Month: February 2014

The BBC caption-machine discusses the Chinese new year (the year of the horse)… but goes a little too phonetic. Are they wrong?

h/t @BarbaraDemick

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Miserable? Feeling like you want to turn the corners of the smiley down so it reflects your current mood? Believe you would get the lead role in the Les Misérables? Take a look at the Misery Index and see if you really are feeling like the only solution is to either jump now or bang your head against the desk of the guy sitting next to you. You could always attempt to punch the screen of the PC so you stop getting the ticker with the bad news across the top of it. Miserable!

The Misery Index was invented decades ago by Arthur Okun, an economist and adviser to President Lyndon Johnson (back in the 1960s). It’s the unemployment rate and the inflation rate added together, which would make any of us real miserable these days, wouldn’t it? At least, the first figure would. Although, if we really want to have some fun, then we could do not just the Misery Index, but the REAL Misery Index by taking the real unemployment figure and not just the one that has been dressed up by the Bureau of Labor Statistics for the masses of Sheeple that are ready to believe that we have a 6.7% unemployment level today in the USA.

The U-3 Unemployment Rate, the official figure that is released publically and bandied about as being a gauge of how great the US economy is doing, is enough to make anyone’s smiley go into a fit of rage. Still, no point ranting, it’s been like that since 1994, when the people who were discouraged from looking for work were taken out of the figures. The inflation rate for the USA stood at 1.5% for December 2013 (released on January 16th 2014). So that means the USA has a Misery Index of 8.2.

Taking the U-6 Unemployment Rate, which includes all of those that are going to do a great deal for the image of any government (the guys that are discouraged, can’t and haven’t been able to find jobs and all of those that have worked part time and so have been considered to be employed) things look very different. The December U-6 figure stood at 13.1%. That’s a more miserable Misery Index than the previous (official) one, isn’t it? More fitting with your current mood? The total figure then stands at 14.6. It could be worse, however, when inflation was running at over 14% in the first and second quarters of 1980 and the Misery Index was at the all-time high of over 21. 
If we are to believe the US Bureau of Labor Statistics, there are more people in work today, but they also fail to tell us that roughly 97% of jobs that have been created are only part-time positions that people have been forced to accept because they can’t get by financially. Economically forced to become miserable! Back in August 2013 when the Federal Reserve kept playing with the nerves of investors and the markets by its catch-me-if-you-can game in which Ben Bernanke thought it would be a good idea to announce Mondays that tapering was on the cards, then Tuesdays that he was having second thoughts. By the time Fridays came around it was just a whole mess and nobody knew what was happening. So it went on for weeks and weeks but the decisive factor was always the employment rate and getting below the 7%-mark.

Now we are there (officially, of course). But, in the first half of the year for 2013 there were 963, 000 people that were reported as having become ‘employed’. Of those, there were 936, 000 that were reported to have found nothing more than part-time employment. Does the Bureau of Labor Statistics know that living off a couple of hours a week in employment doesn’t even help to scrape a living? Part-time means lowly paid jobs too in the restaurant sector, retail and health as well as temporary-staffing agencies. The involuntary part-time employment rate doubled over the period of 2007-2012. Women increased the most from 3.6% to 7.8%, while men went from 2.4% to 5.9%. Miserable!

Unemployment and inflation have a clear influence on happiness in the country, just as long as it’s the real statistics that are being used and not the ones that get doctored up to make it seem as if we are on the road to recovery. The intravenous drip is being withdrawn, but the people are still miserable. Sheeple are miseries too. How far does the Misery Index actually do anything, though? Inflation is low right now and it doesn’t mean that we are happy bunnies waiting for the next bout of open-field cross-country running in the financial markets with the breeze in our hair. Misery is falling according to the Misery Index and is currently at a four-year low.

But, can we judge the book by its cover? Hardly! A quarter of US citizens are going to default in the next few months on their credit-card repayments. One fifth are using credit more and more often just to pay the utility bills and buy the groceries.

Just how miserable do you feel right now?

Originally posted: You’re Miserable USA!

You might also enjoy: Emerging Markets: Lock, Stock and Barrel | End of the Financial World 2014 |  Kristallnacht on Wall Street? Bull! | China’s Credit Crunch | Working for the Few | USA:The Land of the Not-So-Free  

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From Goldman’s sales and trading team. Remember: Long S&P 500 (in AUD terms) is one of the FDIC-backed hedge fund’s top client recommendations of 2014. As if, of course, shorting gold.

Equities have the worst day of the year and really no exchange around the globe was left out. Now every one on our screen is down YTD. For US markets, today was the worst day since last June. Overall, while today was active, it was still an orderly session. We did have some interest to buy topside options. All sectors in the red with Telecom hardest hit -3.7%. Closes: SPX -2.3% to 1741.25; DJIA -2.1% to 15372.8, NASDAQ -2.6% to 3996.96.

 

The VIX is up 2.68 to 21.14.

