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Following this morning’s smackdown, it appears low prices encouraged demand and in the last few minutes, gold and silver turned green for the day and surged on heavy futures volume back above $1250 and $20.25 respectively.
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via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/2NGhq4yM6Bk/story01.htm Tyler Durden
By now the widely accepted groupthink on the collapsing labor force participation rate, which as we noted last Friday, cratered to a fresh 35 year low of 62.8% which was the main reason for the collapse in the unemployment rate to 6.7% from 7.3% two months ago, is that it was perfectly expected and is largely due to demographics. Sadly this is just another example of goalseeking a real-time variable to “fit” with a narrative of a recovery when in reality there is no recovery for the record 91.8 million Americans who have given up on work entirely and are now out of the labor force. All of this is well-known. What may not be as well known is that every two years the BLS releases medium-term (10-year) projections for the participation rate. The projections include the demographic composition of the population and the LFP rates of different demographic groups, among other statistics. And it is here that we see just how “made up” the narrative surrounding the demographic mea culpa truly is.
Presenting exhibit A: “Labor force projections to 2012: the graying of the U.S. workforce“, released by BLS’ Mitra Toossi in February 2004. Jumping to the punchline, here is what the BLS expected a decade ago:
Or, a predicted labor force participation rate of 67.2%, or notably higher than the 66.0% as of the report’s publication in February 2004.
Where are we now?
Net: a 10 million worker delta! Does this mean that, gasp, America’s demographic crunch and “Baby Boomers are retiring” meme were unknown just ten short years ago? Apparently yes. Because somehow the 67.2% expected LFP at the end of 2012 ended up being 63.6% and sliding. And the punchline – if one were to use the expected 67.2% LFP rate, today’s unemployment rate would be higher than 12%!
Because here is what happened next in following BLS labor force participation forecasts:
In a nutshell: lower, lower, lower as the LFP entirely not in line with forecasts, cratered. But hey, what they know now, namely that Americans can’t wait to retire because they have so many 0% yielding savings, they didn’t know back then.
And there you have it: when it comes to the Labor Force Participation rate, one can best summarize it by the old maxim: “We’ll just make it up as we go along.”
Source, ironically, St. Louis Fed: A Closer Look at the Decline in the Labor Force Participation Rate
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via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/s_HPmkFDTbk/story01.htm Tyler Durden
By now the widely accepted groupthink on the collapsing labor force participation rate, which as we noted last Friday, cratered to a fresh 35 year low of 62.8% which was the main reason for the collapse in the unemployment rate to 6.7% from 7.3% two months ago, is that it was perfectly expected and is largely due to demographics. Sadly this is just another example of goalseeking a real-time variable to “fit” with a narrative of a recovery when in reality there is no recovery for the record 91.8 million Americans who have given up on work entirely and are now out of the labor force. All of this is well-known. What may not be as well known is that every two years the BLS releases medium-term (10-year) projections for the participation rate. The projections include the demographic composition of the population and the LFP rates of different demographic groups, among other statistics. And it is here that we see just how “made up” the narrative surrounding the demographic mea culpa truly is.
Presenting exhibit A: “Labor force projections to 2012: the graying of the U.S. workforce“, released by BLS’ Mitra Toossi in February 2004. Jumping to the punchline, here is what the BLS expected a decade ago:
Or, a predicted labor force participation rate of 67.2%, or notably higher than the 66.0% as of the report’s publication in February 2004.
Where are we now?
Net: a 10 million worker delta! Does this mean that, gasp, America’s demographic crunch and “Baby Boomers are retiring” meme were unknown just ten short years ago? Apparently yes. Because somehow the 67.2% expected LFP at the end of 2012 ended up being 63.6% and sliding. And the punchline – if one were to use the expected 67.2% LFP rate, today’s unemployment rate would be higher than 12%!
