Author: admin

Courtesy of the StealthFlation Blog

The zero sum game of competitive global currency devaluations is on like Donkey Kong.  Anyone still sleeping comfortably, confident that all will end well, best brace themselves for a resounding wake up call.  Japan just jacked the joint, and the jerry rigged monetary jig is up, as all the other Asian export economies are now promptly forced to keep up with their FUBAR neighbor, the utterly juiced Japanese Jones’.

Each Nation State in the Far East is now completely compelled to competitively devalue in tandem, in order to maintain export market share, in a desperate attempt to avert their outbound container super ship cargoes from running westwards on empty.

Throughout the new millennium, China has made great technological strides, repositioning itself away from a predominantly low tech manufacturing economy, towards a value added high tech producing exporter. In this capacity it has converged with Japan.  The Japanese, on the other hand, over the same time period, have seen both the Chinese, Koreans and the other Asian Tigers ravenously devour more and more Hamachi and California rolls, promptly snatched from their stale sushi shop lunch box.  Take one quick look at the above chart, and you tell me why Mr. Xi nearly gagged when shaking hands with Mr. Abe the other day.

 

The following excerpt from a Bloomberg article titled; Japan’s Export Reach Three Year Low as Recession Looms, published shortly before Abe’s December 2012 election, clearly outlined the sagging soggy sushi state of affairs:

Japan is suffering its worst year for exports since the global contraction in 2009 as Europe’s crisis, China’s slowdown and a diplomatic dispute with the Chinese hurt manufacturers and deepen the risk of a recession.

 

Shipments totaled 53.5 trillion yen ($653 billion) for January through October, down 2.3 percent from the same period in 2011, according to data compiled by Bloomberg from Finance Ministry figures released in Tokyo today.  The trade deficit for 2012 so far is a record 5.3 trillion yen.

The so-called hollowing out of Japan’s export champions, highlighted by a cut in Panasonic Corp. (6752)’s debt rating to one step above junk status by Moody’s Investors Service yesterday, underscores the urgency of kindling domestic demand. Japan’s political parties are facing off ahead of an election next month on how hard to press the central bank to boost stimulus.

 

Japan’s exports fell for a fifth month, hampered by trade tensions with China and weak demand in Europe, pushing the world’s third-largest economy closer to recession ahead of December elections.

No wonder the hapless Captain Abe, on his sinking sashimi ship, immediately pulled the ripcord releasing the emergency currency life boat, in a desperate effort to rapidly inflate the fiat rescue raft with fresh Yen air.  Can you really blame him?  After all, the Chinese have been buying a gazillion dollars’ worth of U.S. treasuries in order to suppress the value of their own Yuan for years now.

It was all good while Uncle Sam’s force fed extreme global trade imbalances were rocking and rolling on seemingly endless cheap U.S. credit, but that free ride has been bouncing along the bottom of the ocean these days, and may well be about to hit some very jagged rocks.  Be assured, extreme trade imbalances are not a good thing.  As Aristotle once said; Extremes are bad”. The massive capital and current account imbalances that global trading partners have been irresponsibly running over the past 25 years are coming home to roost.  The end result will be nothing short of shock and awe.

Ok, so we get the picture, all the nations on the Pacific rim side of the Globe are now locked into a monumental mortal martial arts fiat food fight for the ages.   As world’s GDP continues to falter, the gloves will come off, plates will start to fly, and eventually the zero sum situation will end up in crazed Kamikaze currency raids battling for each others industrial export capacity.  The trouble with all of this, of course, is that for the overall world economy it’s nothing short of committing Hari Kari.  Let’s move on to the west, and check in overthere, shall we.

Europe is certainly mired in what can only be viewed as a structurally cemented recession.  And guess what, the largest economic block on the planet exports a ton of stuff around the world.  So, like China, they too will get swamped by Admiral Abe’s crushing counterfeit currency wave.   In fact, the Eurozone actually exports more to the USA than China does.  Last year, the EU sent us a whopping total of just under $600 billion worth of merchandise, whereas the Chinese came in at a distant $440 billion.   Make no mistake, as the Pacific rim fake fiat food fight heats up, you can bet your bottom EURO that the Frogs and assorted Eurotrash will join right in, heaving their devalued moldy Camembert and debased wienerschnitzel right over the counter towards the others.

Where’s the end game in all of this you ask?  Well, so far, the USD seems to have dodged the flying currency cup cakes.  The strict adult monitor in the mess hall is not partaking in the flying fiat food fest. As such, many macro mavens are touting the second coming of king dollar as a sure sign of the rebirth of the renown American exceptionalismwhich has brought about yet another economic renaissance, fantastically fueled by an endless reservoir of ingenious technology and new found shale energy.   Myself, I wouldn’t break out the pompoms quite so fast.

The last thing the U.S. needs is more fast flying overseas capital piling into the dollar.  An appreciating dollar has several very serious unintended consequences.  Clearly, one issue is that it will create headwinds for the newly revitalized export sector which had been one of the substantive bright spot for the U.S. economy over the past few years.  Another, conundrum is that as the devalued overseas capital flows seek refuge in the USD from the deliberate debasement abroad, it will serve to only exacerbate the already frothy asset bubbles which have been steadily forming in most asset classes (Stocks, Bonds, Real Estate, Art, Collectibles….etc).

Finally, and most importantly, it will create a massive deflationary wave, which is the last thing the largest debtor Nation in the history of the planet needs.  In fact, this is the Fed’s worst nightmare,  as not only does it increase the real cost of our external sovereign debt, but also, it will further depress the velocity of money which already sits at historic lows.  And therein lies the rub.  How is the Fed going to achieve its wet dream of 2% inflation that it deems to be so crucial to generating the escape velocity that is essential for self sustaining economic growth?   I’m afraid, my friends, that the only answer the FED has in store for us will be more of the same.

Can you say QE 4.0?  Welcome to the Keynesian circle jerk end game.   Picture a dog chasing its own tail until it finally drops from exhaustion, let’s call our dog “Fido Fed”.

Les jeux sont fait, let the games begin.   Got Gold?

via Zero Hedge http://ift.tt/1xIHE7Y Bruno de Landevoisin

Submitted by Raul Ilargi Meijer via The Automatic Earth blog,

Dorothea Lange Negro woman who has never been out of Mississippi July 1936

Looks I have to return to the deflation topic. I’m a bit hesitant about it, because the discussion always gets distorted by varying definitions and a whole bunch of semi-religious issues. The Automatic Earth has for many years said that an immense bout of deflation is inevitable because of global debt levels, and it’s all only gotten a lot worse since we first said that. Our governments and central banks have ‘fought’ deflation with more debt, and that was always the stupidest idea in human history. Or at least, most of us were stupid for believing it would work, or was even intended to.

