Unemployment

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The IMF: Magnanimous

It never ceases to amaze that we vote people into positions. Those people that we have voted in elect in turn (or just go ahead and appoint without an election, making it all look very transparent) other people who are not as important but who will have the possibility of choosing (apparently in an “open, merit-based, and transparent manner”) someone who will be more important than they are, but less important than the first person that is in the voting/appointment chain. 

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Egypt Still in Dire Straits

Talks are still on-going between the IMF and Egypt over future loans worth up to $4.8 billion to get the country back on its feet. Arab aid from the IMF in the entire region has hit the $10 billion mark in the last year alone. But, if there is not action taken pretty soon, Egypt will fall into uncontrollable depths of inflation and unemployment and see unrest increase in the country.

Global Risk Off: Nikkei Plunges 700 Points From Intraday Highs, Whisper Away From 20% Bear Market Correction

Anyone expecting Abe to announce definitive, material growth reform instead of vague promises to slay a "deflation monster" last night was sorely disappointed. The country's PM, who may once again be reaching for the Immodium more and more frequently, said the government aims for 3% average growth over the next decade and 2% real growth, raising per capita income by JPY 1.5 million. The market laughed outright in the face of this IMF-type silly vagueness (as well as the amusing assumption that Abe will be still around in 7 years), which left untouched the most critical aspect of Abenomics: energy, and nuclear energy to be specific, and sent the USDJPY plummeting well below the 100 support line, printing 99.55 at last check. But more importantly, after surging briefly at the opening of the second half of trading to mask a feeble attempt at telegraphing the "all is well", it rolled over with a savage ferocity plunging 700 points from an intraday high of 13,711 to just above 13,000 at the lows: yet another 5% intraday swing in a market which is now flatly laughing at the BOJ's "price stability" mandate. Tonight's drop has extended the plunge from May 23 to 18.4% meaning just 1.6% lower and Japan officially enters a bear market.

Guest Post: Multiple Breadwinners: An American Household Imperative

And the beat goes on!  More studies, more surveys, more statistics, more data to feed the ongoing fires in present day American cultural wars.  Last week, the Pew Research Center released a study stating that women are now the primary breadwinners in 40 percent of households with children in the US.  A figure which more than doubled that of a generation ago. Economic circumstances usually determine the need for multiple breadwinners in a household, and the household today in no way resembles the nuclear family of yesteryear. Perhaps we would not be in these dire economic straits if instead of Erickson’s dominant males governing the US during the past 32 years… we had been ruled by brainy dominant females - not the Amazon-cliché type.  They couldn’t have fared any worse - as simply put: Americans - well, the bottom 80 percent - have lost control of their economic destiny…

Guest Post: Will Saudi Arabia Allow The U.S. Oil Boom?

Technology, technology, and more technology—this is what has driven the American oil and gas boom starting in the Bakken and now being played out in the Gulf of Mexico revival, and new advances are coming online constantly. It’s enough to rival the Saudis, if the Kingdom allows it to happen. Along with this boom come both promise and fear and a fast-paced regulatory environment that still needs to find the proper balance. In an exclusive interview with Oilprice.com, Chris Faulkner, CEO of Breitling Energy Companies - a key player in Bakken with a penchant for leading the new technology charge—discusses: How Bakken has turned the US into an economic powerhouse; What the next milestone is for Three Forks; What Wall Street thinks of the key Bakken companies; Where the next Bakken could be; What to expect from the next Gulf of Mexico lease auction; What the intriguing new 4D seismic possibilities will unleash; What the linchpin new technology is for explorers; How the US can compete with Saudi Arabia; Why fossil fuel subsidies aren’t subsidies; How natural gas is the bridge to US energy independence; Why fossil fuels shouldn’t foot the bill for renewable energy; Why Keystone XL is important; Why the US WILL become a net natural gas exporter

Lucky 21?

All traders walking in today, have just one question in their minds: "will today be lucky 21?" or the 21st consecutive Tuesday in which the Dow Jones has closed green.

All else is irrelevant.

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The Great Plunge is Coming

Are you ready for the next stock-market crash of the century? The Hindenburg Omen was spotted by eagle eyes on April 15th. It was confirmed by a sighting on May 29th. That gives us 40 days approximately before the market takes a plunge (apparently). That’s enough to spark fears on the market that we are in for a shaky time, but are those fears really justified and will the market plunge as the Hindenburg Omen predicts?

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Consumer confidence in the US stands at 76.2 in May 2013 (1985=100). That’s an increase from 58.4 in January. The Conference Board’s figures show that things have not looked so good for months. Things seem to be looking up. But, is the US consumer right to believe in the market and that the economy is getting better and the medicine is working?

