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Gold’s 50-Dollar Sunday Night Collapse Explained – Ep. 97
21 juli 2015 · 23 min
* Today's Podcast is entirely devoted to gold and gold stocks Lees meer
* Last night, in just a few minutes, gold dropped $50
* One or more major sell orders hit the market at the same time and gold went down below $1100
* It was down $20 by the time New York trading opened and by market close gold was down around $37 on the day
* Silver was down only about .15 today
* Why was all that gold dumped? The goal could not have been to get a good price - the goal was to knock the price down
* The HUI was down 10% on the day
* This bear market in gold stocks is now bigger than the one from 1996 to 2000
* Gold stocks are much cheaper today than they were at the end of the dot com bubble
* If this a measure of trust in central bankers, the market is expressing greater confidence in Janet Yellen than it did in Alan Greenspan in 1999-2000,
* We know how badly that turned out for stocks and how bullish it turned out for gold
* The timing of this selloff comes on the heels of the media's spin on Janet Yellen's recent Congressional testimony
* But the real news that ignited the sell-off was China's admission that they have gold reserves and in fact they intend to add to those reserves, surprising the market
* If China was lying about how much gold they have had for the last six years, why does anyone believe they are telling the truth now?
* I think they are still lying - being strategic
* They want to get the price of gold down because they still want to buy a lot more gold
* If China still needs more gold, eventually this will bring the price of gold up
* Also a very negative WSJ article compared gold to the "pet rock" craze
* This is the same nonsense that proliferated in the 1990's
* The WSJ article describes gold investment as "a leap of faith" relative to dollar or stock investments
* Gold should not be compared to stocks - it is currency, a commodity
* Gold has intrinsic value, whereas the dollar is a fiat currency, backed by faith alone
* Gold has had value f…
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Yellen Almost Admits Economy Too Weak to Raise Rates – Ep. 96
16 juli 2015 · 32 min
* Today Janet Yellen goes back up the Hill for the second of her 2-day Congressional testimony and the press has already made headlines about what she did not say Lees meer
* According to the headlines, Yellen's "hawkish" testimony reflected that she is putting the Fed on a path to hike rates later later this year
* That is not what she said
* From her prepared, written testimony, which was carefully crafted for all eyes, this is what she said:
* "If the economy evolves as we expect, economic conditions likely will make it appropriate at some time this year to raise the Federal Funds rate target, thereby beginning to normalize the stance on monetary policy."
* This sentence starts with a big condition: "If the economy evolves as we expect"
* When has the economy ever evolved as the Fed expected? - Probably never
* Even if the economy improves, those improvements may not live up to the Fed's unspecified expectations
* "Economic conditions might make it appropriate to raise rates-
* Not result in raising rates, of require us to raise rates - just because it is appropriate to raise rates doesn't mean the Fed will raise them
* If the Fed was going to do what was appropriate, they would have raised rates a long time ago
* Zero percent interest rates was never appropriate
* Yellen herself has said she was likely to leave interest rates lower than would be appropriate because of "special circumstances"
* Even if it is appropriate, there is no commitment to raise rates at any point this year
* If Janet Yellen really said what the headlines infer, she would have said:
* "Given the strength in the economy we will be raising interest rates later this year
* She said nothing like that
* The Fed went way out of its way to commit to nothing
* Yet that's not the way the media is covering this
* Why is that? Everyone wants to pretend that the economy is good and that the Fed is going to normalize interest rates
* All of this make-believe causes the dollar to rally and go…
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The Real Reason Greece Folded – Ep. 95
14 juli 2015 · 21 min
* As I have been saying all along, the Greek Prime Minister capitulated to German demands Lees meer
* In fact, he is agreeing to a plan that is more onerous on Greece than the one he encouraged his own people to vote down just over a week ago
* Those who thought Greece held all the cards, that the Eurozone would risk a domino effect of other nations leaving the euro
* I felt Germany held the stronger hand and would push Greece from the Eurozone rather than cave in to Greek demands
* Greece is going to stay a part of the Eurozone, at least for now, because it is the only way they can get the bailout funds they need to sustain Greek socialism
* Greek socialism will be mitigated to a degree, by the austerity demands to cut government spending
* They don't need higher taxes
* If Germany were to allow the Greek debt to be forgiven, the moral hazard for other struggling states would be enormous
* The message Germany is sending is that it did not go well for Greece, it is not going to go well for any country who refuses to get their economic house in order
* Germany demonstrated that membership in the Eurozone is not for life
* This will force other countries to get their house in order
* I don't agree with Greece's choice, although it might be better for Greece in the short than leaving the Eurozone
* No Greek politician wants to accept responsibility for the austerity measures - it is easier to throw the blame over to Germany of Brussels
* Push comes to shove no politician is going to be able to undo Eurozone austerity measures without having to face the music
* Greece has run out of other people's money to fund socialism
* Now their debt to GDP will be over 200%
* They can't pay their debt now - how are they going to pay off a larger debt?
* Part of the austerity measures, included a €50 billion privatization program, similar to the IMP's recommendation years ago
* Greek government assets will be sold off for the benefit of foreign creditors
* I think it would…
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Yellen Continues to Talk What the Fed Can’t Walk – Ep. 94
11 juli 2015 · 20 min
* This podcast comes from my hotel room in Las Vegas, as I am attending Freedom Fest Lees meer
* Janet Yellen received a standing ovation at the end of her talk, and I can't understand why...
* Headlines from the talk report "Rates to go up by the end of the year"
* Actual quote:"Based on my outlook, I expect that it will be appropriate at some point later to take the first step to raise the Federal Funds Rate, and thus begin normalizing monetary policy."
* "I want to emphasize that the course of the economy and inflation remains highly uncertain, and unanticipated developments could delay or accelerate the first step."
* In other words, the process will be delayed because whatever happens will be unanticipated or unannounced because the last thing Yellen wants to do is to admit that she can't raise rates.
* We have gone 9 years without a rate hike
* The market is not prepared for a rate hike given the enormity of the debt
* The U.S. owes more money than all the other debtor nations combined
* We can only pretend to be solvent and zero percent interest rates are a big part of that pretense
* We will not be able to service our debt under normalization
* Yellen states that the labor market is continuing to improve
* No, it's not
* Didn't she see Friday's jobs report, based on downward revisions to prior months?
* Didn't she see the plunge in the labor force participation rate to a new low since 1977?
* Didn't she see the all the part-time jobs that have replaced the lost full-time jobs?
* Didn't she see yesterday's weekly jobless claims report that surged to 297,000?
* Yellen previously stated that she would not raise interest rates until the labor market improves, and since then, the labor market has worsened
* Wholesale inventories for May up by .8%
* Year over year, sales are down 3.4%, the biggest decline since the 2008 financial crisis
* Greece is forced to revisit austerity measures as Germany refuses to budge
* Greece realizes they don't want to lea…
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Out of the Frying Pan Into the Fire – Ep.93
8 juli 2015 · 26 min
* Over the weekend the Greeks voted no to the Eurozone bailout terms Lees meer
* The Greeks ars still hoping for a better deal, hoping to avoid austerity
* The irony is that the consequences of their vote will bring on even more austerity, as a return to the drachma will result in a lower-valued currency
* For example, pensioners will be paid not in fewer euros but drachmas that buy less
* This will mean a huge collapse in the standard of living in Greece - far worse than the "austerity" called for under the Eurozone bailout terms
* There is no way out without substantive reforms, particularly in smaller government
* The markets are reacting adversely because they want to extend and pretend
* The euro will be stronger without Greece, despite comments in the press to the contrary
* Fears of "contagion" - other countries leaving - are unfounded
* Greece is headed for hardship, but they will have to impose austerity from within they could rebound
* Greece has a lot of potential, they have natural resources and a thriving shipping industries
* The secret of the success of the shipping industry is that it is not taxed
* The answer will be fewer taxes and less government spending
* Short term, leaving the Eurozone will be negative for Greece
* The Greek vote will be positive for the euro
* There is still a flight to the dollar for safety over gold
* The reason gold has not benefited from Greek instability is that the dollar is still viewed as a safe haven
* More and more economic data reveals how weak the U.S. Eeconomy is
* This week the Service Sector PMI for June contracted from 56.8 in May to 54.8
* More and more people are looking for a rate hike in December rather than September, but they are still buying the narrative that interest rate hikes are feasible
* This belief supports the dollar over gold
* Our economy is weaker than other countries whose interest rates are higher
* When are the dollar buyers going to realize that they have jumped out of the f…
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Labor Force Participation Rate Plunges to 38-Year Low – Ep. 92
3 juli 2015 · 23 min
* Happy 4th of July to everyone Lees meer
* Unfortunately, we have given up our independence to government tyranny
* I will be back on the radio again - I'll be on the Alex Jones Show every first and third Friday of every month when the Non-Farm Payroll numbers come out
* I will be doing tomorrow's show - the second hour of the show
* The Non-Farm Payroll Report came out early this week because of the 4th of July holiday
* The consensus forecast of 230,000 jobs was close to the actual number 223,000
* The unemployment rate of 5.5% last month was expected to come in at 5$% - actually came in at 5.3%, the lowest unemployment rate in 7 years
* Great news, right? Not great news
* The devil is in the details
* The Labor Force Participation Rate - 62.9 last month - plunged down to 62.6%
* This is the lowest rate since 1977
* 432,000 people dropped out of the labor force in June - twice the number of people who got jobs in June
* Once again, these new jobs are low-paying service sector jobs
* During the Obama "recovery" we have lost 1.4 million manufacturing jobs and gained 1.4 million wait staff and bartender jobs
* According to the Household Survey 640,000 Americans left the labor force in June
* Now we have a record 93.6 million Americans no longer in the labor force
* The Household Survey reports 349,000 jobs were lost during the month
* The only net gain - 161,000 part time jobs - represent a net loss
* The Household Survey shows that we lost good jobs
* When asked about the Labor Force Participation Rate number, Secretary of Labor Perez commented, "One month does not a trend make."
