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Michael Pento Recaps The Key Economic News Of The Week

Tyler Durden's picture




 

From Michael Pento of Euro Pacific Capital

Fence Sitters Jump In

The number of Americans filing first-time claims for unemployment
insurance payments fell 37,000 in the week ended Jan. 15, the biggest
decline since February 2010, to 404,000, figures from the Labor
Department showed today. The four-week moving average dropped to 411,750
from 415,750. While the trend in claims is no doubt headed in the
correct direction, it is important to stress that the current level of
initial unemployment claims is still above the trailing 10 year average
of 396,486. That fact is amazing given the massive
number of layoffs which occurred during the last 3 years. So layoffs are
still above trend and hiring is below trend. Those are the facts.

The big jump in mortgage rates caused the bulk of fence-sitters to jump
into the real estate market. Existing Home Sales jumped 12% to reach a
5.28mm annualized rate. However, home sales dropped YOY and median
prices were also down 1% from the year ago period. For all of last year,
purchases decreased to 4.91 million, the fewest since 1997. Those who
were timing the bottom of interest rates to buy a house have now made
their commitment. Therefore, the real estate market is set to take
another dip down as rates continue to rise and the economy and job
creation continues to stagnate.

The Philly Fed came in at 19.3 for January, which declined from the
previous reading of 20.8. The bigger news here was the rise in the
prices paid component, which increased to 54.3 from 47.9 and was the
highest reading since July of 2008.  Slow growth and inflation will
remain with us until the next crisis arrives in just a few years time.
Which, we should all know by now will consist of a U.S. sovereign debt
and dollar crisis.

 

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Sat, 01/22/2011 - 15:02 | 895944 cossack55
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Short, sweet & to the point. I love it.  Time frame may be a little long, though.

Sat, 01/22/2011 - 23:33 | 896649 RockyRacoon
RockyRacoon's picture

...just a few years time.

I agree that the time frame is a bit long.  If there is any optimism in Mr. Pento's comments it is that we all have a bit more time to prepare!  Ain't much to the bright side but I'll take it.  Unfortunately I believe that he is a bit slow on the draw with that scenario.

Sun, 01/23/2011 - 00:12 | 896708 Popo
Popo's picture

Agreed.  With food riots happening in Egypt, Mozambique, Albania etc.  I don't think we'll need to wait "a few years".

 

Food prices in Thailand are up 24% in less than a year, and continuing to rise at the same rate.

http://thaifinancialpost.com/2011/01/23/food-prices-on-the-rise-in-thailand/

Compounding 24% year over year leads to unrest *very* quickly.

Food prices are the metric to watch imho...

 

 

Sat, 01/22/2011 - 15:10 | 895954 DosZap
DosZap's picture

TD,

On the First time filers.

I do not see how we can consider anything positive on that front, when we have nearly 25% of previously employed  not working.

Plus many of those are still drawing UE bennies.

We are ABOVE the UE rate of the 39 Depression.Staggering.

IMO, the reason for the smaller drop, is everyone that could be dropped, has been.(unless they go out of business).

We have 2 people now doing the work of 4 or 5.And, damnably, for the same pay,and likely little or NO bennies.

I spoke to young girl working at a Pharmacy/Drug Store, since she was new, I asked her where she lived, it was about 45 miles ONE way, for an $8.00 per hour job.

She cannot even pay for gas.

Sat, 01/22/2011 - 18:04 | 896265 ebworthen
ebworthen's picture

Yeah, and she is one of the ones with pride left.

It is perfectly rational for someone in her position to go on unemployment and food stamps.  I wasn't raised to believe that was right either, but then again I never would have beleived that the government would bail out malfeasant banks or that the Supreme Court would decimate property rights.

No one should wonder why 43 million people are on food stamps.

Sun, 01/23/2011 - 17:24 | 897594 Spitzer
Spitzer's picture

Girls aways have the option of renting out their pussy. Easy big money. Us guys are not so lucky. So much for gender equality.

Sat, 01/22/2011 - 21:02 | 896496 Die Weiße Rose
Die Weiße Rose's picture

She is lucky to make $8 an hour for working in a Pharmacy/Drug Store

and she does not need Gas, going by public transport.

