Jim Cramer

"It's Working..."

With incomes stagnating (real household incomes at 15 year lows) and gas prices hovering awkwardly near record highs (especially for this time of year), we thought a reflection on the inflationary impact of an always-activist Fed were nowhere clearer indicated than by the collapse in the amount of gas that the average US citizen can afford. Of course, there is a silver lining... the affordability of gas dropping means fewer miles driven, fewer miles driven means more walking, and more walking means less obesity... so the Fed's inflationary leakage into energy prices and implicit enabling of lower living standards of most Americans is good for a nation of fatties - always the optimists.

"Faith..."

While the issue of whether they will or won't taper is certainly still not clear, the WSJ's John Hilsenrath notes that the other dilemma facing the Fed is whether to reduce their purchases of Treasurys, mortgage-backed securities or both. According to officials, Hilsenrath notes, there were two lines of thinking at the Fed on how to structure a pullback from the bond programs and the issue would be discussed at the meeting. Goldman's Jan Hatzius has posited that "Fed leadership probably views MBS purchases as more effective in boosting economic activity than Treasury purchases," but as Hilsenrath notes, some Fed officials prefer a simpler-to-communicate strategy of proportional cutbacks to both MBS and Treasuries. The fact that Hilsy is reporting this suggests that a Taper is somewhat inevitable - as we have noted since the Fed remains cornered. On average, the market expects a $6bn taper on Treasuries and $3 billion for MBS.

The U.S. Census Bureau announced today that in 2012, real median household income and the poverty rate were not statistically different from the previous year.  The 88-page report (found here) contains a plethora of statistical data, slicing and dicing income and poverty data by race, gender, and so on but in order to see through the haze, the following three charts sum it all up perfectly (sadly). The poverty rate in the US is stable at 15% - practically the highest since the mid 1960s and real household incomes are stagnant at 1997 levels. Spot the cyclical recovery...

Now the Apple-Gold relationship is just getting silly...

Just how will your great-grandchildren preserve their wealth - or are they stockpiling condoms and gasoline now?

Sometimes you have to step back and laugh... spurious correlation perhaps, but over 10 years, 2 years, 2 months, or 2 weeks; the ebbs and flows of AAPL shareholders and spot gold prices seem oddly similar... so which is in a bubble and which is a screaming buy?

Today's equity market exuberance is being pitched as due to to Asian strength... We hate to burst that bubble but... The Nikkei 225 actually fell after GDP was released; JGBs rallied (well that doesn't fit with the meme of Japanese growth); Japanese GDP missed expectations (oops); Japanese trade balance was the 3rd worst on record; Chinese imports missed expectations (as copper demand fell since liquidity has eased and less need for cash-for-copper deals). So what is the catalyst for today's S&P 500 rally... behold the EURJPY cross rate...

What's Labor Day to the 130 million not working?

Because we get the feeling Kevin was a busy boy this afternoon...

Earlier we showed one indicator of the US investor's (should they exist anymore) loss of interest in the Federal-Reserve-sponsored equity market - i.e. CNBC ratings at 20-year lows. In the interest of being more fair-and-balanced we present anther perspective... US equity trading volume in August of 2013 is the lowest on average in 16 years... and all-time highs, middle-east war, taper, weak macro, housing un-recovery, German elections, Asian FX crisis will do little to improve that risk-appetite for the retiring boomer army.

As with all propaganda - be it war-mongery, politics, or economics - one can always find some data 'fact' to support your opinion. Presented with little comment - a tale of two consumer confidences...

Louisiana tops the nation's list of "improper" payments for unemployment insurance with a 3-year rate of 38.67%.  Of course, this is the "improper" payments they know about (as only 29.7% of overpayments have been recovered). A stunning 28% of Louisanans who claimed benefits did so even after returning to work. However, while the Louisiana data points are bad, they are not alone. As the chart below shows... 16 states have "improper" payment rates of over 14%. One wonders why the world doesn't trust the US so much anymore?