 

FX symptomatic of the larger risk off move with EM weaker across the board: MXN -1.35%, BRL -1.1%, ZAR -1.3%, and TRY -1.2%. In G10, the price action was more concentrated with JPY +1.0% which intraday broke below 101 to a 3-month low of 100.77 before recovering slightly. USDJPY is looking increasingly shaky as the Nikkei continues to get hit, now down over 10% YTD. AUD and CAD hold in well, CAD actually +0.3% today and we didn’t see position unwinds there.

 

Serious pain in risk assets lent a bid to US treasuries as yields continue to retreat from their New Years’ day highs. Weak ISM Manufacturing exacerbated the downward pressure on yields in a market already feeling a flight to quality bid on the back of weakness in NKY and Eurostoxx. Flows in the morning were relatively muted despite huge volumes in futures. Notable flows in the afternoon were many non-traditional users of USTs buying the belly in small clips that ultimately amounted to considerable net buying. Also notable, considerable activity in TYH 125 puts today as over 100k contracts were traded by lunchtime. 10s and bonds lead the rally, both finishing 7bps stronger at 2.577% and 3.531% respectively.

 

Gold traded within a $5 range during Asia and London hours but spiked abruptly after ISM data came in well below expectations, touching an intraday high of 1266.40 before calming down to about 1261 +1.33%.  Base metals was once again weaker today as aluminum fell 1.70% marking an 8% decline since 17Jan14. The crude complex was broadly weaker in line with the move in equities but Brent found in particular found a bid around noon, trading up to 106.15 from an intraday low of 105.50.

via Zero Hedge http://ift.tt/1fUwYbj Tyler Durden

From Goldman’s sales and trading team. Remember: Long S&P 500 (in AUD terms) is one of the FDIC-backed hedge fund’s top client recommendations of 2014. As if, of course, shorting gold.

Equities have the worst day of the year and really no exchange around the globe was left out. Now every one on our screen is down YTD. For US markets, today was the worst day since last June. Overall, while today was active, it was still an orderly session. We did have some interest to buy topside options. All sectors in the red with Telecom hardest hit -3.7%. Closes: SPX -2.3% to 1741.25; DJIA -2.1% to 15372.8, NASDAQ -2.6% to 3996.96.

 

The VIX is up 2.68 to 21.14.

 

FX symptomatic of the larger risk off move with EM weaker across the board: MXN -1.35%, BRL -1.1%, ZAR -1.3%, and TRY -1.2%. In G10, the price action was more concentrated with JPY +1.0% which intraday broke below 101 to a 3-month low of 100.77 before recovering slightly. USDJPY is looking increasingly shaky as the Nikkei continues to get hit, now down over 10% YTD. AUD and CAD hold in well, CAD actually +0.3% today and we didn’t see position unwinds there.

 

Serious pain in risk assets lent a bid to US treasuries as yields continue to retreat from their New Years’ day highs. Weak ISM Manufacturing exacerbated the downward pressure on yields in a market already feeling a flight to quality bid on the back of weakness in NKY and Eurostoxx. Flows in the morning were relatively muted despite huge volumes in futures. Notable flows in the afternoon were many non-traditional users of USTs buying the belly in small clips that ultimately amounted to considerable net buying. Also notable, considerable activity in TYH 125 puts today as over 100k contracts were traded by lunchtime. 10s and bonds lead the rally, both finishing 7bps stronger at 2.577% and 3.531% respectively.

 

Gold traded within a $5 range during Asia and London hours but spiked abruptly after ISM data came in well below expectations, touching an intraday high of 1266.40 before calming down to about 1261 +1.33%.  Base metals was once again weaker today as aluminum fell 1.70% marking an 8% decline since 17Jan14. The crude complex was broadly weaker in line with the move in equities but Brent found in particular found a bid around noon, trading up to 106.15 from an intraday low of 105.50.

via Zero Hedge http://ift.tt/1fUwYbj Tyler Durden

While the Fed remains convinced (and they would know) that there is no bubble in asset markets – in the face of record issuance of covenant-lite loans, record high stock prices in the face of declining fundamentals, and record low spreads in credit markets as leverage rises – as we noted yesterday, investors “are stretching to find reasons not to cut” their allocations. The bursting of the bubble was dismissed by many late last year as “bubble” talk reached highs – providing psychological non-confirmation that a market drop is unlikely when bubble talk is so high. It seems, in the last few weeks that has shifted as bubble chatter has dropped rather notably.

Does that free up investor psychology to sell? Being “greedy when others are fearful” has an equal and opposite trading meme – cover when no one is worried.

Chart: Bloomberg

via Zero Hedge http://ift.tt/1kHdr13 Tyler Durden

While the Fed remains convinced (and they would know) that there is no bubble in asset markets – in the face of record issuance of covenant-lite loans, record high stock prices in the face of declining fundamentals, and record low spreads in credit markets as leverage rises – as we noted yesterday, investors “are stretching to find reasons not to cut” their allocations. The bursting of the bubble was dismissed by many late last year as “bubble” talk reached highs – providing psychological non-confirmation that a market drop is unlikely when bubble talk is so high. It seems, in the last few weeks that has shifted as bubble chatter has dropped rather notably.