We all had to start off somewhere and $8 is alright money.

Of course if she expects to be given free lunches and huge money,

she got to change jobs...but seriously:

I wish everyone would stop their whining and complaining.

Most of you People never seen any real hardship and all you do

all day long is sit  and complain about how hard your Life is !

Bullshit ! You should get out there sometime,out into the real world,

where gasoline is at least US $5 a Gallon and has been so for years,

and where people have had to really struggle, just to survive .

You Americans are spoiled and soft, and also incredibly ignorant and conceited.

That of course all goes together with the spoiled little middle-class brats you really are !

Stop your whining and complaining, because you know

that your free lunch is over and the world is tired of whinging violas.

Goldilocks is a two-bid junkie as Reality bites hard

into that pink and pampered bourgeois Ass.


 

Sat, 01/22/2011 - 22:30 | 896569 lunaticfringe
lunaticfringe's picture

Sweet. You'll get no junked status from me. Trying to guess the origin. Going with Britain, maybe even Canada...

Sun, 01/23/2011 - 17:23 | 897592 Spitzer
Spitzer's picture

Girls aways have the option of renting out their pussy. Easy big money. Us guys are not so lucky. So much for gender equality.

Mon, 01/24/2011 - 00:08 | 898092 Campagnolo
Campagnolo's picture

I agree. What America is living now is very well deserved. People complain

too damn much and blame to US government, China, Chavez, etc...American 

people are usually lazy, want to earn the highest wages for doing little. Ignorance, laziness and arrogance is what describe better american people. Once in Detroit I ask a guy:

"What do you think about this economical-social crisis?"..the guy answer: "I don't know"

that answer tell all, when 90% of people live thanks to government programs you can't expect grow in a society. They don't know what's a crisis or boom is, they don't need to, they don't care...after all that people live for free. And Detroit is just a little example in the US.

Sat, 01/22/2011 - 15:23 | 895980 Misean
Misean's picture

"While the trend in claims is no doubt headed in the correct direction..."

Based on that TINY data set you conclude THAT?!?!?! Lordy!

At some point there just ain't no one left to fire, you know?

 

Sat, 01/22/2011 - 15:26 | 895983 Red Neck Repugnicant
Red Neck Repugnicant's picture

I'm not quite sure why everyone is so concerned about unemployment in America.  

As Glenn Beck said, "We've been sold a big lie that the poor in America are suffering"

So..... tell me why I should give a shit about the poor and unemployed? - it's all a big lie.   

Sat, 01/22/2011 - 16:15 | 896075 sourgrapesson
sourgrapesson's picture

Just quoting Beck should be a junk getting move let alone admiting you'd watch the fuck.

Sat, 01/22/2011 - 16:16 | 896076 sourgrapesson
sourgrapesson's picture

Just quoting Beck should be a junk getting move let alone admiting you'd watch the fuck.

Sat, 01/22/2011 - 16:16 | 896078 sourgrapesson
sourgrapesson's picture

Just quoting Beck should be a junk getting move let alone admiting you watch the POS.

Sat, 01/22/2011 - 18:04 | 896266 topcallingtroll
topcallingtroll's picture

Yeah? Then why are poor people such fat asses? Obesity has an inverse correlation with both education and income. When I see skinny people on welfare and "disability" then I will start getting concerned. I say fuck the poor. What have they done for me lately?

Sun, 01/23/2011 - 00:10 | 896702 Cash_is_Trash
Cash_is_Trash's picture

Nada much. Even though ignorance may add to GDP like the WalMart Christmas videos. Fuck 'em, but we need them to fight fascism with us.

Sun, 01/23/2011 - 00:10 | 896703 Cash_is_Trash
Cash_is_Trash's picture

Nada much. Even though ignorance may add to GDP like the WalMart Christmas videos. Fuck 'em, but we need them to fight fascism with us.

Sun, 01/23/2011 - 00:10 | 896704 Cash_is_Trash
Cash_is_Trash's picture

Nada much. Even though ignorance may add to GDP like the WalMart Christmas videos. Fuck 'em, but we need them to fight fascism with us.

