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The GOP’s normal press conference is hotting up:
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via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/rrYh0KFveKU/story01.htm Tyler Durden
The GOP’s normal press conference is hotting up:
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via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/rrYh0KFveKU/story01.htm Tyler Durden
Much is made of the expected hockey-stick – any quarter now – in US GDP growth (whether it's a lower fiscal drag or rise in CAPEX or any range of miracle-driven hope factors).
Credit Suisse is not so sure; not just in the short-term, but in the long-term of the potential for US GDP growth. They note that basic growth accounting provides links between potential GDP to the size of the labor force, its productivity, and the capital assets – both public and private – it has available to work with. The problem – longer-term for the US, is, as CS notes, the following four exhibits collectively speak to the recent slowdown in potential, and do not augur positively for future growth.
Exhibit 1 shows that ‘trend” productivity growth has slowed significantly – perhaps to less than 1%, from a local peak of about 3½% at the height of the late 90s technology boom.
Exhibit 2 plots the labor force participation rate, which has declined sharply. The demographics of an aging population will continue putting downward pressure on participation.
Exhibit 3 displays net business investment – or gross investment adjusted for depreciation – as a share of GDP. Think of this as a proxy for capital accumulation. This ratio fell to multi-decade lows in the wake of the Great Recession, and the rebound since has been tepid. Slower growth in capital accumulation today is a downside factor for productivity in future years.
Exhibit 4 shows public investment as a share of GDP, a proxy for public infrastructure spending. The 2009 federal stimulus bill supported infrastructure spending for a time in 2009 and 2010, but since then it has declined sharply as state and local finances deteriorated.
Charts: Credit Suisse
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via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/gVuoJguRf88/story01.htm Tyler Durden
As a result of yesterday’s report that Census was caught manipulating the September 2012 jobs report, the BLS provided the following response via CNBC:
“the incident has been reported to the Commerce Dept Inspector General Office for investigation. We no further (sic) comment.“
In other words, one part of the government – the Commerce Department – will investigate another part of the government – the BLS. We can only assume the NSA will certify the findings of the Commerce Department?
Rinse. Repeat.
And now on to the November nonfarm payrolls “report” which forms the basis for the Fed’s “(manipulated) data dependent” $85 billion monthly liquidity injection into stock markets.
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via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/Ru2_VKeRodY/story01.htm Tyler Durden
The last week has seen retailers begin to push “the promotional panic button” as holiday sales are expected to collapse to the weakest since 2009 (as we discussed here, here, and here). As Bloomberg reports, faced with wary shoppers and a shorter holiday season, retailers are piling on deals as they jockey for market share and are faced with “too much inventory, which doesn’t bode well for 2014.” U.S. retail sales excluding autos and gasoline grew 0.2% in October, half the month-earlier gain leaving this year likely to be the worst and most promotional shopping season since 2008 and perhaps Wal-Mart’s $98 32-inch flat-screen TV is just the start of the deflationary spiral that benefits the stagnant incomes of the middle-class.
U.S. retailers are discounting earlier than ever as they brace for the weakest holiday shopping season since 2009.
Wal-Mart Stores Inc. (WMT) is dangling a 32-inch flat-screen TV for $98, down from $148 last year. Sears Holdings Corp. has waived layaway fees and its Kmart chain is introducing a rent-to-own program. More than a dozen retailers are opening earlier, or for the first time, on Thanksgiving Day. Among the attention-grabbing stunts: a $1 million jackpot for one of the first shoppers to visit Gap Inc. (GPS)’s Old Navy chain on Black Friday.
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For the fourth year in a row, disposable incomes in 2013 have only inched up.
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“The consumer is more deal-driven than ever,” Ken Perkins, president of researcher Retail Metrics LLC, wrote in a Nov. 14 note. “Discretionary dollars for holiday spending are limited for the large pool of lower- and moderate-income consumers due to lack of wage gains this year coupled with the increased payroll tax.”
