013 low and up 48% in the last six months. I guess this must mean the Chinese economy is operating on all cylinders. If you think so, you’d be wrong. Barron’s interviewed a no-nonsense woman who has lived, worked and analyzed China from within since 1985. Anne Stevenson-Yang has spent the bulk of her professional life there working as a journalist, magazine publisher, and software executive, with stints in between heading up the U.S. Information Technology office and the China operations of the U.S.-China Business Council. She’s now research director of J Capital, an outfit that works for foreign investors in China doing fundamental research on local companies and tracking macroeconomic developments.
This lady is about as blunt as you can get about Chinese fraud, lies, mal-investment, and data manipulation. The entire Chinese economic miracle is a fraud. The reforms are false. The leaders are corrupt and as evil as ever. The entire edifice is built upon a Himalayan mountain of bad debt.
The slave labor manufacturer for the world’s mal-investments since 2008 make Japan look like pikers.
China, for all its talk about economic reform, is in big trouble. The old model of relying on export growth and heavy investment to power the economy isn’t working anymore. Sure, the nation has been hugely successful over recent decades in providing its people with literacy, a decent life, basic health care, shelter, and safe cities. But starting in 2008, China sought to counter global recession with huge amounts of ill-advised investment in redundant industrial capacity and vanity infrastructure projects—you know, airports with no commercial flights, highways to nowhere, and stadiums with no teams. The country is now submerged by the tsunami of bad debt that begets further unhealthy credit growth to service this debt.
The BLS should take lessons from the Chinese government in data falsification. But, the American MSM dutifully reports the Chinese data as if it was real. Faux journalism at its finest.
…click on the above link to read the rest of the article…
John Williams’ Take On The October Unemployment Report: “The Economy Remains In Terrible Shape” | Zero Hedge
When it comes to inflation data, there are two parallel sources: the BLS, and ShadowStats’ John Williams, who continues to plough through the underlying “data” using pre-pre-pre-revision protocols, and every month reveals a parallel universe in which something shocking is revealed: the truth. Here is his take on the October “weaker but really stronger than expected” jobs numbers. Here is what really happened.
From ShadowStats
Never Recovered, the Economy Remains in Terrible Shape. The large number of opening headlines in today’s (November 9th) missive reflects various stories, ranging from twisted unemployment data, to an election dominated by underlying economic reality, and to headline 2014 financial results on the federal government’s operations that should raise some troubling questions in the markets. The general outlook is unchanged
Twisted Unemployment Numbers. Headline October 2014 unemployment reporting, in particular, was skewed heavily by warped seasonal-adjustment factors that do account properly for last year’s government shutdown. When the U.S. government closed in October 2013, the shutdown encompassed the Bureau of Labor Statistics (BLS) base-period for determining the unemployment and employment detail in the household survey, as well as for determining employment in the payroll survey. The BLS was unable to determine fully the impact of the government shutdown on the monthly October labor data.
…click on the above link to read the rest of the article…
Manipulating the Consumer Price Index: Hedonic Quality Adjustments | The Consumer Price Illusion
Manipulating the Consumer Price Index: Hedonic Quality Adjustments | The Consumer Price Illusion.
Have you heard the one about CPI?
Suppose that a TV manufacturer retires a product and replaces it with a newer, better, and much more expensive one. If the new TV costs 5 times more than the old one, how can we manipulate the hell out of massage the price of the old TV to make it look like the price fell? By using the dark arts of econometrics, my son!
If you believe the public comments made by the world’s central bankers, the prices that consumers pay for items are not rising fast enough; in some places like Europe they worry that prices might actually fall (a tragedy for the possessing classes, as their manic one-way long bets might not work then).Central bankers are terrified of this outcome. Setting aside for a second the apparent insanity of this logic for your average consumer, who experiences price rises on a near continuous basis, let’s examine in detail one of the jokes gauges economists use for measuring prices: the Consumer Price Index (CPI).
Ostensibly, the CPI is a linear combination of the “prices” of things/stuff consumers could actually purchase weighted by a percentage that the “ideal consumer” spends on any particular stuff/thing in his “ideal” basket. The main problem here is that the “prices” used are not the prices a consumer would actually pay; instead the real price for an item is scaled by what the BLS calls a “Hedonic Quality Adjustment (HQA)”. The HQA was designed to solve a real world problem economists face: the market keeps pumping out new and better devices. In practice the HQA is used to artificially depress the prices used in the calculation of the CPI.
…click on the above link to read the rest of the article…