* This trend has been going down every month of every year that President Obama has been in office
* Janet Yellen announced that the Fed would not start raising rates without "further improvement in the labor market"
* She specifically cited the Labor Force Participation Rate and proliferation of part-time jobs as troubling trends
* We are now further from that goal
* The de…
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Obama Takes the Credit, Workers Suffer the Consequences – Ep.91
1 juli 2015 · 21 min
* One more time President Obama seeks to buy Democratic votes with a free lunch by appealing to workers Lees meer
* Promising more overtime pay, to go into effect in 2016
* Raises the threshold for overtime pay requirements
* Workers who earn salaries of $50,000 or less must be paid overtime for hours worked over 40 hours per week
* This prevents workers who put in extra hours on their own time to try to advance
* This could cause employers to reduce salaries to factor in overtime
* It will be harder for employers to change existing work agreements
* This will adversely affect workers on flexible schedules, such as those who work at home in 2016
* Employers will have to seek more control over workers' schedules
* New law will disproportionately hurt women, the very constituency Democrats claim to protect
* Those who have variable workloads throughout the year will be adversely affected
* This law eliminates choice and increases costs, but it's great politics
* Followup on Puerto Rico: Minimum Wage
* Puerto Rico is an example of the adverse effects of a minimum wage law that has devastated an economy
* Puerto Rico's has more than 20% unemployment
* Puerto Rico labor force participation rate is 42-43%
* The minimum wage has priced out more than half of the labor force
* There is no entry level work in Puerto Rico
* If the minimum wage is so good, why does it not work in Puerto Rico?
* Puerto Rico is a real-life case study on the adverse effects of minimum wage laws
* Puerto Rico's only advantage is its tax law for incoming businesses which will increase demand for labor
* Recent comments on my last podcast questioned my support for Puerto Rico
* I never advised buying Puerto Rican debt - I knew it was a problem
* It makes sense to move to Puerto Rico to take advantage of the new tax laws
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For U.S., Puerto Rico Bigger Tragedy than Greece – Ep 90
30 juni 2015 · 26 min
* Global stock markets got beaten up overnight and the carnage continued here in the U.S. Lees meer
* Dow Jones down 350 points by closing bell - biggest point loss of the year
* NASDAQ down 122 points
* Possible Grexit sparked sell off in FOREX markets
* Banks in Greece closing, sending masses to the ATM machines
* Euro ended up closing near the highs of the day - nearly to $113
* The dollar was weak all day against the Yen and against the Swiss Franc
* There was no safe haven move into the dollar - gold up
* The dollar lost considerable ground against the euro
* Another confirmation that the dollar's rally is over
* My newsletter released today does a good job comparing the U.S. vs global markets
* The U.S. did well against the international market from 1996 to 2000
* In 2008 the U.S markets went sideways and the markets I recommend skyrocketed
* We have been in a period similar to '96 - 2000 and now we are about to see returns even greater than the 2008 gains in our markets
* Regardless of the direction that Greece goes in this weekend's referendum, the dollar is going down against the euro
* Puerto Rican governor finally admitted the obvious - repaying their debt is impossible
* Puerto Rican debt is a fraction of the U.S. national debt
* If it is mathematically impossible for Puerto Rico to pay their debt, why does anyone think the U.S. will be able to eventually pay off its debt?
* The only way we can pretend to pay our debt is for the Fed to do it for us by creating inflation
* This is yet another reason why the Fed is not going to raise rates in September
* We continue to get recession-like economic data, despite the fact that the Fed is still optimistic
* The Federal Reserve is looking for an excuse to not raise interest rates
* Maybe the situation in Greece will provide that excuse
* Maybe it will be the volatility in China
* "External problems" are providing an excuse to not raise rates
* It is important to point out that Puerto Rico would …
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Help Me Correct Wikipedia’s Liberal Bias
25 juni 2015 · 22 min
[fullwidth background_color="" background_image="" background_parallax="none" parallax_speed="0.3" enable_mobile="no" background_repeat="no-repeat" background_position="left top" video_url="" video_aspect_ratio="16:9" video_webm="" video_mp4="" video_ogv="" video_preview_image="" overlay_color="" overlay_opacity="0.5" video_mute="yes" video_loop="yes" fade="no" border_size="0px" border_color="" border_style="" padding_top="20" padding_bottom="20" padding_left="0" padding_right="0" hundred_percent="no" equal_height_columns="no" hide_on_mobile="no" menu_anchor="" class="" id=""] Lees meer
[one_full last="yes" spacing="yes" center_content="no" hide_on_mobile="no" background_color="" background_image="" background_repeat="no-repeat" background_position="left top" border_size="0px" border_color="" border_style="" padding="" margin_top="" margin_bottom="" animation_type="" animation_direction="" animation_speed="0.1" class="" id=""]
[fusion_text]
In reviewing my Wikipedia page, I noticed some information that is either wrong or narrowly slanted to promote a negative impression of me. We've tried to correct the issue, but Wikipedia makes it very difficult for anyone directly connected to the person or subject of the page to make changes, claiming "Conflict of Interest". This opens the door, however, for those who have a good grasp of editing Wikipedia but who have a decided "left" slant to claim the substance and the direction of the information. Once it's out there, it is very difficult to fix. Wikipedia wants editors to be unrelated to the subject to make contributions. Below are a few things that should be added to the page. Please feel free to make these additions as you would like. Please note that changes need to be discussed in the "Talk" page, first. Here are Ten Simple Rules for Editing Wikipedia.
[/fusion_text][/one_full][one_full]
[title size="1" content_align="left" style_type="" sep_color="" class="" id=""]On Minimum Wage[/title][fusion_text]
Eliminate the minimu…
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Greece is a Sideshow. U.S. is the Main Event – Ep.89
24 juni 2015 · 14 min
* It looks like there is going to be some kind of deal to avoid the "Grexit" Lees meer
* Greek's exit would be great for Europe, but it would not be politically attractive for either side
* As long as Greece stays in the Eurozone, the Greek government can continue to blame Germany or Brussels for their problems
* So-called austerity will continue without any haircut to the debt
* The same is true for cuts to government spending
* The Greek government may increase taxes and/or adjust the retirement age for pension, but no government spending cuts are on the table
* Tax increases will provide more incentive for tax evasion or avoidance by leaving the country
* All talks are re-arranging deck chairs on the Titanic - extend and pretend
* The markets are higher - the euro down big
* The market is anticipating more cheap money, which would be threatened by a Grexit
* In an ideal world, if Greece were to leave the Eurozone and set themselves up as a bastion of free market capitalism, then they could come back strong
* Given the electorate, this move is unlikely
* Socialism only works in Greece as long as they have another country's money
* The sell-off in gold based on the Fed's dovish statements last week
* The Fed will only raise interest rates nominally in order to keep the market from balance sheet expansion stimulus into its calculations
* Good news from housing numbers - a surge in the Northeast
* Mortgage rates have been rising, although still low. Some buyers are worried about higher rates
* Higher rates, however would price buyers out of the market
* Monday Chicago Fed National Activity Index came in at -.17, continuing a downtrend consistent with a recession
* May Durable Goods down 1.8% three times lower than expectations
* X transportation met recently reduced expectations
* Durable goods has missed for 5 out of the last 7 moths
* Chicago PMI Manufacturing weaker than expected decrease to 53.4 - now at the lowest level since October 2013
* Manufac…
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Yellen Almost Admits Fed Not Ready to Raise Rates
18 juni 2015 · 20 min
* Today was the expected day for expected rate hikes, indicating economic "lift-off" Lees meer
* The June rate hike is off the table and everyone is focusing attention on September
* The prepared remarks are just a smokescreen to maintain the pretense that the economy can withstand a rate hike
* The Q&A session after the the prepared remarks were more revealing
* Janet Yellen ducked the question of why people who recommend postponing the rate hike to 2016 are wrong
* Yellen stated that the "dots" used to forecast rates are based on mere projections
* The FOMC is always too optimistic about the economy, so if they are wrong again, the dots are meaningless
* Yellen tacitly admits she is hiding behind the data, stating that even if rates to rise, it will be a nominal amount
* Yellen's response to CNBC's Steve Liesman question regarding what labor milestone would justify a rate hike was especially telling
* She said she needs to see further improvement in the Labor Market before she begins to raise rates
* How much improvement does Yellen expect in the labor market over the next three months?