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“We will be seeing promotions significantly above the current 30 percent off, which are the opening table stakes,” said Craig Johnson, president of Customer Growth Partners, a New Canaan, Connecticut-based consulting firm. Stores have too much inventory, which “doesn’t bode well for 2014.”
…
The earlier openings are no panacea because they’ll simply pull purchases forward, rather than driving incremental sales, said Pam Goodfellow, a director at Prosper Insights & Analytics, a Worthington, Ohio-based research firm.
“Once they have spent their money, it is hard to coax them back out into the stores,” she said.
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via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/wwJaslaTRgM/story01.htm Tyler Durden
The last week has seen retailers begin to push “the promotional panic button” as holiday sales are expected to collapse to the weakest since 2009 (as we discussed here, here, and here). As Bloomberg reports, faced with wary shoppers and a shorter holiday season, retailers are piling on deals as they jockey for market share and are faced with “too much inventory, which doesn’t bode well for 2014.” U.S. retail sales excluding autos and gasoline grew 0.2% in October, half the month-earlier gain leaving this year likely to be the worst and most promotional shopping season since 2008 and perhaps Wal-Mart’s $98 32-inch flat-screen TV is just the start of the deflationary spiral that benefits the stagnant incomes of the middle-class.
U.S. retailers are discounting earlier than ever as they brace for the weakest holiday shopping season since 2009.
Wal-Mart Stores Inc. (WMT) is dangling a 32-inch flat-screen TV for $98, down from $148 last year. Sears Holdings Corp. has waived layaway fees and its Kmart chain is introducing a rent-to-own program. More than a dozen retailers are opening earlier, or for the first time, on Thanksgiving Day. Among the attention-grabbing stunts: a $1 million jackpot for one of the first shoppers to visit Gap Inc. (GPS)’s Old Navy chain on Black Friday.
…
For the fourth year in a row, disposable incomes in 2013 have only inched up.
…
“The consumer is more deal-driven than ever,” Ken Perkins, president of researcher Retail Metrics LLC, wrote in a Nov. 14 note. “Discretionary dollars for holiday spending are limited for the large pool of lower- and moderate-income consumers due to lack of wage gains this year coupled with the increased payroll tax.”
…
“We will be seeing promotions significantly above the current 30 percent off, which are the opening table stakes,” said Craig Johnson, president of Customer Growth Partners, a New Canaan, Connecticut-based consulting firm. Stores have too much inventory, which “doesn’t bode well for 2014.”
…
The earlier openings are no panacea because they’ll simply pull purchases forward, rather than driving incremental sales, said Pam Goodfellow, a director at Prosper Insights & Analytics, a Worthington, Ohio-based research firm.
“Once they have spent their money, it is hard to coax them back out into the stores,” she said.
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via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/wwJaslaTRgM/story01.htm Tyler Durden
Over three years after current Warburg Pincus Managing Director and former US Treasury Secretary Tim Geithner welcomed everyone to the recovery, here is where we stand: “According to Markit, optimism is improving among developed economies while emerging markets still show low levels of confidence. Subdued expectations about future activity have led to restrained hiring plans. On net, only 14% of companies worldwide expect to add employees.” And just in the U.S. this number is 19%. Per the WSJ: “Companies continue to fret about further disruptions from unresolved fiscal issues, and are still particularly cautious about committing to hiring in this uncertain environment,” says Chris Williamson, Markit’s chief economist. That is all.
What was left unsaid is how many of the 14% of companies planning on growing are in the Bernanke bubble benefiting FIRE industry. We’ll go with a bold guess here and say, all of them.
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via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/gwfdsZRkDLw/story01.htm Tyler Durden
With Richmond, CA’s plans to use eminent domain to “help” underwater homeowners still ongoing (as suits from mortgage-backed securities owners such as PIMCO, Blackrock, and DoubleLine having been initially dismissed), it appears the “wealth transfer” scheme is gaining traction around the nation. As we warned it would, the appeal of this “bailout” – with no thought to the unintended consequence of crushing an entire investing class out of the market (and its implicit rate-increasing result) – is just too strong for local government and sure nough New Jersey town Irvington is moving in that direction. As AP reports, Irvington’s plan would focus on using eminent domain to purchase so-called “private label” security mortgages, or ones that are not backed by the U.S. government.