Just so we don’t get into yet more confusion, i probably need to explain that the debt deflation we’re talking about here is not some subdivision like consumer inflation or price inflation or cookie inflation, those are just hollow and meaningless terms. Debt deflation is deflation caused by too much debt, and the deleveraging it must and will lead to. Deflation does not equal falling prices, those are merely an effect of it.

The reason this matters is that when you equate inflation and deflation with rising or falling prices, you’re not going to be able to know when you actually have deflation. Because prices can rise for all sorts of reasons. Inflation/deflation is the money/credit supply in an economy multiplied by the speed at which money is spent in that economy, the velocity of money.

It should be obvious that prices for some items can still rise, certainly initially, when deflation sets in. Producers that see less sales can try to raise prices for their remaining buyers. Basic necessities will always be needed. Governments can raise taxes. Rising/falling prices tell us only part of the story, and with a considerable time delay.

Ergo: rising/falling prices are a lagging factor, and if you look at them only, you will have missed the point where deflation has set in. What follows, obviously, is that you can’t measure deflation by looking at consumer prices (CPI) or production prices (PPI) numbers. You’d be way behind the curve. CPI and PPI tell you something, but they don’t tell what causes falling or rising prices. And that is a valuable thing to know.

I see even John Mauldin in this week’s The Last Argument of Central Banks talk about ‘good deflation’, but that doesn’t exist any more than cookie inflation, sorry, John. Prices for some items may fall due to innovation etc. while an economy booms, but if you call that deflation, you’ll miss what’s really deflation when it arrives.

Deflation is always bad. It either occurs when money/credit is so short that people can not get their hands on it no matter how hard and productive they work, and how much demand there is for their products, or it occurs when people are too poor, too much in debt or too reluctant to part with what they have.

In a deflation, people spend only what they absolutely must, provided even that they can afford to, which leads to large swaths of an economy being liquidated. Falling prices lead to falling wages lead to ever further falling prices lead to factory closings lead to more people who can’t afford to spend which leads to closings which leads to less spending which leads to faling prices etc. This continues until the debt has been deleveraged. Governments will lose tax revenue and raise taxes, but soon enough they will in quick succession disband and be replaced, rinse and repeat until even essential services can no longer be provided.

Until recently, a shrinking money/credit supply was very clearly not in the cards. Central banks have gone absolutely nuts in their stimulus plans, and this has artificially kept price levels up somewhat, though far less than they, and scores of ‘experts’ had hoped and expected. Now that game, too, is up. Japan went crazier than ever the other day out of fear that falling oil prices would sink consumer spending even more, but the US Fed has cut QE. That is an admission it has failed to do what it officially was supposed to, not the sign of triumph it’s made out to be, as in ‘the economy is doing so well, it doesn’t need our support anymore’.

Central banks have spent like maniacs, and consumer spending only keeps falling. Just ask Japan. And while you’re at it, ask them how entrenched deflation can become even in an economy that still has the benefit of growing world market to sell its products in. We won’t have any such benefit. The world has stopped growing, and there’s no massaging of numbers left strong enough to hide it. Not that it won’t be tried. As I said earlier this week, we now live in a world built on debt and propaganda.

Since QE and other ‘plans’ never reached the real economy, most nations’ money supplies have also either fallen or at best remained stagnant. We have the perfect set-up for deflation, and we therefore have deflation. It hasn’t reached the US yet, though we should be careful with that because the numbers being reported are notoriously flaky. But it has reached Europe and Asia. Which means the US is only a matter of time. And people, reluctantly, start taking notice. Steve Hochberg and Pete Kendall penned the following for Bob Prechter’s Elliott Wave:

Deflation Rearing its Ugly Head in Subtle and Not-So-Subtle Ways Around the Globe

According to the latest figures, deflation is now perched on China’s doorstep. In September, China’s consumer price index was up 1.6%, but its producer price index fell 1.8%. The CPI increase was its lowest since 2010. [..] in September, demand for electric power, a “bellwether for China economic activity,” fell 8.4% from the prior month, the second straight monthly decline.

 

“Deflation is the real risk in China,” stated the chief economist at a Hong Kong bank. In Europe, deflation is no longer a possible risk; it’s reality. In September, eleven of fifteen European Union members experienced lower goods prices, and the latest quarter-over-quarter Eurozone growth in real GDP is zero.

 

With Alice-in-Wonderland naiveté, U.S. financial media place the United States outside the risk of global deflation. Headlines talk of “Mild Inflation” and insist that the U.S. will gain “From Good Deflation.” On October 14, Bloomberg reported that consumer spending is strong enough “to steer the U.S. economy safely through the shoals of deteriorating global growth and the turbulent financial markets.” In early September, we stated that it was only a matter of time before economic weakness and deflation (which will be anything but good) jump the Atlantic and Pacific oceans and arrive in the U.S.

 

According to the U.S. Labor Department, real wages for full-time employees averaged $790 a week in the third quarter, about $1 less than in the third quarter of 2007. “There’s been no net gain for workers since 1999.” In recent months, spending has been uneven. Retail sales fell 0.3% in September. Most economists are baffled: “one of the great mysteries is why the U.S. has lacked inflation despite all the money being pumped into the economy.” A study by the St. Louis Fed finds that the answer is “a dramatic increase in the private sector’s willingness to hoard money instead of spend it.”

Note: the ‘hoarding meme’ is habitually used by economists, re: Bernanke and his Chinese savings glut, to point out situations which are more often than not characterized by people being too poor to spend, not sitting on anything at all. For economists, if people don’t spend, it must be because they save, never because they’re poor. I kid you not.

For years now, the Fed along with most economists have anticipated the imminent return of inflation, but it continues stubbornly subdued. This long-term chart above of the CPI shows a succession of lower highs since the early 1980s, as inflation turned into disinflation, which is on the cusp of leading to outright deflation. Some argue that the CPI is rigged to show milder levels of inflation, but the bottom graph shows the same steady move toward the zero line in the Personal Consumption Expenditures Index, an alternate inflation measure favored by the U.S. Fed.

 

When outright deflation hits, recognition of it will play an important role. Once its presence becomes widely observed, investors and the debt markets will belatedly take defensive action. Eventually, notes Conquer the Crash, “default and fear of default exacerbate the trend as it causes creditors to reduce lending. A downward ‘spiral’ begins feeding on pessimism just as the previous boom fed on optimism.”

