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The minutes from the last Fed meeting were released on Wednesday afternoon. The minutes, along with a squadron of jabbering Fed heads lying about the economy doing great, pretty much locked in the most talked about .25% interest rate increase in world history. Evidently the Wall Street titans of greed have convinced the muppets higher interest rates are great for stocks, as the market soared by 250 points. As institutional money exits the market on these rigged up days, the dumb money retail investor buys into the market with dreams of riches just like they did with Pets.com in 2000, McMansions in 2005, and Bear Stearns in 2007.

The Fed has lost any credibility they ever thought they deserved by delaying this meaningless insignificant interest rate increase for the last three years, so they will make this token increase in December come hell or high water. They want to give themselves some leeway for easing again when this debt saturated global economy implodes in the near future. The Fed is trapped by their own cowardice and capture by the Wall Street cabal. If they raise rates the USD will strengthen even more than it has already. The USD is already at 11 year highs. It has appreciated by 25% in the last year versus the basket of world currencies. The babbling boobs on the entertainment news channels authoritatively expound with a straight face about the rise in the dollar being due to our strong economic performance. It’s beyond laughable, as the economy has been sucking wind since the day the Fed turned off the QE spigot in October 2014.

Chart of the Day

Anyone with a working brain and an IQ over 100 (eliminates the bimbos and boobs on CNBC) can see the USD isn’t strengthening of its own accord.

…click on the above link to read the rest of the article…

Ignore the Media Bullsh*t–Retail Implosion Proves We Are In Recession

October 15, 2015

Ignore the Media Bullsh*t–Retail Implosion Proves We Are In Recession

Here we go again. The dying legacy media will continue to support the status quo, who provide their dwindling advertising revenue, by papering over the truth with platitudes, lies, and misinformation. I have been detailing the long slow death of retail in America for the last few years. The data and facts are unequivocal. Therefore, the establishment and their media mouthpieces need to suppress the truth.

They spin every terrible report in the most positive way possible. They blame lousy retail results on the weather. They blame them on calendar effects. They blame them on gasoline sales plunging. That one is funny, because we heard for months that retail spending would surge because people had more money in their pockets from the huge decline in gasoline prices.

September retail sales were grudgingly reported by the Census Bureau this morning and they were absolutely dreadful. This followed an atrocious August report. The MSM couldn’t blame it on snow, cold, flooding, drought, or even swarms of locusts. So they just buried the story in their small print headlines. The propaganda media machine had nothing. They continue to spew the drivel about a 5.1% unemployment rate as a reflection of a booming jobs market. If we really have a booming jobs market, we would have a booming retail sector. The stagnant retail market reveals the jobs data to be fraudulent. The 94 million people supposedly not in the job market can’t buy shit with their good looks.

Despite the storyline about consumer austerity being the reason for sluggish spending, the facts prove otherwise. Consumer spending accounted for 68% of GDP in 2008 at the peak. Seven years later it still represents 68% of GDP. The difference is the spending has shifted dramatically towards services since the Wall Street created financial crisis. Spending on services has grown by 31% versus 20% for goods since 2008. Guess what has caused that surge?

…click on the above link to read the rest of the article…

David Stockman On CNBC: ‘We’re On The Fiscal Titanic”

October 1, 2015

David Stockman On CNBC: ‘We’re On The Fiscal Titanic”

A government shutdown would force Congress to address fiscal issues before they reach unmanageable levels, a former Reagan administration official contended Wednesday.

“We’re on the fiscal Titanic and we’re going to hit something hard and immovable one of these days,” said David Stockman, director of the Office of Management and Budget from 1981 to 1985, in a CNBC “Closing Bell” interview.

The House of Representatives and Senate on Wednesday passed a last-minute stopgap spending bill that will keep the federal government open through Dec. 11 pending President Barack Obama’s signature. But another budget battle will likely ensue then, as Congress remains divided over federal funding for women’s health organization Planned Parenthood.

Read MoreHouse passes legislation to avoid shutdown

Many in Congress have opposed a shutdown, as a government closure can put some federal employees temporarily out of work or delay their pay. Stockman contends it could have a positive effect by making lawmakers address spending and debt issues.

He called for entitlement and defense spending reform. He also argued that easy monetary policy from central banks has made lawmakers less likely to address the deficit.

Still, Stockman did not clearly outline why a shutdown would force lawmakers to make significant budget changes.

Why Don’t You Explain this to Me Like I’m 5….

September 10, 2015

Why Don’t You Explain this to Me Like I’m 5….

Soc Gen’s global head of research, Patrick Legland, has gone on record, according to a MarketWatch article yesterday as saying that the selloff in developed equity markets has gone too far, and he provides reasons to support his claim. First, he suggests the Chinese market rout has further to go but believes the fallout will be limited to EM and commodities. Second, Legland believes that the US and other developed nations are protected by “well-armed central banks” evident by the 3.7% economic growth and the 5.1% unemployment rate and the Eurozone’s 3 year low unemployment. Lastly, he suggests that due to central banks having created a bond market bubble bonds are no longer a safe haven and thus no longer a viable alternative to equities. I will point out that Leon Cooperman also discussed on CNBC yesterday morning the fact that there are no viable alternatives to equities anymore and so equities remain in the secular bull.

Let me explain this to Legland like he is an 8 year old.

Ok like he’s 5.

While I admire Legland’s optimism I simply do not accept his claims. They are full of tragic flaws. Allow me to colour code this for all those market ‘pros’ and PhD ‘economists’ who haven’t been able to follow the premise over the past several months.

The chart depicts that this rout has just begun. As EPS rolled over in the first half of this year, it signaled that ‘The Tide has Finally Turned‘ as I explained in a recent piece published Aug 2nd (just weeks before the selloff began). In that research piece I told readers to “prepare for an imminent equity valuation reset” and explained why it would occur. The above chart provides an explanation as if we are a 5 year old.

…click on the above link to read the rest of the article…

Will the Fed Hesitate? “Everything is Too Vulnerable” for Rate Change, Says Ron Paul

August 17, 2015

Will the Fed Hesitate? “Everything is Too Vulnerable” for Rate Change, Says Ron Paul

federal-reserve-wall-street-regulation

The system is teetering on edge, and nearly everyone in the financial sector is waiting for one decision – will the Fed finally raise rates?

Ron Paul has made a bold prediction that the Federal Reserve likely will NOT raise interest rates, something which would have enormous consequences in the market, because it is hesitant to do so with so many negative risk factors the market already faces.

Fed Chair Janet Yellen – and most in the financial sector – know how much is impinging upon the possible decision to raise rates after years and years of quantitative easing have pushed the limits of stimulating the economy. According toCNBC:

By Paul’s reasoning, the Fed is too scared to raise interest rates in the middle of an already weak recovery and risk sending the U.S. economy back into recession, or worse… The Fed chief “does not want to be responsible for the depression that I think we’ve been in the midst of all along,” Paul added. “Everything is vulnerable, so we’re living in very dangerous times,” Paul added.

The banks have basically become junkies to constant cheap money, and QE3 has gone so far over the edge and upside down that pensions, insurance policies and savers can no longer earn future value through basic investment.

But according to the former Congressman and presidential candidate, big trouble in China, or our own potential economic breakdown, may be enough to call off action by the Fed because bigger problems may prevail.

Ron Paul told CNBC:

She’s going to be more hesitant to raise rates because she sees how fragile the global economy is… I could be wrong, but I don’t think they are going to raise interest rates.”

“I think there’s going to be enough problems existing, whether it’s the Chinese precipitating some crisis, or whether it’s our economy breaking down,” he said.

Does this count as yet another prominent warning by experts that the U.S. economy is headed for another crash, and perhaps even a prolonged collapse?

…click on the above link to read the rest of the article…

The Punch Bowl Stays And The Bubble Keeps Inflating

June 10, 2015

The Punch Bowl Stays And The Bubble Keeps Inflating

It is well known that I don’t think much of the ability of government officials to correctly forecast much of anything. Alan Greenspan and Ben Bernanke have made famously clueless predictions with respect to stock and housing bubbles, and rank and file Fed economists have consistently overestimated the strength of the economy ever since their forecasts became public in 2008 (see my previous article on the subject). But there is one former Fed and White House economist who has a slightly better track record…which is really not saying much. Over his public and private career, former Fed Governor and Bush-era White House Chief Economist Larry Lindsey actually got a few things right.

Back in the late 1990s, Lindsey was one of the few Fed governors to warn about a pending stock bubble, and to suggest that forecasts for future growth in corporate earnings were wildly optimistic. He also famously predicted that the cost of the 2003 Iraq invasion would greatly exceed the $50 billion promised by then Secretary of Defense Donald Rumsfeld, a dissent that ultimately cost him his White House position. (But even Lindsey’s $100-$200 billion forecast proved way too conservative – the final price of the invasion and occupation is expected to exceed $2 trillion).

