Remember the Wal-Mart employee who sent out an intercepted email disclosing that "Wal-Mart February sales were a "total disaster", and was the worst monthly start since 2006"? Well, he won't be making that mistake ever again.
BREAKING: Wal-Mart executive who called retailer’s February sales a “total disaster” in an internal e-mail has left the company
— Bloomberg News (@BloombergNews) April 10, 2013
Explains the political motivation for slamming the account holders in Cypriot banks.
The fastest growing part of the median household income for nearly a quarter of a century has been transfer payments. The state has stepped in to fill the gap left by the breakdown of the previous social conract. The new efforts to renegotiate the basket of goods citizens receive is likely to antagonize employee and employer relationships.
Now is the time to think about how you would live your life if your real value was appreciated and fairly compensated.
A sign of "economic and political turmoil"
Despite the mainstream analysts' calls for a "great rotation" by investors from bonds to stocks - the reality has been quite the opposite. While the 10-year treasury rate rose from the recessionary lows signaling some economic recovery in 2009; the decline in rates coincided with the evident peak in economic growth for the current cycle that begin in earnest in 2012 - "With rates plunging in recent weeks the indictment from the bond market concurs with the longer term data that the economy remains at risk." Despite the calls for the end of the "bond bubble" the current decline in interest rates are suggesting that the real risk is to the economy. The aggressive monetary intervention programs by the Federal Reserve, along with the ECB and BOJ, continue to support the financial markets but are gaining little traction within the real economy. Of course, this is likely why the current quantitative easing program is "open-ended" because the Fed has finally realized that there is no escape. The next economic crisis is coming - the only questions are "when" and "what causes it?" The problem is that next time - monetary policy might not save investors.
France is engulfed by a political, economic and moral paralysis. The president has record low popularity, unemployment is making new highs and the tax czar of a supposedly left wing government just quit after repeatedly lying about a pile of cash he had stashed in a Swiss bank account. From such a sorry state of affairs, you might think that things could only get only get better. Unfortunately, economic cycles do not work this way and it is my contention that France is about to enter what was known during the gold standard era as a “secondary depression.” The rigid design of the euro system means the whole eurozone is prone to the kind of brutal cyclical adjustments seen in that hard money era of the 19th and early 20th centuries. But having reached the logical limits of its decades long experiment in state-run welfare-capitalism France is far more exposed than even its struggling neighbors. Until quite recently, our working assumption was that a full-blown French debt crisis would occur between 2014 and 2017. In light of the extraordinary malfeasance of the current government we have changed our mind and believe that France is now extremely near to that abyss. Fasten your seat belt in Europe - the world’s last truly Communist country is about to implode.
It has been well known for years that PIMCO's Dr. Jekyll and Mr. Gross, the original bond king in charge of Allianz' $1+ trillion bond portfolio, has been a vocal critic of QE even in the face of his daily tweet barrage, which often recommends positions in complete contradiction to what said king opined on in his expansive monthly essays. What will come a great surprise, however, is that the "other" fund, which is just as big, is run by Wall Street's shadow king Larry Fink, and which has been advocating to go all in stocks for over a year (preferably using ETFs) interim drawdowns be damned (after all everyone by now should have an infinite balance sheet) - BlackRock - just went all out against QE. As the FT reports, BlackRock's fixed income guru, formerly at Lehman Brothers, Rick Reider, "has called on the Federal Reserve to rein in its programme of quantitative easing, saying its bond-buying tactics are a “large and dull hammer” that have distorted markets and risk stoking inflation." Why, it is almost as if we wrote that... Oh wait, we did. Back in 2009.
Until now it has been up to the San Francisco Fed to carry the torch for digging-holes-and-filling-them-back-in style research but the Boston Fed may just have trumped them. In the past the SF Fed has found the painfully obvious such as: it is Bernanke's fault that unemployment duration is so long, that 'this time it really is different', and asked what effect QE3 will have on the US economy. But this research article on the effect of sunspots by the Boston Fed takes the proverbial biscuit. The conclusion, which is perhaps useful for the propagandists-in-chief, is that during sunspot activity, people act less rationally. What next? Do Sagittarians make better lovers economists? We are sure all of these discussions are well researched and will be helpful for tenure and possibly the next Nobel prize.
The jobs recovery is a complete and total myth. The percentage of the working age population in the United States that had a job in March 2013 was exactly the same as it was all the way back in March 2010. In addition, as you will see below, there are now more than 101 million working age Americans that do not have a job. But even though the employment level in the United States has consistently remained very low over the past three years, the Obama administration keeps telling us that unemployment is actually going down. Anyone that tells you that "a higher percentage of Americans are working today" is telling you a complete and total lie. The sad truth is that there has been no jobs recovery whatsoever. If things were getting better, there would not be more than 101 million working age Americans without a job.
Perhaps the best measure to gauge the European recovery is by the soaring number of companies going bust, because only from this perspective is Europe finally "fixed." As Reuters reports citing a report by Axesor, a record 2,564 companies filed for "insolvency proceedings", a more palatable version of the word bankruptcy, in the first quarter - an increase of 10% from Q4 and up a whopping 45% from Q1 2012. The reasons given: "tight credit conditions and meager demand." Or in other words: no actual cash flow to fund demand for products and services. Obviously it will take some truly phenomenal massaging and manipulation to represent GDP as rising in this environment, but we are confident the Spanish authorities are already on it, and somehow the Spanish pension fund, already 97% filled with Spanish government bonds, will somehow have a finger in yet another completely unbelievable economic print which will fool most of the algos most of the time on flashing red Bloomberg headlines.
We live in a world that is dislocated, on a different axis, where the economy is doing one thing and the markets are doing something else that is not connected. As political nonsense becomes the world's normal banter; the official language in the Press is little more than printed or spoken noise - all caused by the Fed's outpouring of money into the system. Rational reactions become irrational when confined to an irrational world. The world will return to its senses once again either driven by some "event" or by the Fed beginning some sort of withdrawal. In the meantime the markets are beginning to back-up some as moved by becoming accustomed to the continuing flood of money. It is rather like a fine Bordeaux. One meal, two meals, a week's worth of meals and the experience is marvelous but if you drink it every night for dinner the magic begins to dissipate. It is no longer special; it is something expected, it is just the normal fare.
Slew of headlines out of the UK reporting that after suffering a stroke, the Iron Lady and former Prime Minister of the UK, Margaret Thatcher, has died. Rest in Peace.
Portugal's court ruling and Italy's caretaker government decisions briefly discussed.
Data are hard to deal with when your vision is on the wrong side of it. Those wanting to claim there is a recovery underway are having just this problem. These people either have no understanding of economics or they believe falsely that they can inflate “animal spirits” with their hyped reports and that will initiate a recovery. There will not be an economic recovery given the economic policies of this country. A recovery is not unlikely, I would argue it is closer to impossible if not impossible. The reasons for this position are not complicated. In short, the nation has become an out-of-control welfare state that is rapidly destroying the incentives to work or create jobs. Government policies appear designed toward this end. One doesn’t need a high IQ or an advanced degree in economics to understand the problems. There are innumerable factors responsible for the decline of the US. These three important ones will convey why the economy is dying...