Thursday, September 29, 2016

Final GDP report for Q2 2016

Growth since the recovery started:
Low current high Low current high
GDP 1.0% 1.4% 3.3% Q2'13 Q2'16 Q1'15
GDP ex inv 1.2% 1.9% 3.2% Q2'13 Q2'16 Q4'15
GDP ex inv & net imp 0.9% 2.1% 3.4% Q2'13 Q2'16 Q1'15
Real Gross Domestic Product
Real GDP ex inventory swings
RGDP ex inventory swings and net imports

The slowdown is evident.  But above the lows.  A sustained 3% growth would cure a lot of ills.


Wednesday, September 28, 2016

Obama people

Little remains of America - mob version

The incident was broadcast live on television and immediately made news on social media platforms. Conservative commentator Glenn Reynolds was briefly suspended from Twitter for suggesting that trapped motorists “run down” demonstrators in an effort to get free.


Tuesday, September 27, 2016

Do you think there is some stress in the banking system?

{click to enlarge}

There were two previous blips since the crash but were momentary.  The spread presently is higher than those two. 

Little remains of America – mob version

Fresno is mostly Hispanic.  It looks like Hispanics and whites with maybe one black.

How it should work is that a California Highway Patrol should roll down his window and start shooting.  But instead he flees.

I have said to so many times.  The police will not protect you.  And the more they flee the bolder the animals become.  Sorry to insult animals like that.


Thursday, September 22, 2016

There is almost nothing left of America - CIA director a past communist sympathizer


So it is ok.

Evil rules this country - DOJ sides with rioters

The Tulsa Police Shooting - good and proper police work

The media is vile and evil but we know that.  They edited their still pictures to frame the cop.  They showed a still picture of the man with his hands up and titled it that he was shot even though his hands were up.

The dash cam video of the Tulsa officer shooting a black man doesn’t even show he was shot with his hands up.  The proper interpretation is that the black man was walking away from the officer with his hands up to stall her from shooting as he walked to his car.  All the while the officer was shouting at him to stop.  After he reached into his car window he was shoot.

Video from the police helicopter show the black man dropping his hands and reaching into his car.  Then he was shoot.

Police have been shot to death after a subject has reached into the car pulling out a gun, in one case, a M1 carbine.

Good and proper police work.

Wednesday, September 21, 2016

I called the market pretty good yesterday

In my post showing the range of high to low for Fed day I showed the high at 2165.00.  The high for the day was 2165.11.  Pretty damn good guessing.

My options analysis shows options buyers think that there will be a rally but it fades by December and is gone gone gone by January.

This is consistent with what everyone believes.  The Fed will raise rates in December.

Additionally, bond buyers are not abandoning bonds in the slightest.  If they do I will rob a bank or two and put the money in 3x ETFs.

We shall see.

Little remains of America

Tuesday, September 20, 2016

Some necessary information regarding the Fed raising, or not raising rates.

As I said, the Fed uses communication as a transmission mechanism to affect rates.  They didn’t have to do that in the past and didn’t.  The rate changes were not telegraphed ahead of their arrival.

What changed is that they can’t directly affect rates any longer.  This is because they used to affect market rates by adding or subtracting reserves from the banking system.

They can’t do that now because the excess reserves are $2.5 trillion dollars.  They could add or subtract hundreds of billions of dollars and it wouldn’t have any affect as it is too small of an amount of money relative to the amount of reserves.  They would have to drain a couple of trillion dollars from reserves before they could again directly affect market rates.  Draining a couple of trillion dollars out of the banking system would kill the U.S. economy.  And the world economy.

All they have left is talking up market rates so they can follow them up. And they desperately want to raise rates to force up inflation to create more wealth effect.

The reason the Fed won’t raise rates tomorrow

For many decades, the Fed would raise the Federal Funds rate when the 1 year Treasury rate got 50 basis points or more from the Federal Funds rate.

The 1 year rate leads the Federal Funds rate, up or down.  Yet the Fed takes credit for interest rates.  The 1 year rate is a market rate.  When the Fed has let the 1 year market rate stay too high above the Fed Funds rate too long, a boom is created by the money supply being increased too much more than the demand for money.

