Friday, November 7, 2014

Say it ain't so. Okay I will.

The Federal Reserve called off its QE3 asset buying program last week and with the sudden end to Obama's cash printing spree the the stock market went into immediate free fall. There are more stock brokers on the ledges than pigeons.... what? That didn't happen? Not to fear the Republicans have a talking point to cover this, you see they're in charge now so the markets are up and will continue to surge. Never mind that the Dow had nearly tripled while Obama was in charge, and really he's just as much in charge today as he was on Monday. The reality is that the dead weight in Congress really hasn't changed that much. The only difference is we'll have two years with no Senate confirmations much like Obama's first four years.

It should be noted that the markets are more than a little concerned about the prospect of the Tealiban shutting down government. They might do it just because they don't have the power to do anything else, and they feel the need to be in charge at all costs.

The implementation of ObamaCare is destroying jobs by the millions, we lost 800,000 jobs last month alone.... Oh wait that was the last year of the Bush Administration. We actually added another 220,000 jobs in October extending the record number of continuous months of job growth to 57. Add another 31,000 jobs from upward revisions to August and September numbers.

Nobody can get health care with Obama forcing burdensome regulations on doctors, but oddly enough the healthcare sector has added a million new employees anyway. And unemployment ticked down another tenth of a point, because the out of work people have simply died. Conservatives haven't used that one yet, but it would go great with Obama's IRS Death Panels giving all the Conservative Christian White People Benghazi Strain Ebola.

From the really bad investment advice file: Pat Robertson is telling his faithful to buy oil company stocks. It's something about Pat not wanting to support the manufacture of condoms by buying into non-oil companies which are often conglomerates that make god knows what sort of evil contraption. Oil is mentioned in the Bible so it's holy. He probably doesn't realize that providing chemicals to industry that make evil contraptions is where oil companies make their real money, you can see that Satan's hand is everywhere. Never mind that the price of oil is falling through floor and oil company stock is not going to be a winner. You have to wonder if Pat has been caught in a bad market position and is just trying to get a price bump before he unloads his stock, especially if God told him that the Teabillies in Congress will manage to crash the market.

And from the really crazy file: There is a public referendum in Switzerland this month that would force their central bank to buy 1500 tons of gold because... well you know... because. The Swiss government sold off 1000 tons back in 2000 when it was a quarter of its current price and a lot of people are peeved about this. What's really driving this of course is that the gold bugs have lost 32% in the past two years and the price is likely to collapse further.

The Swiss are already the seventh largest owner of gold in the world so there's no justification for a country that size to put still more useless metal into their vaults. The fear of doomsday or the idea that gold is some sort of hedge against inflation convinces people to buy the stuff. But if you compare inflation to the gold price there's actually no correlation. Gold goes up and gold goes down. It would need to be $2500/oz to equal the buying power at its peak price during the Reagan administration. If you bought gold back then, you have lost a lot of money let alone you're getting no return on the investment.

In all the popular doomsday scenarios you never see anybody scrounging for gold in that type of movies, they're always looking for canned goods and ammunition. Unless gold bullets work better to kill zombies it sounds like a bad investment to me. I've never seen the Left Behind movies, maybe there's actually going to be a huge market for golden calves.

Twitter @BruceEnberg - I'm going to have my Swiss Army knife with can opener attachment gold plated, just because....



 

Thursday, October 30, 2014

Everybody's getting Wifi these days


New claims for Unemployment Benefits have for some time been in the neighborhood of 285,000 each week. This hasn't been seen consistently since Clinton was President. It means either business is good and employers aren't laying off, or the outsourcing of jobs has tapered off dramatically so that people aren't permanently losing jobs. Since we've seen a record 56 continuous months of job growth it's likely the economy is in fact picking up speed.

The price for West Texas Intermediate crude oil is continuing to slide and is approaching $80 a barrel. Wall Street banks are predicting it will go to $70 a barrel. One prominent analyst has even predicted $10 oil with the end of oil's stranglehold on the energy market. He's since backed off on this prediction but stands by his claim the oil will continue to fall. Of course what we're really talking about here is the small amount of oil that trades on the open market. They used to call this the spot market, as in "we've got a spot too much oil coming in from the wells today, what will you give us for it?" Most oil is firmly in the hands of the few Big Oil Companies, and they're not going to sell it cheap.  

