5 Things To Ponder Over Thanksgiving

Tyler Durden's picture

Submitted by Lance Roberts of STA Wealth Management,

With the "inmates in charge of the asylum" during this holiday shortened trading week it seemed to be an apropriate opportunity to share a virtual cornucopia of topics to consider while enjoying the delicious delicacies, and subsequent tryptophan induced comas, of a traditional Thanksgiving.

As I discussed earlier this week in "30% Up Years: The Case For Cashing In:"

"If the markets rise to 1850 by the end of 2013, which I believe is entirely possible as managers chase performance, it will mark the 11th time in history the markets have attained that goal.  I have also notated that each 30% return year was also the beginning of a period of both declining rates of annualized returns and typically sideways markets.  It is also important to notice that some of the biggest negative annual returns eventually followed 30% up years."

1) Margin Debt Soars To New Record via Zerohedge

"The correlation between stock prices and margin debt continues to rise (to new records of exuberant "Fed's got our backs" hope) as NYSE member margin balances surge to new record highs. Relative to the NYSE Composite, this is the most "leveraged' investors have been since the absolute peak in Feb 2000. What is more worrisome, or perhaps not, is the ongoing collapse in investor net worth - defined as total free credit in margin accounts less total margin debt - which has hit what appears to be all-time lows (i.e. there's less left than ever before) which as we noted previously raised a "red flag" with Deutsche Bank. Relative to the 'economy' margin debt has only been higher at the very peak in 2000 and 2007 and was never sustained at this level for more than 2 months."



2) Thanking The Fed For Investors' Bounty via Bloomberg Businessweek

"Thanks to outgoing Fed Chairmen Ben Bernanke and the nominee to replace him, Janet Yellen, and their colleagues taking down interest rates to near-zero five years ago and keeping them there—on top of the Fed's nearly $4 trillion of creative asset purchases—investors have enjoyed the restoration of more than $13 trillion in U.S. equity market value. That's called the multiplier effect. And it's also called remorse, if you were one of the record numbers who bolted stocks altogether and are scrambling to get back in now, after indexes have more than doubled. It's also called financial repression if you're a saver having to eat negative real rates on your hard-earned cash.


Any wonder why capital markets threw a summer temper tantrum merely on signaling (arguably) from the Fed that it could soon reduce the size of its asset purchases (not end them, mind you—much less hike interest rates). Either way, the lame-duck Bernanke Fed opted to hold off."

 FedAssets 2006-13

"If it shows what it appears to show," says University of Texas economics and government professor James Galbraith, "then it's not difficult to grasp why the Fed's tapering has acquired the habit of ever-receding into the future."


3) Need To Laugh, Read "Getting Back To Full Employment" via Forbes

"They say that laughter is the best medicine. If so, "Getting Back to Full Employment", a revised and updated book by economists Dean Baker and Jared Bernstein, might just be able to save Obamacare. Read it, and see if it doesn't make you laugh out loud.


Of course, Bernstein, at least, has experience in economics comedy writing. Along with Christina Romer, he wrote "The Job Impact of the American Recovery and Reinvestment Plan," which was the blueprint for President Obama's 2009 "stimulus" program.


In their "Recovery" study, Romer and Bernstein confidently predicted that shoveling $862 billion of borrowed money into the gaping maws of various Democratic interest groups would prevent the unemployment rate from going above 8%, and would push joblessness down to 5% by, well, now.


As they say in text message land, ROTFLMAO! Adjusted to the labor force participation rate that Bernstein and Romer assumed in their study (that of December 2008), the unemployment rate peaked at 11.5% in mid-2011, and it was still at 11.4% last month.

Baker and Bernstein begin by waxing nostalgic over the year 2000, when America reached effective full employment. The official "U-3" unemployment rate bottomed out at 3.84% during April of that year, while a record-high 64.74% of working-age Americans had jobs.


If that was full employment, we are 15.8 million jobs distant from it now. On a full-time equivalent (FTE) jobs basis, the shortfall is even worse: 16.6 million FTE jobs.


Unemployment and underemployment are not laughing matters. The humor is contained in Baker and Bernstein's bizarre ideas for getting America back to full employment. After extolling the glories of Bill Clinton's second term, they go on to recommend policies that are the exact opposites of the ones that worked so well during that period."

4) Goldman's Global Leading Indicator Collapses Into Slowdown via Advisor Analyst

"The best silver lining Goldman Sachs found when faced with the total and utter collapse in their global leading indicator swirlogram was – (probably) stabilizing. The only improving factor across all their global economic components was the US initial jobless claims (and that has been a farce wrapped in a debacle for 2 months of 'glitches'). Having led global industrial production for a few months, it seems the indicator is crashing back to reality as the summer's hopefulness is exsanguinated from hard and soft data around the world."