* There is a good chance that the labor market will not be as strong in the next three months
* She is letting the cat out of the bag; saying that rate hike is not likely in September, either
* Yellen questioned the "obsession" about when rate hikes start because the first rate hike will not necessarily indicate normalization
* She is indicating that a rate hike may be symbolic
* The highly stimulative rate of zero to .25 is only necessary when trying to sustain a bubble
* In response to a question about the Federal Reserve under Greenspan, Yellen indicated that it was a mistake for him to raise rates slowly and methodically
* I was vocal Greenspan's decisions at that time, arguing that his actions were creating the real estate bubble
* Yellen is now moving interest rates even more slowly over a period of 7 years
* I may not be the only person who noticed how dovish Yelle…
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Wall Street Begins to Question Fed’s Narrative – Ep. 88
15 juni 2015 · 20 min
* Dow under pressure on the back of EU talks with Greece Lees meer
* There is a lot of room for the market to decline pending the Fed's announcements
* The consensus is that rates will hike September or later
* If Fed does not rates in September, Election year next year might also put off rate hikes
* Bloomberg article quotes B of A hinting that additional stimulus would further damage the economy
* B of A admits this risk has been getting the least amount of attention
* Empire State Manufacturing Index missed 5.9 forecast - came in at -1.98
* May Industrial Production expected +.2 - came in at -.2
* Capacity Utilization dropped 78.3 to 78.1
* Manufacturing down .2
* Industrial Production has been negative for 4 of the last 6 months
* Currency markets still believe Fed will raise rates
* Consumer spending was up in May because of rise in gas prices
* Weekly Jobless claims saw a slight uptick - exceeded forecast
* Bloomberg Consumer Comfort Index continues to decline
* Listener's Questions, Peter's Answers to resume on this podcast
* Submit your questions on schiffradio.com
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Con Job Report – Ep. 87
7 juni 2015 · 31 min
* Once again, a week of worse than expected economic data punctuated by another better than expected non-farm payroll report from the government Lees meer
* ADP private sector payroll report was slightly below estimates
* 5,000 manufacturing jobs lost - 3rd consecutive monthly decline
* Unemployment rate dropped
* Labor participation rate up to 62.9 - .2% above lowest point
* Large sector of labor force still comprised of older workers
* Teens, twenties and thirties are at all-time lows
* Older Americans want part-time jobs, so increase of part-time jobs contribute to increase in all jobs
* Given the strong government jobs number, the media is discounting all the weak data, including GDP, productivity, consumer spending and industrial production
* The jobs we're creating do not reflect economic strength
* The weekly unemployment numbers are hovering at 42-year lows
* Does anyone believe that this is the strongest economy in 42 years?
* The hiring numbers are suspect to begin with because of the government's assumptions
* The Trade Deficit dropped not because our exports surged, but because out imports plunged
* Our economy is too weak to support a greater number of imports
* A closer look at the data behind the government jobs number actually supports the rest of the weak economic data
* Personal Income and Spending on the month missed estimates
* May Manufacturing PMI dropped slightly
* April Factory Orders fell by more than expected
* Year over year, orders are down 6.4%
* 6th consecutive month that factory orders have been down year over year
* This has only happened in America during a recession
* Mortgage applications fell sharply on the week - 7.6% decline, led by a 12% decline in re-fi's
* May Services PMI fell to 56.2 - lowest level since January
* ISM Non-Manufacturing Index dropped to 55.7 - the lowest level of the year
* The revision to Q1 Productivity - 3.1% decline
* We also had a decline in 2014 Q4
* Corporate profits plunged 5.9% in …
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Markets Still Fooled as Fed Plays “Let’s Pretend” – Ep. 86
30 mei 2015 · 18 min
* Short week closed with some horribly bad news Lees meer
* People are not paying attention to the data; they are paying attention to the Fed
* Government released revision to the GDP: -.7
* The assumption of deflation is cooked into the number
* Most Q2 data is weak
* Q1 Corporate profits plunged by 5.9%
* JP Morgan announced 5,000 layoffs
* Corporations are already levered up to the max
* May Chicago PMI plunged back down to 46.2 - close to March's -year low
* April Durable Goods fell .5
* March Services PMI fell to 56.4 - second monthly drop
* May Dallas Fed Manufacturing crashed to -20.8; fifth consecutive monthly decline
* The Fed has never predicted a recession; in fact they have forecasted economic growth while in a recession
* Bloomberg Consumer Comfort Index: fell for the 7th consecutive week
* There are fewer good jobs available and if someone loses their job the are likely to have to take one they are overqualified for
* The Fed is too concerned about maintaining the illusion of prosperity to allow genuine prosperity
* They are propping up the stock market and the housing market, pretending everything is OK, and allowing the government to continue deficit spending
* People still think the Fed will raise interest rates; the most we would get is a trivial hike< just to say they raised rates to get things back to normal
* There is no more normal anymore; the new normal is interest rates at zero and perpetual QE until the whole thing blows up
* How can we expect to learn from our ancestors when we can't even learn from our own mistakes?
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Currency Traders Still Buying Rate Hike Rhetoric – Ep. 85
23 mei 2015 · 24 min
* The U.S. dollar started out this morning on the defensive Lees meer
* Government released CPI numbers generated a sharp reversal across the board
* Gold sold off, but closed slightly down against the dollar
* April CPI up just .1% on the month; year over year prices dropped -.2%
* Lowest CPI since October 2009
* Core CPI (excludes food & energy) rose .3%
* Biggest monthly jump since March 2006
* News sent dollar up on anticipation that rate hike will be more likely
* Inflation benchmark is just as real as the 6-1/2% unemployment goal
* Traders still haven't figured out that if we ever approach the goal, it will be moved
* Biggest factor within the .3% rise in the Core was +.7% in health care costs
* Biggest increase since January 2007 - prior to Obamacare
* Rising costs will slow consumer spending, weakening the economy and undermining employment
* Yellen in a press conference today did not actually project a rate hike
* It's all about extend and pretend; actually postponing the rate hike will buy the Fed some time before launching QE4
* Increased inflation as the economy cools down means stagflation
* The media is spinning increased inflation as good news
* Bad economic news released yesterday:
* Unemployment numbers came out higher
* Fewer hires mean fewer fires
* Chicago Fed National Activities Index came in at -.15
* Three month moving average down to -.23
* MAY PMI expected to rise to 54.6 unexpectedly declined to 53.8 - lowest lever in 16 months
* Bloomberg Consumer Comfort Index continued to slide from 43.5 to 42.4
* May Philadelphia Fed looked for a bounce back to 8; missed expectations with 6.7
* Missed expectations 5 out of the last 6 months
* Existing Home Sales expected improvement over March; dropped to 5.04 million
* Kansas City Federal Reserve Manufacturing Index missed expectations at -13; dropping for 5 consecutive months
* Economic data as bad as 2009 and inflation is getting worse
* Janet Yellen acknowledged underlying issues…
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The Fix Is In. Government to Rig GDP Again. – Ep. 84
21 mei 2015 · 27 min
* Earlier today latest FOMC minutes released Lees meer
* Once again the weather is blamed for missed expectations, pretending the economy is better than it is
* Now the Fed dismiss numbers as inaccurate, because seasonal adjustments are off
* Why does the government need to seasonally adjust the numbers
* Yearly GDP is the number that matters
* Once the numbers begin adjusting the numbers you open the floodgates to manipulation and subjectivity
* Wall Street analysts tend to be more optimistic for the first quarter
* Studies show that Consumers spend most money in Q4; by the following Q1 consumers are taking a break
* Same studies show Q2 is usually stronger
* Why does the government have to come back with a new GDP measurement in order to come up with a bigger number?