Because here is what happened next in following BLS labor force participation forecasts:
In a nutshell: lower, lower, lower as the LFP entirely not in line with forecasts, cratered. But hey, what they know now, namely that Americans can’t wait to retire because they have so many 0% yielding savings, they didn’t know back then.
And there you have it: when it comes to the Labor Force Participation rate, one can best summarize it by the old maxim: “We’ll just make it up as we go along.”
Source, ironically, St. Louis Fed: A Closer Look at the Decline in the Labor Force Participation Rate
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via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/s_HPmkFDTbk/story01.htm Tyler Durden
John McClaughry, a contributing
editor here at Reason and a longtime stalwart of the
GOP’s small libertarian/decentralist wing, has been serializing his
memoirs at the Front Porch Republic site. In his latest
(and final)
installment, he has pretty much left national politics behind,
but he takes note of President George H.W. Bush’s rhetoric about
volunteerism and “a thousand points of light.” He meets with C.
Gregg Petersmeyer, who as director of the White House’s Office of
National Service is in charge of the points-of-light program, and
concludes that Petersmeyer’s “concept of that role was to organize
the power and majesty of the White House to bestow tributes upon
the (politically acceptable) volunteers and organizations working
for good causes.” This prompts McClaughry to write a memo to the
director, drawing on his experience in past “civil society”
efforts:
“Voluntary Action/Private Sector Initiatives” (or
whatever it is labeled) means different things to different people.
To oversimplify:a) Well-meaning Republicans favor a typically upper middle class
view: those who have should take up a collection for those who
don’t. The collection finances Christmas turkeys and other
benefits. This is the “Lady Bountiful” approach: the gift can be
given and the recipients forgotten. Republican voluntary action
efforts have been plagued with this myopic perspective. Republicans
typically do not understand what life is like in a lower-income or
minority community, and are uncomfortable with spontaneous
grassroots efforts which seem to them to be potentially subversive
of the existing order, of which they general approve.b) Liberals tend to think of using tax dollars to finance
institutions to assist the poor, thereby making themselves feel
good while sending the bill to an otherwise uncaring “society”
through taxes. This attitude gives rise to the “welfare-industrial
complex”, with the government financing an elaborate institutional
structure which employs liberals to take care of the poor. The idea
that their tax-financed institutions as often as not defeat the
self-help efforts of the poor rarely if ever occurs to
liberals.
c) People at the grassroots, faced with
collective problems, usually want the tools, resources and
opportunities to solve their problem themselves. They almost
invariably view government and other institutions as part of the
problem (usually true) and hate paying taxes to finance their
oppressors and pay for programs which don’t really do them any
good. They lean Democratic because of income and class
characteristics, but will vote Republican when the right candidate
comes along who speaks their language.
McClaughry’s memo goes on to identify an alternative
approach to fostering volunteerism, which would focus on
identifiying and removing “specific barriers to organized
grassroots self help.” It also warns that “Almost every ‘barrier’
was put there for a reason,” that “Some interest or institution
will oppose almost every proposal of any merit,” and that fighting
those battles “without the President’s clear understanding and
blessing is for you to call down much grief upon yourself with
little chance of a payoff.”
And there the memorandum ends. “Not surprisingly,” McClaughry
tells us, “I never heard from him again.”
So the Bush administration ignored McClaughry’s advice. What did
it do instead? So glad you asked:
The song
reached #3 on the Billboard country chart. (1991 was
not Nashville’s finest hour.) According to
The New York Times, the songwriters and a Bush flunky
“smoothed out the lyrics in a meeting.” Elsewhere in the White
House, a “Point of Light coordinator” helped “the President pick
his ‘daily point of light,’ a group or individual chosen every day
but Sunday for outstanding volunteer service.”
Bonus links: Past posts about McClaughry’s series can
be found
here,
here, and
here.
from Hit & Run http://reason.com/blog/2014/01/13/you-could-make-a-radical-push-for-grassr
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The $VIX is at a level that has produced selling over the past year, but the indicator we use to capture that dynamic suggests higher prices. The Rydex indicators are starting to roll over from an extreme bullish level. On the other hand, the “smart money” is bullish at least on a relative basis. Maybe these mixed signals are just a sign of a market that needs to consolidate the gains from the past year.
