Archive for the ‘Green Shoots’ Category

Green Shoots & Leaves

Friday, January 15th, 2016

Fear not, the world is still perfect. The economy is humming along. Everything is fine. Sure, the market seems like it is tanking, but that is only until the muppets get back from lunch and realize how great things are. Then, they will take one final sip of their skinny cinnamon dolce latte, and hit the buy button until their nails fall off their perfectly manicured digits.


Bye Bye Bye.

Many of our heroic “story stocks” are getting totally destroyed. Yet not much has changed: Their business model, if any, is the same; they’re still losing money hand over fist; and they’re still trotting out the same custom-designed metrics that seduced analysts and the media once upon a time. But it’s not working anymore.

Inside The Red Ponzi——Why China’s $28 Trillion Debt Mountain Is Scary

Despite the propaganda from the media and happy talk from the Liar-in-Chief, the country is currently in a recession and the Fed has no ammo to fake another recovery. We are going down and going down hard. When 70% of your economy is based on Americans buying shit they don’t need from China on credit cards, a dramatic slowdown in consumer spending equals recession. When sales actually fall from November to December during the holiday season, you are in recession. We’ve arrived.

FBI Posing As Militia: Burns, Oregon

U.S.-based stock mutual funds and exchange-traded funds lost $9.0 billion to withdrawals during a week that saw U.S. stocks continue one of their worst starts to a new year amid fears of a further fall in oil prices.

A great shaking is coming to the global economy, and the pain is going to be unimaginable. So let us enjoy every single day of relative “normalcy” while we still can, because there aren’t too many of them left.

If every Norwegian’s a millionaire, why’s Alberta in hock?

BHP Billiton has written down the value of its US shale assets by $7.2bn (£5bn) as a result of the dive in oil prices.

Remember when the Fed’s dots – less than a month ago – suggested there would be 4 rate hikes in 2016? Ah, the memories. Well, you can not only forget that (now that the market is estimating the next rate hike will come in October if ever), but it appears that the Fed will follow Kocherlakota’s advice after all and not only cut rates (the possibility of a January rate cut now is 10%), but will pass go, and collect negative rates:

The Bubble (and Eventual Bust) in San Francisco Real Estate

The Mayor sees that the market is down over 500 points right now (noonish.) Don’t worry, it’s not the time to panic. If anything, right now is the time to be *cautiously optimistic.”

U.S. Jobless Rate Falls to 9% in January; Payrolls Rise 36,000 – Bloomberg Headline

Friday, February 4th, 2011

There are lies, damn lies, and then there’s Bloomberg.

The headline from today’s post is actually taken word for word from It sure gives you a warm and fuzzy feeling to see that US unemployment is falling and that things are picking up, doesn’t it? As a matter of fact, here’s how Bloomberg *reports* this great news:

Stock futures and the dollar climbed while Treasuries slid as the drop in unemployment pointed to a labor market that’s on the mend following the loss of almost 9 million jobs during the recession.

The labour market is on the mend and the stock market is reacting favourably to this wonderful news. That’s what we’re being told.

Now let’s check in at Zero Hedge and see if they’ve uncovered something maybe Bloomberg missed:

Probably the last chart to bury any doubt about just how truly horrible today’s employment data was, comes from a little observed data metric: that showing the number of people who are not in the labor force, but who want a job now. The number just hit 6,643K, a jump of 431K from December, and the highest number in history. These are people that would send the unemployment rate to about 12.8% if they were in the labor force (and, as indicated, looking for a job). Nothing else needs to be said.

Hmmmm. That doesn’t sound great. Probably an anomaly.

What else ya got, Zero Hedge?

And another curiously divergent dynamic: looking simply at the Seasonally Adjusted underemployment rate (U-6), which came at 16.1%, or the lowest since April 2009, and one might be excused for assuming that there is a silver lining, somewhere. That is, of course, until taking a look at the sister, NSA series. At 17.3%, this was the highest number since March 2010, and higher than just 3 months in the history of this series.

That’s not great either. Another fluke? What else ya got?