* To come up with low unemployment numbers they find ways to under-calculate the unemployed and count under-employed
* Analysts are discounting weak data and expecting eventual rate hikes
* The Fed is denying the weak economy not because they want to raise rates, but because they can't admit that their monetary policy has failed
* Mixed economic data came out this week
* Housing Market Expectation Index dropped from 56 in April to 54 in May - missing estimates for fifth time in 6 months
* Housing Starts surged to 6 or 7-year high
* Lingering optimism for a recovery
* Walmart came in far below estimates, attributing miss to the strong dollar
* Walmart is a net importer, so the strong dollar should work in its favor
* Big drop in gasoline prices in Q1 did not provide a boost for Walmart because the underlying economy is weak
* Los Angeles is the largest city in the country to pass the $15/hr minimum wage
* They staggered the increase over 5 years, so adverse effects will not be directly attributed to those who voted for the increased minimum wage
* It will be difficult to measure decisions not to hire as a result of the minimum wage
* The $15/hr minimum wage makes it illegal to hire low-sk…
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Fewer Hires Means Fewer Fires – Ep. 83
17 mei 2015 · 20 min
* S&P responds to bad news with new high; DJ just barely off record high Lees meer
* Dollar continues to fall
* The currency traders still have not accepted the significance of bad news
* Lower dollar will be the trend
* Friday got a trifecta of bad economic news
* Thursday Weekly Jobless Claims number declined to 264,000 - lowest weekly jobless claims in 42 years
* Why are there so few job losses? Because so few people are getting hired
* Government numbers come from the Birth/Death Model, which assumes a certain number of businesses created each month
* What if these businesses are not actually created?
* This would explain lower number of unemployment claims
* There's no way we can say that the economy is the best it has been in 42 years
* Empire State Manufacturing Index, which was weak last month, expected to be +5, came in at 3.09; below estimate for the 4th month in a row
* Both Business Expectations and Hiring declined from April to May
* Industrial Production Capacity Utilization was expected to be flat; down again .3%
* This is not the 5th consecutive monthly decline in Industrial Production; longest losing streak since 2009
* Consumer Sentiment Number 95.9 in April - expected to hold steady - came in at 88.6; biggest drop since December 2012, and biggest miss ever
* If the job market is so strong, why is confidence plunging?
* The percentage of employees who fear losing their jobs is at highest level since March of 2009
* The bubble is rapidly deflating
* Unofficially, I think we have been in recession for the entire "recovery"
* The government is not accurately measuring inflation in the GDP deflator
* The Fed has not forecast a single recession
* Recessions always happen contrary to forecasts
* If we are in a recession there can not be a rate hike
* At some point they are going to have to acknowledge that the numbers are not accurate
* The unemployment rate is going to have to tick up at soe point this year
* At some point after the end…
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U.S. Economy Teetering on the Brink of Recession – Ep 82
14 mei 2015 · 20 min
* Another week and another round of bad economic news Lees meer
* Wall Street may be finally paying attention
* JOLT Report projected at 5.158 million; came in at 4.994 million
* April Retail Sales expected to rise .2%; came in flat
* X Automobiles expected an increase of .5, actual number was .1
* Beneath the surface there was a collapse in retail sales in all areas except groceries
* Weakest year over year increase in retail sales since 2009
* Department Store Sales experienced the biggest drop since January 2014
* A look beneath the headlines of the jobs numbers reveals that the jobs are not good jobs
* The Birth/Death Model assumption added 175,000 jobs to the last jobs report
* These numbers came from a biased source
* The fact that there is no spending is evidence that the job market is not as robust as the numbers claim
* Jobs numbers can be made up but retail sales can't
* Wall Street is surprised that we have weak data because they believe we are experiencing job growth
* March Business Inventories up .1% versus expectation of .2%
* February Business Inventories was revised down from .3% to .2%
* I estimate that Q1 GDP will contract by greater than 1%
* The Atlanta Fed just revised down their Q2 GDP estimate to .7, which would indicate the U.S. economy contracted for the first half of the year
* The Fed is still looking for 3% rise in GDP for 2015, which would mean we would need growth of 6% for the last half of the year
* It is more likely that we will get a negative number again for Q2
* Two consecutive contracting quarters will indicate an official recession
* If we are in a recession, the Fed will not raise rates and is more likely to respond with stimulus
* I predicted that a pause in QE3 would trigger another recession
* When the Fed is unable to raise rates to stimulate the economy, the only trick they will have up their sleeve will be QE4
* When that happens, the moves we saw today in the FOREX and Precious Metals markets will look ta…
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The April Jobs Report and My Encounter With Ben Bernanke – Ep 81
9 mei 2015 · 30 min
* First official jobs report of Q2 Lees meer
* Wednesday's ADP private payrolls were below expectations
* March was revised down, indicating a softer labor market
* Challenger job cuts numbers well above previous month, biggest year over year increase in 10 years
* The jobs number came in at 222,000 jobs with unemployment down to 5.4%
* The media is spinning the headline number
* The picture underneath the jobs report is not as nice
* The March downward revision by 41,000 jobs causes one to question whether today's job number will be revised downward given all the negative underlying data
* The stock market recognized this; sensing the Fed will remain on pause
* Average Hourly Earnings increased only .1%, half expectations
* Numbers of Americans who have left the labor force is now at a record high
* When employers are changing the nature of the workforce replacing full time workers with part time workers it distorts the net number of jobs
* The Household Survey indicates the breakdown of full time vs. part time
* The government makes no such distinction
* In April we created 437,000 part time jobs - biggest gain in part time employment since last June
* The number of full time jobs declined by 252,000 - the biggest drop of the year
* The bad news of full time job loss is buried beneath the superficial layer of part time jobs
* The demographic breakdown indicates workers 55 and older gained 266,000 jobs in April
* Workers 25 - 54 lost 19,000 jobs
* This blows a hole in the notion that labor force participation is going down because of retiring baby boomers
* Other bad news to hit this quarter's GDP:
* Wholesale Trade numbers: inventories expected to rise by .3% but rose by .1% - smallest gain since March of 2013
* Wholesale Sales expected to break 3-month losing streak; instead increasing streak to biggest year over year decline since November of 2008
* Earlier in the week, Q1 Productivity down 1.9% following 2.1% decline last quarter
* Unit Labor Cos…
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Bloom Rapidly Coming Off Recovery Rose – Ep 80
5 mei 2015 · 21 min
* Upcoming Appearances Lees meer
* Thursday morning panel at the SkyBridge Capital SALT Conference in Las Vegas
* Liberty Forum - Salt Lake City
* MoneyShow - Las Vegas
* Economic News for the Week: March Factory Orders met expectations, but downwardly revised February number for 5th straight year-over-year monthly drop
* March Trade Deficit: $51.4 billion, a miss greater than $10 billion and the single worst trade deficit since October 2008 and largest monthly gain in nearly 20 years
* If the economy is so good, why do we have such a large trade deficit?
* Rising oil prices, along with other rising prices are putting additional pressure on consumers
* April U.S. Auto Sales fell, missing expectations for the 5th month in a row - sales at lowest year-over-year start since 2009
* The auto bubble has burst
* The United States has been spared the discipline of the market by virtue of the dollar being the reserve currency
* Gold is still just below $1,200/ounce - we will eventually run out of sellers who are keeping prices down, and when it goes up it will go up in a spectacular way
* Aussie dollar is up a percent and a quarter
* Canadian dollar up half a percent
* Euro up a third of a percent
* Swiss Franc up almost a full percent
* There was some good news: April ISM Service Non-Manufacturing Index rose, to 57.8, beating estimates
* New orders plunged into negative territory
* April PMI dropped from 59.2 in March to 57.4, a bigger drop than expected
* No one is looking for the April jobs number to be lower
* The consensus is also for unemployment to keep falling from 5.5% to 5.4%
* If we have all these jobs, why isn't the consumer spending?