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Yes, I wish I knew or had a crystal ball, but sometimes (maybe a lot of the time) the indicators don’t line up. Our default mode is to defer to our “dumb money” indicator (shown in figure 2). This is the indicator we use in our equity model, and the model remains bullish, and will likely remain so for another 2 weeks or more. We have been bullish for 18 weeks now when we became bullish during a period of extreme investor bearishness, and it is our expectation that this trade should last on average 15 weeks. So we are in the late stages of the rally. The best, most accelerated gains typically occur in the beginning of the trade. Just when investors typically get the all clear, the trend will flatten out. Maybe this is the message of all these mixed signals. Our plan is to become sellers of equities when investor sentiment unwinds, but we are not at that point. As a reminder, we have moved our stop loss up to SP500 1706.92.
Figure 3 (below) shows the “smart money” and this is currently at a level where buying has taken place over the past year. Mind you, the value is still negative suggesting that there is no real buying and that the pace of selling has just slowed. Nonetheless, in a market that only knows one direction — up! –, this is the kind of levels that are associated with a rise in asset prices. Once again, these aren’t absolute levels of buying but only relative to the past year.
Figure 4 (below) is the Rydex Total Bull to Total Bear ratio and this is rolling over. If there is one group of market timers who actually have timed this market well over the past 4 years, it has been (oddly enough) the Rydex market timers. As figure 4 shows, they have become less bullish.
Figure 6 is an indicator that looks at the $VIX and with the indicator pointing higher, we should expect higher prices. But hold on a second. Over the past year when the $VIX hit a level of 12, this produced selling. The $VIX closed the week at 12.14.
Folks, I wish I had the answers for you this week. I don’t. The signals are mixed. Don’t get mad at me. I just interpret the tea leaves. You should have been around 18 weeks ago when I made the bullish call. Now you are left wondering “should I jump in?”
Figure 1 is our composite sentiment indicator. This is the data behind the “Sentimeter”. This is our most comprehensive equity market sentiment indicator, and it is constructed from 10 different variables that assess investor sentiment and behavior. It utilizes opinion data (i.e., Investors Intelligence) as well as asset data and money flows (i.e., Rydex and insider buying). The indicator goes back to 2004. (Editor’s note: Subscribers to the TacticalBeta Gold Service have this data available for download.) This composite sentiment indicator moved to its most extreme position 10 weeks ago, and prior extremes since the 2009 are noted with the pink vertical bars. The March, 2010, February, 2011, and February, 2012 signals were spot on — warning of a market top. The November, 2010 and December, 2012 signals were failures in the sense that prices continued significantly higher. The current reading is neutral but heading towards bearish (as in too many bullish investors).
Figure 1. The Sentimeter
The “Dumb Money” indicator (see figure 24) looks for extremes in the data from 4 different groups of investors who historically have been wrong on the market: 1) Investors Intelligence; 2) MarketVane; 3) American Association of Individual Investors; and 4) the put call ratio. The indicator shows that investors are extremely bullish.
Figure 2. The “Dumb Money”
Figure 3 is a weekly chart of the SP500 with the InsiderScore “entire market” value in the lower panel. From the InsiderScore weekly report: “Market-wide sentiment continues to move further into Neutral territory, away from a Sell Bias, as transactional volume continues a seasonal decline. With earnings season beginning in two weeks, most companies have closed trading windows, limiting the ability of insiders to transact non-10b5-1 purchases and sales.”
