Goldilocks

Fed's Labor Market Conditions Index Tumbles For 6th Straight Month

Despite Friday's 'magnificent' goldilocks jobs print, The Fed's Labor Market Conditions Index (once Janet Yellen's favorite indicator... until it started to turn down... and now just "experimental") tumbled 1.9% in June, dramatically worse than expected and down for the 6th straight month.

Here We Go Again - Stockman Warns Of August 2007 Redux

Nearly everywhere on the planet the giant financial bubbles created by the central banks during the last two decades are fracturing. The latest examples are the crashing bank stocks in Italy and elsewhere in Europe and the sudden trading suspensions by four UK commercial property funds. If this is beginning to sound like August 2007 that’s because it is. And the denials from the casino operators are coming in just as thick and fast.

Soros – A Rudimentary Theory Of Bubbles

"...financial markets, far from accurately reflecting all the available knowledge, always provide a distorted view of reality. The degree of distortion may vary from time to time. Sometimes it’s quite insignificant, at other times, it is quite pronounced. When there is a significant divergence between market prices and the underlying reality, there is a lack of equilibrium conditions. I have developed a rudimentary theory of bubbles along these lines..."

The Vanity Of Central Bankers And The Common Sense Rule

Yellen's recent indignation at (and manipulation of the inputs to) The Taylor Rule, "gives the appearance that one is changing the rule or the inputs to the rule to get an answer. I do not think that reason would go over well in Congressional testimony," exclaimed the rule's creator. And yet, so many of Taylor’s peers in the economic community continue to feed policymakers’ penchant for contorting the world into a fantastical one that only exists in those leaders’ dreams. Is it any wonder so many of today’s leaders in central banking sport God complexes?

Goldman Fires Dozens Of Investment Bankers

Following an abysmal quarter for investment banks around the globe, which saw salary cuts across the board as a result of sliding revenues in virtually all product areas, we forecast that the next logical step will be ongoing major layoffs of some of the world's highest paid employees. This morning none other than the most insulated from global financial troubles bank confirmed just this when Bloomberg reported that Goldman had quietly cut investment banking jobs in the last few weeks, joining securities firms that are adjusting to a slowdown in deal activity.

What Wall Street Expects From Today's Payrolls Report And How To Trade It

In what may be one of the least relevant payroll reports in a long time as the Fed already knows the labor market is doing better quantiatively (qualitatively it has been all about low-paying jobs gaining at the expense of higher paying manufacturing and info-tech positions) and as has further demonstrated it is no longer jobs data dependent, here is what Wall Street consensus expects: total payrolls +200,000, down from 215K in March; a 4.9% unemployment rate; average hourly earnings rising 0.3% (last 0.3%) M/M and 2.4% Y/Y (last 2.3%); on labor force participation of 63%.

Futures Ignore Apple Plunge; Oil Rises Above $45 As Yellen Looms

For those who thought that the world's biggest company losing over $40 billion in market cap in an instant on disappointing Apple earnings, would have been sufficient to put a dent in US equity futures, we have some disappointing news: with just over 7 hours until the FOMC reveals its April statement, futures are practically unchanged, even though the Nasdaq appears set for an early bruising in the aftermath of what is becoming a disturbing quarter for tech companies. Instead of tech leading, however, the upside has once again come from the energy complex where moments ago WTI rose above $45 a barrel for the first time since November after yesterday's unexpected 1.07 million barrel API inventory drawdown.

Cycles, Bounces, & The Only Question That Matters

Unfortunately, when central-planners "drag forward" future consumption today, you leave a "void" in the future that must be filled. That future "void" continues to expand each time activity is dragged forward until, inevitably, it can not be filled. This is currently being witnessed in the overall data trends as seen in the deterioration in corporate earnings and revenues. The only question is whether Central Banks can continue to support asset prices long enough for the economic cycle to catch up. Historically, such is a feat that has never been accomplished.

Institutionalized Lying - Why Central Bankers Never See Bubbles

Every day there is more confirmation that the casino is an exceedingly dangerous place and that exposure to the stock, bond and related markets is to be avoided at all hazards. In essence the whole shebang is based on institutionalized lying, meaning that prouncements of central bankers, Wall Street brokers and big company executives are a tissue of misdirection, obfuscation and outright deceit. And they are self-reinforcing, too.

America's New Impossible Trinity: You Can't Have Higher Wages, Steady Inflation And High Profits At The Same Time

America’s ongoing labour productivity slump has created a new impossible trinity – policymakers can only choose two of the following three desirable outcomes: higher nominal wage growth, steady inflation and high corporate profits. The theory behind this new ‘impossible trinity’ is intuitively simple. If workers’ wages rise faster than their productivity, the companies paying those higher wages face two choices. They can either pass on the extra costs to customers, thereby leading to higher overall prices and rising inflation, or they can absorb the extra costs resulting in lower profit margins.

David Stockman: "Trump Unbound"

At the end of the day, Trump has petrified the Wall-Street Washington establishment for good reason. He loudly rejects the War Party consensus on foreign intervention. And he has tapped into a deep vein of main street alienation from the phony recovery and economic fixes promulgated by the Fed and its beltway henchman.

Only 4% From Record Highs?

“There have been three great inventions since the beginning of time: fire, the wheel, and Central Banking. – Will Rogers