* The answer is the jobs don't pay very much or the hours are reduced
* Meanwhile, as much as the Fed wants to pretend there is low inflation, the cost of living is rising
* The one safety net for the consumer was oil prices, and now that is gone
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Spring Has Sprung, But U.S. Economy Still Snowed In – Ep 79
2 mei 2015 · 30 min
* Markets on roller coaster ride final two trading days of this week Lees meer
* Bad news parade marches on in April
* The players are still clinging to fantasy of U.S. economic recovery
* Dollar finished down substantially on the week - April was the first down month in 10 months
* Dollar has seen its highs and is heading lower
* Gold back below 1200
* Oil prices added to gains closed above $59 - moving opposite to the dollar
* Friday - March Personal Income & Spending flat below expectations
* Personal Spending also lower than expected; .4% gain
* Savings dropped from 5.7 to 5.3 - the lowest savings rate of the year
* April PMI Manufacturing Index - dropped more than expected to 54.1 even as weather warms
* ISM Manufacturing expected to rise to 52 - remained flat
* Employment Index dropped two points - the first drop in 2 years
* March Construction Spending fell by .6 missing expectations
* Atlanta Fed correctly forecasted Q1 GDP at .2, forecasting Q2 at .8
* Article on Zero Hedge: Goldman Sachs warning Europe about severe "Lowflation"
* Article in Bloomberg: Chinese can't "kick" savings habit
* Blames problem on "not enough government"
* The reason America is in so much trouble is that we don't save
* Once the Chinese have built up a cushion, then they will spend
* When our phony economy bursts, it will be apparent that we did not save enough and had too much debt
* America gives capitalism a bad name - we preach it but do not practice it
* We rely on a giant government-run ponzi scheme of socialized savings
* We are telling the Chinese they have too much free market capitalism
* We have been indulging our present and sacrificing our future
* The Chinese will be rewarded for their prudence
* The most ironic thing about the Bloomberg article is that they suggest Chinese would be better off under Communism
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Will the Fed Run Out of Excuses as the Weather Warms?
2 mei 2015 · 23 min
* Government's first look at Q1 GDP Lees meer
* There was a lot of optimism around Q1 with expectations above 3%
* Actual GDP was 1/5 of expectations at.2%
* The rest of the story of Q1 GDP:
* The deflator this time was negative - meaning that prices dropped by .1%
* The last time the deflator was negative was 2009 Q2; still in the Great Recession
* The previous occurrence of a negative deflator was in 1949
* I believe the true rate of inflation is higher than -.1%
* Inventory build continued into Q1 - businesses continue to believe the myth of the recovery
* Inventory to sales ratio are the highest they have been since the Great Recession
* They are still blaming poor economic performance on the weather. It is always cold in the winter; why is bad weather always a surprise?
* The Fed just released their official statement on interest rate policy
* They removed language from statement indicating it is unlikely that rates will rise
* Continuing give the illusion that they are progressing toward a point when they will raise interest rates
* The Fed went out of its way to dismiss all the bad economic news we got in Q1
* The dollar just had its biggest 2-day decline in 6 years
* The Fed came out and put a smiley face on the whole thing and the dollar recovered somewhat
* The Fed is never going to confess that they are worried; that's not their job
* What evidence is there that things will improve in Q2?
* Cheap gas windfall is over; oil prices have risen every week in the past month
* Early April economic data is negative
* An economy based on spending is a bubble; production grows an economy
* Consumers have lots of debt, but they don't have good jobs
* Decline in the dollar signals that the markets are already sensing this
* The Fed feels that economic growth will recover in Q2 & Q3
* They also said they need to see additional strength in the labor market
* Business are making foolish decisions because they believe the Fed
* As the economy disappoint…
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Minimum Wage, Maximum Stupidity – Ep 78
28 april 2015 · 25 min
* The Keynesian myth of mandating prosperity actually hurts the lower middle class and the working poor Lees meer
* Something for nothing is appealing to voters, so politicians make empty promises that are good politics but bad economics
* A Seattle-based company called Gravity Payments has instituted a minimum salary of $70,000/yr
* This has given him great publicity, but how will this work in his company?
* Lower paying jobs will have to be eliminated, because they don't represent enough productivity to justify a raise that doubles the employee's cost
* Higher salaried workers are not hurt because they keep their job and perhaps get a raise for picking up the extra duties formerly handled by lower-salaried workers
* The most recent political gimmick in the State of Connecticut is a tax masquerading as a minimum wage law
* The Democratic State Legislature have proposed a law that will fine companies of 500 or more employees $1/hr for any worker who is paid under $15/hr
* How will this work in the State of Connecticut?
* Right away, business just over 500 employees will pare down to fall under the new regulation, so jobs will be lost
* In reality, this is just a tax increase on the people who can least afford it
* For employees who are currently working at the minimum wage, a $1 fine is cheaper than a raise from the current $9.15 rate to $15/hr, if they do not eliminate that person's job
* This is essentially another employment tax that will result in higher prices across the board
* Neither the employee nor the employer benefits
* For employees who are working above the current minimum of $9.15/hr a raise would cost the employer more than the $1 fine
* According to minimum wage law, it is illegal to cut the worker's pay - the only option is to cut the worker
* The penalty does not apply to higher paid workers; it only applies to jobs between the current minimum wage and the new minimum wage
* It will be cheaper to pay the tax than to raise wages, but there …
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Do the Swiss Envy Canadians Paying Higher Prices? – Ep 77
27 april 2015 · 20 min
* S&P and the NASDAQ made new record highs Lees meer
* Stock market continues to ignore all the bad news about the economy
* Bad news is not being ignored in the foreign exchange markets
* Negative economic news is buoying the stock market because it removes fear of interest rate hikes
* Weak economy means more cheap money which means higher stock prices
* Oil prices hitting highest prices of the year
* Gold is back above the 1200 level
* April PMI Manufacturing Flash Index at 54.2 biggest miss ever
* New Home Sales tumbled by 11.1% - biggest drop since July of 2013
* March Durable Goods slight bump based on military aircraft, but less transportation, the index unexpectedly declined .2%
* Durable good orders, less defense and transportation dropped for the 7th consecutive month
* April Service Sector PMI missed lowest expectations at 57.8 - the biggest miss ever
* Dallas Fed Manufacturing Survey - recorded significant drop at -16; biggest losing streak ever
* There will be a delayed reaction from the market to first quarter's bad economic news on top of this quarter's economic news
* A Boston Fed official is considering retaining "balance sheet tools", i.e. QE
* In other words, the Fed is considering not having an exit strategy - because it can't exit
* We have done all sorts of crazy things that we never would have done but for zero percent interest rates and QE
* A market that was built for 0% interest rates can't handle 2% interest rates
* The product of all this stimulus will be big increases in prices, and the Central Banks are setting the stage for higher inflation
* Declining Swiss consumer prices are described as "dangerous"
* Currently, the Swiss consumers are enjoying lower prices and do not need a government "cure"
* The law of supply and demand is so simple that only an economist would fail to understand it
* Keynesians will spin ever-conflicting news to support their theory
* Fitch has downgraded Japanese government debt to A- because or t…
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Inflation Is The One Promise Central Banks Can Deliver – Ep 76
22 april 2015 · 21 min
* Markets have been volatile but economic data still looking bad Lees meer
* Chicago Fed National Activity Index: contrary to expectations, came in at -.42 in addition a downward correction for last week to a 2-year low
* Weekly Redbook Same Store Sales Survey down to lowest annual increase in 4 years with a dramatic rate of decline in recent months
* Implausible excuses, such as the weather or the timing of Easter, attempt to mask the fact that the economy is just weak
* Oil prices moved above $57, forming a sizable W-bottom
* Canadian dollar up about 5%
* Canadian inflation, especially food prices up
* This signals the end of rate-cutting cycle in Canada
* Central banks around the world are going to have to dial back on their cheap money policies
* The "Threat of Deflation" will be in the rear view mirror
* Central banks may like high prices, but consumers don't
* President of the Federal Reserve Bank of Boston Eric Rosengren stated our 2% inflation goal is "too low"
* He thinks higher inflation allows for more growth, and allows interest rates to remain low
* Cheap money does not create economic growth and doesn't create employment - it undermines both
* Cheap money applied to a slower economy creates a vicious cycle
* A weakening dollar will put upward pressure on already rising consumer prices
* The Fed is hinting at a higher inflation goal
* The problem is we can't do anything about our inflation because our debt is out of control
* Fiscally solvent countries are able to raise rates and still service their debt
* All the U.S. can do is "talk tough"
* If they had a "Hall of Economists" in Disneyland, the Keynesians would have to be in Fantasyland
* Paul Krugman's Keynesian experiment is blowing up the U.S. economy
* Everybody will figure it out before Paul Krugman does
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Disney World, Paul Krugman, and Market/Economic News – Ep. 75
19 april 2015 · 28 min
* Disney's theme parks are a monument to capitalism as it existed when Walt Disney envisioned Disneyland Lees meer
* The Hall of Presidents, however manages to honor presidents who supported big government over the free market
* The choice of presidents demonstrates revisionist history that supports the liberal, big-government narrative
* Whenever you expand government you contract liberty
* The Dow ended the week down 279 points; NASDAQ down 75
* The search is on for excuses but the real issue is not global causes but U.S. economic performance
* Housing Starts and Permits were way below estimates
* Jobless claims were higher than expected
* Leading Economic Indicators weaker than expected this month after last month's downward revision
* Core CPI came in twice expectations, but described as "better than expected"
* The dollar had a very weak week; Canadian dollar had strongest week in years, with a possible rally going forward
* Weakness in Stock Market, continuing weak economic data makes June rate hike less and less likely in the minds of traders
* The most prominent poster boy for the myth of the U.S. economic recovery, Paul Krugman, recently published an article claiming victory for U.S. Keynesian economic policy
* Krugman claims U.S. is performing better than Europe due to Keynesian policies
* Perception is not reality: the U.S. is not doing as well as Krugman would have us believe
* Krugman references an article by Germany Finance Minister Wolfgang Shauble, criticizing him for rejecting macroeconomics
* Macroeconomics IS B.S. and should be rejected
* Krugman infers that Europe's woes are the result of rejecting Keynesianism
* Shauble warns against going for the "quick fix" of Keynesian policies
* Germany understands that austerity, rather than debt, is the answer
* Krugman believes we should continue to create bubbles through stimulus and debt
* It will be interesting to see what Krugman says when the U.S. economy slips back to recession as Europe…
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Bad Economic News… When It Rains, It Pours – Ep 74
16 april 2015 · 19 min
* Dollar usually drops on bad news but rallies because traders automatically buy on the dip Lees meer
* Bad news is dismissed because the first quarter "doesn't count"
* This puts greater pressure on the last 3 quarters to make up for the first quarter and still show growth
* Expectations of a bump similar to last year are based on non-repeatable conditions - Obamacare and inventory build
* Inventory to sales ratio is the highest it has been since 2009
* What is the basis for dismissal of the bad news in Q1?