Does that free up investor psychology to sell? Being “greedy when others are fearful” has an equal and opposite trading meme – cover when no one is worried.

Chart: Bloomberg

via Zero Hedge http://ift.tt/1kHdr13 Tyler Durden

While the Northeast is blanketed by another winter storm, California has its own, quite inverse, climatic problems in the form of a historic drought which as Bloomberg reports, is forcing farmers in the fertile central valley region to fallow thousands of acres of fields and has left 17 rural towns so low on drinking water that the state may need to start trucking in supplies. It is so bad that water reservoirs are at about 60 percent of average, according to state water data, and falling as rainfall remains at record low levels.

Unfortunately for our California readers, it is going to get worse before it gets better because mountain snowpack is about 12 percent of normal for this time of year. The following picture of California from January and a year ago shows just this dramatic difference, which confirms that there is little hope for the parched state.

Here is the WaPo’s Reid Wilson explaining the above visual comparison:

The three-year long drought plaguing the western United States is only likely to get worse over the next year, forecasters and climate scientists say, given a dismal snowpack that has officials in many states worried. Despite a snowstorm earlier this week, the snowpack in the Sierra Nevada mountains stands at just 12 percent of the average level, the lowest measurement in the half-century records have been kept.

 

The low snowpack has serious consequences for the summer. Less snow means less summer runoff. Already, California has banned fishing in some drought-prone rivers. Gov. Jerry Brown (D) has asked residents to turn off the water while brushing their teeth. Earlier this week, President Obama called Brown to discuss the drought.

 

Earlier this month, Brown declared a state of emergency, urging residents to conserve water as much as possible. Several state agencies have said they plan to ration water throughout the summer. And already this year, several wildfires have broken out in areas of the state like Humboldt County, which is typically wet enough in the winter to mute any fire activity.

This of course is great news for America’s already reeling economy, not to mention its stock markets and earnings growth-less corporations: it means one more excuse can be added to the arsenal of scapegoating, because while the latest snowstorm will come and go, even if it should provide “economists” and “analysts” with another reason to ignore “weaker than expected” February data, the aftereffects of Calfornia’s drought will linger. And as everyone knows, Californians don’t buy houses, cars, iPads, burgers, clothing, and generically, stuff, when there is a drought raging.

So bring on the bad data, and let it all be explained away by California’s lack of snow, not to be confused with the overabundance of snow everywhere else.

via Zero Hedge http://ift.tt/1j81Aew Tyler Durden

While the Northeast is blanketed by another winter storm, California has its own, quite inverse, climatic problems in the form of a historic drought which as Bloomberg reports, is forcing farmers in the fertile central valley region to fallow thousands of acres of fields and has left 17 rural towns so low on drinking water that the state may need to start trucking in supplies. It is so bad that water reservoirs are at about 60 percent of average, according to state water data, and falling as rainfall remains at record low levels.

Unfortunately for our California readers, it is going to get worse before it gets better because mountain snowpack is about 12 percent of normal for this time of year. The following picture of California from January and a year ago shows just this dramatic difference, which confirms that there is little hope for the parched state.

Here is the WaPo’s Reid Wilson explaining the above visual comparison:

The three-year long drought plaguing the western United States is only likely to get worse over the next year, forecasters and climate scientists say, given a dismal snowpack that has officials in many states worried. Despite a snowstorm earlier this week, the snowpack in the Sierra Nevada mountains stands at just 12 percent of the average level, the lowest measurement in the half-century records have been kept.

 

The low snowpack has serious consequences for the summer. Less snow means less summer runoff. Already, California has banned fishing in some drought-prone rivers. Gov. Jerry Brown (D) has asked residents to turn off the water while brushing their teeth. Earlier this week, President Obama called Brown to discuss the drought.

 

Earlier this month, Brown declared a state of emergency, urging residents to conserve water as much as possible. Several state agencies have said they plan to ration water throughout the summer. And already this year, several wildfires have broken out in areas of the state like Humboldt County, which is typically wet enough in the winter to mute any fire activity.

This of course is great news for America’s already reeling economy, not to mention its stock markets and earnings growth-less corporations: it means one more excuse can be added to the arsenal of scapegoating, because while the latest snowstorm will come and go, even if it should provide “economists” and “analysts” with another reason to ignore “weaker than expected” February data, the aftereffects of Calfornia’s drought will linger. And as everyone knows, Californians don’t buy houses, cars, iPads, burgers, clothing, and generically, stuff, when there is a drought raging.

So bring on the bad data, and let it all be explained away by California’s lack of snow, not to be confused with the overabundance of snow everywhere else.

via Zero Hedge http://ift.tt/1j81Aew Tyler Durden