Archive - Sep 2010

The BLS has announced that as a result of the Labor Day weekend, 9 states (among which the biggest one California) did not report initial claims data to the bean counters, so instead the government had to "estimate" what the data would have been: yep, estimate, what the data was in these nine states. From Bloomberg: "For the latest reporting week, nine states didn’t file claims data to the Labor Department in Washington because of the Labor Day holiday earlier this week, a department official told reporters. California and Virginia estimated their figures and the U.S. government estimated the other seven." Official data is now made up on the fly. This US economic data reporting has just entered the twilight zone. Also, when the data is officially made up, it is not that difficult to get data that is "better than expected." The full list of states is: DC, Illinois, Idaho, Hawaii, Oklahoma, Michigan, and Washington. California and Virginia estimated themselves.

Futures surge as the US economy continues to hemorrhage jobs: a 451K print in initial jobless claims merely means that ever more people are being shifted over to extended benefits, which increased by 64.7K. One can be sure that at least 20K of this number is those hitting the 6 month ceiling on claim applicability. And yes, anything over 400K means no job creation (private or census), contrary to whatever the DOL may want everyone to believe. Elsewhere, the US trade deficit for July came out at "only" $42.8 billion on expectations of $47 billion, with the previous print slightly revised to $49.8 billion. We are looking forward to the Chinese release over the weekend of their version of the story, which will show more updated August data, and allow to read into how the China-US trade balance is developing.

• Norway Buys Greek Debt as Sovereign Wealth Fund Sees No Default (Bloomberg), and in two years those responsible for the decision will be sued for criminal negligence; In other news ECB funding to Greek banks stays within €0.3 billion of all time high at €95.9 billion. Perhaps Norway meant buying ECB bonds?
• Funniest self-serving statement of the year: Greece Says Bonds Now an 'Opportunity' as Budget Deficit Falls (Bloomberg)... as opposed to yesterday when they were a catastrophic investment. Also not mentioned was the austerity is really working as Greek industrial production plunges far below expectations
• And guess what - more QE coming to a broke Europe near you: BOE Mulls ‘Second Wave’ of Bond Buying as Rebound Ebbs (Bloomberg)
• Base metals overnight flash crash in China (Reuters)
• OECD Says Slowdown `More Pronounced' Than Anticipated (Bloomberg)
• European Crisis Flares Up in Ireland (WSJ)
• A recent uptick in insider buying is normally considered a positive for the stock market, but it may be misleading for investors (Reuters)
• Japan Plans to Seek Discussions With China on Bond Purchases (Bloomberg)

In response to HP's suit against its former CEO Mark Hurd to block him from working at Oracle, Larry Ellison threatened the suit could jeopardize the 25-year partnership between HP and Oracle. Whereas in fact, if anything Ellison was trying to instigate a fued with HP.

On one hand you have the Greek finance minister uttering the most self-serving statement of the year, saying Greek bonds are no longer something to fear (even as Greek industrial production falls 8.6% on expectations of -5.7%), on the other you have John Taylor saying that "unless a miracle takes place, the Greek situation will deteriorate and other countries will follow in the next few years." That's fine: G-Pap is currently taking advanced transmogrification lessons as the local alchemy university - even miracle workers have to start somewhere.

• Afghan president's brother made $800K in Dubai using loan tied to Kabul Bank.
• Asia stocks up, SKorea unexpectedly leaves key rate at 2.25% as recovery slows.
• Australian employers' hiring for August exceeds estimates; Currency gains.
• BOE mulls 'second wave' of bond buying as rebound ebbs.
• China trade surplus may top $20B, stoking tension over yuan policy.
• China's stocks decline most in 2 weeks on concern about new property curbs.
• Euro slides to $1.2693.
• Norway buys Greek debt as sovereign wealth fund sees no default.

The trade balance, jobless claims, and the Fed’s balance sheet….

RANsquawk European Morning Briefing - Stocks, Bonds, FX etc. – 09/09/10

Cherry picking the best money management techniques that have evolved over the last 30 years, and discarding the dross. Sophisticated hedge fund management for the little guy.Benchmarking performance to an arbitrary index, such as the S&P 500, has been consigned to the dustbin of history. Buy and hold is dead. Security in the wake of the Madoff affair. No more black boxes, homemade account statements, or a “need to know” basis. Scouring the world for only the cream of investment opportunities. An exclusive interview with Lee O’Dwyer of 5T Wealth Management on Hedge Fund Radio. (CU), (DBA), (CORN), (PHO), (GLD), (SLV), (FXC), (FXA), (IDX), (TUR), (ECH), (EPOL), (TBT), (YCS).

The President's economic team doesn't seem to know how to fix the economy. Here are some immediate things he can do to turn it around, quickly. But he has to ignore his advisers.

Having worked for a big box retailer for 14 years, I understand the dynamics of a high growth rollout of stores as a key to increasing market share and profits. Some of the best retail names in the US have practiced the identical strategy of concentrating many stores in each market to drive the small competitors out of business. This strategy worked wonders for Lowes, Wal-Mart, Target and Kohl’s during the early part of this decade. The combination of solid same store sales and opening new stores is a fantastic combination during good times. The results actually make the CEOs of these companies think they are brilliant. Their store expansion models based on rosy assumptions are followed like they can’t go wrong. What these CEOs didn’t realize was that their expansion plans were based on lies and frauds. If they had advisors who could give them a reality check, they could have avoided the massive downsizing that awaits them. Their hubris didn’t leave room for a reality check. The population of the US has grown from 281 million in 2000 to approximately 308 million today. We’ve had a 10% population increase in 10 years. Consumer expenditures have grown from $6.7 trillion in 2000 to $10.3 trillion today. This is a 54% increase over the course of the decade. Amazingly, real average weekly earnings have only gone up by 6% in the last decade.

There are women (and men) who will do anything for a price. Then there is Jim Cramer who will go from hating Obama (and the impact of his policies on the market, all the while misinterpreting such impact: i.e. the brilliant "Passage of the healthcare bill means a double dip is coming", and other such pearls), to loving the president, in the span of 40 minutes just so long as the market does not vommit for the duration of a teleprompted address. And the master of momo mediocrity may want to sit down with his "Stop Trading" friend Erin Burnett so two can clarify the official CNBC stance on Obama and his policies: Burnett: "I think the problem is you have the fastest job creation in this recovery than you have in any recession in 25 years... Technically speaking this recovery has not been tepid." Cramer: "I can show you chapter and verse how this is the weakest post-recovery environment since World War II." Sigh. Then again, if it makes for good theater, and the filling of some free ad slots in another Nielsen-rating impaired cable station, so much the better.

Zero Hedge is happy to announce its most recent collaboration, this time with Atlantic Capital Management, whose special reports we will post in the future on a periodic basis. We start off with the September report , which is divided into three parts: Part 1 – The Economy Can Go From Bad to Worse, Part 2 - Self-Similarity (on High Frequency Trading and fractal systems), and Part 3 - The Myth of Valuations. We hope you find the report as interesting and informative as did we.

This story won't quit.

Recently, we have had a number of queries about real estate. And no wonder. For starters, real estate prices have come down. Plus, in an environment with next to zero interest rates, the idea of possibly picking up some income-producing property on the cheap holds a certain appeal to some. Then there’s the fact that real estate is very much a “tangible” – and so should hold up reasonably well, should the fiat currency system come undone, as we expect it will before this crisis is over. The following, from reader and correspondent Ross, considers the issue of home buying from an interesting angle. - Caser Research