* Data confirms that the consumer is already broke
* Consumers will be hit with rising oil prices
* Traders who are loading up on the dollar are ignoring all the evidence that they are wrong
* The wake-up call will be like the sub-prime mortgage crisis
* The same thing will happen in the Foreign Exchange Markets when they realize the story is not about a recovery but about another round of QE
* Changing trend coming in the dollar
* Changing trend in the oil market
* Changing trend in the gold market
* If we don't get a recovery in the summer how is the Fed going to raise rates in Q4?
* Election year 2016 will likely see no rate hikes
* Retail Sales missed Wall Street expectations with a bounce of only .9
* March Small Business Optimism fell to lowest level in 9 months
* Hiring Plans dropped to lowest level in 6 months
* Business Inventories for February rose to .3 based on weak wholesale sales
* Inventory to Sales Ratio holding at 1.36 (highest since July of 2009)
* My radio broadcasts from a year ago predicted that the data was not reflecting reality
* April Empire State Manufacturing Index missed expectations at -1.9, near a 2-year low
* Employment down
* Hours worked down
* New orders down to 3-year lows
* Prices paid went up
* March Industrial Production dropped .6, missing expectations - 4th consecutive month below estimate
* This news can't be blamed on April showers
* Those who have been betting on the recovery are about to realize the…
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Markets, Economic Data, & The Ben Bernanke Book – Ep. 73
11 april 2015 · 21 min
* Markets continue to rally worldwide Lees meer
* Record highs overseas - much more action in Asia
* Markets riding a sea of liquidity
* Gold had an interesting week, closing at 1207
* The dollar had one of its best weeks in months
* In terms of other currencies gold was at a 2-year high
* This means that the euphoria about the dollar is not universally shared
* Commodities in general were up - crude oil was up - holding above 50
* This is a good indication of a solid bottom on the price of gold
* Traders continuing to make bullish dollar bets in the face of bad economic data
* Traders are willing to throw out the first quarter - regardless the excuse
* The bounceback from Q1 2014 was due to reasons that will not be repeated
* Obamacare created a huge rush to sign up
* There was a big inventory build anticipating future sales
* Bets for a 2015 Q2-3 rebound are based on optimism for consumer spending
* February Revolving Credit tumbled by $3.7 billion
* Non-Revolving Credit surged $19.2 billion - mostly student loans
* Consumers are cash poor, yet Wall Street believes they will start buying when the temperature rises
* Government under-reporting student loan defaults due to forbearances
* Wednesday release of FOMC minutes encouraged the dollar speculators because there were discussions about higher interest rates in June
* Currency traders still haven't figured out the the Fed's comments are all theater
* They are playing the game based on FedSpeak until it falls apart
* A drastic turn in the FOREX markets will take a lot of people down with it
* February Wholesale Trade declined again after January reported biggest decline in 6 years
* This marks the first 3-month decline since 2008 financial crisis
* Inventories rose slightly because of decline in sales
* Inventory to Sales Ratio at 1.29 - highest since 2008 financial crisis
* 2014 GDP increase was due to rush to build inventory in anticipation of recovery
* Bottom line: economic data shows that …
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Sexist Female Reporter Refuses to Apologize to Male Victims – Ep. 72
8 april 2015 · 19 min
* Big double standard in the media regarding "sexism" Lees meer
* Rolling Stone story based on complete fiction about a woman who claimed she was raped in a fraternity house
* The reporter accepted the woman's story without checking sources
* After the facts were out, the reporter apologized to everyone except the men who were falsely accused and the fraternity involved
* Where is the outrage that the real victims did not receive an apology?
* Is it sexist to assume that men do not deserve apologies when wrongly accused?
* The reporter refuses to condemn the woman who lied
* The primary apology must go to the wrongly accused, the fraternity and to the university
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Media’s “Rand Paul Can’t Win” Nonsense – Ep. 71
8 april 2015 · 10 min
* Media's take: Why run for President if you can't win? Lees meer
* "He's too Libertarian to win"
* "He is not as Libertarian as his father"
* "Rand Paul is closer to the mainstream than his father"
* His chances are as good as anyone's at this point
* He is actually closer to his father than he is to the mainstream
* If you like Ron Paul, how can you not like his son?
* Rand will maintain his father's supporters
* There are a lot of Libertarian Republicans, and Rand will attract most of those votes
* Rand has a chance to win in 2016 and in 2020
* If he wins, he will maintain his strong principles
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Frontline Perspective on the Government’s War on Liberty – Ep. 70
7 april 2015 · 20 min
* When employers empower certain groups with special privileges they become clubs with which to beat the employer Lees meer
* Employers are then reluctant to put themselves in a position to be bashed with that club
* Large companies must prove diversity and go out of their way to hire minorities
* That kind of discrimination is the right of the employer
* Whenever you hire anyone you make yourself vulnerable to frivolous suits
* The government has made American business less competitive by appealing to the job seekers not the the job creators
* This eventually backfires on the job seekers by minimizing the number of employers
* I established my offshore bank because government regulation made it so much harder for me to service my international clients
* This drove away jobs that would have been in America
* Now it is impossible for our company to accept foreign accounts, including Americans living overseas
* My offshore bank may not accept offshore accounts or non-American customers
* Government regulations are now making it difficult on Americans who live abroad
* Every business in the country is being undermined by growing government regulation
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Market’s Delayed Reaction to the Jobs Report – Ep. 69
7 april 2015 · 15 min
* Markets are finally getting a chance to react to worst jobs report in two years Lees meer
* March non-farm payrolls coming in at about half of forecast
* Dollar was off about 1% on FOREX
* Stock futures were down on opening bell but shot 100 points higher
* "Bad News is Good News" rally
* CNBC thinks jobs takes June rate hike is off the table - but it was never on the table in the first place
* The Fed will not be serving a September rate hike either
* It's going to be an all you can eat "QE Buffet"
* The dollar should have sold off more, but the bull market persists
* Currency traders are using circular logic about the strong dollar
* The dollar is rising for the same reason that the economy is slowing - the Fed has suspended QE and higher rates are expected
* The effects of a strong currency should build over time
* When the dollar uptrend ends, it will be a collapse because there are so many people on the wrong side of the trade
* March ISM Non-Manufacturing Index slipped more than expected - lowest since June 2014, a two-year low
* Monday WSJ article said that if Fed is worried to raise rates even a quarter of a point, then the U.S. Economy is not as strong as everyone thinks
* If the Fed really believes the economy is strong, they would have already raised rates
* Continued low interest rates indicate the Fed does not believe the economy is strong.
