Category Archive: 5.) The United States

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All About Inventory

2017-06-14

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2017-06-14

Crude Oil Stocks, January 2009 - June 2017
Andy Hall has been called the God of Oil. As chief of Astenbeck Capital, he has proven at times that even gods can be mortal. In the “rising dollar” period, for example, after making money on the way down Mr. Hall went bullish.

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Forced Finally To A Binary Labor Interpretation

2017-06-13

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2017-06-13

U.S. Job Openings, December 2000 - June 2017
JOLTS figures for the month of April 2017, released today, highlight what is in the end likely to be a more positive outcome for them. It has very little to do with the economy itself, as what we are witnessing is the culmination of extreme positions that have been made and estimated going all the way back to 2014.

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Signs of Something, Just Not Wage Acceleration

2017-06-11

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2017-06-11

Average Weekly Earnings Production And Nonsupervisory, January 1990 - May 2017
I have been writing for many years that they really don’t know what they are doing. I only wish it was that simple. There has been developing another layer or dimension to that condition, a second derivative of stupid, whereby when faced with this now well-established fact the same people, experts and authorities all, they have no frame of reference to figure out what next to do. In other words, they really don’t know what to do when they realize...

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The Anti-Perfect Jobs Condition

2017-06-10

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2017-06-10

Unemployment Rate, January 2013 - May 2017
The irony of the unemployment rate for the Federal Reserve is that the lower it gets now the bigger the problem it is for officials. It has been up to this year their sole source of economic comfort. Throughout 2015, the Establishment Survey improperly contributed much the same sympathy, but even it no longer resides on the plus side of the official ledger.

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Dollars And Sent(iment)s

2017-06-09

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2017-06-09

ISM Manufacturing PMI, July 2014 - May 2017
Both US manufacturing PMI’s underwhelmed just as those from China did. The IHS Markit Index was lower than the flash reading and the lowest level since last September. For May 2017, it registered 52.7, down from 52.8 in April and a high of 55.0 in January. Just by description alone you can appreciate exactly what pattern that fits. The ISM Manufacturing PMI was slightly higher in May than April, 54.9 versus 54.8, but still down from a February peak...

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Bi-Weekly Economic Review: The Return of Economic Ennui

2017-06-07

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2017-06-07

The economic reports released since the last of these updates was generally not all that bad but the reports considered more important were disappointing. And it should be noted that economic reports lately have generally been worse than expected which, if you believe the market to be fairly efficient, is what really matters.

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How Debt-Asset Bubbles Implode: The Supernova Model of Financial Collapse

2017-06-04

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2017-06-04

Venezuelan Bolivar, January 2013 - May 2017
Gravity eventually overpowers financial fakery. When debt-asset bubbles expand at rates far above the expansion of earnings and real-world productive wealth, their collapse is inevitable. The Supernova model of financial collapse is one way to understand this. As I noted yesterday in Will the Crazy Global Debt Bubble Ever End?, I've used the Supernova analogy for years, but didn't properly explain why it illuminates the dynamics of financial...

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Will the Crazy Global Debt Bubble Ever End?

2017-06-03

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2017-06-03

Inflation
We've been playing two games to mask insolvency: one is to pay the costs of rampant debt today by borrowing even more from future earnings, and the second is to create wealth out of thin air via asset bubbles. The two games are connected: asset bubbles require leverage and credit.

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Simple (economic) Math

2017-06-02

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2017-06-02

Average Weekly Earnings Production And Nonsupervisory, January 2007 - May 2017
The essence of capitalism is not strictly capital. In the modern sense, the word capital has taken on other meanings, often where money is given as a substitute for it. When speaking about things like “hot money”, for instance, you wouldn’t normally correct someone referencing it in terms of “capital flows.” Someone that “commits capital” to a project is missing some words, for in the proper sense they are “committing funds to...