Moving from theory to practice, we end up with our old friend Ambrose. Though he confuses inflation and consumer prices, and thinks they’re one and the same thing, he does have useful numbers:

Spreading Deflation Across East Asia Threatens Fresh Debt Crisis

Deflation is becoming lodged in all the economic strongholds of East Asia. It is happening faster and going deeper than almost anybody expected just months ago, and is likely to find its way to Europe through currency warfare in short order. Factory gate prices are falling in China, Korea, Thailand, the Philippines, Taiwan and Singapore. Some 82% of the items in the producer price basket are deflating in China. The figures is 90% in Thailand, and 97% in Singapore.

 

These include machinery, telecommunications, and electrical equipment, as well as commodities. Chetan Ahya from Morgan Stanley says deflationary forces are “getting entrenched” across much of Asia. This risks a “rapid worsening of the debt dynamic” for a string of countries that allowed their debt ratios to reach record highs during the era of Fed largesse. Debt levels for the region as a whole (ex-Japan) have jumped from 147% to 207% of GDP in six years.

 

These countries face a Sisyphean Task. They are trying to deleverage, but the slowdown in nominal GDP caused by falling inflation is always one step ahead of them. “Debt to GDP has risen despite these efforts,” he said. If this sounds familiar, it should be. It is exactly what is happening in Italy, France, the Netherlands, and much of the eurozone. Data from Nomura show that the composite PPI index for the whole of emerging Asia – including India – turned negative in September.

 

China itself is now one shock away from a deflation trap. Chinese PPI has been negative for 32 months as the economy grapples with overcapacity in everything from steel, cement, glass, chemicals, and shipbuilding, to solar panels. It dropped to minus 2.2% in October. The sheer scale of over-investment is epic.

 

The country funnelled $5 trillion into new plant and fixed capital last year – as much as Europe and the US combined – even after the Communist Party vowed to clear away excess capacity in its Third Plenum reforms. Old habits die hard. Consumer prices are starting to track factory prices with a long delay. Headline inflation dropped to 1.6% in October. This is so far below the 3.5% target of the People’s Bank of China that it looks increasingly like a policy mistake. Core inflation is down to 1.4%.

 

China has flirted with deflation before: during its banking crisis in the late 1990s, and again during the West’s dotcom recession from 2001-2002. Both episodes proved manageable. This time the level of debt is greater by orders of magnitude, with a large chunk in trusts, wealth products, and other parts of the shadow banking nexus, and a further $1.2 trillion in “carry trade” loans from Hong Kong.

 

Standard Chartered thinks total debt has reached 250% of GDP. This is roughly $26 trillion, the same size as the US and Japanese commercial banking systems put together, and therefore a headache for us all. Larry Brainard from Trusted Sources says China is sliding towards a European debt-compound trap. “It’s arithmetic.Deflation will kill you if you’re leveraged. It is just a question of how quickly. We don’t know how big the problem is because China is playing a game of three-card Monte and moving the debt to different buckets,” he said.

 

Asia is not yet in a full-blown currency war, but no country can stand idly by as neighbours dump toxic deflationary waste on their front lawn. Korea has threatened to force down the won, pari passu with the yen. The central bank of Taiwan has been intervening. These skirmishes are happening in a region of festering grievances and territorial disputes, with no Nato-style security structure – or for that matter EU-style soft governance – to damp down fires.

 

[Chinese] purchases of foreign bonds have dropped to zero, down from $35bn a month at the start of the year. The yuan has appreciated 22% against the yen since June, and 50% since mid-2012. It is up 12% against the euro since the early summer. China is in effect strapped to the rocketing dollar through its quasi-peg, increasingly a torture machine.

 

George Magnus from UBS says this cannot continue. “What is happening in the property market is the tip of the iceberg for the whole economy. China will have to resort to monetary reflation over the winter, and I think this will include a lower yuan. We are heading into a currency war,” he said.

We have the debt. And we recognize it. Still, the line politics and media feed us is that more debt can be a good thing, that we need more debt in order to attain what they like to call ‘escape velocity’ from the financial crisis caused by that same debt. Oil on fire.

We have the propaganda. We don’t always recognize it for what it is, but the, that’s the idea, isn’t it? It’s to make people think that things are not really what they really are. That we need to spend more public funds on saving banks, not saving people, or else armageddon. There’s hardly a news story left today that is not to an extent phrased by propaganda.

And now we have deflation. Which is not the falling prices, though they are a – delayed – symptom. Still, other symptoms are as valid, as nobody is spending. Mass unemployment in southern Europe is a symptom. West Texas oil at $74 dollars today is one. The Chinese economy, allegedly still growing at $7.5%, but at 250% debt-to-GDP, is another. Throw in 207% debt-to-GDP debt levels across southeast Asia.

With deflation becoming a daily topic in our propagandistic media, despite the fact that governments and central banks are vehemently allergic to it (for good reasons), rest assured that we are entering a next phase of the crisis. Just not one that they would like you to think we are. When debt starts being deleveraged for real, deflation cannot be avoided. And debt must be deleveraged, we can’t sit on it till Kingdom Come and keep adding more while we’re at it. That was never in the cards. And we’ve accumulated too much of it to ever outgrow it. We simply can’t sell or make enough iPhones to accomplish that. Or eat enough burgers, hard as we try.

Our world, our life, has been built on debt and propaganda for many years. They have kept us from noticing how poorly we are doing. But now a third element has entered the foundation of our societies, and it’s set to eat away at everything that has – barely – kept the entire edifice from crumbling apart. Deflation.

It’s time to check where your basic needs will come from when it becomes first harder and them impossible to obtain them from the sources you have been used to. And please, get out of debt. Debt during deflation is a cruel and unforgiving mistress. Think of deflation as a biblical plague.

via Zero Hedge http://ift.tt/1y37yBn Tyler Durden

Following last week’s (humiliating for the US) APEC meeting in Beijing, in which the BRIC nations clearly distanced themselves from the “developed world” and the topic of the “Russian invasion of Ukraine” was largely missing as it is clearly not in the interest of the Pacific nations to warmonger when the two key nations, Russia and China are obviously not complying with the western media ‘straight to populism‘ narrative, it was time for another major world summit, this time in the quite “western” Brisbane, Australia.

It was here that the G-7 part of the G-20 nations seized the opportunity to quickly pivot against Moscow and remind Europe that the reason why Europe is in a triple-dip recession (if one removes the GDP “boost” from hookers and blow) is because of Russia’s “take over” of east Ukraine, ignoring the reality that it was the US State Department’s Victoria Nuland that incited the Kiev coup and the west that imposed the “costly” sanctions on Russia which have hurt Germany and Europe just as badly. This was all largely lost on the local, as outside the summit, Ukrainian Australians staged an anti-Putin protest, wearing headbands reading “Putin, Killer”.

