Tag Archives: Jobless claims

Your Vote Is Useless – Here’s Why

Financial Markets, Gold, Market Manipulation, Precious Metals, U.S. Economy, , , , ,

In this 101st episode of the Shadow of Truth, we discuss the Group of 30.   Ever hear of it?The Group of 30 is organization comprised of political and banking elitists who appear to help set the political and economic agenda for the U.S.,  Japan, Europe and England, with the goal toward One World, One Government.

All of the members hold or have held senior positions in Government, Banking/Finance and/or the largest multi-national corporations.  We can assure you that the Group of Thirty was instrumental in drafting the highly secretive and controversial TPP Treaty, which will elevate the largest western corporate entities above the legal jurisdication of any signatory Government.

We also dive into the fraudulent employment reports and the impending real estate bubble collapse.

2008 Redux Times 10 Is Brewing

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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.

Jobless Claims Are Irrelevant – Private Sector Data Shows Employment Is Dropping Quickly

Financial Markets, Market Manipulation, U.S. Economy, , ,

After non-farm payrolls, GDP and CPI and new home sales,  the jobless claims report is probably the useless data report released by the Government.  It supposedly measures the relative strength of the jobs market by indexing the weekly number of new claims for jobless benefits.   However, there’s two obvious and distinct problems with this report.

First and foremost, the data is based on weekly reports filed by each State’s unemployment insurance claims office.  The data is often subject to delayed reporting and reporting errors.  And, of course the data gets to go through the Governments trusty “seasonal adjustments” meat grinder.   That latter fact alone renders the data completely suspect.

But there’s  bigger problem.  It has to do with the nature of the labor force.  Obviously we’ve seen ad nauseum that the labor force participation rate graph is falling go quickly that it appears to trying to dig a hole to China.   As the actual number of workers in the labor force declines, the layoff rate declines and therefore the rate of workers (who qualify) file of jobless benefits declines.

Furthermore, by the Government’s own rigged numbers, since 2008 character of the workforce has been shifting from full-time to part-time.  Part of the reason for this is that Companies can eliminate the expense of paying unemployment insurance by replacing full-time workers with part-time employees, even if it means hiring a few more bodies.  Full-time workers are entitled to health insurance, pension and unemployment insurance benefits.  By eliminating the need to pay these entitlements, the cost of paying three part-time workers in place of two full-time workers.

The OBVIOUS result of this workforce demographic shift is that there will be a lot less workers filing for jobless claims on a weekly basis simply because the labor force is composed of a significantly higher percentage of workers who do not qualify to file for jobless benefits when they get “downsized.”

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Ergo, the weekly jobless claims filings decline over time, as do the 4 week running continuing claims. The idiots on bubblevision (CNBC, Bloomberg, and Fox Biz) report the continuously  low – relative to history – weekly jobless benefit filings with a high-five and an end zone dance because they think it reflects a healthy labor market.   But, quite the contrary, the low weekly jobless benefits claims reflects a tragically declining labor rate participation rate and workforce composition demographic that is riddled with terminal pancreas cancer.

Here’s a graph sourced from Zerohedge that shows the discrepancy between the Government’s employmentuntitled numbers and an index of six major regional Fed surveys which shows employment doing a cliff-dive.

As you can see the regional Fed metrics are showing a stunning negative divergence from the Government massaged reports. Which one do you trust?

Furthermore, Challenger, Gray released its monthly layoff report this morning which showed that layoffs surged 43% in September.  Yet, these layoffs didn’t move the needle on the weekly jobless claims, which Bloomberg bills as being “near a decade low.”

I suspect the real layoff numbers are even worse than is being reflected by Challenger, Gray and the Fed surveys.  The housing and auto industries are turning lower again rather quickly.  The construction industry employs a lot of independent contractors who don’t register as part of the labor force and thus don’t register as “unemployed” when they can’t get contract work.  Soon retailers and restaurants will cutting a lot jobs and then the real fun begins…

 

The U.S. Financial Markets: Theater Of The Absurd

Financial Markets, Gold, Market Manipulation, Precious Metals, U.S. Economy, , , , , ,

As we prepare our state of mental health for the monthly economic idiocy known as “non-farm payroll report Friday,” I wanted to point out just how silly the markets – and the “economic” reports the that influence the short term direction of the markets – have become.

Perhaps the most, for lack of a better word, retarded indicator of economic vitality is the weekly jobless claims report.  Nothwithstanding the fact that this “metric” is tortured by the vagaries and fraudulent handling of Government data collectors and statisticians, the interpretation of the data is now abused to an extreme degree.

The trend for the last 18-24 months has been to promote a jobless claims number below 300k as an indication of a strong labor market.  I even saw a Marketwatch article in the past two weeks which asserted that the jobless claim report indicated “tightness” in the labor market.  Explain that one to the large portion of  the 38% of working age people who are not in the labor force because they gave up looking for a job that pays more than the amount of money available to them from the various Government welfare programs.

