Obamacare

Spain's economic data lost all credibility once the local bureau of economics, statistics and other goalseeked numbers decided to arbitrarily start adding what it estimated was the "contribution" from not only local drug dealers but also hookers. No surprise then that the government has proudly declared quarter after quarter that Spain is one of Europe's most boom economies. And yet, while the GDP data was clearly fabricated, Spain's job numbers did seem impressive. And then we looked at the following chart of full-time versus part-time Spanish workers, and it all quickly fell into place.

Did you know that 89 percent of all minimum wage workers in the United States are not teens?  At this point, the average age of a minimum wage worker in this country is 36, and 56 percent of them are women.  Millions upon millions of Americans are working as hard as they can (often that means two or three jobs), and yet despite all of their hard work they still find themselves mired in poverty.  One of the big reasons for this is that we have created two classes of workers in the United States. 

It should come as no surprise that in the month of April America's attempts to rekindle a manufacturing renaissance have fizzled once again, with a tiny 1,000 manufacturing jobs added, following zero manufacturing jobs added the month before. Putting this in perspective, for every manufacturing job added in April there were 26 new waiters and bartenders confirming the "robustness" of America's jobs recovery.

For all the talk about a jobs recovery and about a US economy that has put the great financial crisis and recession of 2007/8 in the rear view mirror, don't tell it to those workers who desire a full-time job and instead are forced to settle with measly part-time offerings (mostly courtesy of Obamacare). Because as the chart below shows, as of April 2015, the number of full-time jobs remained well below the pre-recession peak, which incidentally was hit on December 2007, the month the last recession officially started.

"In the 2014 elections, 31,976 donors - equal to roughly one percent of one percent of the total population of the United States - accounted for an astounding $1.18 billion in disclosed political contributions at the federal level. Those big givers - what we have termed the Political One Percent of the One Percent - have a massively outsized impact on federal campaigns.They’re mostly male, tend to be city-dwellers and often work in finance. Slightly more of them skew Republican than Democratic. A small subset - barely five dozen — earned the (even more) rarefied distinction of giving more than $1 million each. And a minute cluster of three individuals contributed more than $10 million apiece."

"What investors need to know today is that they are currently priced just as high as they were back then! The problem is they once again want their cake and to eat it, too. Despite paying an extremely high price for stocks today they also expect a high rate of return. A few recent polls show investors expecting to get 10% per year from their equity investments right now. Some are even expecting to generate twice that much and there’s just no chance it’s going to happen."

George Soros may owe some $6.7 billion in taxes Bloomberg says, noting that despite the billionaire's call to increase taxes on the wealthy, his fund has employed a loophole that allowed for the deferral of taxes on management fees the reinvestment of which has generated billions in returns. 

Unlike last year when every single weatherman, pardon "economissed", quickly declared the collapse in Q1 GDP from an initial consensus of 3% to an abysmal -2.5% was due to the weather, and not due to a dramatic tightening in Chinese end demand, this time there is suddenly no silver lining, and one after another, the economisseds are lining up to say that, ooops, they were all wrong.

What surprised even us is that far from subtracting from GDP growth, the harsh winter actually boosted consumption, in the form of utiility (mostly heating) spending, which made up the second largest increase in personal consumption in the first quarter. Because, to every economist's cries of horror, freezing weather while perhaps reducing discretionary spending actually boosts spending on such mundane, if very expensive, tasks as utilities which, to the same economists, also translates into growth.

Today we get a two-for-one algo kneejerk special, first with the Q1 GDP release due out at 8:30 am which will confirm that for the second year in a row the US economy barely grew (or maybe contracted depending on the Obamacare contribution) in the first quarter, followed by the last pre-June FOMC statement, in which we will find out whether Janet Yellen and her entourage of central planning academics will blame the recent weakness on the weather and West Coast port strikes and proceed with their plan of hiking rates in June (or September, though unclear which year), just so they can push the economy into a full blown recession and launch QE4.

Politics in Ukraine continues to be characterized by the East/West divide that was so clearly visible in maps of Ukrainian elections and the distribution of the Ukrainian and Russian language (see “Mapping the Conflict in Ukraine” for details on this). While the new government wants to be seen as embodying Western values in contrast to the kleptocracies that previously governed the country, both its actions and omissions very often seem at odds with this aspiration, to say the least.

"...the ladder that has supported the move to record high U.S. corporate profit margins is beginning to snap. It may be a long way down."

• Just How Leaky Is the Fed? More Than You May Realize (BBG)
• Republican Presidential Candidates Spar Over Party’s Future (WSJ)
• Euro Area Seeks Greece Roadmap to May Agreement (BBG)
• The $320 Billion Bogey Needed to Placate U.S. Stock Market Bulls (BBG)
• Seeking Obamacare alternative, Republicans eye tax credits (Reuters)
• Gundlach Says Market Hasn’t Seen Full Impact of Fed Moves (BBG)
• EU meets on migrant crisis as shipwreck corpses brought ashore (Reuters)
• Canada’s Own Oil Pipeline Problem (WSJ)

Having previously explained the 175,846,629,768 reasons why former Fed Chair Ben Bernanke would join Citadel - the most-levered hedge fund in the world and alleged conduit of fed put protection; we thought it intriguing to note what billionaire Citadel Ken Griffin had to say about Bernanke and his policies just 2 years ago...

The only surefire way to dramatically reduce healthcare costs is to remove the middlemen and allow market forces to return to healthcare.