It was a full court press from the start: as the NYT reports, “at a speech at a university in Brisbane, Mr. Obama called Russia’s aggression against Ukraine a “threat to the world, as we saw in the appalling shootdown of MH-17, a tragedy that took so many innocent lives, among them your fellow citizens,” a reference to the Australian citizens and residents who were killed when Malaysia Airlines Flight 17 went down in eastern Ukraine.

“As your ally and friend, America shares the grief of these Australian families, and we share the determination of your nation for justice and accountability,” Mr. Obama said.”

This charade was set to continue Sunday, when leaders from the European Union planned to meet with Mr. Obama to discuss Ukraine, among other issues, said Herman Van Rompuy, the president of the European Council. He said the European Union was committed to finding a political solution to the crisis.

“We will continue to use all the diplomatic tools, including sanctions, at our disposal,” he said.

Indeed, as Reuters adds “Western leaders warned Vladimir Putin at a G20 summit on Saturday that he risked more economic sanctions if he failed to end Russian backing for separatist rebels in Ukraine.”

But perhaps the best confirmation that all the G-20 meeting was nothing but a giant populist photo-op comes from Bloomberg which reports that “Russian President Vladimir Putin got a blunt message when he approached Canadian Prime Minister Stephen Harper for a handshake at today’s Group of 20 summit in Brisbane, Australia.

“I guess I’ll shake your hand but I have only one thing to say to you: you need to get out of Ukraine,” Harper told Putin, the prime minister’s spokesman Jason MacDonald said in an e-mail.

Putin’s response to the comment wasn’t positive, MacDonald said, without elaborating. Putin and Harper talked briefly, according to Putin’s spokesman Dmitry Peskov.

“Indeed Harper told Putin that Russia should leave Ukraine,” Peskov said by phone today in Brisbane. “Putin told him that this is impossible because they are not there.”

Asked about the tone of the meeting between the two leaders, Peskov said “it was within the bounds of decency.”

Say no more.

Russian President Vladimir Putin, right, walks past Canadian Prime Minister
Stephen Harper, left, during a welcoming ceremony at the G-20 summit in Brisbane.

Yet at the end of the day, captioned photo-op or not, one wonders how much of all the front-page drama is even remotely real when every single time the west goes on the “offensive” against Putin with “costs” just to have a convenient scapegoat for Europe’s ongoing depression, one hears in the back of one head the following exchange:

Obama: “This is my last election. After my election I have more flexibility.”

Medvedev: “I understand. I will transmit this information to Vladimir”

via Zero Hedge http://ift.tt/1sTPc1s Tyler Durden

Dispatches from Occupied Territory – Awakening Alone While in a Relationship

By

Cognitive Dissonance

 

 

You will always find original articles by Cognitive Dissonance and other authors first on www.TwoIceFloes.com before they are posted here on ZH.

To become a Premium or Basic member click here. If you wish to subscribe to ‘Dispatches’, a periodic newsletter from Cognitive Dissonance and TwoIceFloes Creations, please click here.

 

 

 

This is the fourth in a series of fictional explorations into an individual’s awakening to the suddenly unfamiliar world around and within her while still engulfed by the day to day insanity. These short stories in letter form are intended for the more sensitive and inquisitive reader who wishes to look more deeply within and explore in depth their beliefs and perceptions as well as how to cope with a world gone frighteningly mad. It is the author’s hope to accomplish this by way of an intimate and revealing first person correspondence between two long time friends as they discuss her ongoing awakening. The first three chapters may be found here.

 

Dear Marie,

It saddens me deeply to find you so distressed. Your last letter detailing the deteriorating relationship with your husband was heartbreaking and so very familiar to me. You may remember my divorce several years back after seventeen years of marriage. While we maintained the public façade of an inmate and loving couple, beneath the surface great rifts had formed and eventually we decided to part ways. So I can identify with everything in your letter and more, having experienced it firsthand.

One of the first lessons I failed to learn in my ongoing awakening was there are multiple layers, blind corners and dark alleys to transit and I had only just begun the process. So the fact I thought I was pretty well versed in not only the external illusion, but the accompanying internal self deception, simply set me up for the next soul crushing fall into the abyss. Only later did I find out this was normal for an early awakening and something to watch for.

I often wonder if it is this reinjuring of the psyche so soon after the initial wounding that sends so many newly awakening into a self defeating spiral of cynicism, depression and isolation. If nothing else it most certainly is damaging, sometimes fatally so, to any personal (and professional) relationship we may presently be involved in. Sadly our culture is full of psychological and emotional instruction manuals for those descending into the social insanity and precious few for those attempting to break free.

In keeping with my theme of the need to gain a greater perspective before attempting to understand, it would help if we pull back and walk a few miles in your husband’s shoes. One of the dangers we experience during first light, that period of time when we initially recognize all is not as it appears, is the problem of self induced tunnel vision. Because we are trying to take in so much so quickly we fail to see anything with clarity, thus we develop a form of tunnel vision to cope with the onrush of new information. Maybe a better phrase to explain this might be selective vision.

Instead of broadening our perspective with this new perception and awareness, it is as if we don dark glasses and everything we perceive is run through this filter. While we might feel it justified, often we judge others’ actions based upon whether we feel they are ‘aware’ or not. Just because someone is still ‘asleep’ doesn’t necessarily invalidate their perspective. As well, just because we are awakening does not mean we see clearly and correctly. It is because of this flaw that we sometimes needlessly dismantle or even sabotage relationships. It is important to recognize our critical part in this unraveling if we are to properly deal with it. 

During the period when we are courting or dating many unspoken mutual understandings and agreements are formed and cemented. We might call this psychological phenomenon ‘compatibility testing’ or ‘harmonizing’. While we might agree this is an important prerequisite to a long lasting and satisfying relationship, rarely do we actually examine what is going on under the surface.

Those who have little in common with their partner often run into severe difficulties at various points in the future, particularly during times of stress. A common refrain from those who are awakening is they suddenly find themselves living with someone they no longer ‘know’. Rarely do they understand their partner may actually feel the same way.

If the initial attraction between two people is sexually based, rather than similarities and commonalities, many differences are ignored or papered over as not important or immaterial to furthering the physical relationship. Later, after the initial rush of emotional attachment has subsided, these differences rise to the surface to disturb the peace. This doesn’t mean long term relationships are the epitome of compatibility and congruency. In practice the reality is often the opposite.

While courting, particularly long term courting, we are constantly assessing if our potential partner is a good fit. When a difference is recognized or confronted, an assessment, often unconsciously or semi-consciously, is made as to the importance of the incompatibility. “Can I live with this?” is one way it might be verbalized if we were bold enough to say so. Of course we do not speak this truth because our self interest dictates we not discuss potentially inflammatory subjects with a prospective mate. 

What courting boils down to is a contract-for-services negotiation, some of which is verbalized with the potential partner and some unspoken with and within ourselves. As dry and unemotional an assessment as this is, when seen in the light of day and from a non emotional basis this is precisely what it is. When the contract is signed, either through the public spectacle of a religious/state sanctioned marriage or, as is increasingly more common these days by simply cohabiting together, essentially we are promising to commit to something we may not have fully examined or thoroughly thought out.

 

 

Oftentimes we assume (and I use the term ‘assume’ even if this part of the contract negotiation is verbalized and formalized) either no unilateral changes will be made to the contract conditions agreed upon or they will be discussed and agreed upon before being implemented by one or the other of the partners. It is here where tensions exist and problems arise, particularly when the ‘honeymoon period’ has ended and reality presents, warts and all.

Please understand that sometimes the ‘other’ person has not actually changed or made any changes to the contract conditions. Rather, what is actually going on here is our own reassessment of conditions previously considered ‘livable’ or not important. How often are we surprised or even shocked to discover our partner holds this or that view or perspective? Maybe they chew with their mouth open, are messy and unkempt or they are spendthrifts and reckless with money. Unless outright deception was involved, this ‘new’ discovery is evidence of a failure on our part to see reality for what it is, a self awareness often hidden by our ego.

Obviously Marie this is an imperfect one-size-fits-all description that fits no one perfectly but applies to everyone generally. In practice the negotiation is ongoing even after the signing, and contract conditions are always morphing and ever changing. It is with this in mind that I ask you to reach for perspective, even if it is contrary to your perception of you being the victim and your husband the perpetrator.

From his point of view you are the moving party here, the one who has unilaterally violated the terms of the contract without prior discussion, negotiation or agreement. Considering the tectonic reverberations your awakening has caused you personally, imagine what it must be like to be your husband and suddenly witness huge changes in you, particularly if those changes are contrary to the consensus belief of the majority of the population and to those expressed by you prior to your awakening.

Taking into consideration the fact you have been married nearly two decades, thus both of you are experienced with the ebb and flow of any long term relationship, based upon your description he most likely initially viewed your changes as simply transitory and was waiting for ‘normalcy’ to return. When after a period of time you did not ‘return’ I suspect his internal alarm bells and sense of outrage over the one sided changes have led to the series of confrontations on his part you describe in your letter. He wants to know what the hell is going on and when you’re going to be done with ‘this silliness’.

You may recall in an earlier letter my description of your inner fear projecting into your conversations with those you are attempting either to warn or simply to explain what is, and has been, happening to you. No doubt your husband senses your fear which concerns him greatly and adds to his belief that something is deeply wrong with you. While at first he showed great patience when dealing with you out of love and affection, this has now morphed into his own fear of loss and sense of violation.

Since you still go to work, run the household and conduct yourself in so many other ways considered ‘normal’ in today’s world, at this point he is beginning to wonder if you may not be readying to leave him for someone else. This is why he is directly asking if you are cheating on him behind his back. In his mind, since what you are telling him about your awakening makes no sense what-so-ever, from his point of view the only other thing it could be is an affair or some other type of deception.

As well because he also senses the world taking a turn for the worse, yet there isn’t something quantifiable and widely accepted by the culture with which he can grasp upon as proof his own concerns are valid, your ‘illness’ (his words) is what he points towards as the problem with the marriage and his world. Denial tends to push the mind outward searching for scapegoats lest it linger too long looking within and chance the discovery of the true source of our inner distress. The more certain someone is about how the world works and the source of their problems, the less likely they will be to search within themselves for the root of their problems.

Keep in mind deep within our ‘self’ the truth is always known, even if only on a subconscious level. We pile layer upon layer of dirt, mulch, rocks and debris on top to prevent it from escaping into our conscious mind, though there are constant leaks which lead to cognitive dissonance. If these leaks were to become a flow, the condition would demand resolution requiring a complete reassessment of our worldview, precisely what you are presenting undergoing and which you recognize is extremely destabilizing and quite distasteful.

Knowing what you now know, are you surprised in the least we would go to nearly any length to remain in a state of self induced ignorant bliss? In so many ways, when asleep we are very similar to a drug addict seeking a fix and relief from the pain, though for us the drug of choice is denial and the high is the ignorant bliss of self deception.

 

 

The secret to this psychological sauce is we are never fully and truly asleep. Rather we have constructed a carefully compiled worldview that takes into account many of the constantly changing variables the world presents on a daily basis. Now that our awakening is beginning to take hold we can clearly see the contradictions, illogic, deception and fraud that permeate the system and the people. To those of us who go through life asleep we only see what we wish to see and ignore or rationalize away the rest. While imperfect, it ‘works’ because we wish it to work.

It is as if we were previously tuned to a narrow radio frequency and missed ninety five percent of what was being broadcast on other channels. But now we have a wide band radio and receive nearly every channel, though we still lack the ability to fully discern and differentiate the different messages. Your husband still operates on a narrow band receiver and is baffled by your (in his mind) garbled recital of what you are hearing, seeing and thinking.

Please understand that most of his directed anger is actually carefully disguised fear, both of what it is you seem to know and what it is he appears to be missing in your eyes. He doesn’t know what is going on with you and despite his protestations otherwise does not want to know what is going on with you. He just wants the old Marie back and his life to return to ‘normal’. In many ways he thinks he is sleeping with the enemy in the same way you feel you are.

Most certainly neither of you ‘knows’ each other anymore, though in fact you never really did to begin with. At best you knew what each of you exposed to each other as part of the greater challenge of living within a world beset by (self) deception, fraud and The Big Lie. In an insane asylum exactly how well can anyone ‘know’ anyone else when they have not begun to know themselves? Not well I’m afraid.

So where does this leave you Marie? Well first off, not alone by any means since there are hundreds of thousands of individuals just like you who are also struggling to cope with relationships both personal and professional while also nurturing their own awakening. If I were to give any advice it would be this. To go forward from here you need to do two things.

