Tag Archives: unemployment rate

2008 Redux Times 10 Is Brewing

Using the “jobless claims” metric,  the financial media and snake oil salesmen would have us believe that the Government-compiled jobs market metrics indicate “sustained strength in the labor market that should further dispel fears of a recession”  – Reuters’ Animal Farm.

A reader asks:  “if the jobs market is so good why did my bilingual daughter, who graduated with a 3.8 GPA from Ga. Tech [Dr. Paul Craig Roberts’ undergrad school], not get a job offer for two months until someone I know hired her?”

A funny thing, those Government compiled, manipulated and propagated reports.  I answered with:   “She was fishing in the wrong fishing hole for jobs – she should have been sending her resume to Burger King and Starbucks.  But it sounds like the service sector is starting to shed jobs as well.  I honestly don’t know how they are coming up with their jobs reports.  As for the jobless claims, it makes sense that the claims are dropping like this.  As the labor force shrinks, especially the component that would qualify for jobless benefits, the number of people who file for jobless benefits shrinks, right?”

The first time I read “1984,”  I tried to imagine Orwell’s vision superimposed on the United States.  Now I don’t have to imagine.  Instead of Big Brother spying on us through our televisions (and they might through “smart” tvs), the Government monitors us through our cell phones, emails and web-browsing.  It’s truly frightening and it’s quite stunning how so few in this country understand – or are willing to accept – the degree to which it occurs on a daily basis.

While the Ministry of Propaganda spins its wheels convincing the public of a new bull market in stocks and a robust economic recovery are both in process – bolstered by a job market with more alleged openings than bodies willing to fill those alleged openings – the underlying structure of the economic and financial system is quickly rotting away.

Zerohedge reports today that the yield spread between 2-yr and 30-yr Treasuries is at its lowest (the difference between the yield on the 2yr Treasury and the 30yr Treasury) since its low-point in 2008 – A Flat Yield Curve Spells Recession.  There’s yet another comparison between 2008 and now.

The fundamental problems which caused the 2008 de facto financial collapse were never fixed.  Instead, they were “treated” with money printing and the massive expansion of credit.  While this enabled the operators benefiting from these subtle and insidious this wealth transfer mechanisms, it also seeded the next big systemic earthquake, which has the potential to be 10x worse than 2008.

Notwithstanding the Fed’s omnipresent intervention in the interest rate markets (Treasuries, repos, Fed funds and interest rate swap derivatives), the Fed has been unable to prevent a “flattening” of the yield curve.   A flat yield curve is the Treasury market’s signal that the U.S. is going into a recession.  Without that Fed intervention the Treasury would be inverted, a market event that verifies a deep recession in process.

While treating the problems with negative interest rates, money printing, debt creation and the continuous effort to systematically control the markets may temporarily cover up the symptoms of the underlying problems,  it is analogous to rubbing Neosporin on melanoma.  Eventually that cancerous mole will manifest as untreatable lymphoma.

The U.S. economic and political system is on the verge of a systemic disruption that will make life difficult for the entire population.  It’s anyone’s guess when the catalyst hits that pushes that button, but the force with which the next 2008 times 10 hits will likely even shock and awe those of us who can see that something ugly is about to hit.

Precious Metals Are Ripping Higher As The Government Jobs Report Loses All Credibility

The Government’s non-farm payroll report announced the creation of 242,000 news jobs in February. When the numbers hit the newswires, the Fed trading algos triggered a 12 point spike up in the S&P 500 futures and a $14 cliff dive in Comex gold futures.

The Government’s propagandized economic reporting has deteriorated into nothing more than an epic insult to anyone with two brain cells to rub together. Beyond that, the reports are nothing more than a source of embarrassment for the “experts” who gather on the financial networks to dissect and analyze the numbers for the purpose of “baptizing” the report.

But once the momentum from the Fed’s intervention had subsided, the SPX futures quickly retreated into a loss for the day and gold spiked up as much as $20.  The response to the Fed’s “invisible hand” in the market reflects the fact that these blatantly rigged Government-produced economic reports have lost all credibility with the market’s smart money:

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Gold and silver this week have traded in complete defiance of Wall Street’s “siren call” for a big price correction. The Goldman Sachs analyst, Jeff Currie, incessantly insists on embarrassing himself with a forecast of $800 for Wall Street’s Pet Rock. Contacts at Goldman told me he was instructed under no uncertain terms wipe some of the rotten egg off his face and get on CNBC to raise his target to $1000.