Figure 3. InsiderScore “Entire Market” value/ weekly
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Figure 4 is a weekly chart of the SP500. The indicator in the lower panel measures all the assets in the Rydex bullish oriented equity funds divided by the sum of assets in the bullish oriented equity funds plus the assets in the bearish oriented equity funds. When the indicator is green, the value is low and there is fear in the market; this is where market bottoms are forged. When the indicator is red, there is complacency in the market. There are too many bulls and this is when market advances stall. Currently, the value of the indicator is 78.74%. The indicator is crossing below the signal line. Similar signals from this past year are highlighted on the chart. Values less than 50% are associated with market bottoms. Values greater than 58% are associated with market tops. It should be noted that the market topped out in 2011 and 2012 with this indicator between 70% and 72%.
Figure 4. Rydex Total Bull v. Total Bear/ weekly
The Rydex Buying Power indicator assesses the amount of money on the sidelines. It is “fuel” available for buying. This indicator assesses both non – committed money (i.e., assets in the money market fund) and committed money (i.e., assets in all of the bearish funds that could potentially wind up in bullish funds) as available money on the sidelines. Low indicator values suggest little money on the sidelines and are consistent with excessive bullishness (i.e., bear signals). High indicator values are consistent with increased buying power and are consistent excessive bearishness (i.e., bull signals). The current value of the indicator is at 33.22%. Values less than 40% are consistent with market tops.
Figure 5. Rydex Buying Power/ weekly
Figure 6 is a weekly chart of the SP500. The indicator in the lower panel looks at the current value of the $VIX relative to past pivot points in the $VIX and trend lines formed by those pivot points. The indicator is turning higher suggesting that price will follow soon follow lower as well.
Figure 6. $VIX/ weekly
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via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/RDzOVjCrvh8/story01.htm thetechnicaltake
With the Dow Transports pressing new record highs this morning (up 1% in 2014), the Dow Industrials are still lagging (down 0.8% year-todate). Despite a bid in Treasuries this morning (5Y and 7Y -2bps), stocks are jumping since the US open, helped by a lift in JPY crosses (USDJPY bounce off 103), dragging the NASDAQ into the green once again for 2014. Gold and silver have recovered the early losses but WTI crude continues to slide (back under $92).
Stocks are ‘correlated’ with the reversal off 103 in JPY – but it seems a little to high beta to be sustained for now…
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via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/b1LDoiSKUO4/story01.htm Tyler Durden
Worried that Starbucks is running out of real estate? Concerned that McDonalds will be unable to fill its quota of minimum-wage employees as urban sprawl caps out? Have no fear for as the following map shows, there is plenty of room left in the world for the chains to expand… and of course, where there is a Starbucks there is mass affluence, right? Of course, extremes of heat and cold will require a little adaptation but that’s what free easy money is for…
Source: @planetpics
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via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/EP-rrZywxSs/story01.htm Tyler Durden
When it comes to forecasts and outlooks for 2014 (or 2013, or 2012, or 2011, etc), there is no way one can’t be tired of the endless Keynesian drivel which the sellside bombards its gullible client base, which can be summarized as follows: “this is the year when the central bank strategies, which have failed to boost the global economy for the past 5 years, will finally work and the economy picks up – yes, this time will be different, we promise. Oh, and ‘if’ we are wrong (again), well just blame it on cold weather in the winter, or warm weather in the summer and if need be, delay the ‘recovery” to the following year, while blaming the lack of insufficient stimulus – because $1 trillion in balance sheet expansion per year is obviously not enough.” Rinse. Repeat. One would think spinning the same yarn year after year, they would get it right purely by luck at this point. Alas, they haven’t. So for everyone tired of listening to the same old broken record, here is a completely different “Austrian” perspective, one shared by Scotiabank’s Guy Haselmann.