At 64.2%, the labor force participation rate (as a percentage of the total civilian noninstitutional population) is now at a fresh 26 year low, the lowest since March 1984, and is the only reason why the unemployment rate dropped to 9% (labor force declined from 153,690 to 153,186). Those not in the Labor Force has increased from 83.9 million to 86.2 million, or 2.2 million in one year! As for the numerator in the fraction, the number of unemployed, it has plunged from 15 million to 13.9 million in two months! The only reason for this is due to the increasing disenchantment of those who completely fall off the BLS rolls and no longer even try to look for a job. Lastly, we won’t even show what the labor force is as a percentage of total population. It is a vertical plunge.

Yikes. So the unemployment rate went down because the labour force participation plummeted and not because 36,000 jobs were created, as Bloomberg would have you believe from their headline? And the number of unemployed fell because people fell off the rolls and stopped looking for work? That doesn’t sound so great after all.

Now, does that really sound like a labour market that’s “on the mend?”

The Bloomingidiotberg pump-monkey’s understand that the average Joe only reads a headline and nothing else and will come away from today’s news feeling as if things might have turned the corner. But they obvious haven’t. And Bloomberg sucks and should be ashamed of the shoddy reporting they put out each and every day.

The Top Ten Financial Links Of The Day

Wednesday, February 2nd, 2011

Washington Post – Prince George’s schools may cut 1,100 jobs, enlarge classes

Sun Times – Preckwinkle proposes more than a 1000 layoffs in county

OC Register – Corinthian Colleges to cut 600 jobs

Yahoo Finance – The coming collapse of commercial real estate is already here

Wall St Cheat Sheet – Your cheat sheet to the 11 countries that could follow Egypt’s lead    **HT J.M. Heinrichs

WSJ – Ethanol lobbyist Newt Gingrich and us, and the future of the GOP     **HT J.M. Heinrichs

NY Times – In oil price differential, the scent of tar sands

Financial Post – Canadian debtors take the hint

The American Dream – What is globalization?

Bloomberg – US to sell $72 billion in debt as limit nears

The Top Ten Financial Links Of The Day

Tuesday, February 1st, 2011

LB Post – Facing another massive budget deficit in the 2011-12 school year, the Long Beach Unified School District board of education Tuesday will discuss sending layoff notices to more than 600 employees – most of them teachers.

WKBW – National Grid cutting 1200 jobs

Yahoo Finance – 11% of US houses empty

Housing WireRealtyTrac Senior Vice President Rick Sharga said major banks currently hold roughly 1 million REO, or homes repossessed through foreclosure, but only 30% have actually made it onto the market.

Instapundit – Egypt Woes Bring Global Food Inflation Fears to Fore    **HT J.M. Heinrichs

Patterico – An analysis of the Obamacare ruling: An Enlightened decision    **HT J.M. Heinrichs

Bloomberg – Construction spending in the U.S. unexpectedly fell in December to the lowest level in a decade, signaling the industry will continue to lag behind the economic recovery.

The Market Ticker – Health care unconstitutional: Obama sedition?

SHTF Plan – Panic buying: governments in Asia, Mideast and Africa stocking up on food reserves as prices rise, riots rage

Canada’s Housing Bubble – Federal gov’t should get out of the mortgage business

The Top Ten Financial Links Of The Day

Monday, January 31st, 2011

Bloomberg – Chrysler reports $199 million quarterly loss (reported as a great thing).

Telegraph – Champagne cellars could run dry by April/May, French producers warn    **HT J.M. Heinrichs

Rasmussen Reports - While a number of states now face serious budget shortfalls, most voters continue to oppose federal bailout funding to help them out. The latest Rasmussen Reports national telephone survey finds that just 26% of Likely U.S. Voters believe the federal government should provide bailout funding for states with serious financial problems.  Fifty-three percent (53%) oppose individual state bailouts, and another 21% are undecided    **HT J.M. Heinrichs

APN – The foreclosure crisis is getting worse as high unemployment and lackluster job prospects force homeowners in an increasing number of U.S. metropolitan areas into dire financial straits.

Mercatus – Jobs, Jobs, Jobs: Where do they come from    **HT J.M. Heinrichs

How To – How to communicate if your gov’t shuts down the internet (talk?)

Guardian – UK: Store bosses cut the equivalent of more than 10,000 full-time jobs in December as they reduced staff working hours and neglected to offer overtime during the industry’s busiest month of the year.