18 Signs That Massive Economic Problems Are Erupting Everywhere

This is no time to be complacent.  Massive economic problems are erupting all over the globe, but most people seem to believe that everything is going to be just fine.  In fact, a whole bunch of recent polls and surveys show that the American people are starting to feel much better about how the U.S. economy is performing.  Unfortunately, the false prosperity that we are currently enjoying is not going to last much longer. Unfortunately, the majority appear to be purposely ignoring the economic horror that is breaking out all over the globe.

 

Guest Post: The Fleeting Beauty Of Bubbles And Bonds

Here's the challenge the Status Quo monetary and fiscal authorities faced in the 2008 global financial meltdown: how do we maintain the power structure and keep the masses passive while masking the fact that the Status Quo is broken? The solution: sell bonds to fund benefits to the masses, lower interest rates to zero to keep the explosive rise in fiscal deficits affordable, and rapidly inflate new bubbles in assets that painlessly enrich the top 25% of households who then increase their borrowing and spending, i.e. the "wealth effect." The political calculus is simple: the bottom half of households don't vote, don't contribute to political campaigns and don't have enough income to borrow huge sums of money to enrich the banks. They are thus non-entities in the fiscal-monetary project of maintaining the power structure of the Status Quo. All the Status Quo needs to do is borrow enough money to fund social programs that keep the masses passive and silent: food stamps, Section 8 housing vouchers, Medicaid, Medicare, Social Security, SSI permanent disability, unemployment, etc. Unfortunately for the Powers That Be, the cost of placating the rapidly increasing marginalized populace is rising much faster than tax revenues.

European Propaganda On The Ropes - France Delays Unemployment Report

We can only imagine that the unemployment data must be so good that the French need a little more time to get positioned for the market's exuberance. It seems the government's statistical agency has proclaimed that:

  • *INSEE WON'T BE ABLE TO PROVIDE FULL 1Q FRENCH UNEMPLOYMENT DATA
  • *INSEE WAS SCHEDULED TO PUBLISH 1Q UNEMPLOYMENT DATA ON JUNE 6

Of course, we are sure this has nothing to do with the nation being near depression (as we discussed here and here most recently) and jobseekers at all-time record highs. It seems 'when the news is bad, "lie"' is trumped by 'when the news is dreadful, "don't report it"'.

Visualizing The European Monetary (Dis)Union

While we are told day-after-day just how 'fixed' Europe is; just how 'past the crisis' they are; and just how close to banking union; the reality is the nations of Europe are as disparate as they have ever been. We discussed the dismal unemployment picture last week, but one glance at the chart below will highlight the growing divergence between the haves and have-nots in Europe. As Bloomberg's Niraj Shah notes, unemployment rates are diverging at record levels in the euro area.

Where Do We Stand: Wall Street's View

In almost every asset class, volatility has made a phoenix-like return in the last few days/weeks and while equity markets tumbled Friday into month-end, the bigger context is still up, up, and away (and down and down for bonds). From disinflationary signals to emerging market outflows and from fixed income market developments to margin, leverage, and valuations, here is the 'you are here' map for the month ahead.

For David Rosenberg The Legacy Of The Bernanke Regime Will Be Stagflation

From Rosie: "The next major theme is stagflation — this will be the legacy of the Bernanke regime. You cannot keep real short-term rates negative for this long in the face of even modestly positive real economic growth without generating financial excesses today and inflationary pressures in the future. Imagine dusting off the Phillips Curve and getting away with it — it's as if the Fed has changed religions as it now believes there is some trade-off between inflation and unemployment The last time we had negative real policy rates for this long with a central bank wedded to the Phillips Curve was under the Burns-led Fed of the early 1970s. As I have said recently — I am undergoing my own epiphany. I am renowned for being very early — to a fault — in my calls and no doubt am early yet again."

Frontrunning: June 3

  • BIS lays out "simple" plan for how to handle bank failures (Reuters) - Are we still holding our breath on Basel III?
  • Deficit Deal Even Less Likely - Improving U.S. Fiscal Health Eases Pressure for a 'Grand Bargain' Amid Gridlock (WSJ)
  • IRS Faulted on Conference Spending (WSJ)
  • Deadly MERS-CoV virus spreads to Italy (CNN)
  • Turkish PM Erdogan calls for calm after days of protests (Reuters)
  • Financial system ‘waiting for next crisis’ (FT)
  • Russia to send nuclear submarines to southern seas (Reuters)
  • China Nuclear Stockpile Grows as India Matches Pakistan Rise (BBG)