Irvington, N.J., is moving forward with plans to become the second municipality in the nation to use eminent domain to buy mortgages that are in foreclosure.
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“When you hear those words, it usually has a negative connotation,” Smith said. But, when used to take control of underwater mortgages the city will “recast it so people can stay in their homes.”
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Richmond, Calif., announced plans to use eminent domain to help underwater homeowners earlier this year and a lawsuit challenging the practice was dismissed by a California district court judge in September. Richmond has not yet used eminent domain.
Smith said Irvington’s plan would focus on so-called “private label” security mortgages, or ones that are not backed by the U.S. government.
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Smith said the city needs a third party to come in and actually buy the mortgages.
According to Cornell University law professor Robert C. Hockett, eminent domain is one of the few tools available to take over and write down an underwater mortgage because it gives municipalities the power to circumvent mortgage contracts, acquire loans from bondholders, write them down and give them back to the bondholders.
“Some government instrumentality is going to have to do this,” said Hockett, who helped create the approach. “No private actor can get around the contracts, but a public actor can.”
Worryingly, the idea is now gaining traction across the nation with Newark, NJ and North Las Vegas also floating the idea… Of course, with the Fed buying everything in sight, who cares? Oh wait, doesn’t the government want to encourage a private mortgage market? Oh well…
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via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/52bFfmT4SDU/story01.htm Tyler Durden
With Richmond, CA’s plans to use eminent domain to “help” underwater homeowners still ongoing (as suits from mortgage-backed securities owners such as PIMCO, Blackrock, and DoubleLine having been initially dismissed), it appears the “wealth transfer” scheme is gaining traction around the nation. As we warned it would, the appeal of this “bailout” – with no thought to the unintended consequence of crushing an entire investing class out of the market (and its implicit rate-increasing result) – is just too strong for local government and sure nough New Jersey town Irvington is moving in that direction. As AP reports, Irvington’s plan would focus on using eminent domain to purchase so-called “private label” security mortgages, or ones that are not backed by the U.S. government.
Irvington, N.J., is moving forward with plans to become the second municipality in the nation to use eminent domain to buy mortgages that are in foreclosure.
…
“When you hear those words, it usually has a negative connotation,” Smith said. But, when used to take control of underwater mortgages the city will “recast it so people can stay in their homes.”
…
Richmond, Calif., announced plans to use eminent domain to help underwater homeowners earlier this year and a lawsuit challenging the practice was dismissed by a California district court judge in September. Richmond has not yet used eminent domain.
Smith said Irvington’s plan would focus on so-called “private label” security mortgages, or ones that are not backed by the U.S. government.
…
Smith said the city needs a third party to come in and actually buy the mortgages.
According to Cornell University law professor Robert C. Hockett, eminent domain is one of the few tools available to take over and write down an underwater mortgage because it gives municipalities the power to circumvent mortgage contracts, acquire loans from bondholders, write them down and give them back to the bondholders.
“Some government instrumentality is going to have to do this,” said Hockett, who helped create the approach. “No private actor can get around the contracts, but a public actor can.”
Worryingly, the idea is now gaining traction across the nation with Newark, NJ and North Las Vegas also floating the idea… Of course, with the Fed buying everything in sight, who cares? Oh wait, doesn’t the government want to encourage a private mortgage market? Oh well…
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via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/52bFfmT4SDU/story01.htm Tyler Durden
Today’s AM fix was USD 1,272.25, EUR 942.13 and GBP 790.12 per ounce.
Yesterday’s AM fix was USD 1,283.50, EUR 950.04 and GBP 797.01 per ounce.
Gold fell $14.10 or 1.09% yesterday, closing at $1,273.70/oz. Silver slid $0.34 or 1.64% closing at $20.41/oz. Platinum dropped $30.50 or 2.1% to $1,406.99/oz, while palladium fell $15.47 or 2.1% to $714.83/oz.
Gold remains under pressure after the losses incurred yesterday. Gold has failed to rally despite Janet Yellen, the Federal Reserve’s chief in waiting, indicating she would continue the U.S. central bank’s ultra-easy monetary policy.
Gold in USD, 1 Year – (Bloomberg)
Gold prices look vulnerable to further price falls. Support is at the recent low of $1,261.42, followed by the $1,251.84 low from October 15th. A close below that mid October low could see gold fall to test the June lows of $1,180/oz.
Investor sentiment remains extremely bearish amid surging stock markets and a complete lack of awareness of real and growing risks – sovereign, monetary and systemic.
Speculators on the COMEX got less bullish on gold last week as hedge funds and banks doubled their short holdings. The net long position on the COMEX plunged 37% to 55,456 futures and options in the week ended November 12, U.S. Commodity Futures Trading Commission (CFTC) data show, the biggest drop since February. Short bets climbed to 54,143, the highest since mid August, from 26,490 a week earlier.
The world’s largest gold exchange-traded fund, SPDR Gold Trust, said its holdings fell 1.2 tonnes to 864.51 tonnes on Monday – the fund’s lowest since February 2009.
Physical demand, which usually tends to provide a floor for prices at lower levels, remained anaemic even after Monday’s price drop. Demand has lately failed to pick up even below the $1,300 level as many bullion buyers had bought a lot of bullion when prices fell earlier in the year.
The Fed’s $85 billion in monthly bond purchases are inflationary and remain very gold bullish but gold remains very weak despite this ongoing currency debasement.
This money printing and currency debasement and still elevated systemic risk has led to bitcoin surging to new record highs overnight as buyers take shelter in the new virtual currency. Yet, at the same time gold prices remain weak. This is giving further credence to allegations of price suppression.
The virtual currency rose to a high of $900.98 on the Mt. Gox exchange Monday afternoon. It surged 42% from Sunday’s close and is up 107% from a week earlier.
Cross Currency Table – (Bloomberg)
Bitcoin was developed in 2009 and is a decentralized digital currency that enables low cost payments without the need for central authorities and issuers. Bitcoin is a peer-to-peer (P2P) currency system created in open source C++ programming code. Bitcoins can be accessed from anywhere in the world with an internet connection. Once a user has Bitcoins, they are stored in a digital wallet. Bitcoins can then be sent to anyone else who has a Bitcoin address.
U.S. law enforcement and regulatory agents expressed optimism and acknowledged risks for digital currencies. U.S. officials outlined the potential benefits and liabilities of bitcoin.
Federal Reserve Chairman Ben Bernanke said in a letter in absentia to the Senate panel that virtual currencies “may hold long-term promise, particularly if the innovations promote a faster, more secure, and more efficient payment system.”
Bitcoin’s latest gains came despite the potential for regulation of the digital currency. The U.S. Senate Committee on Homeland Security and Governmental Affairs (HSGAC) began a hearing yesterday. The event brought representatives from different federal agencies and representatives from the bitcoin community to discuss virtual currencies.
Gold Prices/Fixes/Rates/Volumes – (Bloomberg)
Bitcoin has increased more than tenfold since the beginning of 2013. One of the reasons for the incredible surge is that bitcoin is a freely traded market and not subject to rigging or price manipulation by banks or government. Total market capitalization of bitcoins is in excess of $8 billion based on recent prices, according to Bitcoincharts.com.
The bitcoin frenzy today will be mirrored by a gold buying frenzy which will again see gold prices surge in value in the coming months. This will only happen when prices are again dictated by physical supply and demand.
Bitcoin is an interesting speculative punt and may merit a small allocation in a portfolio however its virtual and digital nature create advantages and also risks.
Physical gold, either in your possession or in allocated accounts, remains a far safer alternative both to bitcoin, to digital gold platforms and to paper and electronic currencies in what is still a vulnerable banking system.
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via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/4x5rMj_lIwA/story01.htm GoldCore