Now Lindsey is speaking out again, and this time he is pointing to what he sees as a painfully obvious problem: That the Fed is creating new bubbles that no one seems willing to confront or even acknowledge. Interviewed by CNBC on June 8th on Squawk Box, Lindsey offered an unusually blunt assessment of the current state of the markets and the economy. To paraphrase:

…click on the above link to read the rest of the article…

Why the Fed Will Crash the Economy If It Hikes Rates: In Three Charts

May 4, 2015

Why the Fed Will Crash the Economy If It Hikes Rates: In Three Charts

If you’ve been scratching your head since the middle of last year as consumer confidence surveys depicted an optimistic, eager to spend consumer while other hard economic data was showing a sputtering economy, we’re here to put your mind to rest. You’re not crazy. The U.S. economy is dramatically diverging from where most consumers think it is and we have three charts to prove it.

Most Americans have never heard of the Labor Force Participation Rate. Consumers judge the availability of jobs, or lack of them, by the Unemployment Rate that is fed to them in newspaper headlines and TV sound bites monthly. The Unemployment Rate has been coming down nicely and fueling positive vibes among consumers.

Unfortunately, the Labor Force Participation Rate, which measures the number of people who are either employed or actively looking for a job has been hitting historic low numbers, suggesting far more slack in the labor market than captured by the official Unemployment Rate.

On February 4, Jim Clifton, Chairman and CEO of Gallup, told a stunned interviewer at CNBC that he was concerned he might “suddenly disappear” and not make it home that evening if he disputed the reliability of what the U.S. government is reporting as unemployed workers. Clifton’s concerns are essentially based on the fact that consumer confidence and Fed jawboning on when it’s going to hike interest rates to slow down this “strong” U.S. economy before it overheats is about all the U.S. has left in its monetary arsenal.

Clifton had penned an opinion piece on the company’s web site which punctured the rosy spin on the improving jobs market. Clifton wrote:

…click on the above link to read the rest of the article…

Money Worries

April 28, 2015

Money Worries

The cynicism among the informed classes has never been so deep. Even the pompom boys in the cheerleading clubs like CNBC and The Wall Street Journal express wonderment at the levitation of stock indexes and bond values. They chatter about a “correction” of 20 percent being a healthful tonic that would clear away some dross and quickly usher in a new episode of “growth” — or growthiness, which, like truthiness, became an acceptable approximation of the real thing. The truth, as opposed to truthiness, is they no longer believe their own bullshit about growthiness.

The suppression of interest rates and pervasive accounting fraud has thundered through the financial system, and the deformities caused by it have emerged in currency war, currency instability, trade collapse, and political crisis. Years of central bank intervention have stolen the capital of the future to construct a Potemkin economy meant to conceal the sickening gyre of diminishing returns strangling business as usual.

Until it collapses by a great deal more than the wished-for mere 20 percent, more perversities will be piled onto the already existing burden. Is it not a wonder that professionalized interest groups like AARP have not screamed bloody murder over the suppression of interest rates which deprives its members of bank account and bond interest on savings? Instead AARP, like virtually every enterprise in America, has turned to racketeering. Don’t worry, they’ll be gone from the scene soon enough.

…click on the above link to read the rest of the article…

The Economic Wall Dead Ahead Is Hidden Behind False Signs Of “Recovery”

April 3, 2015

The Economic Wall Dead Ahead Is Hidden Behind False Signs Of “Recovery”

This morning I had left the TV mistakenly tuned to CNBC with the sound on—-and unavoidably caught another bullish strategist jawing about the US economy’s awesome strength. This one was peddling as exhibit #1 the recent surge in C&I loans, arguing that it is a sure sign that business is gearing up for a post-winter boom.

It turns out that the $1.8 trillion of C&I loans outstanding at the end of February, in fact, were up by 14% since January 2014. But then again, when are they going to find a guest which wasn’t born yesterday. That is to say, an analyst who is capable of looking at the historic context in which the latest data points are anchored, the quality of the numbers at issue and the deeper implications of the indicators.

In this case, like most of the blizzard of bullish factoids spewed out each day on bubble vision, the purported business lending boom is not all that. The upward blip during the last 13 months was from a level which had first been reached way back in October 2008. In other words, it had taken 63 months to dig out of the deep crater that had resulted from the liquidation of the mountains of bad debt that existed on the eve of the financial crisis.

Next consider the quality and content of the purported “surge” in business lending. The skunk in the woodpile is patently obvious in the graph below.

The “surge” is almost entirely due to financial engineering and LBOs. In fact, virtually all of the growth in business lending during the past two years is due to a dramatic rise in leveraged loans from the deal business. Thus, overall C&I loans are up a modest $220 billion since October 2008, but 100% of that gain is accounted for by the 37% rise in leveraged loans outstanding since 2008.