The behavior of gold this past week reflects an increasing loss of credibility in not just Government economic reports, but also a deteriorating faith in the fiat nature of the U.S. dollar. How can anyone place any faith in a Government which is comprised of nothing but thieves have any “credit” to back its currency?  As it stands now, the U.S. dollar is backed by a technically bankrupt Government run by corrupt politicians who serve as well-paid human puppets for the banking and corporate interests who control them.

On an interesting note, it was reported today that is suspending issuance of new shares in its physical gold ETF (ticker: IAU) due to a shortage of registered shares: LINK.  This is highly misleading because market makers can borrow shares and short them to buyers. Currently there’s only 2.4 million shares short in IAU out of 635 million shares issued. That’s only .3% of the float, which means there’s 10’s of millions of shares available to borrow and short in order to satiate buyer demand.  Compare this to GLD, which has 4.5% of the float shorted right now.

The real reason Blackrock had to suspend issuance of shares is because it is seeing something in the physical market that is stopping the firm from creating new share “baskets” which require the procurement of physical gold to back those “baskets.”  The best bet is that Blackrock knows it will ultimately be unable to buy enough physical gold on a timely basis to back the registration of new shares if called upon to do so.   In other words, there is a short of Pet Rocks.

Gold and silver are moving higher because all signs indicate that the markets are broken and the Government is beginning to lose control over the system.   The flow of capital out of paper assets and in to physical gold and silver is further evidence that the Government, Wall Street and the financial markets are both quickly losing credibility.

Non Farm Payroll Report: “Good Grief, These Guys Are Shameless”

The manipulation of markets (witness today) and the overt lying about the economy intensify as we move inexorably towards the precipice.  – John Embry

Short Seller’s Journal update:  My “Quick Hit” pick is now down 27% from its Dec 31 close.   Subscribers who took the plunge on my put option play are up over 500%.  The put expires today and is a little over $5 in the money (it was a slightly out of the money put on 12/31/15).  My long term short sell play is up (down) over 14%.  This is a stock that I believe will go from $30 (12/31) to $10 by 2017.  Short Seller’s Journal

The headline quote is from John Embry, who had emailed this morning asking me my opinion on the jobs report released this morning.   Here’s my response, verbatim:

John, I woke up late this a.m., about 8:40 EST – that’s how much I care about the employment report.  I turned on the tv to check the markets and saw the 292k and literally laughed out loud.  It’s beyond shameless – it’s a full frontal assault on our intelligence.  The Govt claims 45k new jobs in construction? But we find out earlier in the week that the Govt admits to rigging the construction spending number for the last 10 years. Is this some kind of joke? 

The NFP is a completely fictitious number and it truly confounds me every month to see how much time, energy and money is spent by the financial mafia discussing a number that is indisputably 100% fabrication.

I don’t want to tossed into the cesspool of analysts who get sucked in to dissecting and discussing an economic report that is entirely fictitious.  Let’s face it, it’s a made up number.   The number reported is not even remotely credible when put in the context of what’s happening to the U.S. economy.

I have better things to do with my time, like discuss this weekend’s NFL playoff games.  I can assure you, Embry’s knowledge and analysis of NFL football is at least on par with his high level of insight – and the ability to communicate that insight – on the financial markets.

To me the more interesting and relevant conversation encompasses how much longer can the insiders keep the financial markets propped up and how much longer will it be before the Government imposes complete totalitarian control over our system.

The response to today’s payroll by the stock and precious metals markets tells us that the market does not believe the NFP report.  When the headline hit, the S&P 500 futures spiked up 14 pts to go up 30 pts from where they were at yesterday’s 4 p.m. NYSE close.  Gold was smashed $8.   Currently, three hours later, the S&P 500 cash market is down 8 from yesterday’s close and gold has snapped back $13 from post NFP low print.

I will point out that the homebuilder stocks have dropped over 11% this year to date.  By the financial media’s yardstick, they are halfway to being considered in a “bear market.” If the NFP number had any fathomable degree of credibility, the homebuilder stocks would have staged a big rally today.  They are down 2.2% today alone.   Nothing more needs to be said on this matter.

Please have a good weekend – enjoy what you can, as much as you can, while you still can. The rug is being pulled out from under us and the landing will not be pleasant.

Non-Farm Payroll Reports – The Big Lie: Feed The Pigeons

If you tell a lie big enough and keep repeating it, people will eventually come to believe it. The lie can be maintained only for such time as the State can shield the people from the political, economic and/or military consequences of the lie. It thus becomes vitally important for the State to use all of its powers to repress dissent, for the truth is the mortal enemy of the lie, and thus by extension, the truth is the greatest enemy of the State. – Joseph Goebbels, Hitler’s Minister of Propaganda

Think about the psychology behind Goebbel’s statement for a moment. If you are going to tell a lie, make it so outrageous that most people would fall into believing that it’s true because they would not let themselves believe that someone would try to present an extreme lie as the truth. It’s like a modified Stockholm Syndrome mechanism.