Since January 2007, the labor force participation rate has plummeted from 66% to 62%. Tens of millions have been permanently terminated from corporate America payrolls.  From February 2006 to March 2009, the weekly jobless claims spiraled higher from 289k to nearly 700k.  That reflected the mass layoffs and job eliminations caused by the financial collapse of 2008/2009.

The reason jobless claims have trended lower since then is not because more people found jobs again, and are keeping those jobs, its because overall there are less people working full-time in jobs that qualify for unemployment benfits when they do lose their jobs.

This graph I constructed from the St Louis Fed data supports my assertion – I’d love to hear Steve Liesman or one of the turd-brains on Bloomberg or Fox Biz explain this graph:

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Furthermore, its a function of the simple law of averages.   There’s less people employed in jobs with jobless claims benefits now than there were in 2009, so it follows that there will be a lot less jobless claims filings now than when the big purge in employment hit the economic system.

In fact, the jobless claims metric is largely meaningless in any regard as an in indicator of economic anything, other than to vaguely represent the amount of money the Government is paying out to those who are left in the workforce that qualify to file for this taxpayer-financed benefit.   Beyond that, the “economic” metric completely useless.

Of course, never waste the release of an economic report, regardless of whether the data is positive or negative, or even completely meaningless.   The graph below shows Comex Paper Gold trading in 10-minute intervals since 8:00 a.m. EST (x-axis is MST):

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As you can see gold was slammed the moment the report was released despite the fact that the report disappointed expectations and showed a 14% year over year decline in factory order for July.  If anything, gold should have shot up on the expectation that a weakening economy will lead to more QE.

In fact, the ECB’s Mario Draghi today announced that the ECU was going to, in a roundabout way, expand the ECB’s money printing program by enabling the Central Bank to buy a bigger portion of the sovereign-issued bonds it purchases.  He also suggested that the ECB would consider increasing QE.

The S&P 500 futures shot straight on this announcement.  Gold should have as well. But you can see from the graph above that gold was sold down in the London paper market as soon as London opened.  Obviously the entities doing the selling wanted to manipulate the price of gold lower ahead of a gold-friendly announcement from Draghi.

Gold was hit again when the completely useless jobless claims report was released.  Gold is hit automatically every time this report is released.

The blatant market interventions in both the stock, oil and precious metals markets reflects the increasing desperation of the western Central Banks and Governments to use the markets as a mechanism to hide the truth about the underlying deteriorating economic and financial condition of the western economic and political system.

I have a bad feeling that when they lose control of their ability to hide the truth, we’re going to find out the true purpose of the Jade Helm exercises that have been going on since July 15.

U.S. Economy Collapsing Faster Than In 2008

Financial Markets, Gold, Housing Market, Market Manipulation, U.S. Economy, , , ,

U.S. Macro “Suprise” index has never collapsed this fast (Zerohedge):  click to enlarge

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USmacro1

I wanted to show those graphs from Zerohedge with my edits (right graph) because they show the extreme dislocation between the true economic fundamentals and the financial markets in the U.S.  The “US Macro” data is the differential between Wall Street’s “brain trust” estimates for various economic data and the actual reported result. The negative differential between the expectations of supposedly educated, bright economic professionals and reality has never been greater.

The economic data – almost all of it – has been collapsing at a rate as great or greater than it was collapsing in 2008.   The media propaganda megaphone loudly broadcasting that “all is well” has never been set at a higher volume than right now.

Today, for instance, the S&P 500 spiked higher on the jobless claims report, which came in well below Wall Street’s “Einstein” forecast.  The jobless claims report is probably the most useless barometer of the employment market other than the Government’s non-farm payroll report.  IN FACT, with the labor force participation rate at 30-year lows, we would expect that reported jobless claims would drop.   With less people as a percent of the population working, it means there’s less people to be fired and less to file for unemployment benefits.

MOREOVER, many people losing jobs do not even qualify to file for jobless benefits.  A long-time white collar/blue collar worker for a big corporation is covered by unemployment insurance.  An independent contractor working for an energy company or construction company (construction spending plunged in Q1) does not.  Nor do the retail employees of chain stores closing down mall space.   In other words, the jobless claims number is basically useless.

My colleague Rory Hall and I recorded a brief video which we discuss some quite shocking data which further reinforce that BOTH the global and U.S. economy are falling off a cliff:

I hope you take some time to watch the video – I think you’ll be quite shocked by the data we present…When the stock market begins to “regress toward the mean” by re-correlating with the US Macro data, the massive influx of retail investors into the stock market will get decimated – just like in early 2000 and in 2008.