* Crude Oil continues to rebound - above $53/barrel
* If we close above $54, the market should see move up to mid $70's
* Higher oil prices will start to hurt consumers
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Will April Showers Rain on the Wall Street Excuse Parade? – Ep 68
2 april 2015 · 25 min
* April Fool's Day and all the fools are buying U.S. stocks Lees meer
* Atlanta Fed GDP Now Estimate for Q1 GDP finally down to zero
* Despite the fact that the economy is worse than the 2008 crisis, Wall Street expects a Q2 boom
* Last Q2 was boosted by Obamacare spending and inventory build
* No data supports wishful thinking that Q2 will stage a comeback
* U.S. corporate profits fell despite Wall Street gains
* Q4 corporate profits dropped by 3%
* Final revision for Q4 GDP held at 2%, weaker than expectations
* First back to back decline in March University of Michigan Consumer Sentiment since October 2013
* Personal Income and Spending rose only .1%, missing expectations for 4th consecutive month
* Savings rate increased to 5.8%, contrary to Fed's objective to maintain spending bubble
* Savings increase is problematic for the Fed because it undermines the spending spree that masquerades as wealth
* The Fed will have to launch QE4 to encourage more spending
* The March Dallas Fed Manufacturing Index plunged by 17.4%- the sharpest 1-month decline since 2008
* Chicago PMI was below 50 in March - near 6 year lows
* March ADP numbers lowest in 14 months - biggest miss vs expected in 4 years
* March ISM Manufacturing Index dropped again to 51.5 - lowest level in 22 months - 5-month decline - first time since 2008
* Construction spending "unexpectedly fell"
* Zero might not be the floor for Q1 GDP
* Stock market weakening again - oil and gold up
* U.S. dollar no longer making new highs
* Everyone is going to come to the same conclusion at once triggering violent moves in the market
* Right now there are still people willing to buy the dollar, but eventually there will be no one to take the other side of those trades
* Countries with smaller balance sheets will start raising rates when dollar plunges and commodities rise
* Friday jobs number, the Fed's gauntlet, will start reflecting the rest of the bad economic news
* Rate hikes are so far into the futu…
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If You’re Not Free to Discriminate You’re Not Free – Ep. 67
1 april 2015 · 38 min
* Indiana passed a law to prevent lawsuits targeting religious objection Lees meer
* Pressure and feigned outrage from the left wing machine causes Governor to walk back the meaning of the law
* The mark of a free society is the willingness to tolerate intolerance
* Liberals are the most intolerant of other peoples' intolerance
* In a free market there is always someone who wants my business, even if someone else does not
* I would rather get the intolerance out in the open, and just avoid that business
* It looks like the Indiana gay couple were searching for a business that would object to participating a gay wedding
* Why can't there be a business for bigots?
* It doesn't hurt anyone but the business, because it narrows the customer base
* The Governor can't stand up for what he believes
* Why doesn't he just say that the law allows certain individuals to discriminate based on religion
* A small segment of the community is holding everyone else hostage
* There is some inherent hypocrisy - whom is it OK to discriminate against?
* It should be legal to discriminate against anybody
* Government should not give a license to do what they should naturally have a right to do
* The government is extolling privileges on individuals that turn into weapons, frivolous lawsuits, and undermine our economy
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Since When is Filing a Frivolous Lawsuit Heroic? – Ep. 66
1 april 2015 · 25 min
* If an employee sues an employer falsely, the employer has no recourse, because it could be interpreted as retaliation Lees meer
* Ms. Pao lost not only on her discrimination claim, she also lost on claim that she was retaliated against
* The big problem is the reaction in the media
* The tone in the press is supportive to Ms. Pao, even though she was not telling the truth
* She was suing for $16 million - her motive was greed
* This is not a "victory for women" - it is a loss
* The suit makes employers reticent to risk false gender-based accusations
* The press promise more sexual discrimination cases in the pipeline, suggesting someone might "get lucky"
* Most gender-based lawsuits are never litigated - they are settled for cash
* Employers are not going to discriminate based on gender
* Gender discrimination is a poor business strategy
* This case sends a loud message to employers to avoid the risk of gender based discrimination by avoiding women
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The Truth About Gender-Based Discrimination Lawsuit – Ep 65
26 maart 2015 · 20 min
* Pao v. Kleiner Perkins: there should be no damage even if there was discrimination Lees meer
* The law against discrimination is unconstitutional
* Employees are free to discriminate - they can work for whomever they want
* Why should an employer then lose that right?
* Everyone should be free to deal with the consequences of their choices
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Is Bad Economic News Finally Weighing on Stocks? – Ep. 64
26 maart 2015 · 11 min
* Near 300 point drop in the Dow Lees meer
* NASDAQ down 118
* S&P down 30 points
* $1.50 gain in oil and oil stocks up
* No significant economic news that would trigger this move
* Dollar was not down much lower on day
* The 110 level is holding back the euro
* Expectations that the euro will roll over on higher U.S. interest rates kept the dollar up
* A weak stock market is bad for the dollar and good for gold because the Fed is likely to not raise interest rates or launch QE4
* The only way the Fed can prevent a correction from turning into a bear market is by launching QE4
* The Fed has built this "recovery" on asset bubbles
* Launching QE3 guarantees QE4
* The only thing that will stop perpetual stimulus is a currency crisis
* Durable Goods Orders were estimated at .7% gain
* Actual number came in at a 1.4% decline
* Five consecutive monthly declines in Durable Goods X Transportation
* The last time that happened was during the months surrounding the 2008 financial crisis
* The U.S. economy today is the weakest it has been since the depth of the 2008 financial crisis
* The final revisions to Q4 GDP due on Friday are estimated to go down
* There's a good chance the number will be lower than 2%
* Pundits are making excuses, saying that the "First quarter
s always weak" or "It's the weather"
* They don't want to come to terms with reality
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Economy is Weakening But at Least the Cost of Living is Rising – Ep. 63
25 maart 2015 · 24 min
* Bad economic news coming in is more a deluge than a trickle Lees meer
* Dollar continuing to drift lower since "patience" was removed
* New Zealand Dollar record high against the euro and the Australian dollar
* New Zealand enjoys a strong currency, economic growth, low inflation and low unemployment
* Swiss franc had a strong day today
* Chicago Fed National Activity Index revised down to -.11
* Three consecutive months of declining numbers
* Deteriorating numbers reflect pattern similar to pre-QE3 months
* Existing home sales number below estimates
* February new home sales up, however
* Richmond Fed Manufacturing Index -8, twice as low as most negative forecast. declining 4 times in 5 months
* CPI came in at .2%, exactly as expected; core up to 1.7
* Price of ground beef up 19.2%, at a record high
* The jobs numbers are a lagging indicator
* We are likely to see a jobs number downturn based on less optimistic assumptions
* Weaker jobs number will keep rates low
* The only thing that might drive rates higher is inflation, but goal of "medium term" is vague
* Weaker economy and higher inflation will cause dollar to drop
* When inflation is the only focus, it will be obvious that the Fed cannot raise rates, driving dollar down
* A currency crisis will finally force the Fed to raise rates
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Are Forex Markets Finally Calling the Fed’s Bluff? – Ep. 62
21 maart 2015 · 30 min
* The Fed removed the word "patience" from their statement while promising patience Lees meer
* We are likely to see weaker employment numbers, further delaying talk of rate hikes
* Pundits who failed to foresee the 2008 crisis are now saying the "problem is solved" because they do not understand the problem
* The problem is worse now than ever
* The Fed caused the 2008 crisis and they are in the process of creating the next, much larger crisis
* I have been critical of QE 1,2 and 3 and low interest rates because they only mask the problem
* "Failure of Capitalism" comments are actually criticizing our socialist economic policy
* The same applies to the Fed, as they are price-fixing the market
* Faulty logic assumes that low inflation is the reason for the weak economy
* Low inflation, which is not as low as reported, is a silver lining in the economy right now
* The rich are making money on inflation because they are leveraged and speculating
* Inflation undermines the middle class, business and job creation
* Who will be blamed when the consequences of the Fed's policy finally result in crisis?
* Free market capitalism is the solution
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Losing “Patience” Does Not Mean the Fed has Lost Patience
19 maart 2015 · 24 min
* The Fed released long-awaited FOMC official statement Lees meer
* Indicating they will be more patient without the word "patient" than when they were officially patient
* Why take the word away in the first place?
* The Fed wants to appear to be moving closer to a destination to which it has no intention of arriving
* The Fed is clearly more concerned about the economy today; they reduced growth estimates
* Janet Yellen said she will not raise rates until she sees improvement in the labor market
* The Fed not satisfied with 5-1/2% unemployment
* The jobs number is the outlier and will turn around
* Housing starts collapsed in February; biggest in 8 years
* Economic Surprise Index is most negative in memory
* It doesn't matter what the unemployment rate is; the Fed can't raise rates without creating a financial crisis worse than 2008
* The minute the Fed went down the path of QE, they sealed our fate
* There is now so much debt that we need QE more than ever
* The dollar had a huge rise in anticipation of rate hikes
* The Fed is more likely to launch QE4 than to raise interest rates
* The Fed is not going to raise interest rates until there is a currency crisis
* When the dollar turns, commodity prices will surge in all currencies
* The fact that the day of reckoning has been delayed with increased debt means a bigger payday for Euro Pacific Capital investment strategy
* It will be better to restructure and default on some of our debt that to deflate it away
* Understand the end game, ride it out and have the last laugh
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Dollar Strength Defies U.S. Economic and Stock Market Weakness – Ep. 61
14 maart 2015 · 24 min
* The Foreign exchange markets continue to ignore the darkening U.S. economic picture Lees meer
* Dollar had best two-week gain since the financial crisis of 2008
* Market exuberance based solely on the jobs report which is an outlier among all other negative news
* Why aren't the jobs numbers being questioned?