Dave , this is so transparent and bad that I am almost rendered speechless and I always have something to say.  – John Embry  in an email exchange

I didn’t bother to watch the American Horror Story presentation of the release of the non-farm payroll report as it was released. I’m not in the habit of turning on the Cartoon Network this early in the morning. But when I saw the headline numbers my response was to laugh out loud.

No sense dissecting the numbers because I’m also not in the habit of spending time analyzing and interpreting complete nonsense. Everyone reading this has seen the analytic dismemberment of the BLS data releases ad nauseum.  After enough iterations, it becomes a boorish waste of time.  I am looking forward to John Williams’ comments later today, of which I’ll share a few snippets.

Kudos to my friend and colleague who predicted how today would unfold almost perfectly. Almost. Even he vastly underestimated the degree to which the BLS would shove a lie in our face. Well, he got the sequence of plays right but he underestimated the size of the Big Lie – this was from Wednesday:

BD model adds 145,000 jobs. NFP for October comes in at 190,000. Mark Zandi gets quoted in every wire service saying it’s a clear indicator of the underlying strength and improvement in the economy. All jump even harder on the consensus December Fed rate hike band wagon. Stock market rips lower and Gold gets hammered to under $1100. Stock market rips at 3:30pm into the Friday close as they force massive short covering into green and Gold goes unchanged on the day.

It remains to be seen if the stock market rips higher by the end of the day. I bet it will. I doubts gold will rally however, at least today. It’s for sure going higher but we might have to wait until the market understands that there will be no rate hike in December and, if anything, more QE is coming.  But the only way to support the Big Lie is keep a lid on the one indicator that would severe the Achilles’ Heel of the Big Lie.

On another note, the homebuilders are getting ripped apart again today. Gee, if so many people found jobs, doesn’t that mean homebuilders will selling more homes? Shouldn’t these stocks being flying? Two of the largest homebuilders have now reported big declines in deliveries in their third quarters through September. But I thought the summer was supposed to be the best period for home sales…bummer dude.

Burst of hiring sends unemployment to 5%!!!!! LOL! This is getting to be such a joke Dave. I’m getting crash fatigue. It’s like the Bataan Death March. Let’s get it over with my God! – blog comment from “Richard”

The Jobless Claims Metric Is A Complete Joke

Anyone who follows the jobless claims reports is either ignorant or just not very intelligent  –  FOD (Friend of Dave’s)

The joke’s on us.  While perhaps the monthly non-farm payroll report – while nothing short of blatant fraud in its entirety – may contain some small “kernels” of statistical reality, the weekly jobless report is absurdity in its purified form.  I take that back, the issuance of that report is indeed reflective of a Government showing complete contempt for the relative intelligence of its population.

I wrote an article last week in which I detail why the jobless claims report is completely devoid of any meaningful information about the relative health of the job market other than the fact that, yes, there are still some people getting terminated from jobs from which they are entitled to file for jobless benefits:   Jobless Claims Are Irrelevant.

The fact that Government can issue economic reports do not even remotely represent the economic reality intended to be conveyed by the reports reflects a Government has morphed into a the type of propaganda-generating central American-style Banana Republics at which we used to laugh in the 1970’s.

With all the announced layoffs over the last several weeks, plus all of the private sector regional Fed economic surveys reflective of a workforce in decline, it would be logical for jobless claims to be spiking.   In order to avoid reinventing the wheel, I’ve hypothecated this graph from Zerohedge in order to illustrate the point:

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I take back an earlier statement in which I asserted that the jobless claims report contains no meaningful content.  I was wrong.  The report shows a Government that has decided to hypothecate a fairy tale and use that story in place of reporting the truth.  It reflects the reality of a Government that will go to any lengths in an attempt to perpetuate the fraud and criminality underlying the giant systemic Ponzi scheme being used by the elitists to transfer as much wealth as possible from the U.S. citizenry and into their own pockets.

Non-Farm Payrolls: There’s Not Enough Lipstick In The World To Pretty Up This Pig

Every good lie has to retain an element of truth. If today’s non-farm payroll report is the best possible lie, how bad is the truth?  – Investment Research Dynamics

Well, now we know why they aggressively and blatantly tried to push gold as low as possible this week.  Is this the best they got?