When the Fed has let the 1 year rate stay too low below the Fed Funds rate for too long, an economic contraction is created.  This is because there isn’t enough money to meet the demand for money.

The last time the Fed raised rates December 16, 2015, the spread between the 1 year and the Fed Funds got to a high of .58 points on December 11th, just before their meeting.  They had to move.

Now the spread is only .10 points so they don’t need to raise rates.  The chart is the 1 year interest rate minus the Fed Funds interest rates.

{click to enlarge}

Aren’t you sick of hearing the Fed constantly talk about raising rates?  It is a communications transmission thing.   They are trying to talk up the market rate of interest so they can follow it up.  Why?

It is inflation.  It is the wealth effect.  The only single thing the Fed cares about is the wealth effect.  Nothing else matters.  Not unemployment or any other economic indicators.  And inflation is the way to get more wealth effect.  How?

Inflation causes interest rates to rise.  So the want to raise rates to push up inflation.  The cart before the horse.  They can't raise rates without the market rate going up first as show above.  So they try to talk up the market interest rate.

I believe that when the FOMC meeting opened on December 15, 2015 they had already over the weekend called the necessary voting members and made the decision then.  The minutes are show.

Fed day tomorrow

The S&P got stuck between the little and big triangle.

{click to enlarge}

Little remains of Western Civilization

For some sick reason city people want more Muslims.  To be fair, so do a lot of other people.

Sunday, September 18, 2016

Little remains of Western civilization

There is absolutely not logic, rhyme, reason, rational explanation as to why this is true.

Haiti - Clinton Foundation

Do you believe what this guy says?  I do.

Can't someone ask Hillary Clinton how much money was given to her foundation to go Haiti after the 2010 earthquake and how much of it did she send to Haiti?

Wikipedia "Haiti"...

"Former US President Bill Clinton's foundation contributed US$250,000 to a recycling initiative for a sister-program of "Ranmase Lajan" or "Picking Up Money" by use of reverse vending machines".

"According to the UN Office of the Special Envoy for Haiti, as of March 2012, of Humanitarian funding committed or disbursed by bilateral and multilateral donors in 2010 and 2011, only 1% has been pledged to the Haitian Government"

I am not sure what that last sentence means.

Where is Charles Ortel when you need him?  He has a great big headline:

But this is all he has to say:

"Overall I consider the Clinton Foundation to be a charity fraud network. I base this conclusion on my review of extensive data about its operations including the activities of the Clinton family and their friends in Haiti, a nation that has suffered many disasters, both natural and manmade."

Where's the meat?

Muslims in the US improving bomb making

Police and civilians continue to be stabbed and sliced by Muslims at a steady pace.

That NYC bomb was big.  It didn’t kill anyone because no one was walking or driving by the dumpster.  Reported 29 injured.

Concealed carry or semi-concealed open carry is effective against stabbers.  There is no defense against bombs.

In the Middle East they have perfected bomb making.  Suicide and car bombs kill many people.  This is because of the effectiveness of the bombs and that they are detonated in crowded places.

The NYC bomb shows US Muslims are improving their bomb making skills.  Just wait until they learn how to make car bombs like they do in the Arab world.

So far US Muslims are not into suicide bombs.

Tax receipts August 2016 - good

Withholding of income and payroll taxes was really good in August indicating the growth in the economy is still strong.  It was up 9.5% over August 2015.

And, this was an improvement from the much lower year over year rate since January which was 3.1%.

Friday, September 16, 2016

Wednesday, September 14, 2016

Little remains of America

Dogs and cats, and cats and mice

Dogs and cats sleeping together:

Cats and mice sleeping together:

Stocks and bonds sleeping together:

Bonds and stocks sleeping together:

Despair not. You too can get in on the Risk Parity strategy

Tired of the 'ol 60/40 stocks/bonds portfolio allocation?  There is a new ETF for you.  A Global Risk Parity ETF.  Don’t worry about it going down.  The proponents of this strategy say it is for long term investors.  Be patient.  Theoretically over time this will perform better in down turns because it has in the 2000 crash and the 2008 crash.  (But that was when bonds and stocks moved in different directions).