5) In Fed Policy, Exits May Be Harder To Hear via New York Times

"Is it time for the Federal Reserve to start its exit from the extraordinary set of policies it has pursued over the past few years? That crucial question is on the minds of the nation's central bankers, as well as the stock and bond traders who follow the Fed's every move.    



In her recent testimony before the Senate Banking Committee, Janet L. Yellen, the eminently qualified nominee to lead the Fed, made clear she didn't think the time for an exit had come. With inflation running below the Fed target of 2 percent and continued weakness in the labor market, she argued, the economy needs all the help the central bank can provide. 


Many of the numbers back up that diagnosis. The unemployment rate is about three percentage points higher than it was seven years ago, before we got the first whiffs of the economy's financial problems. The employment-to-population ratio is about five percentage points lower, and it has not recovered much at all since the trough of the recession.


But that is only a small part of the story. A relevant measure is the employment-to-population ratio for those in the prime working age group —25 to 54. This statistic also shows the recession's lingering effects: the ratio declined to about 75 percent from 80 percent over the course of the recession, and has recovered to only about 76 percent today. So we have recovered only about a fifth of what we lost during the downturn.


These numbers indicate that there is still much slack, or unused potential, in the economy. In turn, this suggests that inflation is unlikely to become a problem anytime soon, so the Fed can delay its exit. But the labor market data are hard to interpret, because this recession has been so different from those before it.


How these conflicting signals are resolved will eventually determine the course of monetary policy. Because Ms. Yellen says the economy has a lot of slack, she isn't especially worried about inflation and isn't eager for the Fed to quit its stimulative policies. Many measures confirm her judgment, but this recession has been extraordinary, making historical norms hard to apply, and other statistics point to a different conclusion. Ms. Yellen may well turn out to be right, but as new data arrive, she had also better be prepared to change her mind."

Have a great Thanksgiving holiday, be safe and enjoy your family.

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Intoxicologist's picture

Thankful I don't work at McDonald's. 

DoChenRollingBearing's picture

Despite all the bad news and everything (above), we really do have a lot to be thankful for.  Just typing away our thoughts on the Internet for just one.  Yes, there are lots of people really hurting out there, but keep perspective, ALL of you reading this are alive anyway!

A friend of mine likes to say:

"Every day is a good day."

And so it is.


Thankz, fishez!  Thank you to all, enjoy this day and every day.

ZerOhead's picture

I'm thankful for the courage of Edward Snowden and Private Manning.

Thanks to them my friends now consider me less of a nut each day...

alfred b.'s picture


....may there be a 1000 more Edward Snowdens, and Chelsey Mannings!



gmrpeabody's picture

And may we hear from them soon.

AldousHuxley's picture

Thankful to the Fed for QE and exposing their game to the rest of the world.


Kind of like OPEC getting so greedy that they raised the oil prices to a point where alternative energy became profitable.

Boris Alatovkrap's picture

You are also have one less nut!? Boris is complete sympathy.

ZerOhead's picture

Thanks Boris...

Basically I'm just a one ball man with his pecker in his hand and I'm off to the rodeo...

Zadig's picture

Yes indeed.  I never believed that one conscientious person could change the world, but Edward Snowden has changed my mind.

A Lunatic's picture

The trend on "historic norms" is the total collapse of the Empire in question.......

I am Jobe's picture

More fun to come

Bank of England cuts mortgage support to avoid housing bubble


Hedgetard55's picture

"The unemployment rate is about three percentage points higher than it was seven years ago, before we got the first whiffs of the economy's financial problems."


     Fuck whoever wrote this garbage. There were more tnan just whiffs in 2006, asshole.

Skateboarder's picture

That would be N. Gregory Mankiw (kinda like "thank you"? lol), and he obviously has to write this kind of garbage or not write at all. Yeah, like NYT would admit the real unemployment rate.

stant's picture

godspeed to all the low brow zhers this TG

I am Jobe's picture

Stores are open

Crap avaialble the day of T Giving and Day after

Corp continues to abuse the working class

Federal Reserve is the only game in town

USSA is falling fast

AldousHuxley's picture

I saw an ad where they sang to the tune of eat your turkey as fast as possible and head down the to mall to shop


One time in south america, as I walked down the tourist spot shopping area the shop keepers literally threw their t-shirts on your back and make you return the merchandize.


Inthemix96's picture

After reading the impending doom of China thread, and after returning home from work, cold, tired, and pissed off, I thought I should just mention this.