1)   Determine what you need to do regarding changes in your life right now. As I have spoken about before, there is a world of difference between needs and wants. Because you are on high alert, regardless of how your husband may be reacting, you feel danger is present and in close proximity. In so many ways this changes your demeanor and aura and those who know you sense the change in you and are on the defensive.

Consider that in his eyes you are the moving party so his position is somewhat justified regardless of his state of awareness in relation to yours. Since you have made most of the unilateral changes to the mutual agreement by awakening, it behooves you to make the first gesture towards reconciliation if this is what you want to do. If not, you need to be just as upfront about your unwillingness to do so.

You cannot have your cake and eat it too Marie. You state the desire to cease self deception as soon as you become aware of it and I commend you for your efforts. But if you wish the relationship to remain in place you must make compromises you might find distasteful. If you are dishonest with yourself with regard to whether you can become comfortable with that type of decision you are only hurting yourself, your husband and your children.

This is why I speak of becoming centered and settled before any decisions are made about your future. Based upon our prior conversations I know you are making great strides in this direction, but you also know much work remains. This is a moment of truth for you and you know this to be true. There is no ‘right’ decision here, only a decision that is true to your ‘self’. Find that ‘self’, then make those decisions.

 

 

2)   Sit down with your husband and, in a non threatening manner, carefully and calmly speak to him about your relationship past, present and future. Acknowledge the fact you have changed, but refrain from talking about collapsing currencies, government lies and so on for doing so just muddies the waters and charges the emotions. Once either you or your husband becomes emotionally charged all logic, reason and potential compromise goes out the window while hurt and anger takes its place.

You might need to do this over several sessions since judging from your letter so much has not been said for so long that much will be said by both before you are able to clear the table enough to get down to the substance that matters, your relationship. Do not expect him to ‘see’ or understand your point of view nor vice versa. The real question here is simple. Are both of you willing to make enough changes in yourself and accept enough of each other to mend the rift and find value and love once again in each other?

A critical mistake I continue to make is to see the world through black and white filters. As much as I claim to now see the artificial polarity foisted upon the world in order to divide and conquer the population, unfortunately I do the same thing and think it completely reasonable. Just because I now claim to see clearly does not mean my partner must do so as well in order for the relationship to work. Why am I demanding change in my partner when I would object if the demands were reversed?

One of the personal (one could rightly say intimate) needs filled by our partner is their affirmation and confirmation of our ‘self’. This is part and parcel of our need for some sort of compatibility, of a sameness or similarity we crave if we are to return the affirmation. This is a form of codependency that often expresses in a destructive manner when we require validation of our own state of denial. It was only after my divorce did I clearly see my unreasonable demands for validation of my awakening while refusing to validate her continuing slumber. Not only did I stop affirming my wife’s self image, but I demanded she acknowledge my changes and that she change her ‘self’.

Seen from this perspective, of course my marriage ended in acrimony and heartache, particularly since I made no effort to meet her halfway and instead demanded near total capitulation and unilateral change from her. While I made all the proper noises promising compromise and consideration on my part, in fact my demands needed to be met before I would fulfill my own promises. Worse, I felt justified since in my egoic self righteous point of view she refused to acknowledge I was right and she was wrong.

While I fully appreciate you are not as extreme as I was, surely you must see parallels between my mistakes and what is going on in your life. This is not to say you must make amends with your husband, only that you need to recognize the unfair conditions you have imposed upon the relationship. I understand your complaint that to continue to live with your husband means enabling his worldview and way of thinking, not because you wish to enable, but because he will expect you to at least tolerate his point of view which in a co-dependent relationship is the functional equivalent to enabling. And to be independent means you must shed co-dependent relationships whether personal or professional.

Ultimately you must decide if the benefits of maintaining your marriage outweigh the cost, which means you must examine what your marriage was previously based upon, what if anything is salvageable and whether you can still be fulfilled with less than you wish to receive. The key here is to see that the answer is not black and white, all or nothing unless you decide it needs to be. You can allow yourself some flexibility here while still being true to yourself so long as your intent is grounded and your actions are not self deceptive or co-dependent. 

Just like you, early on I found the insanity I was just beginning to fully recognize was extremely seductive, inviting and alluring. As much as I wished to move towards sanity, now that I had begun to walk the path, similar to a clean and sober addict I often craved a return to the soothing bliss of ignorance, the fuzzy numbness derived from my unaware stupor washing away any feelings of fear or alarm. I so wanted the hard edges of the world to melt away, allowing me to drift in feigned indifference and disbelief that life’s facade really was fake and fraudulent.

So I fully understand your point of view when you say to remain with your husband is to dance with the devil, a seduction so strong you are presently uncertain you will be able to resist. This is precisely why I isolated after my divorce, to heal and grow before I once again ventured out to slay my inner dragons. But to this day I am uncertain if this was the proper path to follow. While I was able to heal some of my wounds I missed out on some badly needed on-the-job training of how to live among the insane while retaining my own growing sanity. It is all just an intellectual exercise until the first time we meet the monster face to face and attempt to co-exist.

Ultimately only you can be the judge of your needs and wants. Because one of your children is already off the college and the other only a year away, any decision you make here should not be clouded by the fear you will harm your children by leaving, or staying, in the marriage. Others in your situation are not so lucky, though I am not sure if ‘luck’ is the proper term to use here.

If I may add one more piece of advice; whatever decisions you make over the next few weeks or months are only as permanent as you wish them to be. One of the biggest lies of the Big Lie is insidious in its simplicity. We are conditioned to believe certainty is of the utmost importance and to exhibit indecision or to change our mind is a sign of moral weakness or immaturity. Among other things this mind meme is designed to trap us inside the insanity by limiting our choices and constricting social acceptance of nonconformity and independent thinking. Once we embody the antithesis of this mind virus we have truly begun to walk the path of our awakening.

Beside you always,

 

Jonathan

_______________

 

Cognitive Dissonance

11-15-2014

 

via Zero Hedge http://ift.tt/14rv16q Cognitive Dissonance

Submitted by Martin Armstrong via Armstrong Economics blog,

 

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

Back in July we wrote “Slamming The Door Shut On The “Plunging Labor Force Participation Rate” Debate Once And For All“, in which we showed, definitively we thought, that contrary to the pervasive and erroneous propaganda, the collapse in the labor force has little to do with the alleged millions of retiring baby boomers (quite the contrary: as a result of ZIRP crushing their lifetime savings, baby boomers have been forced to remain in the workforce in ever greater numbers) and everything to do with the lack of employment opportunities, or perhaps an unwillingness to work, for young Americans.