I am not going to discuss the actual details of what was reported in today’s NFP (non-farm payroll report). This serves no purpose other than to imbue the numbers that were reported with some sense of legitimacy.   The numbers are a fairytale and I’m not in the business of engaging in a debate over the “finer points” of fantasy-derived fiction.

Having said that, and given that the August lie was revised lower by 21%…think about that for a moment:   the stock market screamed higher on a number originally reported in September that they decided was incorrect by twenty-one percent…let that sink in for a moment…one has to wonder just how bad the truth is that lies beneath the carefully constructed fiction.  

If you take a paint-scraper to the heavy latex paint applied on top of the facade, just how badly damaged is the underlying structure?

Again, without giving any assent to the validity of the number that was reported, the Government is telling us that the percentage of the population that is “participating” in the labor force is at its lowest rate since 1977.   That is a staggering statistic because in 1977 this country was largely still a one-income producing household. So how catastrophic is the real number? 

Interestingly, after the “number” was reported, the S&P 500 futures embarked on a 40 point reversal from the 10 point gain that the Fed had managed to achieve overnight.  A 40 point reversal that was not just a “flash crash” because it took several minutes to transpire.  Conversely, gold had been pushed lower by Yellen’s gang and it embarked on a $33 dollar upward reversal.

The reason this is interesting is that if this “miss” by a major “economic” report had occurred 3 months ago, the S&P 500 would have spiked up 30-40 points on the “renewed” indication that the Fed would not raise interest rates at the next meeting. Conversely,  gold would have been slaughtered because the only way to smear the lipstick of legitimacy on ZIRP is to make sure gold stays in a dungeon.

Something has changed in the complete character of the market and the Fed’s ability to manipulate it. We saw this a couple weeks ago when the stock market behaved scatologically – and gold shot higher – after the Fed deferred (predictably by me) on hiking Fed funds by even a tiny amount.

The Fed is losing control of a system that is rapidly collapsing from countless skeletons in the closet that have come to life.  Too much debt in every nook and cranny of the U.S. system;  hidden OTC derivatives bombs with lit fuses; impending emerging market sovereign bankruptcies; declining tax revenues and State/local Governments on the verge of insolvency;  a real economy that is in a frenetic downward spiral; the most overvalued stock market in history (when you strip out all the accounting gimmicks piled into what is being reported by S&P 500 America).

Perhaps most frightening is a political system with the wheels coming off.  A good friend and colleague of mine – and someone who was actively involved in politics at one time – commented, after Boehner announced that he was quitting the job he was elected and paid well to do, that he couldn’t recall ever seeing so many “insiders” voluntarily leaving the system (Congressmen, Bernanke, high profile hedge fund managers) as we’ve seen the past couple years.

And now guys like Carl Icahn are openly stating that the system is fake and will sooner or later crash.  This is the guy who got rich off of exploiting and front-running waves of dumb money piling into the the markets (he was an original beneficiary of Drexel Burnham’s junk bond odyssey).

Something really devastating is coming at us in the system.  The insiders see it but we can only see and interpret the smoke signals that are leaking out from the cracks in the Orwellian wall that has been built over the last 40 years which has prevented the herd from seeing the truth.

The best we can hope for now is that the insane neocons running the Department of Defense do not start pushing the wrong buttons as a means of deflecting our attention from a system that is economically, financially, politically and socially collapsing…

Paul Craig Roberts: The US Economy Continues Its Collapse

When I was a Wall Street Journal editor, the deplorable condition of the US economy would have been front page news.  –  Paul Craig Roberts

President Obama attributed the decline in the participation rate to baby boomers taking retirement. In actual fact, over the so-called recovery, job growth has been primarily among those 55 years of age and older. For example, all of the July payroll jobs gains were accounted for by those 55 and older. Those Americans of prime working age (25 to 54 years old) lost 131,000 jobs in July.

Over the previous year (July 2014 — July 2015), those in the age group 55 and older gained 1,554,000 jobs. Youth, 16-18 and 20-24, lost 887,000 and 489,000 jobs.

Today there are 4,000,000 fewer jobs for Americans aged 25 to 54 than in December 2007. From 2009 to 2013, Americans in this age group were down 6,000,000 jobs. Those years of alleged economic recovery apparently bypassed Americans of prime working age.

You can read the rest of Dr. Roberts’ commentary here:  The U.S. Continues To Collapse

There’s No BS Like The BLS

The employment report isn’t worth discussing, quite frankly.  We already know ad nauseum that the report is completely fabricated and, perhaps, only reflects a modicum of what is really happening in the U.S. labor market.  That is, the report shows that most of the employment “gains” are occurring in the part-time segment of the labor force, while full-time jobs continue to disappear.