After Duterte called Obama poontang, what did you expect

In 2008 liberals told us the world hates George W. Bush and loves Obama.

The fly in the stock market ointment

Again, the strategy of individual investors is to ride down the market believing it will come back since it always has.  The exception is when a recession is anticipated, then a subset following the ride it down and back up strategy will sell their positions and go to cash.

It is a matter of whether you have faith in the U.S. or not.

But do you have faith in systematic strategies employed by hedge funds.  What about the strategies of CTA’s, Commodity Trading Advisers.  And what about the trillion dollars or so under management with Risk Parity strategies.

Huh?  I can’t hear you.

Bankruptcy up from last year

25,655 bks through August 2016
20,223 bks through August 2015
24,278 bks through August 2014
31,106 bks through August 2013
40,801 bks through August 2012
51,928 bks through August 2011

63,154 bks through August 2010

I think this is more evidence of the economy slowing down.

From the American Bankruptcy Institute

Tuesday, September 13, 2016

Triangle witchcraft

The bear case: Friday's break was so bad that there will be more to the downside
The bull case: Sideways motion from here, even in a wide range, will heal Friday's break.

If the market goes to the support line I think there will be a lot of buying there.  Of course a shock could send the market right down through it.  If it doesn't hold, well I am not thinking about it.

4 sectors responsible for most of the inflation

Healthcare Services, Housing, Education, Prescription Drugs


But do notice, these four sectors are not free markets by any stretch.  Government is directly involved in keeping prices high in three and the state and local governments are captive to the real estate industry.  In fact, you home town city council is dominated by these people.  In bigger cities it is also environmentalists who strive to keep housing prices high.

The Federal Reserve

Trader Phil Davis, “You can't let a rabbit with a switch dictate how you are managing your finances and the Fed is like a bag full of rabbits - no better than a roulette wheel these days as their policy is, in turn, influenced by the market - so you are all running around chasing each other's tails while trying to figure out which way the other one is going.

And this from a commenter on the internet. (41 seconds long).

Personally, I think it is time for the Fed to stop with having their regional presidents, governors, and vice chairs constantly giving talks.  In other words, STFU.

Now here is a better example of the Federal Reserve Bank speakers.  This is what Davis was referring to.

Monday, September 12, 2016

Bernie Sanders for Hillary's replacement

How could they select anyone else?  He got a massive number of delegates at the nominating convention.

Without comment

Yeah !!! The Triangle is Back

All the magenta buy the dip lines are parallel. 

Buy when price reaches the bottom support line, or when price breaks above the top resistance line.

If price breaks down blow the resistance line what will you do?

Sunday, September 11, 2016

Constitutional crisis = stock market disaster

I am really really negative about the stock market.  Clinton is kaput.  Obama may try to delay the election.  Even if he doesn’t, just the talk about it will trash the stock market.

Postpone the election - Monday we will start hearing this


This also is a good angle of Hillary- ok she is done BUT !!!!!

It is a mirror image of the previous video but it helps seeing what is happening.

The bad is that she is the most easy to beat.

This also is a good angle of Hillary- ok she is done BUT !!!!!

The bad is that she is the most easy to beat.

Fox New is bad

I have thought Fox News was actually pro-Clinton, or at least anti-Trump for quite a while.

Here is a front page photo showing Clinton getting into her secret service limo without any help.

This is propaganda.  The still photos and videos are of Clinton getting into her limo unconscious or semi unconscious.   Fox is showing her healthy and smiling getting into her SUV.

This is for the benefit of those who have not seen the devastating video.  It is to convince those people that this was all about nothing.

Fox Badnews.

Did James Comey know?

I wonder if James Comey knew H Clinton was really medically in bad shape.  Doesn’t matter.  Comey should resign and leave the country.

And congress should impeach him in absentia.

Trump needs to announce he will debate Tim Kaine

Hillary Clinton is finished.  Trump should announce he will debate Tim Kaine because if Hillary Clinton is elected, Tim Kaine will soon be president.

Then what drug did they give H Clinton. I want some.

First Hillary Clinton had heat exhaustion (on a moderate day).  Then it was pneumonia (yet she embraced a child outside Chelsea's apartment).  Then it was dehydration.  Then what was the drug they gave her at Chelsea’s apartment that she could come out smiling and waving to the crowd, glad handing them even though she carried a dangerous bacterium?  I want some.

