Blog Archives

Overlooking “Small Details” or Emerging Realities?

April 23, 2007
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China’s stock mania has shifted into another high gear as shoeshine boys all over the country rush to open gambling club accounts. Any attempts by authorities to stem this have been shattered so far, as over the weekend they failed to act on any new moves. I suspect it is coming, but they may be hard at work re-reading Sun Tzu’s Art of War so as to gain tactics for maximum effect.

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What’s Really Happening?

April 21, 2007
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This morning Lee Adler and I conducted a podcast essentially asking what is really happening in the economy. This expands nicely on my theme of the last couple weeks about the distorted, untruthful numbers being released on employment trends, retail sales and consumption. Below are useful charts for following this cast including a new one on commercial paper (CP) issuance that Lee mentioned.

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Job Reports: Getting the Big Chief Tablet Back Out

April 20, 2007
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I still can’t get over the recent jobs reports put out by the Ministry of Truth and their minions. Of course one of my major themes is that a serious decline in residential construction and real estate related employment is well underway. MoT sources (and the cognoscenti actually believes them) barely takes notice. Yesterday however, we got verification that my suspicion about a million job loss in the residential construction sector (or equivalent independent contractor loss of business) from the peak is already in the bag. If so then the piss poor sales results reported by ShopperTrak, and further confirmed by the state of California sales tax receipts pretty much seals the case for me.

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The Great Ethanol Loot

April 18, 2007
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“See if the law takes from some persons what belongs to them, and gives it to other persons to whom it does not belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime.” - Frederic Bastiat (1801-1850)

Seems like the Pig Men, plutocrats and the political cronies never tire of, or run out of loots. The latest act in the series is “energy independence” via ethanol. In reality ethanol uses gasoline and energy like there is no tomorrow, and now that this scam has gotten a good toehold it is starting to show. This one is unique (and nasty) as it drives up prices not only for energy, but also for food, thus benefiting a whole slew of plutocratic fat cats at the expensive of Brazil America.

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More Bloated Housing Inventory On The Way

April 18, 2007
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The supply of bogus and nonsensical economic reports seems endless. On Tuesday we were presented with another one, new housing starts which checked in at a 1,518,000 annualized rate for March. Naturally this blogger elects to scrutinize this. Does it reflect reality?

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Impasses or Just Lousy Demand?

April 17, 2007
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A read of Purchasing.com items paints a clear picture. Suppliers have been aggressive all though the 1st quarter with price increases, yet basic demand is waning and all indications are that a significant cyclical downturn is under way. Here are some representative remarks from this source.

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Swoon Du Jour: Trade

April 16, 2007
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More evidence that a pronounced and deep economic contraction is underway can be gleaned from recent trade figures. February real imports into the US fell 1.9%, with the change in the last six months running minus 3.8%. The drop in real exports in February is even nastier at minus 3.7%, with the three months change minus 9.7%. There really are no strong categories in the mix, but industrial materials are especially weak. Click April 13th for more detail. Read more »

Swoons

April 14, 2007
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A key piece of information was released yesterday that passed completely without notice by the cognoscenti, who would much rather focus on bogus Ministry of Truth “data” and the utterances of the apparatchiks. March tax receipts in California completely bombed, coming up 7.4% short of forecast. Personal income tax collections were unusually poor, and sales tax collection seems to be confirming the ShopperTrak trends. Year over year personal income, sales & use, and corporate taxes were 5,031 to 5,366, down 6.3%. In February it was 4,100 to 4,276, down 3.9%. Corporation taxes paid remain healthy. The swoon in state revenues is not really new news, but now it appears to be accelerating. This now brings California’s November-March tax tally in at $1.9 billion below forecast.

We will get a good look at One Trick Pony Federal tax receipts next week.
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Short, Sweet, and to the Point

April 13, 2007
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Podcast on LBO pump and dumps, and using the MSM for scams and stock manipulations.

Once in awhile I come across charts that pretty much says it all. In fact these are so sweet and to the point, that your blogger will simply present them without further ado.

- Record vacant properties for sale or rent

- Households all in the water

- Even for normal times (which this is not) new housing activity is still far too high

- Lots of consumers working in real estate and construction related employment

- $654 billion being subjected to rate resets just in 2007

- Many marginal creditors, with little skin in the game

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More Apparatchik Warnings for the Riskloves

April 12, 2007
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Bulls of 1929 had their eyes glued on improving profits and stock valuations. Not a thought was given to the fact that the rising tide of money deluging the stock market came from financial leverage and not from savings.”
- Dr. Kurt Richebacher

With Riskloves around the world overexposed, overaggressive and overleveraged, the NASD has decided to weigh in with a “warning”. This probably will have as much impact as the two year process of developing “guidance” for quasi-criminal mortgage lenders.

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