As the Census Bureau said then:

“In 2010, 16.2 percent of the population aged 65 and over were employed, up from 14.5 percent in 2005. In contrast, 60.3 percent of the 20 to 24 age group were employed in 2010, down from 68.0 percent in 2005. Employment shares declined from 2005 to 2010 for all age groups younger than age 55. There was no statistical change in the employment share for workers aged 55 to 64 nor those aged 70 to 74. Engemann and Wall (2010) found that more people aged 55 and over were employed during the recession than would have been if there was no recession. Using the Bureau of Labor Statistics employment data, Engemann and Wall found that during the 2007–2009 period, employment grew by 7.4 percent for the population aged 55 and over. Based on trends prior to the recession, employment for this age group was expected to grow by only 6.1 percent. All younger age groups experienced a decline in employment during the same 2007 to 2009 period.”

 

Our punchline was simple: “dear US “retirees” – if you want to mitigate the impact of the US depression and the loss of savings income courtesy of the Fed’s ZIRP policy, all you have to do is, well, work until you die.“

And yet, the very serious narrative that the labor participation rate is at a 36 year low is primarily due to such benign factors as demographics and retiring workers continues, with few if any mainstream outlets daring the challenge the econo-dogma.

So here, to help clear the confusion once again, is the Pew Research Center which also has cracked the numbers and done the math. Its punchline:

You might think legions of retiring Baby Boomers are to blame, or perhaps the swelling ranks of laid-off workers who’ve grown discouraged about their re-employment prospects. While both of those groups doubtless are important (though just how important is debated by labor economists), our analysis of Bureau of Labor Statistics data suggests another key factor: Teens and young adults aren’t as interested in entering the work force as they used to be, a trend that predates the Great Recession.

And just what is enabling the young adults to be “not as interested in entering the work force as they used to be” and to lead to a misleadingly low unemployment number? This.

* * *

So just in case there is still confusion, here is the full note from Pew:

More and more Americans are outside the labor force entirely. Who are they?

According to the October jobs report, more than 92 million Americans — 37% of the civilian population aged 16 and over — are neither employed nor unemployed, but fall in the category of “not in the labor force.” That means they aren’t working now but haven’t looked for work recently enough to be counted as unemployed. While that’s not quite a record — figures have been a bit higher earlier this year — the share of folks not in the labor force remains near all-time highs.

Why? You might think legions of retiring Baby Boomers are to blame, or perhaps the swelling ranks of laid-off workers who’ve grown discouraged about their re-employment prospects. While both of those groups doubtless are important (though just how important is debated by labor economists), our analysis of Bureau of Labor Statistics data suggests another key factor: Teens and young adults aren’t as interested in entering the work force as they used to be, a trend that predates the Great Recession. 

By far the biggest chunk of people not in the labor force are people who simply don’t want to be, according to data from the monthly Current Population Survey (which the BLS uses to, among other things, calculate the unemployment rate). Last month, according to BLS, 85.9 million adults didn’t want a job now, or 93.3% of all adults not in the labor force. (All of the figures we’re using in this post are unadjusted for seasonal variations.)

But let’s look in particular at the youngest part of the eligible workforce. The share of 16- to 24-year-olds saying they didn’t want a job rose from an average 29.5% in 2000 to an average 39.4% over the first 10 months of this year. There was a much smaller increase among prime working-age adults (ages 25 to 54) over that period. And among people aged 55 and up, the share saying they didn’t want a job actually fell, to an average 58.2% this year.

People 55 and over do, as you might expect, account for more than half of the 85.9 million adults (as of October) who say they don’t want a job — about the same percentage as in 2000. But the 16-to-24 share has edged higher, while the 25-to-54 share has slipped. That could reflect more young adults staying in or returning to school rather than chancing a tough job market.

Women are more likely than men to say they don’t want a job, although the gap has been narrowing — especially since the Great Recession. Last month, 28.5% of men said they didn’t want a job, up from 23.9% in October 2000 and 25.2% in October 2008. For women, the share saying they didn’t want a job hovered around 38% throughout the 2000s but began creeping up in 2010, reaching 40.2% last month.

Researchers disagree about why people leave the labor force and how likely they are ever to return. In a report issued in February, the Congressional Budget Office estimated that about half the decline in labor-force participation was due to long-term demographic trends, a third was due to cyclical weaknesses in the labor market, and the rest a consequence of “unusually protracted weakness in the demand for labor [which] appears to have led some workers to become discouraged and permanently drop out of the labor force,” such as by taking early retirement or signing up for Social Security disability benefits. But two Federal Reserve economists have argued that cyclical factors, rather than demographic shifts, account for the bulk of the drop in labor-force participation since 2007.

Economists are especially interested in the subset of non-participants who are considered “marginally attached” to the labor force. Those people aren’t counted as unemployed, because they haven’t looked for work in the past four weeks, but they have job-hunted sometime in the past year and say both that they want a job and are available to take one right away. Many labor economists believe marginally attached people are most likely to be drawn back into the labor force.

The number of discouraged workers — those who’ve not searched for work recently because they don’t think they’ll find any — spiked during and after the Great Recession, peaking at 1.3 million in December 2010. Though that number has come down since, October’s estimate of 770,000 discouraged workers was still well above pre-recession levels, which typically hovered around 400,000 to 500,000.

But discouraged workers make up only about 35% of all marginally attached workers, and account for just over half the increase in their ranks since the 2008 financial panic. The rest of the marginally attached cite a range of reasons for not having looked for work recently, including family responsibilities, being in school, ill health, and problems with child care or transportation.

via Zero Hedge http://ift.tt/1q46BKd Tyler Durden

While most people’s attention has been focused on the demise of the Russian Ruble this year, since the June highs in Crude Oil, the oil-producing nations of the world have seen their currencies devalue rapidly. From Brazil to Nigeria and Algeria, the impact of lower oil revenues is starting to create a vicious circle for many of these nations… and having consequences for the very Petrodollar flows that the US relies upon…

 

 

Mission Accomplished – if the goal was crashing Russia’s Ruble – but the consequences of the collapsing Petrodollar flows (as we noted here) may wellcome back to bite…

 

As we concluded previously,

• The stronger US dollar is having an inverse impact on dollar-denominated commodity prices, including oil. This will affect emerging market (EM) credit quality in various ways.
• The implications of reduced recycled petrodollars has significant ramifications for financial markets, loan markets and Treasury yields. In fact, EM energy exporters will post their first net drain on global capital (USD8bn) in eighteen years.
• Oil and gas exporting EMs account for 26% of total EM GDP and 21% of external bonds. For these economies, the impact will be on lost fiscal revenue, lost GDP growth and the contribution to reserves of oil and gas-related export receipts. Together, these will have a significant effect on sustainability and liquidity ratios and as a consequence are negative for dollar debt-servicing risks and credit ratings.