Best wishes, and a heart felt thanks from inthemix to all my American friends out there on this Thanks Giving day 2013.  I wish you all, even if we dont and have never agreed on anything the best I could possibly offer.  We are still here, we can still post our thoughts, wishes, hatred, anything you desire, and I thank you all for being who you are.

I suppose its a consequence of getting older eh?  You feel the weight of yourself and it just doesnt hold does it?  I feel more compassion and more thoughtful these days thanks to places like ZH that lets you get things off of your chest so to say, so, rather than run on with bullshit I sincerely wish each and every one of you mad fuckers the very best on a very special day.

Its your day my friends.  I really hope, mean and wish you enjoy yours as I enjoy mine.

Mix out


wisehiney's picture

My family is thankful, but this Holliday always makes us a little melancholy. My great great grandfather bred turkey's, and loved drumsticks. After years of trying he finally produced a six legged one. We would all be wealthy if only he could have caught him!

AngelEyes00's picture


That's a link to the firing story of the pizza hut manager.  He was told to open on Thanksgiving Day and he refused to because he didn't want to make the other 15 employees come in as well, so was told to write a letter of resignation.  Instead he wrote a letter explaining why people shouldn't have to work on Thanksgiving or Christmas.

The story hit the main stream media, so corporate headquarters quickly acted to offer him his job back.  But we all know they only did this because otherwise it reflected poorly on their name, 'Pizza Hut' and may cause damage to their brand.  It had nothing to do with being nice or considerate towards one of their slaves. 

He's now considered a great hero to his friends.  He is a hero!  Anyone with the guts to go up against management in this day and age of people being so afraid of losing their jobs is a gutsy leader standing up for our rights.

kchrisc's picture

"...inmates in charge of the asylum"

Shouldn't that be "the criminals running the prison?"

Ignorance of the Constitution and "following orders" is no excuse.

Yen Cross's picture

   I'm pondering how the MSM/.gov/Steve LIEsman is going to spin the putrid "Grey Friday" sales results.

   They already have their fallguy, that winter storm that's being played up moving through the eastern U.S. right now.

e_goldstein's picture

Got to say I'm thankful for Zero Hedge and the Tylers. You guys keep me relatively sane in douchified Amerika. So thank you.

DoChenRollingBearing's picture

Well, at least you can take comfort in the fact that that will not happen again for 70,000 + years...

Angus McHugepenis's picture

Heard this from a trader many years ago. He said, "Guess what day is the busiest day of the year for the company Mr. Rooter"?

Answer: The day after Thanksgiving!

Take care and have a great holiday.

Turkey, BitCheZ!! I'll take the leftovers!


The_Prisoner's picture

Free Francis Sawyer!

Radical Marijuana's picture

It is the MOST Criminally Insane "inmates in charge of the asylum," since those are the real qualifications that they have in order to do what they do. I suppose we may be thankful that things have not yet gotten as bad as they are going to get. However, as far as I can tell, that is the only thing we have to be thankful for.

Any superficial discussion of the financial affairs that fails to comprehend that it is BASED ON EXPONENTIAL RUNAWAY TRIUMPH OF LEGALIZED LIES, BACKED BY LEGALIZED VIOLENCE, fails to face the fact that it really is the MOST criminally insane inmates in charge of the insane asylum that we call our civilization. The deep paradoxes are due to the history of successful warfare being based on backing up deceits with destruction, which was the foundation for the financial system to become based on the triumph of organized crime, by the international bankers, which has made the WHOLE SYSTEM HAVE THE FOUNDATION OF ALWAYS INCREASING FRAUDS, such as currently exemplified by the actions of the Federal Reserve Board.

The main thing to ponder is how long will it take for that runaway fascist plutocracy system to get mad enough to destroy itself. We are locked into the social mechanisms that enable the best professional liars and immaculate hypocrites to control civilization, because the real controls are done by lies, backed by violence. There is nothing left to laugh about the macabre joke that the most criminally insane people actually control civilization, while those who were being controlled have survived through adapting to accept that, if not adopt the same bullshit view of the world.  The bigger the contexts one looks at those things within, then the more significant it becomes that the world is controlled by the most criminally insane people, through their always increasingly insane systems of legalized lies, backed by legalized violence, which have no end in sight for how much worse that is going to get ... So, the only thing to be thankful for is that things have not yet gotten that bad, although there can be no reasonable doubt that the real world has become a mad house, dominated by the most criminally insane madmen, whose degrees of criminal insanities are the only actual qualifications they have to be "in charge of the asylum."