The Market Oracle – US real statistical economic recovery, bubble complacency

FDIC – Four more banks bit the dust last week

Bloomberg - President Barack Obama’s health care law, assailed as an abuse of federal power in a 26-state lawsuit, was ruled unconstitutional by a U.S. judge who said Congress overstepped its authority to regulate commerce. U.S. District Judge Roger Vinson in Pensacola, Florida, declared the entire law unconstitutional today in a 78-page opinion. He said the law’s provision requiring Americans over 18 to obtain insurance coverage exceeded Congress’ powers under the commerce clause of the U.S Constitution.

The Top Ten Financial Links Of The Day

Friday, January 28th, 2011

Bloomberg – US cattle herds at lowest since 1958: may send beef prices to record high

KBOI – BOISE, Idaho — Supervalu Inc. announced this week plans to close more than two dozen grocery stores throughout the country. The company says it’s closing 29 stores in the United States (mostly on the east coast). A spokesperson told KBOI-TV that no Albertsons stores in Idaho are affected. On the corporate front, the company also announced plans to eliminate 350 jobs from now until the end of May.

The Market Ticker – If world trade is improving, why is the Baltic Dry tanking?

Business Insider – A frightening satellite tour of America’s foreclosure wasteland

Daily Finance – What does Chinese inflation mean to Americans?

Yahoo News – Spain announced Friday its jobless rate surged to a 13-year record above 20 percent at the end of 2010, the highest level in the industrialized world, as the economy struggled for air.

Daily Mail – The world faces a chocolate ‘drought’ over the next few years, an expert warned yesterday.

Washington Examiner – A detialed look at the Rand Paul spending bill

American – A State insult with Chinese characteristics

Cato – New CBO numbers re-confirm that balancing  the budget is simple with modest fiscal restraint

The Top 10 Financial Links Of The Day

Thursday, January 27th, 2011

Chicago Breaking Business – Abbott Laboratories said Wednesday that it would cut 1,900 jobs, or 6 percent, of its U.S. workforce in the wake of a series of disappointments in its drug development pipeline, triggering a restructuring of pharmaceutical commercial and manufacturing operations.

Bloomberg – Lowe’s to cut 1700 management jobs, add pt weekend jobs

Zero Hedge - Expectation of 405,000… Print: 454,000! Worst print in forever (well, October). The BLS calls it a “weather related backlog.” Read - snow. Call it what it is -Stagflation, baby. Non-seasonally adjusted number came at 482,399, as 161,913 people fell off extended benefits.  Continuing claims: 3,991K on expectations of 3,873K.

Washington Post – Outside of Washington DC, a grim housing market    HT J.M. Heinrichs

Washington Examiner – Time to get real about public-sector pensions    HT J.M. Heinrichs

Reason Magazine – Destroying jobs in order to save them     HT J.M. Heinrichs

Yahoo News - Buyers purchased the fewest number of new homes last year on records going back 47 years. Sales for all of 2010 totaled 321,000, a drop of 14.4 percent from the 375,000 homes sold in 2009, the Commerce Department said Wednesday. It was the fifth consecutive year that sales have declined after hitting record highs for the five previous years when the housing market was booming.

Vancouver Sun – High Canadian housing costs carry a big price

Macro Business – Households face the most dramatic squeeze in living standards since the 1920s, the Governor of the Bank of England warned, as he reacted to the shock disclosure that the economy was shrinking again. Families will see their disposable income eaten up as they “pay the inevitable price” for the financial crisis, Mervyn King warned.

Breitbart – An unexpected contraction in the British economy shocked investors on Tuesday, prompting a sharp drop in the pound and reigniting debate about the government’s plans to slash spending and raise taxes to reduce public debt.

Green Shoots & Leaves

Wednesday, January 26th, 2011

Money News – Peter Schiff: China to unleash US “Inflation nightmare”

Money News – Abbott Laboratories said Wednesday it would eliminate 1,900 employees to keep profits up, indicating that one of the pharmaceutical industry’s few success stories of recent years is not immune to cost pressures squeezing the sector.

USA Watchdog – The most predictable financial calamity in history

CNBC – U.S. single-family home prices fell for a fifth straight month in November and could plumb new lows soon, a closely watched survey showed on Tuesday.  **HT J.M. Heinrichs

The Automatic Earth – Only 47% of working age Americans have full time jobs

Business Week – Potholes gape from NY to Detroit as funds fade (another $900 “stimulus” should fix those holes).   **HT J.M. Heinrichs

Smart Money – It sounds like a bad commercial for a local car dealership: “These rates are so low, we’re barely making money!” But more than three years after the recession threw car sales into a tailspin, many dealers have started offering loans at interest rates so low they don’t make much of a profit — and that’s turning conventional car-buying wisdom on its head.

York Region - More than 100 people will be looking for employment come April. Snap-on Tools Company LLP is closing its doors, leaving 116 employees out in the cold at the end of April.

BloombergToyota Motor Corp., the world’s biggest carmaker, recalled about 1.7 million vehicles globally for defects in fuel pipes and pumps, pressure sensors and spare tire carriers. The shares fell 1.9 percent in Tokyo.

Zero Hedge – No surprise: the projected deficit just went up by another half a trillion: “For 2011, the Congressional Budget Office (CBO) projects that if current laws remain unchanged, the federal budget will show a deficit of close to $1.5 trillion, or 9.8 percent of GDP.” This is up from $1.07 trillion: a very small margin of error there. But don’t worry – like true Keynesians the CBO expects that future deficits will have no choice but to go down:

Green Shoots & Leaves

Tuesday, January 25th, 2011

Yahoo Finance – Get ready for higher gas prices    **HT J.M. Heinrichs

Biz Journal – J.C. Penney to lay off 350

Investors – Why does the US still give China aid?     HT J.M. Heinrichs

Gamasutra – Reports trickling out of game publisher Disney Interactive indicate severe layoffs at the company, including at its Austin-based Junction Point Studios and its Los Angeles headquarters. ”Sources familiar with the situation” told CNBC that a “significant portion” of the division’s employees have been let go, citing “some insiders” as reporting the cutbacks may have affected up to half of the studio’s 700 employees.

Brave New Climate – The cost of ending global warming – a calculation      HT J.M. Heinrichs

Gonzalo Lira – Reading the tea leaves of the Federal Reserve Board

National Post – China’s coming fall     HT J.M. Heinrichs

Zero Hedge – Inflation is so much worse than we are being told

Of Two Minds – The Kubler-Ross Model: Denial, Acceptance and Renewal in America

Daily Reckoning – A word of advice to financial authorities

Green Shoots & Leaves

Monday, January 24th, 2011

Herald News – Most of the 800 workers at the A.J. Wright distribution center were let go this week as the facility winds down its production ahead of next month’s closing.

China Daily – BEIJING – The country’s gross domestic product (GDP) growth is expected to retreat to 9.8 percent this year, with inflation likely to be under control at 3.7 percent, a government think tank said on Saturday (3.&% inflation? hardy harr har)

USA Today - The U.S. Postal Service will begin the process of closing as many as 2,000 postal offices in March and will review 16,000 more — half of all existing post offices — that are losing money,The Wall Street Journal reports. The new round of closures is in addition to 491 that are already being shuttered.

Newsweek - The final dam to stopping $150-a-barrel oil and $4-a-gallon gas is being breached, as financial regulation continues its daily erosion into worthlessness.

Newsweek – - America’s dying cities (how many Democrat Mayor’s are there in those cities?)      **HT J.M. Heinrichs

College Scholarships – The student load scheme: a gateway drug to debt slavery     **HT J.M. Heinrichs

Bloomberg - Fannie Mae and Freddie Mac’s combined inventory of foreclosed residential property has quadrupled in just three years and now stands at a record $24 billion. The number of properties on their rolls — now at nearly 242,000 — has increased fivefold. That’s roughly a third of the total U.S. portfolio of repossessed homes. And it’s growing because the two mortgage companies operating under U.S. conservatorship aren’t finding buyers faster than new foreclosures come in.     **HT J.M. Heinrichs

WSJ – Winemaker and socialite Patricia Kluge, ex-wife of the late Metromedia founder John Kluge, is facing foreclosure proceedings on her Albemarle House in Charlottesville, Va. According to local paper The Daily Progress, Bank of America filed suit alleging Patricia—who got the house in her divorce—defaulted on nearly $23 million in loans on the 23,500-square-foot mansion.

USA Watchdog – Housing shows there is no recovery

The Daily Bell – “Super Stagflation” end game?

