Obamacare

By the power of his pen... President Obama gives minimum-wage-earning Federal employees (and physically and mentally handicapped workers) a 39% pay hike to $10.10 (and there's nothing you can do about it) to "benefit hundreds of thousands of people." We suspect that the president will remind us to the new "myRA" program and its benefits and how we should all tell our young friends to sign up for Obamacare too... and how this is paid for by the usual unicorn-tears-for-dollars swap...

After initially sending the all important USDJPY carry pair - and thus all risk assets - into rally mode, the initial euphoria over manipulated Chinese trade data (see China Trade Puzzle Revived as Hong Kong Data Diverge), has all but fizzled and at last check the USDJPY was sliding to its LOD, approaching 102 from the wrong side. That, and a statement by the ECB's Coeure that the ECB is "very seriously" considering a negative deposit rate (and that the OMT is ready to be used even though it obviously isn't following the latest brewhaha from the German top court) have so far defined the overnight session, the latter having sent the EUR sliding across all major pairs.

Today, more than 10,000 Baby Boomers will retire.  This is going to happen day after day, month after month, year after year until 2030.  It is the greatest demographic tsunami in the history of the United States, and we are woefully unprepared for it.  We have made financial promises to the Baby Boomers worth tens of trillions of dollars that we simply are not going to be able to keep.  Even if we didn't have all of the other massive economic problems that we are currently dealing with, this retirement crisis would be enough to destroy our economy all by itself.  During the first half of this century, the number of senior citizens in the United States is being projected to more than double.  As a nation, we are already drowning in debt.  So where in the world are we going to get the money to take care of all of these elderly people?

We have become a delusional state dependent upon fallacies to convince ourselves our foolhardy beliefs, ludicrous economic policies, corrupt captured political system, and preposterously fraudulent financial system are actually based on sound logic and reason. The fallacy being flogged by government drones and the legacy media about companies not hiring new employees because it has been cold and snowy during the winter is beyond absurd. The other fallacy being pontificated by retail executives in denial, cheerleaders on CNBC and the rest of the propaganda press is weather is to blame for terrible retail sales over the last quarter. Revealing the truth about pitiful employment growth and dreadful retail sales would destroy the fallacy of economic recovery stimulated by the monetary policies of the Federal Reserve and fiscal policies of the Federal government. We have a country built on a Himalayan mountain of fallacies.

While we realize that newsflow over the past few years has taken a decided turn for the surreal, we are sad (or, alternatively, delighted) to announce that we are dead serious when we report that Illinois governor Pat Quinn has now tapped The Onion - that would be the famous satiric website - to sell Obamacare. Perhaps we should not be surprised: after we previously revealed that The Onion served as the mystery source of economic insight by such intellectual economist titans as Paul Krugman and Larry Summers, the time may have come come to surrender to the great wave of absurdity that has washed over this nation, and admit that when it comes to pitching idiotic policies, self-referential satire may be the only option left in the arsenal of the central planners.

A sneaky overnight levitation pushed the Spoos above 1800 thanks to a modest USDJPY run (as we had forecast) despite, or maybe due to, the lack of any newsflow, although today's first official Humphrey Hawkins conference by the new Fed chairman, Janet Yellen, before the House and followed by the first post-mortem to her testimony where several prominent hawks will speak and comprising of John B. Taylor, Mark A. Calabria, Abby M. McCloskey, and Donald Kohn, could promptly put an end to this modest euphoria. Also, keep in mind both today, and Thursday, when Yellens' testimoeny before the Senate takes place, are POMO-free days. So things may get exciting quick, especially since as Goldman's Jan Hatzius opined overnight, the third tapering - down to $55 billion per month - is on deck.

It is becoming more uncomfortable to make fun of Dennis Gartman's always incorrect calls (see here and here and here and here) than to watch Richard Simmons Obamacare commercials, but... well - it's just too funny.

Just as we predicted it would happen, here it comes:

• OBAMACARE EMPLOYER MANDATE TO BE DELAYED FOR SOME COMPANIES

Specificaly, according Bloomberg, businesses with 50-99 workers have until 2016 before being penalized for not providing health-care coverage to full-time workers, according to final regulations released by Treasury.