* We have had three consecutive months of declining retail sales
* Falling prices are reflecting a lack of demand
* The stock market has begun to decline, bracing for Fed rate hikes
* Gold held steady against the dollar; up against other currencies
* Inventory to sales ratio lowest since 2008
* This week the Atlanta Fed reduced Q1 GDP down to .6%
* The second revision for Q4 could be below 2%
* Poor GDP numbers already being blamed on the weather
* Europe looked to US QE as a success because inflation was masked
* The European market is already issuing negative bonds in anticipation of ECB purchase (QE)
* The Germans are going to push back when they see inflation
* At lease Europe will be able to withstand higher rates because of smaller debt and trade deficit
* U.S. won't be able to tolerate the consequences of rate hikes which would ultEimately heal the economy
* Therefore inevitable QE4 will be even larger than QE 1,2 & 3 combined
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Markets, Rate Hikes, and Student Loans – Ep. 60
11 maart 2015 · 17 min
* The NASDAQ 5,000 party ended nearly the day it began Lees meer
* NASDAQ down more than 80 points
* Dow Jones down 332 points
* Outside reversal week a reliable pattern signaling a downturn
* The market believes optimistic non-farm payrolls will trigger Fed rate hike
* Dollar hitting new highs
* Janet Yellen is the victim of too much success, allowing for rate hike assumptions
* All data other than jobs numbers are weak
* If we continue along this path, we are heading toward recession
* Stock market and real estate bear markets will trigger QE4
* Stock market will drop dramatically if rate hike notion is not dispelled
* Obama Administration floating trial balloon on student loan debt discharge for bankruptcy
* This moral hazard would force education prices even higher
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U.S. Economy Not Nearly as Strong as Payrolls Suggest – Ep. 59
7 maart 2015 · 45 min
* February Non-Farm Payrolls Number - 295,000 jobs Lees meer
* Unemployment down 5.5%
* Analysts were expecting a miss
* Dollar at a new high
* Productivity dropped 2.2%
* Factory orders fell for the 6th consecutive month
* Economic data points only seen during recessions
* The Dow closed down - NASDAQ down more
* Labor force participation rate is down
* Average hourly earnings flat
* Number of people not in the labor force at an all-time high
* Increase in jobs represents people working more than one jobs
* 45% of the 295,000 jobs are assumed to have been created by optimistic government statisticians
* Disconnect between the weak GDP and the jobs numbers
* Consumer credit declined, indicating the consumer is struggling
* It's a good time to take advantage of the strong dollar and invest abroad
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Polish Central Bank Joins 2015 Rate Cutting Party – Ep. 58
5 maart 2015 · 21 min
* Poland became the 21st country to lower interest rates this year Lees meer
* New record low to 1.5%
* Polish economy is strongest in three years
* Growing faster than the U.S. economy
* Policy conundrum: what is inflation target?
* Low inflation stimulating Polish economy
* Yet Central Bankers look to illogical Keynesian textbooks
* Where is the evidence that deflation is undermining the economy?
* There is no magical point where a good thing becomes a bad thing
* If they overcompensate and weaken the economy, they will be raising interest rates on an already weak economy
* Poland could afford to raise rates, however, if this policy fails, because their debt is low
* U.S. debt is so high, we can't afford to raise rates in order to support the dollar
* When inflation picks up in the world and other central banks raise rates, the dollar will decline
* The Fed will be unable to curb inflation because we can't afford to service our debt
* Ultimately this will precipitate a currency crisis when it becomes apparent that the Fed has run out of options
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This Time It Is Different – It’s Worse – Ep. 57
3 maart 2015 · 26 min
* First trading day of march - NASDAQ closed above 5000 for the first time in 15 years Lees meer
* Each time the market goes up with crazy valuations, pundits say, "This time it's different."
* This time the Fed is under more pressure to create the illusion of prosperity
* Today's rally came against the backdrop of weak economic data
* The only way this bubble won't burst is if the Fed intervenes with more stimulus
* Bubbles force you to make an important decision:
* Look like a fool before they pop, or look like a fool after they pop
* It doesn't matter how much money you make, it's how much money you keep
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Shocking Admission & Denial from Alan Greenspan
28 februari 2015 · 24 min
* Government released revised estimate for Q4 GDP Lees meer
* Initial estimate was 2.6; revised down to 2.2
* Economic growth dipped from 5% in Q3 to 2.18% in Q4
* PMI was expecting 58.7 but plunged to 45.8, indicating contraction
* Alan Greenspan commented that the U.S. economy is weak
* Greenspan cites declining U.S. productivity
* Points to declining gross domestic savings brought on by entitlement programs
* Greenspan refuses to blame Fed policy for productivity and savings declines
* He predicts continued low interests rates to create the illusion of wealth
* In 1966, Alan Greenspan blamed the Fed and their cheap money policies for stock market bubble and economic imbalances
* Today, he still believes this to be true, but no longer cares about the consequences of reckless economic policy
* The Fed's job now is to just do whatever it takes to postpone the pain
* Inflating bubbles with the certain knowledge that the outcome will be bad, while pretending that they will eventually raise rates
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Fed Might Begin Thinking About Raising Rates at Some Point – Ep. 56
26 februari 2015 · 30 min
* Janet Yellen's prepared remarks were the most dovish yet Lees meer
* If economy is improving, why do we still need "a high degree of accommodation?"
* There is still room for "substantial improvement in the labor market"
* Any modification of guidance will not necessarily indicate rate increase
* Yellen states lower energy prices is positive for the economy, yet looks for higher inflation
* The Fed says outlook is data dependent and the data is getting worse
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Hollywood Hypocrisy and Gender Pay Gap Fiction – Ep. 55
24 februari 2015 · 29 min
* Patricia Arquette claims that there is a still an unfair gender wage gap in the labor market Lees meer
* If that were true, all employers - male and female - would hire women first, because they are more cost effective employees
* But they don't
* Women who choose to balance family with career often accept lower-paying positions
* Women do not make less money for the same work
* They make less money for different work
* In Hollywood, youth is an asset for women - for men, not as much.
* Male action movie stars can earn more because action movies earn more.
* Liberal spin promotes a government "solution" for a free market system that is working
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Fed’s Open Mouth Operations Having Complications – Ep. 54
19 februari 2015 · 21 min
* Two days of bad economic news this shortened week Lees meer
* The Fed still says the economy is recovering
* Recent FOMC minutes maintains pretense they can raise interest rates
* FOMC members are worried about raising rates "too soon"
* The Fed is worried about how to remove the word "patient" from communications
* How confident can the Fed be in the "recovery" if they still fear raising interest rates?
* The "recovery" was just a bubble masquerading as a recovery
* If we had a real recovery the Fed could have already raised rates
* They are now concerned about weakness overseas
* They are worried about a strong dollar
* They expressed concerns about the risks of lower oil prices
* Low inflation causes concerns
* The Fed is clearly paying attention to the negative economic news
* Empire State Manufacturing down
* Home Builder Confidence at 4-month low
* Industrial production weak
* PPI number declined .8
* Eventually the economic numbers will force the Fed to acknowledge weakness and resume stimulus
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Investor Confidence Sends Stock Indexes to New Highs – Ep. 53
14 februari 2015 · 21 min
* Friday 13th was not unlucky for Wall Street Lees meer
* S&P 500 traded to an all-time record high
* The Dow closed above 18,000
* NASDAQ at almost a 15-year high
* Despite overall trend of weak corporate earnings
* Weak economic data does not dampen Wall Street's spirits
* Central Banks are behind the surge with excess liquidity
* Wednesday - Mortgage Applications plunged 9%
* Purchases declined 7% following a 2% decline prior week
* 10% decline in Mortgage Refinances
* Jobless claims up 25,000 from prior week
* Biggest back-to-back decline in Retail Sales since October of 2009
* Consumer Confidence is down 2 weeks in a row
* Business Inventories rose by just .1% contrary to expectations
* Inventory to sales ratio highest since July 2009
* Huge drop in Consumer Sentiment
* Jobs number is a lagging indicator
* Part-time economy is a double-edged sword
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