In other words, oil exporters are now pulling liquidity out of financial markets rather than putting money in. That could result in higher borrowing costs for governments, companies, and ultimately, consumers as money becomes scarcer.

via Zero Hedge http://ift.tt/1tUNY66 Tyler Durden

 

It is beyond dispute.  The US dollar is in a powerful bull run.  There are two main drivers, and their ability to dominate the price action varies according to the news stream.  The first is constructive economic news from the US that reinforces ideas that the Fed will likely raise rates next year.

 

The second driver is what is happening in the other key centers.  This is the aggressive monetary easing by the Bank of Japan and the diversification by Japanese pension funds.  It is also the trajectory of the ECB’s monetary policy, with the range of assets it is buying likely to increases over the next few months.  This driver also includes the loss of momentum in the UK economy and later and slower tightening cycle than previously anticipated.  

 

The year-to-date performance of major foreign currencies may surprise many casual observers.  The weakest currencies are not the euro and yen, which are both down around 9.7%.  The Swedish krona has seen the largest depreciation, falling 13.4% so far this year, followed by the Norwegian krone, which has fallen about 10.4%.

 

In the past week, it was the yen and sterling that led the declines, both with about a 1.3% loss. The yen is being pushed lower by the diversification of Japanese savings overseas.  Stepped up foreign purchases of Japanese assets, especially stocks, appears be largely transacted on a currency-hedged basis.

 

The US dollar finished the week above JPY116.00.  Like many we were surprised by the aggressiveness of the BOJ and GPIF.  We now see potential for the dollar to move toward JPY120 over the month or two.  Support is pegged in the JPY115.00-50 area.  Last week, we had noted that the greenback was flirting the upper Bollinger Band.  However, the higher volatility means that the two-standard deviation band is considerably wider.  The upper band now is near JPY118.85.

 

For its part, sterling stabilized in first half of last week, but the dovish Quarterly Inflation Report pushed it over.  It fell around 2% in the last three sessions.  The report warned of the risk that inflation falls below 1% over the next six months.  Investors knew this meant a later start to the rate hiking cycle.

 

Sterling briefly dipped below $1.56.  Although the $1.55 level is the next target, there is scope to test the (potential) trend line connecting the 2010 and 2013 lows, which comes in below $1.5100. That said, sterling has pushed through its lower Bollinger Band near $1.5675.  The Bollinger Band may move toward prices , especially if, as we suspect, this area, which extends to $1.5720 acts as resistance.  

 

The euro was confined to a little more than a 1.25-cent range over the past week.  The sideways consolidation helps ease the technically over-extended market, but the absence of the proper upside correction is a testament to the extent of bearish sentiment.   We do not read much into the outside up day recorded before the weekend.  The $1.256-70 area like denotes the near-term ceiling. It corresponds to a retracement objective of the down move since October 15 and the 20-day moving average, which the euro has not closed above for more than two weeks.   The downside opens up on a break of $1.2360, the recent low.  The immediate target would be $1.22, but many have their sights set on $1.20 before the end of the year.

 

The Australian dollar fell to three-day lows before the weekend, but recovered to finish near its session high and above the 20-day moving average near $0.8735.  We are watching the price action around the downtrend line drawn off the September 5 high (~$0.9400), the October 29 high (~$0.8910).  It caught the November 13 high (~$0.8765).  The flows out of the yen may be giving the Aussie some legs, but they are still weak.  Technically, it looks difficult for the Aussie to sustain gains above $0.8800 now.

 

If one is inclined to look for an alternative to the US dollar, the Canadian dollar looks interesting from a technical perspective. The RSI and MACDs are turning lower.  The price action before the weekend was constructive.  The US dollar’s advance faltered in front of CAD1.1400.   The weekly close below CAD1.13 now could spur a move toward CAD1.12.     In a strong US dollar environment, the Canadian dollar tends to do well on the crosses.

 

The price action of the Mexican peso was also constructive ahead of the weekend.  The US dollar’s momentum has faded around MXN13.60.  It has straddled this area in the last two weeks, but is has not been able to get much of a foothold.  It is relatively expensive to be short the peso without momentum in one’s favor.  Initial support is seen near MXN13.50, but a break could spur a move toward MXN13.40.

 

US 10-year Treasury yields are consolidating in a mostly 2.30% to 2.40% range.  Global liquidity issues, the drop in oil prices, and the strengthening dollar makes US bonds attractive, even though the yield is below when many regard as fair value based on growth and inflation trajectories. The University of Michigan’s consumer confidence survey provided more evidence before the weekend of an erosion in inflation expectations.  This helped spur the rally in US Treasuries that pushed the yield to the lower end of the range, and weighed on the dollar.  

 

Although the S&P 500 made new record highs on November 13, it has really moved sideways last week.    Market sentiment is still constructive based on global liquidity and low interest rates.  However, the technical condition appears to be deteriorating a bit.   Support is pegged in the 2020-2028 band. A break could signal a test on the 1997-2000 area.

 

 

Observations based on the speculative positioning in the futures market:

 

1.   There were two significant adjustments (10k+ contracts) in gross positions.   The first is somewhat surprising.  The gross short euro position was cut by 14.2k contracts to 224.3k. It is still more than the combined gross short position of the yen, sterling and Swiss franc.  And this is after taking the second significant adjustment into account:  The gross short yen position rose by 20.3k contracts to 129.8k.  

 

2.  Of the remaining 12 gross positions we track, there were only two that changed by more than 5k contracts.  The gross long yen futures position increased by 9.3k contracts to 47.3.  The gross short Canadian dollar position rose by 5.5k to 54.5k contracts.  Half of the 10 gross positions were adjusted by less than 2k contracts.  

 

3.  Speculators generally added to gross short currency futures positions.  The notable exceptions were the euro and Australian dollar.  

 

4.  There was a 15k contract reduction of the net short euro position, which now stands at 164k contracts.  It was the first decline in six weeks.  The nearly 13k net short sterling contracts is the most since September 2013.  The net short Swiss franc position of 22.7k contracts is the largest since mid-2013.  

 

5.  Treasury bears tried to make a stand.  The gross short position jumped nearly 10% or 41.4k contracts to 503k.  The gross longs were culled by a little more than 5% or 23.8k contracts to 390.1k. This saw the net short position swell to 112k contracts from 47.3k in the previous reporting period.  

via Zero Hedge http://ift.tt/1xC50uX Marc To Market