…click on the above link to read the rest of the article…

DANGER WILL ROBINSON

March 25, 2015

DANGER WILL ROBINSON

It’s funny how the truth sometimes leaks out from the government. I’m guessing that Mr. Ted Berg will not be working for the Office of Financial Research much longer. This new agency was created by the Dodd Frank Law and is supposed to protect consumers from the evil Wall Street banks. But we all know the evil Wall Street banks wrote the bill, have gutted the major provisions, have captured all the regulatory agencies, own the Federal Reserve, and control all the politicians in Washington D.C. So, when an honest government analyst writes an honest truthful report that unequivocally proves the stock market is grossly overvalued and headed for a crash, the Wall Street banking cabal will surely call the top government apparatchiks to voice their displeasure. Truth is treason in an empire of lies.

The soon to be fired Mr. Berg’s verbiage is subtle, but pretty clear.

Option-implied volatility is quite low today, but markets can change rapidly and unpredictably, a phenomenon described here as “quicksilver markets.” The volatility spikes in late 2014 and early 2015 may foreshadow more turbulent times ahead. Although no one can predict the timing of market shocks, we can identify periods when asset prices appear abnormally high, and we can address the potential implications for financial stability.

Markets can change rapidly and unpredictably. When these changes occur they are sharpest and most damaging when asset valuations are at extreme highs. High valuations have important implications for expected investment returns and, potentially, for financial stability.

However, quicksilver markets can turn from tranquil to turbulent in short order. It is worth noting that in 2006 volatility was low and companies were generating record profit margins, until the business cycle came to an abrupt halt due to events that many people had not anticipated.

…click on the above link to read the rest of the article…

T. Boone Pickens Rages On CNBC: “I Am The Expert, Not You”, Says Oil Down Due To “Weak Demand” | Zero Hedge

December 23, 2014

T. Boone Pickens Rages On CNBC: “I Am The Expert, Not You”, Says Oil Down Due To “Weak Demand” | Zero Hedge.

Narrative, we have a problem! No lesser oil-man than T. Boone Pickens made quite an appearance on CNBC this morning – stunning the cheerleaders into first defense then silence as he broke the facts on oil’s collapse to them. Oil is down “mainly due to weak demand,” he explains… the anchors deny, “I am the expert, not you” Pickens rages as he warns drilling rigs will be laid down on a very wide scale (just as we have noted previously). Arguing over ‘peak oil’, he calls CNBC chatter “bullshit” and laid out a rather dismal short- to medium-term outlook for the oil & gas sector – not what the cheerleading tax-cut slurping media narrative wants to hear at all…

“demand is down” – “lower demand is the main driver” – “rig count is gonna fall – drop 500 rigs in next 6-9 months”

Capex cuts coming… oil prices may be back at $90-100 Brent in 12-18 months but not without rig counts plunging.

At 4:15 Pickens starts to discuss Peak Oil… enjoy –

CNBC: “Peak Oil didn’t happen” ..

Pickens: “that’s all bullshit… I am the expert not you” CNBC: “well you’re not much of an expert if you thought Peak Oil happened”

…click on the above link to read the rest of the article…

In Defense of Peter Schiff – Ludwig von Mises Institute Canada

November 8, 2014

In Defense of Peter Schiff – Ludwig von Mises Institute Canada.

The financial television channel CNBC has hit hard times. Nielsen ratings show the network’s viewership is at a 21 year low. This is a far cry from two decades ago. The dot-com bubble of the late 90s and early aughts gave the channel its highest ratings in history. The Federal Reserve’s easy money flooded the market, hitting blue chip stocks like a tidal wave. All of a sudden laypeople fancied themselves market gurus, playing the market and investing for a big pay day some time in the future. Trader and commentator Barry Ritholz described the environment as one where “CNBC was everywhere.” “Gyms, bars, restaurants, any public place you went into that had a TV — even sports bars! — had the ticker strewn channel running in the background.”

One bubble burst and a financial crisis later, the home of hothead Jim Cramer has cooled off significantly. There are a few reasons for this. As Lehman Brothers cratered into bankruptcy, the middle class saw its 401(k)s lose a significant portion of value. Such a loss begged for an explanation. Yet economists and financial experts were caught off-guard by the crisis. No popular orator of the dismal science could explain why the banking system devolved into chaos. CNBC’s most popular hosts and guests could only offer guesses.

One person was the exception: Peter Schiff. The internet video “Peter Schiff was right” collaged all of Euro Pacific Capital founder’s dire warnings about the housing bubble. At the time, he was ridiculed on air. Schiff was a cassandra, spouting crank theories long disproven by economic orthodoxy. But by September of 2008, he had the last laugh. The financial world was in turmoil, and Schiff’s explanation – based on the Austrian school’s theory of boom and bust cycles – was at last seen as legitimate.

…click on the above link to read the rest of the article…

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