Gasoline on the other hand is subject to market forces. Gasoline makes up between 40 and 50% of a barrel of crude oil. But, the big money is in the much desired chemical fractions that make up only a couple of percent at most of each barrel. Gasoline and fuel oils (like diesel, kerosene and jet fuel) are basically waste products of refining to get the good stuff. If the tank farms are all full and the tankers moored offshore are full they have no choice but to cut the price to increase consumption. They used to just burn it, but since the Koch brothers haven't been able to kill the EPA that's not an option in the US.

So now you know why higher mileage standards are fought tooth and nail by the Republicans. Big oil could refine the extra fuel into other useful products but that's way more investment than simply buying elections. Most people have no idea how any of this works and you'll never hear about on the network news. The bulk of Americans polled think the country is headed in the wrong direction. The networks wanting to maintain the election horse race let people believe that this means everyone will vote Republican. In fact liberals are probably more upset than conservatives since they have better idea of what's happening.

New calculations of China's gross domestic economy show that based on actual buying power China has passed the US in realistic GDP. This isn't really surprising since China has more middle class than the US has people and they intend to move another 300 million from rural poverty into newly built cities over the next decade.

To put into perspective how China has been able to do this, they own over half the world's large construction cranes and consume over half the world's cement. China is building tens of thousands of miles of light rail and 250 mph bullet trains that run on thousands of miles of high speed track. At the same time they're eliminating passenger service from heavy rail lines allowing for more freight trains. The US of course has no bullet trains and runs its extremely limited passenger service on poorly maintained freight lines at speeds lower than Casey Jones operated his coal fired steam train on the Illinois Central in 1900.

The Republicans say we can't build any of the things that China builds in huge volume, but they promise to bring America back to the good old days. Casey Jones is rolling in his grave.

Twitter @BruceEnberg - I finally hit 666 followers today with the addition of Andrew Breitbart. Thanks to Satan for installing Wifi service in Andy's circle of Hell.







Friday, October 3, 2014

Have you gotten any postcards from the FEMA Camps?

Unemployment has fallen to 5.9% based on the Census Bureau's Household Survey showing 329,000 fewer people responding that they were unemployed. The employer survey shows 248,000 new jobs created in September. The 80,000 difference between these two numbers will mean that the employer hiring number will be adjusted upward as more employer data is processed. Both July and August numbers were adjusted upward by 31,000 and 38,000 respectively.

The Conservative take on the falling unemployment rate is that it's because Obama's IRS Death Panels have infected White Conservatives with the Benghazi Strain of Ebola, and UN troops have moved them to FEMA camps. Once they get to the Saul Alinsky FEMA camps, the White Conservatives only get ObamaCare and die. This is freeing up jobs for illegal immigrants who bring more disease. Conservatives are doomed unless they buy gold from Glenn Beck.

It's not that you can give Obama any direct credit for the recovery other than holding the GOP crazies at bay. If they had been able eliminate safety net spending, totally deregulate everything, eliminate the minimum wage and on and on, we'd be living in 1932, except back then half the population lived on farms and had food. The dystopia the Republicans would have created as the country began to spiral toward the drain is hard to imagine. Their goal of course was to create a Fascist State, but the problem is that these people aren't half as smart as they think they are. Who knows how that would have turned out.

It's not that they've given up on their goals but the opportunity has been lost for now. They are however still actively engaged in the slow decline of America. You've probably heard that former Federal Reserve Chairman Ben Bernanke was refused a re-fi on his home loan. Rumor is that he's standing on a street corner wearing a sign that says, "Will manage financial markets for food". A report from one of the big banks says that half the people with Student Loan debt don't qualify for a home loan.

In the olden days a college a degree or a union job was the basis for the American Dream. Anymore if you want the American Dream you need to be born in China. They have more middle class then the US has people and are planning to bring another 300 million up to that level in ten years. In ten years will there be any middle class in the US?

Twitter @BruceEnberg - where you can keep up on reports from the FEMA camps
                                         in case your Conservative relatives disappear.





Thursday, September 25, 2014

What's the daily bag limit on McDucks?

Dallas Federal Reserve President Richard Fisher said Friday in a Fox News interview that the US economy is threatened by higher wages. His solution is to head this calamity off by raising interest rates so that hiring is cut back. He fears that higher wages are inflationary. 

The Fed as a whole has been trying to create inflation in order to stop the rich from hoarding cash. The Fed has set a modest goal of 2% inflation instead of the 4 to 6% we really need to make such a policy work to jump start real investing (real as in creating jobs). Creating jobs is part of the Fed's legal mandate and the results have not been stellar to say the least. 

And guess what? A census of billionaires by Wealth-X and UBS (a census not a poll because a representative sample is all of them, so they just asked them) the census found that they're indeed hoarding cash. The billionaire's money bins have 1000% more cash in them than a year ago. Weaker billionaires have had to quit swimming in their money bins out of fear of drowning.

Wealth-X is a Singapore based intelligence service company that keeps track of the world's Ultra High Net Worth individuals (UHNW) and funnels profitable invests to them. UBS sponsored the study and is the same huge Swiss bank that paid off Senator Phil Gramm for repealing the Glass Steagall Act. It's repeal allowed Wall Street banks to engage in unlimited gambling with depositors money and was a major contributor to the 2008 banking collapse. 

The level of wage inflation that this Texas Fed banker fears could happen is 4% . He's at odds with Fed Chair Janet Yellen who sees wages as having pent-up deflation and believes that a jump in wages is healthy for the economy. After all it's people spending money that makes the economy work, not rich people swimming in it like Scrooge McDuck. 

If wages were to increase at 4% above price inflation for 18 years in a row, that would double wages. This would get workers back to roughly the position in the economy that they enjoyed on Jan 20, 1981, and never saw again. The Ultra High Net Worth pay the media big bucks to tell you how awful it is to increase wages, and in fact we'd all be better off if everyone's wages were cut. The UHNW don't collect any wages at all, so they're doing their part. Perhaps Wealth-X can do a census on what's the best swimming stroke to use in new currency as opposed a bin with a lot of older bills?   

Twitter @BruceEnberg - Where it's open season on McDucks every day.


Monday, September 15, 2014

Is that Jesus on your pancake? What if the media told you that it was?

The great commotion about Urban Outfitters selling blood stained sweatshirts from Kent State is a classic case of a huge tempest in a media teapot.

Some facts, UO only offered just one sweatshirt that was a supposed a classic, that's hype "for we got a bale of crap from Goodwill for a $10 a ton & we're going to sell them to suckers for $130 each".

UO made no claims of blood stains or bullet holes, although there are some brown stains that could be blood or motor oil. The 'bullet holes' are just snags in the fabric that appear to have been made with a seam ripper or some other tool. It's also possible the shirt was simply damaged by the machine that bales clothing for the rag trade. That is where most of your clothing donations end up.

The snags that in no way resemble bullet holes appear bright red because the inside of the sweatshirt is not faded as you can see on the inside of the collar. There are some hi-res pictures on Google if you want to look at it.

The real question is how did the media find out about the shirt. Did Urban Outfitters place a tip to get publicity? That would make them every bit as bad as you care to see them.

Did the person who purchased the shirt place the tip hoping to clean up on Ebay? The reporters are quoting them, but Ebay doesn't let you sell bloody clothing and such, so suggesting that it might be a real souvenir of the shooting was dumb. Ebay has taken the listing down. It's also possible that a reporter with an overactive imagination was surfing Urban Outfitters while eating his Jesus pancakes and freaked out.

Ebay will let you sell Jesus pancakes because that's not anything real, just like this sweatshirt. I personally just eat the pancakes without naming them. I learned that in 4-H as a kid, don't make a pet (real or imaginary) out of your dinner.

Twitter @BruceEnberg - Classic farm joke - The traveling salesman asks the farmer why he has a pig with a peg leg. Farmer says, "he was too good of a pig to eat all at once". Thankyou, Thankyou, I'm here on an extended engagement, remember to tip your server and try the veal special. (don't think of them as cute baby cows and they're quite tasty)

Thursday, September 11, 2014

Recycling the BS for fun and profit

The Gold Bugs are at it again, not that they ever really stopped. The latest nonsense is being sold by some quasi business reporter that claims to have a confidential informant inside the CIA. He claims that the agency is in a growing panic about China's looming attack on the USD using gold.

Supposedly the Bank of China has secretly acquired thousands of tons of gold bullion virtually eliminating the physical gold available on the open market. Stories of heavily armed convoys moving gold through the Hong Kong night are sparking the interest of people who 'invest' in gold. This is much the same as the way nearly naked bikini babes in TV commercials spark the interest of those who 'invest' in drinking beer. Either of these 'investors' are as in touch with reality as the other, well actually a beer drinker could get lucky, the gold investor will just get screwed.

The details of this clandestine gold hoarding by China vary wildly depending on whose particular sale pitch you listen to and what they're selling. Straight up gold salesmen simply predict a shortage of gold and/or the collapse of paper currency. Obama's fault of course.

Some are using it to push the idea that China is near collapse and desperately needs gold to stave this off. These salesmen are selling short positions on companies heavily invested in China since those stocks would plummet. Never mind that China's growth rate could be cut in half and still be double that of the US during the past 33 years. (since Reaganomics became the norm)

Other hucksters are selling bets against the USD by claiming a sudden huge rise in gold prices will drive the dollar through the floor. Since we haven't been trading the USD and other currencies by tying them to gold since Nixon was President, this claim seems a bit silly.

So what is really going on? It's not likely China is going to try anything flashy since they are already making money like they're the only 21st century nation on a third world planet. Are they buying gold? Sure, they buy everything that's for sale and they also mine ridiculous amounts of gold themselves.

We don't know exactly how much gold they have or want to have because we really don't have any hard numbers about anything in China that you can't see in a satellite photo. But while China has moved into the top ten of countries holding gold reserves, compared to the size of their economy they really don't have all that much.

The reality is that gold is just another commodity and while it has countless uses there is an awful lot of it. You could stop mining it now and not run out of it before the giant cockroaches have taken over the planet.

Twitter @BruceEnberg - where you'll learn things like, you can't actually see the Great Wall of China from space, it's really long, but really narrow.

Tuesday, September 9, 2014

The stock troll visited

I got some comments from the RWNJ Stock Broker Troll today. To summarize: he's gotten rich even though he's never made much money in salary. He eschews Treasury bonds (reality: people who were in bonds before the crash made a huge return).

He never keeps money in banks. When the stock market crashes, he says "Buy more!". Okay where does the cash come from to do that if he never puts money in banks or bonds? His Mattress?

He gave me every cliche that stock brokers use rope in the suckers. I won't post any of them, I'm sure he gets paid for each one. Something to bring in an extra buck besides greeting at Walmart.

I particularly liked his comment on the mongoose eating the Tea Party snake "Only the ignorant allow others to fuck them over. Get educated. You have a brain use it". He doesn't want you to get educated, he wants you to repeat his talking points and buy stocks from his boss.
 

Friday, August 22, 2014

Are you Pent-up?

Federal Reserve Chair Janet Yellen just introduced a new term into Fed Speak', "pent-up wage deflation". This seems to be an effort to explain away the problem of stagnant wages in the US economy that are not allowing the Fed to meet its 2% inflation goal by blaming it on the "inability or unwillingness of US firms to drastically cut wages" after the Bush collapse in 2008. This according to the Fed is making it possible for companies to now expand employment without raising wages. Ms Yellen did acknowledge that real wages had been declining for some time prior to the crash (real wages have been declining for 33 years, but who's counting).

Deflation is always the goal of an economic collapse as this further enriches the hoarders of cash since they can buy more assets for 10 cents on the dollar, and drastically increases the burden on anyone who is in debt since they now owe a much bigger percentage of their declining income on devalued property.

The conclusion that the Fed has jumped to is that wages could start to rise rapidly once this 'pent-up wage deflation' that's currently causing stagnation in wages is exhausted. Companies would suddenly be forced to start paying significantly more for labor. In that light they're planning to end their QE3 bond buying program in October. This happens to be just in time for the election. If this happens to trigger a huge decline in the Stock Market (as investors return to bonds), I wonder who the voters will blame for this even if the economy itself is in an accelerated recovery?

You can bet the corporate networks will be dutifully telling everyone about the billions that disappeared from their 401(k), never mentioning that their 401(k)s must inevitably lose money because looting them is where Wall Street is getting their billions from. Nobody in their right mind should put money into a 401(k), it ranks up there with planning your retirement around buying lottery tickets.

Twitter @BruceEnberg - where we are not 'pent-up'.