There is one video out there with a poor angle.  This one is revealing.  When the car came to get her she didn’t respond.  When your car shows up you gather up your purse, you straighten your body, you step forward in anticipation.  They came for her and then she lost control her body.  I guess she had already before they came to help her.

This is freaky.

This woman is a mess.  I am sure this is why she has so few in person appearances.  And when she has them they are short.  Not always.  But I think she is being governored* like you do a small engine.

*Machinery. a device for maintaining uniform speed regardless of changes of load, as by regulating the supply of fuel or working fluid.

Saturday, September 10, 2016

The solution is simple - raise rates

Low and negative rates are perverse and there can never be an adequate economy with them.  Rates need to rise.

It can be done gradually while gradually eliminating the right of commercial banks to offer interest on deposits.  CB savings deposits have grown dramatically.  This is bad because this money is inert.

As interest on savings deposits is removed money will leave bank savings accounts and go to the non-banks where money is actually put to use.  Money velocity happens via the non-banks, not the commercial banks.

The commercial banks do not lose any deposits. The non-banks are customers of commercial banks and deposit the money right back into the commercial banking system the same day a savings account customer decides to accept an offer from a non-bank.  It is just that the money is now in checking accounts where money velocity happens and not in savings accounts where money sits and does nothing.

Banks don’t use the savings deposit to make loans.  Banks do not and cannot lend out savings deposits.  These deposits are used to support the banks trading and speculative activities.  These activities do not involve main street America.  Money velocity is dying from money going into commercial bank savings accounts.

It is all about BONDS - spelling out the stock bear case (which is easy to do after the fact)

Interest rate on bonds.  That is what it is all about.  This time the bond market really reacted to the fear of rising interest rates, in spite of all the negative bonds in the world and all the officials all saying that is a good thing and they could do more of it.

I think the market knows negative rates is perverse.

All the commentators seemed to miss this.  I sure did.  Thursday was like ringing a bell:

I think fear of a rate hike built up in the stock market as evidenced by the market moving sideways.  Note the peak in the 30 year bond in early July.  This really signaled the start of the sideways motion in stocks.  When the bond price came down to its 50 day moving average, optimistic that it would hold, the market jumped up a bit but it was the beginning of the final sideways motion.  Stocks hit a final peak all time high on August 15 coinciding with the bond dropping through its 50 day moving average. Finally the bond tested resistance at its 50 day MA and failed to break through.  On September 6 the S&P tried but failed to make a new high.

The markets are telling the Fed they better not raise rates or this is what is going to happen.  If the markets don’t recover in the next two weeks I don’t see how the Fed can raise rates.  BUT politics.  It will be seen as a political move if they raise the Fed funds rate and it will be seen as a political move it they don’t.

So maybe they will just do what they actually want to do.

Hillary Clinton: "Half of Trump supporters are a basket of deplorables"

"You know, racists, sexist, homophobic, xenophobic, Islamophobic."

"The other half think the government has let them down.  They have been left behind.  And feel forgotten."

Friday, September 9, 2016

Little remains of France

President Hollande said in an campaign speech on Thursday September 8th:

'Nothing in the idea of secularism opposes the practice of Islam in France, provided it respects the law,' Hollande said.
Secularism was not a 'state religion' to be used against other religions, he said in the speech in Paris, denouncing the 'stigmatisation of Muslims'.

Asking whether Islam could co-exist with secularism, like Christianity and Judaism, he insisted: 'My answer is yes, certainly.'

'The question the Republic must answer is: Is it really ready to embrace a religion that it did not expect to be this big over a century ago? There too, my answer is yes, certainly.'

The two main stock market investment strategies of individuals

One – hold their stocks and bonds and ride down with any market declines as the markets always come back.  (Many sell at the bottom).

Two – identifying a recession is coming and only then sell their stocks when otherwise would ride down with the decline.  (Good luck identifying a coming recession.  All those early warning indicators in my labels are being watched by everyone so they probably won’t work.  If people in general don't believe them as happens during irrational exuberance, then they will work.)