Green Shoots & Leaves

Friday, January 21st, 2011

**Picture courtesy of Avis Claims

NRO – No surrender on debt ceiling

Business Insider - Boeing just laid off 1000 workers in Southern California, according to the Orange County Register. The move comes just a day afterBoeing agreed to a $19 billion dealwith China to produce 200 airplanes for the country   **HT J.M. Heinrichs

US News – Moving aggressively to make good on election promises to slash the federal budget, the House GOP today unveiled an eye-popping plan to eliminate $2.5 trillion in spending over the next 10 years. Gone would be Amtrak subsidies, fat checks to the Legal Services Corporation and National Endowment for the Arts, and some $900 million to run President Obama’s healthcare reform program.

NRO – There will be no bailout for the States    HT J.M. Heinrichs

Devvy – The true state of the economy: You better be darned scared

The Fiscal Times – The Obama administration is sorely divided over how to reform Fannie Mae and Freddie Mac, the controversial mortgage giants.  Sources familiar with the discussions raise the possibility that the White House will miss its statutory deadline for submitting recommendations to Congress.    **HT J.M. Heinrichs

Business Insider – Here’s the 30 second version of that huge Obama economic piece in the NYT      **HT J.M. Heinrichs

WND – Let the states go bankrupt

Zero Hedge – While rising prices alone are traditionally never seen by conventional economists as sufficient to push inflation into the stratosphere, due to the claim that flat wages prevent a comparable rise in spending, the same can not be said about the combination of rising prices and wages. In fact, when that happens, there is little that a deflationist can assert will offset the price pressure. And it just happened in the epicenter of the Chinese frothy excess liquidity driven inflationary bubble, after Shanghai just announced it will hike minimum wages by 10%. This also means that labor costs are about to surge, corporate margins for Chinese corporations will plummet, and CEOs will be forced to sell their trinkets to the US at higher prices to offset the margin plunge. Which in turn means prices for “commodity” made in Wal Mart prices will be forced to also go much higher, setting off screams about wage hikes in the US, which in turn will force either US companies to see margins drop even more, or the Fed to assume that it has to offset the resulting equity weakness with more money printing. In other words, bad news all around.

WSJ – Cuomo weighs more than 10,000 layoffs  (and when it’s only 7000, he’ll say he saved 3000)

Green Shoots & Leaves

Thursday, January 20th, 2011

Forbes – US banks reporting phantom income on $1.4 trillion delinquent mortgages (zombie banks making interest on zombie mortgages. Sweet).

Reality Trac – Is a national foreclosure settlement in view?

Yahoo Finance – The eight States running out of homebuyers

Bloomberg – Irish emigration will accelerate and exceed the worst of the 1980s, when the country was last mired in recession, the Economic & Social Research Institute said.

Shanghai List – Crowdsourced map: Chinese labour unrest

Future Pundit – The U.S. Geological Survey has released a report on what the most severe storm for California, a once in 500-1000 year event, would do to the state. **HT J.M. Heinrichs

Volokh – “Bankruptcy law professor David Skeel, whose new book The New Financial Deal is one I admire a great deal, has a new op-ed in the Wall Street Journal today urging a bankruptcy regime for the states.  Among his most important points is that bankruptcy for states offers the most likely means that states can address the arguably most important long-term problem — the deals set with public employee unions for retirement benefits that are already crowding out the provision of services to the public.  States cannot afford to maintain current staff — teachers or whatever job category — given the obligations to retired employees, even if one assumes that those services, requiring whatever levels of staffing, at whatever levels of current pay, are prudent.”       **HT J.M. Heinrichs

Neithercorp – Disinformation fog intensifies as economic turmoil develops

CNN -The mayor of crime-ridden Camden, New Jersey, has announced layoffs of nearly half of the city’s police force and close to a third of its fire department. One hundred sixty-eight police officers and 67 firefighters were laid off Tuesday, as officials struggle to close a $26.5 million budget gap through a series of belt-tightening measures, Mayor Dana Redd told reporters. The layoffs take effect immediately (this should end well).

SHTF Plan – The lead stories during this economic recession/depression have been about real estate, jobs, and GDP. The real story is none of those. Although it has yet to become the mainstream talking point , the real crisis facing America is a sovereign debt crisis. We have too much debt, and that’s going to get cleared out of the system one way or the other.