His full report is attached below, but for those curious what an alternative take on 2014’s risk factors, here is the summary:
Market Factors and Risks in 2014:
Full 2014 Outlook report (pdf)
via Zero Hedge http://ift.tt/1hiETRs Tyler Durden
When it comes to forecasts and outlooks for 2014 (or 2013, or 2012, or 2011, etc), there is no way one can’t be tired of the endless Keynesian drivel which the sellside bombards its gullible client base, which can be summarized as follows: “this is the year when the central bank strategies, which have failed to boost the global economy for the past 5 years, will finally work and the economy picks up – yes, this time will be different, we promise. Oh, and ‘if’ we are wrong (again), well just blame it on cold weather in the winter, or warm weather in the summer and if need be, delay the ‘recovery” to the following year, while blaming the lack of insufficient stimulus – because $1 trillion in balance sheet expansion per year is obviously not enough.” Rinse. Repeat. One would think spinning the same yarn year after year, they would get it right purely by luck at this point. Alas, they haven’t. So for everyone tired of listening to the same old broken record, here is a completely different “Austrian” perspective, one shared by Scotiabank’s Guy Haselmann.
His full report is attached below, but for those curious what an alternative take on 2014’s risk factors, here is the summary:
Market Factors and Risks in 2014:
Full 2014 Outlook report (pdf)
via Zero Hedge http://ift.tt/1hiETRs Tyler Durden
The national security researchers at the
Washington, D.C.-based New America Foundation have combed through
data on 225 individuals identified as posing possible terrorist
threats to the United States. The analysts sought to uncover data
that suggests that the National Security Agency’s unconstitutional
bulk collection of the phone records of essentially all Americans
significantly helped in any of those investigations.
The NAF analysts begin by pointing out after the revelations of
NSA whistleblower Edward Snowden were first published the agency’s
abettors countered by claiming that their extensive spying on
Americans had averted several terrorist attacks. As the NAF reminds
us:
President Obama defended the NSA surveillance programs during a
visit to Berlin, saying: “We know of at least 50 threats that have
been averted because of this information not just in the United
States, but, in some cases, threats here in Germany. So lives have
been saved.” Gen. Keith Alexander, the director of the NSA,
testified before Congress that: “the information gathered from
these programs provided the U.S. government with critical leads to
help prevent over 50 potential terrorist events in more than 20
countries around the world.” Rep. Mike Rogers (R-Mich.),
chairman of the House Permanent Select Committee on Intelligence,
said on the House floor in July that “54 times [the NSA programs]
stopped and thwarted terrorist attacks both here and in Europe –
saving real lives.”
The new NAF report finds that these claims are almost entirely
specious:
Surveillance of American phone metadata has had no discernible
impact on preventing acts of terrorism and only the most marginal
of impacts on preventing terrorist-related activity, such as
fundraising for a terrorist group. Furthermore, our examination of
the role of the database of U.S. citizens’ telephone metadata in
the single plot the government uses to justify the importance of
the program – that of Basaaly Moalin, a San Diego cabdriver who in
2007 and 2008 provided $8,500 to al-Shabaab, al-Qaeda’s affiliate
in Somalia – calls into question the necessity of the Section 215
bulk collection program. According to the government, the
database of American phone metadata allows intelligence authorities
to quickly circumvent the traditional burden of proof associated
with criminal warrants, thus allowing them to “connect the dots”
faster and prevent future 9/11-scale attacks. Yet in
the Moalin case, after using the NSA’s phone database to link a
number in Somalia to Moalin, the FBI waited two months to begin an
investigation and wiretap his phone. Although it’s unclear why
there was a delay between the NSA tip and the FBI wiretapping,
court documents show there was a two-month period in which the FBI
was not monitoring Moalin’s calls, despite official statements that
the bureau had Moalin’s phone number and had identified him. ,
This undercuts the government’s theory that the database of
Americans’ telephone metadata is necessary to expedite the
investigative process, since it clearly didn’t expedite the process
in the single case the government uses to extol its
virtues.Additionally, a careful review of three of the key terrorism
cases the government has cited to defend NSA bulk surveillance
programs reveals that government officials have exaggerated the
role of the NSA in the cases against David Coleman Headley and
Najibullah Zazi, and the significance of the threat posed by a
notional plot to bomb the New York Stock Exchange.
Go
here to read the full report.
from Hit & Run http://ift.tt/1cegCqn
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