Succinct summation of week’s events (02/10/12)
Succinct summation of week’s events:
Positives:
1) Initial Jobless Claims fall to 358k, 12k less than expected and the 4 week average drops to 366k, the least since May ’08
2) Job Openings in monthly BLS data rise to match the highest since Sept ’08
3) MBA said avg 30 yr mortgage rate falls to new low of 4.05% and refi’s jump 9.4%
4) German Factory Orders in Dec rise a bit more than expected
5) China’s PPI moderates to a gain of just .7% y/o/y, the slowest rate since Nov ’09
6) Indonesia unexpectedly cuts rates to 5.75% while RBA and SK sit pat
Negatives:
1) Greece on brink, AGAIN, unemployment rate in Nov hits 20.9% from 18.2% in Oct
2) German exports in Dec, the main driver of their economy, falls 4.3% m/o/m vs an expected decline of just 1%, German IP falls 3% vs est of flat from Nov
3) Euros being redeposited with the ECB overnight remain around 500b, matching the amount borrowed under the LTRO
4) BoE votes for more QE, brings asset purchase program up to 325b pounds. The most famous English economist, John Maynard Keynes once said this in a book of his, “Lenin is said to have declared that the best way to destroy the Capitalist System was to debaunch the currency. By continuing a process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens…while the process impoverishes many, it actually enriches some…Lenin was certainly right…The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose,”
5) US inflation expectations in TIPS continue to drift higher
6) Feb UoM confidence moderates 2.5 pts after Jan jump of 5,
7) Avg gallon of gasoline at the pump rises to most since Sept.
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February 10th, 2012 at 3:49 pm
Reading this:
At least so far, each round of US Fed money printing (quantitative easing) has had a very positive impact on stock prices, but with diminishing duration of positive impact at each money printing interval. The latest Fed balance sheet expansion experiment that is the current dollar swap arrangement with the European Central Bank (ECB) is now only two months old. ”
http://contraryinvestor.com/mo.htm
Also I don’t get these two items:
7) Avg gallon of gasoline at the pump rises to most since Sept.
Inquiring minds are watching a plunge in Petroleum Distillates and Gasoline usage.
http://globaleconomicanalysis.blogspot.com/2012/02/huge-plunge-in-petroleum-and-gasoline.html
Why the price of gas going up when demand is going down? or is it usage going down because of rising prices?
February 10th, 2012 at 5:11 pm
Gulf War III coming soon to a theater near you!
February 10th, 2012 at 5:20 pm
Of course #7 is the sign of the Rapture – Mr. Santorum said so,
http://www.theatlantic.com/business/archive/2012/02/rick-santorum-is-right-gas-prices-caused-the-great-recession/252790/
February 10th, 2012 at 5:22 pm
“…John Maynard Keynes once said this in a book of his, “Lenin is said to have declared that the best way to destroy the Capitalist System was to debaunch the currency. By continuing a process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens…while the process impoverishes many, it actually enriches some…Lenin was certainly right…The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose,”…”
Deeply True. (Lenin’s insight)
and, really, at the EOD, Why else would there be a Central Bank (the Federal Reserve) at the ‘Heart’ of the Economy?
Good thing ‘We’ don’t have to think about it..
or, maybe, We do (?)
http://search.yippy.com/search?query=Expiration+of+The+Federal+Reserve+Act&tb=sitesearch-all&v%3Aproject=clusty
February 10th, 2012 at 7:17 pm
for traders, we might have seen a 30-60 high.
signals are
“Open Thread: “Where Are the Bears?” and
“Are Positives Starting to Dominate ?”
February 10th, 2012 at 7:28 pm
MF Global deficit at 1.6 billion?
http://dealbook.nytimes.com/2012/02/10/mf-global-trustee-sees-1-6-billion-customer-shortfall/?hp
February 10th, 2012 at 7:38 pm
TRI quantification of forward-looking economic data releases over the past weeks suggests GDP will shake off a dip to a o.7% pace in March (Q1) and rise to 2.7% in September (Q3), the latter being the final BEA announcement in the days prior to the Nov 6th Election.
TRI chart: http://trendlines.ca/free/economics/RecessionIndicatorUSA/USA-TRI.htm
February 10th, 2012 at 8:00 pm
Of course German exports are falling. Austerity is shrinking all the European economies, especially the “bad” countries that borrowed from German banks to buy German Goods.
And the Chinese economy is not growing so much. China is German”s main export buyer.
February 10th, 2012 at 10:56 pm
this is really beginning to piss me off (I thought you people were smart).
First Brodsky (http://www.ritholtz.com/blog/2012/02/an-adult-approach-i-investing-in-a-vulgar-age/ ) says – “So, we should expect central banks to manufacture mass quantities of currency to ensure bank system solvency. Knowing this in advance is an even bigger gift for unlevered real asset investors than Ben Bernanke’s gift to levered carry-trade investors by promising to keep US interest rates zero bound through 2014.”
And then our host agrees with him quoting no less an authority than VI Lenin that some people will get effin rich (I paraphrase) as the government confiscates wealth through inflation (with an atta boy from Keynes) – same quote in the Brodsky article (who doesn’t respond to emails from paupers I might add).
So FUCK – we can all get rich from the coming age of inflation (if in fact, an age of inflation is coming) if we know what to do (gold will hold it’s value, so you can remain roughly as wealthy as you are now if you put all your assets in gold). So what do you do?
Really – I expect there are people out there who know what to do (e.g., invest in TIPS until x happens then switch into gold and then double down in 3x leveraged sp500 ETFs for 3 hours and then switch to shelf-stabilized canned goods for 2 weeks) but I have no idea what to do and I’m looking for some high-IQ UofC MBA to tell me.
February 11th, 2012 at 10:08 am
I can’t BELIEVE you could POSSIBLY summarize the weeks events Linless!
http://espn.go.com/blog/new-york/knicks/post/_/id/11355/world-peace-to-j-lin-get-some-swag
“…The Lakers’ World Peace knows how to leave an impression. And he has some advice on how Jeremy Lin can do the same. “Get some swag,” World Peace was quoted as saying by Dave McMenamin of ESPNLosAngeles.com, when asked about the Knicks’ emerging young star. “Put your hat on backwards. Come to practice with your pants sagged and just tell them, ‘I don’t feel like practicing. Practice?!’ You know? ‘Practice?!’ Wear an [Allen] Iverson jersey.”
Metta World Peace needs tax cuts …or he ain’t gonna do nuthin’.
February 11th, 2012 at 10:20 am
US gasoline consumption has fallen off a cliff.
http://www.zerohedge.com/news/guest-post-why-gasoline-consumption-tanking
And then there’s that Baltic Dry Index.
The end is nigh.
February 11th, 2012 at 10:28 am
howardoark:
It’s worse than it appears. Not only has the money supply been inflated, it’s purely fiat, AND it’s being hoarded by the top economic strata. Velocity, in our recent adventure into a purely credit-based economy, is dependent on borrowers, not on earners, as is traditional. Currently the earners ain’t earning enough to grease the machine (high unemployment and declining wages, in both real and nominal terms).
With all of the money we’ve pumped into the system, the economy should be red hot, jobs plentiful, and inflation a real threat.
As for what to do: As there is no carpet that can’t be pulled out from under you at the whim of someone, somewhere in our corporate/governmental kleptocracy/clusterfuck, the only safe strategy is to diversify and hedge: some gold (and maybe some foreign currencies from resource rich countries), some 3x leveraged sp500 ETFs (or whatever you think is least risky — good F’n luck wit dat), and some shelf-stabilized canned goods.
If I’m not mistaken (and I usually am), Keynes called for the countercyclical confiscation of wealth, via taxation and monetary policy, in flush times, with the opposite policies being employed to flatten the impact during lean times.
We had flush times, and we cut taxes and liberalized monetary policy.
Don’t blame Keynes — no economic theory works in a kleptocracy.
February 11th, 2012 at 10:38 am
“being hoarded by the top economic strata” thanks Petey .. reditto “it’s purely fiat”
… but I heard they aren’t making any more land .. actually some kooks say its disappearing
not trying to be confrontational – it’ll play right into the King & Queens Handbook circa 1200AD
February 12th, 2012 at 11:40 am
Under the ATS (Antartic Treaty System) Lake Vostok should be renamed Lake Syria to shame the Russians and their ham-fisted leadership.