1a, 2a - people who earn enough more than they spend build cash and buy the dips.
Then engage either one or two.

You know investors that have dividend paying stocks that they bought at much lower prices are really really reluctant to sell them.  Their rate of return has grown as dividends were raised over the years.  Retired people especially will not want to sell this income producing source.

Most people with 401k plans and IRAs likewise are reluctant to ever sell.

Pain threshold.  Selling happens to long term investors when they just can't stand the pain any longer.  (This is often at the bottom).

It used to be that in the end, you either have faith in American enterprise or you don't.  Now, the world economy is financialized and asset classes are correlated.

But it still comes down to the same decision.  Do you have faith or don't you.

Market down Friday 9/9/16 because of bear steepening

I feel bad for my incomplete lesson on the four monetary/macro conditions. 

Here is the 4 conditions again and I have added the effect on the yield curve.

            1 DOVISH FED – BULL STEEPENING (bullish for everything)
                        Short term rates fall faster than long term rates
            2 HAWKISH FED – BEAR STEEPENING (renewed animal spirits)
                        Long term rates rise faster than short term rates

            3 DOVISH FED – BULL FLATTENING (secular stagnation)
                        Long term rates fall faster than short term rates
            4 HAWKISH FED – BEAR FLATTENING (recession risk)
                        Short term rates rise faster than long term rates

What happened was that long term yields went higher overnight.  It may have been started in Germany.  Maybe Japan.  While in Germany long rates did go higher, it is the fear that Japan will engage in a big way in steepening their yield curve.  And since everything is almost completely correlated, when bonds go down so does everything else.  AND, very importantly, fear that the Fed wants to disprove the accusations that they are solely about keeping the stock market up might actually raise rates September 21.

We have been in condition 3.  A weak macro economy and a dovish Fed.  But central banks DESPERATELY want the world to be in condition 2, improving macro economics with the central banks raising rates into that strength.  While forcing up long term rates in the face of weak macros may seem delusional, it could happen.

So the fear of, more than actual policy action, is that the policy action will be to raise rates because of a belief (delusional) that the economic situation is good.

This is delusional.  The world economy is stagnant.  It has slowed down.  It is weak.  There are lots of stock funds that have strategies tied to bond prices.  Many of these are highly leveraged funds.  The potential for a really nasty sell off of stocks is high.

If the market has a nasty down draft before the Fed meets on Monday September 19, then I think they will not raise rates this time around.

Wednesday, September 7, 2016

Filthy scum corrupt Clintons

As a preview of the extensive analysis contained in these Exhibits, a summary of some of the subjects considered is presented below--these Exhibits document an escalating pattern of lawlessness and suggest that trustees of entities in the Clinton Charity Network exhibited gross negligence and reckless disregard in performance of their solemn duties.

As Mr. Krugman and others will learn over the course of coming weeks should they
study details, the Clinton Foundation is, in fact, part of a network of “false-front”charities--these entities are illegally organized and have been operating in violation
of state, federal, and foreign laws, starting by 1997

Obama never stops criticizing America when abroad

Well, that's because he hates America.  Too many white people.

Huckabee is the idiot

Mike Huckabee said, ‘what kinds of idiots are running this country’, referring the $1.3 billion cash payment to Iran.

Huckabee is the idiot.  Obama is not an idiot.  He is evil. 

Structurally rotten labor market

Fed Vice Chair Fischer said the economy has almost met the Fed’s full employment goal.

That is nice of him.

We have a structurally rotten labor market.  It started when Bill Clinton promoted off shoring of jobs.  This is true by the way if you are too young to remember.  Bill Clinton promoted and promoted and promoted the concept of “comparative advantage” to justify undermining America’s production powerhouse.  It was Bill Clinton that got China admitted to the WTO, World Trade Organization.  And his “deal” was massively one sided in favor of China.  You know, those communist hammers that recently stole the Spratly Islands.  The communist hammers that are so feared that when Chinese tourists visit Tinian Island where the internet is not censored, they are fearful using the internet because they think they might get caught.

Labor Participation Rate - August 2016

Fed Vice Chair Fischer said the economy has almost met the Fed’s full employment goal.