Sat, 01/22/2011 - 23:17 | 896630 New_Meat
New_Meat's picture

"I'm not quite sure why everyone is so concerned about unemployment in America."

Revealing to all and sundry why you are a dick-head.

- Ned

Sat, 01/22/2011 - 23:31 | 896631 lynnybee
lynnybee's picture

 " So..... tell me why I should give a shit about the poor and unemployed? - it's all a big lie. "

I hope that was sarcasm, it's hard to tell what's sarcastic & what's said in truth .  It's not a lie.   Today at the grocery store I saw an elderly woman pushing her cart with just a few things & she looked so forelorn & scared.   Then, I noticed a young man with two little children, he was holding their hands.    He only had one small bag of food for them & he also looked to be scared & worried.    I worry about those I do not even know, but, I can see it.   NEVER IN ALL MY DAYS COULD I HAVE IMAGINED THIS WOULD BE OUR FATE HANDED TO US BY WASHINGTON & WALL ST.   It doesn't matter how much money you have, it will never be enough once we go into hyperinflation.   Can only imagine how mad people will be when they realize that all those dollars that they've been saving for all those years for their retirement are worthless ............ Our FOUNDING FATHERS would be ashamed of all of us right now.   It is our duty to overthrow this government & put in it's place righteous men & women of HONOR.   

Sat, 01/22/2011 - 23:39 | 896658 RockyRacoon
RockyRacoon's picture

I'll believe that change has come when Larry Kudlow stops believing that corporate tax cuts will the the saviour of the economy.  Supply side economics has been shown to be a farce.  Yeah, it works when you don't actually need it to work.   Like when the bank will loan you a dollar for each one you have on deposit with them.

Sat, 01/22/2011 - 23:49 | 896679 ejhickey
ejhickey's picture

hope you are wrong but afraid you are not.  speaking of grocery stores, the latest trend is reducing the size of the product but charging the same.  this is a subtle form of inflation that no one will cop to.   While I can afford it , I too worry about people like the ones you mentioned,  those on limited budgets.   Corporations will not admit the change is due to rising producer prices.   they blame it on the "competition".  This trend affect many products from OJ to the size of toilet paper.   However at least I know my ass is not getting bigger - it's the smaller sheets.

Sat, 01/22/2011 - 15:29 | 895989 satansanus
satansanus's picture

SEND ALL THE FERRARIS TO BEN BERNANKES HOUSE TILL ITS A FUCKING JUNKYARD OF EXOTIC CARS

SEND HIM ALL THE GOLD, ALL THE CHAMPAGNE, AND ALL THE CARS. THEN MAKE HIM CONSUME IT ALL.

THATS WHAT YOU WANT BEN YOU GET IT!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

VICTORY FOR THE GOOD!!!!!!!

Sat, 01/22/2011 - 22:32 | 896571 lunaticfringe
lunaticfringe's picture

Dude...Satan's anus? Geezus you people are funny!

Sat, 01/22/2011 - 16:03 | 896045 VegasBob
VegasBob's picture

The fastest way to jump start an economic recovery is to remove Bernanke from office.

Sat, 01/22/2011 - 16:26 | 896101 DoctoRx
DoctoRx's picture

Whenever a modern Fed head gets renominated, he first has to agree to do the administration's bidding.  That was true for Volcker under Reagan.  The concept of Fed independence is a myth.  There is nothing in the Federal Reserve Act mandating an independent Fed.  Ever since its creation, the Fed has been squeezed between Treasury and the large banks.  An inflation in money supply aiming to goose the economy in the third year of a first term lasting to the fourth (election) year has been the classic tool of Presidents wanting re-election at least since FDR.   

without absolving Bernanke, think of who renominated him.

Sat, 01/22/2011 - 20:02 | 896438 The Talmud Kid
The Talmud Kid's picture

You're backwards.

Sat, 01/22/2011 - 23:55 | 896685 ejhickey
ejhickey's picture

So his full name is Ben (Dover) Bernanke?

Sat, 01/22/2011 - 16:24 | 896094 Sudden Debt
Sudden Debt's picture

I really hoped that this crisis would finally set things straight and reset some of the crappy things that are going on.