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Inflation Isn’t Evenly Distributed: The Protected Are Fine, the Unprotected Are Impoverished Debt-Serfs

2017-06-01

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2017-06-01

US Health Care, 1960 - 2010
The Consumer Price Index (CPI) measure of inflation is bogus on a number of fronts, a reality I've covered a number of times: though the heavily gamed official CPI is under 2% for the past four years, the real rate is 7% to 12%, depending on whether you happen to live in locales with soaring rents/housing and healthcare costs.

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The Keynesian Cult Has Failed: “Emergency” Stimulus Is Now Permanent

2017-05-31

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2017-05-31

Total Public Debt, 1970 - 2017
Can we finally admit that eight years of following the Keynesian coloring-book have not just failed, but failed spectacularly? What do we call a status quo in which & emergency measures" have become permanent props? A failure. The "emergency" responses to the Global Financial Meltdown of 2008-09 are, eight years on, permanent fixtures.

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Not Do We Need One, But Do We Need A Different One

2017-05-30

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2017-05-30

Chinese Money, Oil Prices And Asian "Dollars" , January 2006 - July 2009
On March 24, 2009, then US President Barack Obama gave a prime time televised press conference whose subject was quite obviously the economy and markets. The US and global economy was at that moment trying to work through the worst conditions since the 1930’s and nobody really had any idea what that would mean.

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Suddenly Impatient Sentiment

2017-05-28

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2017-05-28

Fed Fifth District Survey Of Manufacturing, January 2014 - May 2017
Two more manufacturing surveys suggest sharp deceleration in momentum, or, more specifically, the momentum of sentiment (if there is such a thing). The Federal Reserve’s 5th District Survey of Manufacturing (Richmond branch) dropped to barely positive, calculated to be just 1.0 in May following 20.0 in April and 22.0 in March.

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Global Asset Allocation Update

2017-05-27

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2017-05-27

Moderate Allocation
There is no change to the risk budget this month. For the moderate risk investor, the allocation between risk assets and bonds is unchanged at 50/50. There are, however, changes within the asset classes. We are reducing the equity allocation and raising the allocation to REITs. 

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State of Denial: The Economy No Longer Works As It Did in the Past

2017-05-26

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2017-05-26

U.S. Productivity Growth, 1980 - 2017
If there is one reality that is denied or obscured by the Status Quo, it is that the economy no longer works as it did in the past. This is the fundamental economic context of our current slide into political-social disintegration.

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Less Than Nothing

2017-05-25

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2017-05-25

Eurodollar Futures Dimensions, 2005 - 2007
As I so often write, we still talk about 2008 because we aren’t yet done with 2008. It doesn’t seem possible to be stuck in a time warp of such immense proportions, but such are the mistakes of the last decade carrying with them just these kinds of enormous costs.

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Commodity and Oil Prices: Staying Suck

2017-05-24

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2017-05-24

U.S. Industrial Production, 2006-2017
The rebound in commodity prices is not difficult to understand, perhaps even sympathize with. With everything so depressed early last year, if it turned out to be no big deal in the end then there was a killing to be made. That’s what markets are supposed to do, entice those with liquidity to buy when there is blood in the streets. And if those speculators turn out to be wrong, then we are all much the wiser for their pain.

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Bi-Weekly Economic Review

2017-05-23

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2017-05-23

The economic data releases since the last update were generally upbeat but markets are forward looking and the future apparently isn’t to their liking. Of course, it is hard to tell sometimes whether bonds, the dollar and stocks are responding to the real economy or the one people hope Donald Trump can deliver when he isn’t busy contradicting his communications staff.

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Reasonable Retail (Therefore Consumer) Expectations

2017-05-20

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2017-05-20

Transitory Retail Sales, January 2013 - May 2017
Retail sales estimates are not adjusted for inflation, but even so whenever they get down toward the 3% growth level you can be sure there is serious economic trouble. The 6-month average for overall retail sales dropped below 3% in March 2001, the month that marked the start of the official dot-com recession (though that is not the official name for the cyclical peak, it probably should be).

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