Low-wage workers clocked the shortest workweek on record in December - even shorter than at the depth of the recession, new Labor Department data showed Friday. The figures underscore concerns about the Obamacare employer insurance mandate's impact on the work hours and incomes of low-wage earners. Still, as Krugman told Colbert recently, he's "ok with a little bit of wealth redstribution from people who have been lucky to people who are unlucky."

Now that the full court press to refute the findings of the CBO report which, as we reported, confirmed what was largely known - that as a result of Obamacare, the strapped US economy will have even fewer workers as millions will fall back on welfare state entitlements which make hard work obsolete - has failed, it is time for the propaganda to take a different track: one where not having a job, and in fact losing it due to Obamacare, is hailed as an act of nobility. Sure enough, here comes one of the administration's favorites, the Bezos Times, with "They quit their jobs, thanks to health-care law" which does largely as its name suggests: highlights just how "enabling" and "liberating" Obamacare is for one's life, once a person is no longer burdened by something as trivial as a job.

So what happened to the unemployment rate that it dropped so fast it surprised and embarrassed even the "venerable" Federal Reserve, which had initially expected a 6.5% unemployment rate some time in 2015. To get the answer we go back in time to the last (and only previous) time when the US unemployment rate dropped from roughly 10%, which was in June 1983, to 6.6%, which took place three and half years later, in December 1986 - let's call it the "Reagan Recovery" in short.

As the State of the Union address highlighted, both the Russia Federation and the United States have leaders that lean toward various degrees of autocratic government to achieve their agendas.  President Putin rules with an iron fist and treats the legislative branch as an afterthought to use as needed but otherwise ignores.  President Obama declares he will use executive action to get what he wants and quietly uses government agencies to intimidate and stifle his opposition in flagrant abuses of power.  Putin has dismantled the Russian free press and imprisoned vocal opponents.  The majority of the American press does Obama’s bidding for him while the administration puts movie makers in jail. 

Today, the pundits are a-buzz making sense of the latest jobs report. But most of us care more about the state of one particular job: our own. How relevant is this latest bit of data to that? Not very. So, to better understand the trends in the work environment most likely impact our own paychecks, it will help to look at another bellwether similar to our fuzzy groundhog friend: AOL. AOL, a once-important pioneer in the transition to the 'digital economy', is once again showing us where the future of work is headed. Unfortunately, like the health of AOL's business over the past decade, it's not a pretty picture. As we've transitioned to an economy in which corporate profitability -- and thereby, stock prices -- is THE metric for success, the employer-employee relationship has become much more superficial than in past generations; and the encroachment of automation remove income options for those temporarily out of work, but it's increasingly limiting the options for the large pool of unskilled labor with few other alternatives

It's that time again, when a largely random, statistically-sampled, weather-impacted, seasonally-adjusted, and finally goalseeked number, sets the mood in the market for the next month: we are talking of course about the "most important ever" once again non-farm payroll print, and to a lesser extent the unemployment rate which even the Fed has admitted is meaningless in a time when the participation rate is crashing (for the "philosophy" of why it is all the context that matters in reading the jobs report, see here). Adding to the confusion, or hilarity, or both, is that while everyone knows it snowed in December and January, Goldman now warns that... it may have been too hot! To wit: "We expect a weather-related boost to January payroll job growth because weather during the survey week itself - which we find is most relevant to a given month's payroll number - was unusually mild." In other words, if the number is abnormally good - don't assume more tapering, just blame it on the warm weather!

The taper program distances the bankers from responsibility for crisis in our financial framework, at least in the eyes of the general public. If a market calamity takes place while stimulus measures are still at full speed, this makes the banks look rather guilty, or at least incompetent. People would begin to question the validity of central bank methods, and they might even question the validity of the central bank’s existence. The Fed is creating space between itself and the economy because they know that a trigger event is coming. They want to ensure that they are not blamed and that stimulus itself is not seen as ineffective, or seen as the cause. We all know that the claims of recovery are utter nonsense. The taper is not in response to an improving economic environment. Rather, the taper is a signal for the next stage of collapse. The real reason stocks and other indicators are stumbling is because the effectiveness of stimulus manipulation has a shelf life, and that shelf life is over for the Federal Reserve.