Now to realise we'll just proceed with all of the BS until the next bomb falls is just mind boggling.

Sat, 01/22/2011 - 17:31 | 896212 I think I need ...
I think I need to buy a gun's picture

the hammer is coming one way or another just revalue gold now and quit kissing chinas azz on when to revalue so we can get our jobs back it will take 10 years so we may as well get the show on the road..........

Sat, 01/22/2011 - 17:49 | 896243 DavidC
DavidC's picture

I'm surprised that nothing has been said about this.

http://www.cnbc.com/id/41198789

"The change essentially allows the Fed to denote losses by the various regional reserve banks that make up the Fed system as a liability to the Treasury rather than a hit to its capital. It would then simply direct future profits from Fed operations toward that liability".

So, unless I misunderstand this, the Feds can denote losses to a Government department, the Treasury, even though the Fed is a private institution!

Ye Gods.
DavidC

Sat, 01/22/2011 - 23:42 | 896670 RockyRacoon
RockyRacoon's picture

January 6 weekly Federal Reserve H.4.1 Factors Affecting Reserve Balances of Depository Institutions and Condition Statement of Federal Reserve Banks.  It begins with an announcement of an accounting change, effective January 1, 2011.  The change affects the reporting of each Federal Reserve Bank’s capital account and their distributions of residual earnings to the US Treasury.

In the past, when Federal Reserve Banks owed residual earnings to the Treasury, it was recorded as a reduction of the Banks’ capital.  Apparently that will no longer be done.  Instead the amounts owed to the Treasury will be posted in liability accounts.  The explanation is almost impossible to understand.  However, one analyst at Bank of America thinks that this means that any future losses by Federal Reserve Banks will no longer be recorded as lowering capital accounts.  Instead, any daily losses that might occur will end up being booked as either negative liabilities or maybe even as assets.  By this route, it will never be possible for the Federal Reserve’s financial accounts to show that it has become insolvent.  Of course, if the Fed can claim that it is financially sound, that would reduce investor fears of the safety and strength of the US dollar, thereby reducing demand for gold and silver as safe haven alternatives.

http://www.federalreserve.gov/releases/h41/20110106/

http://news.coinupdate.com/gold-and-silver-prices-impacted-by-rule-changes-backwardation-and-rumors-galore-0638/

Sun, 01/23/2011 - 14:36 | 897278 Amish Hacker
Amish Hacker's picture

Thanks for the links and the explanation, Rocky, but I still don't get it. Only an Fed accountant could think the current problems can be fixed by calling daily losses "negative liabilities," or by claiming that losses are assets.

I can name my kid Moonrocket, but it doesn't mean he can fly.

Sun, 01/23/2011 - 20:09 | 897799 Temporalist
Temporalist's picture

Maybe you need to throw the kid out of a higher window...

Mon, 01/24/2011 - 00:03 | 898089 RockyRacoon
RockyRacoon's picture

You're not supposed to get it.  That's the whole idea.

Sat, 01/22/2011 - 18:00 | 896258 topcallingtroll
topcallingtroll's picture

Guys it appears Goldilocks is back. Too late to btfd. Capitulate now you bearish bitchez.

Sat, 01/22/2011 - 18:09 | 896272 topcallingtroll
topcallingtroll's picture

Maybe the new catch phrase should be a golden oldie. Dont fight the fed because you will get your bitch ass slapped.

Sat, 01/22/2011 - 18:10 | 896276 topcallingtroll
topcallingtroll's picture

bitchez.

Sat, 01/22/2011 - 19:51 | 896425 Die Weiße Rose
Die Weiße Rose's picture

so what should we do ?

go back to our air-raid shelter

and hide until the anarchists have burnt down the Reichstag ?

There are 6.600,000,000 people living in the world out there

and what that means is :

buy the fucking dip,

or sell the farm and move back into the bunker...;))

no wha' ta mean ?



 

 

 

Sat, 01/22/2011 - 23:44 | 896673 RockyRacoon
RockyRacoon's picture

Why are you coming back to preach to us fat-assed, pansy Americans?

Didn't get enough satisfaction the first time?

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