That is nice of him.  I guess the labor participation rate doesn’t matter.

Labor Market Conditions Index for July 2016

Vice Chair Fischer said the economy has almost met the Fed’s full employment goal.

This is the Fed’s favorite indicator.  It is sucking right now.  But I guess that is ok.

This is the Fed’s LMCI “activity” index.  It shows the rotten labor market we have in the U.S.  We have a structurally rotten labor market.  But I guess that is ok.

Quits, Openings, Hires for July 2016

This chart is the year over year rate of change of Quits.  This is a very important labor indicator.  High quits implies high confidence among the labor pool.  This chart is steady and is a positive sign.

Here is Openings and Hires – year over year changes.  This doesn’t look very good at all.  But we do know from the Bureau of Labor Statistics that job growth has slowed down.

Opinion on the stock market

Everyone is looking at all the same indicators hoping to see a recession coming that would inform them to get out of stocks and go to cash.

With everyone watching one of two things will happen.  The indicators will not work, or, people will not believe them.  I sure don’t think there is any irrational exuberance in sight so I think the indicators will not work.

That leaves a surprise.  A shock.  It could be a slow burn fuse like the bond market fails.  It wouldn’t happen all at once.

In the meantime, the stock market may climb the wall of worry.

Full Time Employment

They say employment is a lagging indicator.  Not necessarily.

Friday, September 2, 2016

Third choice about Hillary Clinton

Besides either being a crook or a moron, she could be mentally incompetent.

Impeach James Comey

But congress won't do it.

You did read about Hillary Clinton's FBI interrogation.

FBI director Comey is an incompetent piece of shit.  But if Comey is right, Clinton is not a criminal but a nincompoop.

August Private jobs - my report

Excluding government jobs, that is, Private Payrolls only, there is a different seasonal pattern.  November is a cycle peak though now and then December has a small number more jobs.  January crashes from the holiday layoffs which includes shipping and warehousing jobs, not just retail.

Then jobs climb to an intracycle peak in August followed by a trough in September.  This is summer vacation employment ending.  Then jobs grow in October and November reaching a cycle peak in November or December.

The August intracycle peak this year was really poor.  One million six hundred and eighty four thousand more jobs than in November.  You have to go all the way back seven years to get a worse performance.

It will take one million seventeen thousand more jobs to equal the job growth of the last cycle which was two million seven hundred one thousand jobs.

Of course, there is an expected job drop next month in September so it will be more than this required.

Jobs report for August 2016 - my job report

Table: under each month is the number of more jobs than there were the preceding November. (left column reads 144,122,000 or one hundred forty four million, one hundred twenty-two thousand jobs).

The number of jobs peak every November then crash in January.  Then jobs grow to a peak in June, then trough in July.  This intracycle peak and trough is important because it is from the trough that job growth has to climb its way back to a new peak in November.

This year’s slowdown in job growth shouldn’t be surprising as many economic indicators show a slowdown.

July only has 78,000 more jobs than the past November.  This is practically zero growth.  It is a low starting point for growing to November.

As you can see the cycle ending November 2015 showed the same rate of growth as 2014 with 2,791,000 more jobs than 2014 which had 2,788,000 more jobs than 2013.

I don’t see jobs growing at a rate of 2.5+ million per year as a bad thing.  I just don’t like seeing a slowdown because slowdowns can be followed by more slowdown.

These numbers are Non-Farm employment and includes government jobs. This is from the Establishment data not the household phone survey.

Thursday, September 1, 2016

We are doomed by the Left - more proof

At Lake Tahoe Obama said:

"The fact is, it is manmade. It's not 'we think it's manmade.' It's not 'we guess it's manmade.' It's not 'a lot of people are saying it's manmade.' It's not, 'I'm not a scientist so I don't know.'"

"You don't have to be a scientist," Obama said. "You have to read, or listen to scientists to know that the overwhelming body of scientific evidence shows us that climate change is caused by human activity."
I will be looking for scientists to explain that the earth has swung between be a frozen ball to being all rain forest several times before human beings.

We won't see it because scientists are all Democrats and on the take.  And, like it is with Muslims, if a scientist says something different than what their Supreme Leader says, that scientist will be shunned and banned.