The only purpose served by dissecting the report is to “legitimize” the number as if those are the numbers we should be discussing.  The talking heads and economic “experts” in the financial media look like complete idiots when they engage in passionate discourse about a “tight labor market” and an “improving employment situation.”  It’s beyond absurd.

Furthermore, we already know that the labor force participation rate continues to decline into oblivion.  Again, it’s become obvious over the last several years that the U.S. economy is quickly approaching the point at which more than one-third of the population is not even considered to be part of the “workforce.”  That fact is starting to put me to sleep – and perhaps that’s the goal of these Government manipulated economic reports.

But one area of the report did catch my eye.  According to Government data-collectors and statisticians, the number of workers over the age of 55 surged to an all-time high, while the number of workers in the 25-54 age bucket plunged by 131k.  Even if that latter number not the real number, it certainly reflects some sort of statistical reality.  In fact, I would bet the real number is even bigger.   This fact becomes obvious when you walk into any retail big box stores and grocery stores – not just Costco or Home Depot – and you see AARP members performing menial tasks like greeting and thanking customers, collecting grocery baskets and even bagging merchandise.  The Social Security set is being forced back to work and its crowding out the prime segment of the workforce who might otherwise take those jobs or who don’t take them because they don’t pay enough.

The only reason I bring this up is because – for any of you who remember – Obama gave a speech about a year ago in which he asserted that the rapid decline in the labor force participation rate was caused by people over the age of 55 taking early retirement.

Either Obama is a psychopathic liar or he is a complete idiot who merely serves the purpose of reading the propaganda that scrolls in front of his eyeballs on the teleprompter.  I suspect it’s a combination of the two factors.

I suspect I was not the only person at the time who pointed out this incongruity, because I have not heard that particular propaganda soundbyte coming from the Obama Government since Obama expelled that large brown piece of fecal matter from his mouth.

SoT Ep 27 John Crudele: “The Unemployment Rate In And Of Itself Is A Joke”

I think the stock market is rigged and I don’t think anybody argues with that anymore.  In 2009 when Goldman Sachs is speaking with the Treasury Secretary – and I have the phone logs –  more times in one day than Treasury Secretary Paulson talks to the Federal Reserve, I have to figure these guys are up to something you know they’re not making vacation plans – they’re doing something. And then when the phone call is just a half an hour before some major rally in the stock market – all documented – then I have to figure they’re up to something.  – John Crudele, Shadow of Truth

Our friend and colleague Bill “Midas” Murphy (GATA, LeMetropole Cafe) hooked us up with John Crudele, business reporter/columnist for the NY Post.  For those of you who do not read the NY Post or have not heard of him, John Crudele is one of the very few reporters who is willing to look for and report the truth.   He’s been a journalist for 40 years, with time spent at the New York Times, New York Magazine, LA Times, Washington Post and, the last 25 years, with the NY Post.

Right now we have a job market that is not doing great but it’s doing better than the economy as a whole…either there’s something we’re not understanding correctly or the numbers are wrong

John was the journalist who exposed fraudulent Census Bureau data reporting in the Bureau of Labor Statistics nonfarm payroll report  (the Census Bureau collects the data). He discovered that one of the Census Bureau’s regions was fabricating 100’s of data collection reports.

If someone is screwing around with those numbers (employment data), then the numbers are going to be wrong…we found there were some cushy deals with politicians in six States.

Crudele and the NY Post currently have SIX Freedom of Information requests into the Census Bureau for which the Census Bureau refuses to answer or turn over documents. Some of the requests are more than a year old.

Many of you are familiar with the JOLTS report (Job Openings and Labor Turnover).  It measures the alleged number of job openings in the United States on a monthly basis. But just like the nonfarm payroll report, this report is egregiously misreported by the Government.

One of Crudele’s readers emailed John and explained to him that every time someone puts in a bid for a Goverment contract, they report those jobs as job openings. But every contractor that puts in a bid on the same contract also reports those jobs as job openings. On the job bid that John’s reader referenced, 20 contractors submitted jobs, which means that 2,000 job openings were reported although only 100 true job openings were going to be produced by the Government contract.  The JOLTS number, in other words, has no bearing on the true number of job openings.

We hope you take the time to listen to this engaging and lively interview with John Crudele.  His commentary is infused with lively New York-style sarcasm and humor.  Chatting with him made me long for a slice of NY pizza or an all-beef hot dog with spicy mustard and kraut from Papaya King, although John informed us his standard fare is one of the NYC dirty water dogs from a stand outside his building. We think you’ll find it refreshing to hear from a journalist who has the guts to stand up for reporting the truth: