Some interesting thoughts and insights by Mauldin on the BLS employment figures among other things (another--there are over 3,000 different tax programs that allow for deductions”) in this weekend’s missive. He acknowledges the employment “numbers need to be taken with a large dose of salt,” but recognizes the nuances like they now include the 2010 census.
“There were some early comments that the unemployment number was lower because another 1.1 million people dropped out of the work force, no longer looking for work. If you read just the simple number, you might think that. But there were asterisks all over this report, telling us we had to look deeper. A lot deeper.”
He then goes on to examine in more detail.
Have to run; not enough time to cut & paste. This link may require one to register (free) for the weekly email of his “Thoughts from the Frontline.” Perhaps you could google or bing; the title of this weekend’s article is Who Took My Easy Button
Recently I was about to download a mobile app on my android smartphone from a big city daily newspaper.
I checked the “permissions” which included the usual gps location, etc. However, I noticed the app permissions also authorized access to your phone book, all numbers called, your smartphone camera and all photos in your gallery!
Why does the newspaper need access to these? Needless to say, I declined and did not load the app.
There doesn’t seem to be much concern over the lack of privacy. Perhaps it’s a generational gap.
"LOL I don't have 25k and can't daytrade, yet this fool can steal hundreds of millions, deal in billions without a license, and get off scot-free."
I share your outrage, along with others, about Corzine. However, it's not a given he will "get off scot-free."
Most crimes are here's the crime (be it robbery, assault, theft), who did it?
In fraud, it's a little different.
It's more like here's the body, where's the crime?
An investigation will have to unravel the evidence of what happened, where's the money, etc. It takes more time to put the blocks in place to build a criminal financial fraud case.
The media can put out all types of information about missing money, alleged statements and even write opinions without concerrn of putting it all together in a legal criminal prosecution requiring subpoenas, interviews and a trail of digital evidence and document review.
Don't get me wrong, I'd like to see him sent off to prison now. Maybe "tar and feathers" is more approriate.
We'll see how it turns out, but unfortunately, we'll have to wait.
"There's a reason the Lower 99 currently lack leadership: Anyone with the ability to organize large numbers of unsuccessful people has been diverted into Wall Street jobs, mainly in the analyst programs at Morgan Stanley and Goldman Sachs.''
The Greek Lower 99 viewpoint: "Ordinary Greeks seldom harass their rich, for the simple reason that they have no idea where to find them. To a member of the Greek Lower 99 a Greek Upper One is as good as invisible."
"During last Wednesday's big decline, the TRIN closed above 6. That's only happened eight times in the past 60 years, and one month later, the S&P 500 was up every time, by an average of 6.0%.
Three months later it was up every time except one, by an average of 10.3%, with the one loss a meager -0.1%.
What it shows is that we experienced some climactic selling pressure last week, a good sign."
Forget all that tut-tutting coming from the Beltway's smart set. A deal to cut the federal deficit by more than $1 trillion and avoid devastating cuts is on the way.
So say Illinois' two U.S. senators. (Note: 1 Dem and 1 Rep)
I see clues of small growth similar to what Bill has mentioned. It's not perfect and it's not 2006, but it's also not recession IMO.
Yes, I’ve read posters here who paint a bleak picture in their neighborhood, houses underwater, manufacturing gone and not returning, unemployment up, etc.
I look around and see what’s happening not only where I live, but also when traveling and when I talk with others. It’s similar to trade what you see, not what you think. (Or what the FETV media tells you to think)
I do see some signs of life. Here are just a couple of observations:
- In mid October, I took a trip to Boston and Massachusetts. Their economy seems to be doing well. I had a hotel room in Boston, but did check on availability while there. Practically all the city hotel rooms were packed and had no vacancy. I found one or two hotels with a room or two available, for “discount” prices ranging from $300 to $600. There were a lot of people in town and the restaurants were full. Lot of hustle and bustle.
-In a working class town along the SE coast of MA where I regularly visit, I saw some signs of construction and expansion.
These things usually don’t happen in a recession.
-A relative works for an upscale restaurant in Minneapolis. He’s been there for more than 12 years. During September 2011, they took in the most revenue ever: +20% more than any prior month. I was surprised. I talked to him again about 2 weeks ago and it appears October will have similar revenue. He couldn’t put his finger on any specific reason other than business travel and activity have picked up.
That usually doesn’t happen in a recession.
Finally, when things are picking up have you ever noticed how the quality of service suffers somewhat?
-Example: A coffee chain establishment nearby (Chicago) had a complete turnover in staff. The manager said a number were college students who had found better opportunities elsewhere. Soon the manager was transferred/promoted. On a recent visit I ordered coffee, but my better half wanted a skim decaf café ole. No one knew how to make it and the new manager had to call another store to ask about it. I kid you not! Guess they don’t train personnel before they place them in the store.
This may be just one example, but I’ve recently encountered slippage in service at least two other locations. Perhaps it’s just an anomaly. However, I’m keeping my eye on this as I view it as a “tell” on the economy.
Now this doesn’t mean Europe, our politicians and/or HB&B can’t throw a wrench into everything and things change again; but for right now, I’m seeing some growth out there.
Going into tomorrow, looking at 1300 as resistance and the 200 SMA around 1275 as support.
One would think there would be a pullback or sideways consolidation due, However, it is the end of the month and some funds don’t like to appear as if they had a lot of cash on the sidelines during the biggest monthly advance in decades.
A lot of hedge funds have lagged the market this month and underinvested. A number are reportedly under for the year and will be pressured to play catch-up before the end of the year. We could see some performance chasing. So looking out a month or two, I suspect an uptrend after some consolidation and buying on the dips.
Only caveat is the November due date for the political deficit commission Bill alluded to earlier. That's the landmine to get past.
Friday earnings due out include: CVX, MRK, CI, GT, WY, WHR, ACI, NEW and BIIB.
"This week the Chinese Gold & Silver Exchange Society (CGSE) - a bullion exchange based in Hong Kong - started trading gold quoted in Chinese yuan.
The contract, called Renminbi Kilobar Gold, is promoted as offering investors a "double safe haven" - exposure to both gold and an appreciating currency.
This line of thought nicely accompanies China's intention to boost the yuan's international appeal. It is expected that this product will attract retail and institutional investors alike from both the Chinese mainland and overseas.
Whether or not the yuan can deliver its part of the "double safe haven plan," Renminbi Kilobar Gold trading in the first day was strong, with 322 traded gold contracts totaling 112 million yuan (or US$17.5 million). The settlement price ended up at 346.95 yuan per gram, or $1,693.9 an ounce."
"The government is reporting that 50 percent of U.S. workers earned less than $26,364 last year, reflecting a growing income gap between the nation's rich and poor.
According to the Social Security administration, there were fewer jobs and overall pay was trending down — except for the wealthiest Americans. The number of people making $1 million or more soared by over 18 percent from 2009. There were 5.2 million fewer jobs in 2010 than in 2007, when the deepest recession since the 1930s began.
The payroll figures are based on W-2 forms submitted by employers to the IRS. The figures were posted by Social Security on its website . . . . "
So how are the banks reporting earnings? Through smoke and mirrors!
Check those numbers and you’ll see something called DVA (debt value adjustment). DVA records debt securities as an adjustment!
Excerpt from October 17th edition of Barron’s Up and Down Wall Street by Randy Forsyth
“WHO SAYS ACCOUNTANTS DON'T have a sense of humor? The rules for bank earnings are as absurd as anything Monty Python ever came up with, but to the market, they're pretty much an unfunny joke.
Take JPMorgan Chase (ticker: JPM), which posted third-quarter earnings of $1.02 a share Thursday, handily beating the consensus estimate of 91 cents. A big factor: a $1.9 billion gain from DVA, or debit valuation adjustment. DVA reflects the change in value of the company's debt securities. A decline is recorded as an addition to income because the presumption is the company would be able to repurchase the debt at a discount and record a gain. Of course, the same holds if that same company's finances deteriorate, according to this accounting theory.
This principle should be applied to Europe. Think of it: Record the decline in the price of Greek government bonds as revenue. That should eliminate Greece's budget deficit. Repeat in Ireland, Portugal, Spain and Italy. Problem solved.”
Rare to see this situation . . . looks like State of Michigan may have a surplus! I can guarantee you Illinois, California, others aren't in the same neighborhood.
"Lansing, — It turns out Michigan's state government might have brought in more money from taxes and fees than previously expected in the fiscal year that ended Sept. 30.
That likely will set up a battle this fall over what to do with the cash, which could total $285 million or more."
Not sure if this was previously posted. Der Spiegel, MSNBC, NYT mentioned it.
Title: Traders more reckless than psychopaths, study shows
“Traders more reckless than psychopaths, study shows disturbing new research about financial traders and their personalities may shed some light on the behavior of Kweku Adoboli, the so-called “rogue” UBS trader who allegedly lost the bank $2.3 billion through unauthorized trading.”
“A new study from a Swiss university finds that financial traders are more uncooperative than psychopaths and that they have a greater tendency for lying and risk-taking.”
Some of the community has made trips to gold miners checking out operations, etc. And Bill has mentioned his upcoming trip to SVM’s operations in China.
This week’s Barron’s has an interesting article on visiting a junior exploration company in British Columbia, CN that you may find informative.
“A company-led tour of a gold mine can yield useful information. But it can't answer the big questions: how much gold is in the ground, and how much value is in the miner's shares?”
"Gold mine visits can yield useful information about geology, drilling prospects and management's plans. But seeing isn't always believing."
Speaking of juniors, recall past mention of SVM as one of the top 10 holdings of the GDXJ ETF.
The last semi-annual report (June 2011) shows SVM as the number 5 holding comprising 3.5% of portfolio. The ETF owns 7,512,925 shares as of the date of the report.
GDXJ hit its SEP 2011 high on 9/8 only to slide the last five days including today (although it appears at this time, a doji may be forming).
"Interestingly, the totals are now fairly evenly split between equity options, index options and ETF options whereas a year ago the equity options total was about double the other two types."
Bill, FWIW. The Options Industry Council (OIC) is providing (marketing) free seminars on ETF options. I actually received a mailing today of a specific ETF option seminar coming up later this month.
Judging by the record setting option activity in an increased volatile environment, I'd say they are having success.
"Goldman earlier in August lowered its estimate for future legal costs to $2 billion from its $2.7 billion estimate three months earlier. It said it expects such costs to remain high for the foreseeable future."
Yes, GS has lots of money, but can't help but recall the old quip attributed to Senator Evertt Dirksen :
"A billion here, a billion there, pretty soon, you're talking real money."
Some interesting thoughts and insights by Mauldin on the BLS employment figures among other things (another--there are over 3,000 different tax programs that allow for deductions”) in this weekend’s missive. He acknowledges the employment “numbers need to be taken with a large dose of salt,” but recognizes the nuances like they now include the 2010 census.
“There were some early comments that the unemployment number was lower because another 1.1 million people dropped out of the work force, no longer looking for work. If you read just the simple number, you might think that. But there were asterisks all over this report, telling us we had to look deeper. A lot deeper.”
He then goes on to examine in more detail.
Have to run; not enough time to cut & paste. This link may require one to register (free) for the weekly email of his “Thoughts from the Frontline.” Perhaps you could google or bing; the title of this weekend’s article is Who Took My Easy Button
http://www.johnmauldin.com/frontlinethoughts/who-t...
Recently I was about to download a mobile app on my android smartphone from a big city daily newspaper.
I checked the “permissions” which included the usual gps location, etc. However, I noticed the app permissions also authorized access to your phone book, all numbers called, your smartphone camera and all photos in your gallery!
Why does the newspaper need access to these? Needless to say, I declined and did not load the app.
There doesn’t seem to be much concern over the lack of privacy. Perhaps it’s a generational gap.
"LOL I don't have 25k and can't daytrade, yet this fool can steal hundreds of millions, deal in billions without a license, and get off scot-free."
I share your outrage, along with others, about Corzine. However, it's not a given he will "get off scot-free."
Most crimes are here's the crime (be it robbery, assault, theft), who did it?
In fraud, it's a little different.
It's more like here's the body, where's the crime?
An investigation will have to unravel the evidence of what happened, where's the money, etc. It takes more time to put the blocks in place to build a criminal financial fraud case.
The media can put out all types of information about missing money, alleged statements and even write opinions without concerrn of putting it all together in a legal criminal prosecution requiring subpoenas, interviews and a trail of digital evidence and document review.
Don't get me wrong, I'd like to see him sent off to prison now. Maybe "tar and feathers" is more approriate.
We'll see how it turns out, but unfortunately, we'll have to wait.
From Bloomberg:
MICHAEL LEWIS' TAKE ON THE OCCUPY PROTESTS
"There's a reason the Lower 99 currently lack leadership: Anyone with the ability to organize large numbers of unsuccessful people has been diverted into Wall Street jobs, mainly in the analyst programs at Morgan Stanley and Goldman Sachs.''
The Greek Lower 99 viewpoint: "Ordinary Greeks seldom harass their rich, for the simple reason that they have no idea where to find them. To a member of the Greek Lower 99 a Greek Upper One is as good as invisible."
http://tinyurl.com/7z6mz9w
With everything else happening this morning . . .
Remember the rules proposed by the SEC on Naked Access? Implementation was delayed last summer as HB&B and others bitterly complained.
Well, those partial rules banning "naked access" where electronic traders bypass brokerage firms takes effect today.
Interestingly, I recently received a letter from the broker offering 6% interest if my wife would loan shares of a stock in her IRA.
Excerpt from Schwab's Sonders that caught my eye:
"During last Wednesday's big decline, the TRIN closed above 6. That's only happened eight times in the past 60 years, and one month later, the S&P 500 was up every time, by an average of 6.0%.
Three months later it was up every time except one, by an average of 10.3%, with the one loss a meager -0.1%.
What it shows is that we experienced some climactic selling pressure last week, a good sign."
Crain's (Chicago):
Forget all that tut-tutting coming from the Beltway's smart set. A deal to cut the federal deficit by more than $1 trillion and avoid devastating cuts is on the way.
So say Illinois' two U.S. senators. (Note: 1 Dem and 1 Rep)
http://tinyurl.com/72gbhkn
I see clues of small growth similar to what Bill has mentioned. It's not perfect and it's not 2006, but it's also not recession IMO.
Yes, I’ve read posters here who paint a bleak picture in their neighborhood, houses underwater, manufacturing gone and not returning, unemployment up, etc.
I look around and see what’s happening not only where I live, but also when traveling and when I talk with others. It’s similar to trade what you see, not what you think. (Or what the FETV media tells you to think)
I do see some signs of life. Here are just a couple of observations:
- In mid October, I took a trip to Boston and Massachusetts. Their economy seems to be doing well. I had a hotel room in Boston, but did check on availability while there. Practically all the city hotel rooms were packed and had no vacancy. I found one or two hotels with a room or two available, for “discount” prices ranging from $300 to $600. There were a lot of people in town and the restaurants were full. Lot of hustle and bustle.
-In a working class town along the SE coast of MA where I regularly visit, I saw some signs of construction and expansion.
These things usually don’t happen in a recession.
-A relative works for an upscale restaurant in Minneapolis. He’s been there for more than 12 years. During September 2011, they took in the most revenue ever: +20% more than any prior month. I was surprised. I talked to him again about 2 weeks ago and it appears October will have similar revenue. He couldn’t put his finger on any specific reason other than business travel and activity have picked up.
That usually doesn’t happen in a recession.
Finally, when things are picking up have you ever noticed how the quality of service suffers somewhat?
-Example: A coffee chain establishment nearby (Chicago) had a complete turnover in staff. The manager said a number were college students who had found better opportunities elsewhere. Soon the manager was transferred/promoted. On a recent visit I ordered coffee, but my better half wanted a skim decaf café ole. No one knew how to make it and the new manager had to call another store to ask about it. I kid you not! Guess they don’t train personnel before they place them in the store.
This may be just one example, but I’ve recently encountered slippage in service at least two other locations. Perhaps it’s just an anomaly. However, I’m keeping my eye on this as I view it as a “tell” on the economy.
Now this doesn’t mean Europe, our politicians and/or HB&B can’t throw a wrench into everything and things change again; but for right now, I’m seeing some growth out there.
Going into tomorrow, looking at 1300 as resistance and the 200 SMA around 1275 as support.
One would think there would be a pullback or sideways consolidation due, However, it is the end of the month and some funds don’t like to appear as if they had a lot of cash on the sidelines during the biggest monthly advance in decades.
A lot of hedge funds have lagged the market this month and underinvested. A number are reportedly under for the year and will be pressured to play catch-up before the end of the year. We could see some performance chasing. So looking out a month or two, I suspect an uptrend after some consolidation and buying on the dips.
Only caveat is the November due date for the political deficit commission Bill alluded to earlier. That's the landmine to get past.
Friday earnings due out include: CVX, MRK, CI, GT, WY, WHR, ACI, NEW and BIIB.
From the Daily Pfennig quoting Casey Research:
"This week the Chinese Gold & Silver Exchange Society (CGSE) - a bullion exchange based in Hong Kong - started trading gold quoted in Chinese yuan.
The contract, called Renminbi Kilobar Gold, is promoted as offering investors a "double safe haven" - exposure to both gold and an appreciating currency.
This line of thought nicely accompanies China's intention to boost the yuan's international appeal. It is expected that this product will attract retail and institutional investors alike from both the Chinese mainland and overseas.
Whether or not the yuan can deliver its part of the "double safe haven plan," Renminbi Kilobar Gold trading in the first day was strong, with 322 traded gold contracts totaling 112 million yuan (or US$17.5 million). The settlement price ended up at 346.95 yuan per gram, or $1,693.9 an ounce."
TOM RAUM / Associated Press / October 20, 2011
"The government is reporting that 50 percent of U.S. workers earned less than $26,364 last year, reflecting a growing income gap between the nation's rich and poor.
According to the Social Security administration, there were fewer jobs and overall pay was trending down — except for the wealthiest Americans. The number of people making $1 million or more soared by over 18 percent from 2009. There were 5.2 million fewer jobs in 2010 than in 2007, when the deepest recession since the 1930s began.
The payroll figures are based on W-2 forms submitted by employers to the IRS. The figures were posted by Social Security on its website . . . . "
The "Help I'm getting arrested!" app for your android phone.
http://download.cnet.com/8301-2007_4-20119537-12/h...
It's a new century.
Interesting that Chicago OWS demonstrators/protesters and police (CPD) held meetings ahead of time to prevent any problem situations.
Parties agreed ahead of time to:
Demonstrator wearing:
Red shirt: wants/willing to be arrested if asked to move
Yellow shirt: unsure
Green shirt: I'll move, don't arrest me
Seems to be working. Unaware of any injuries. Not sure the media is aware of agreement.
So how are the banks reporting earnings? Through smoke and mirrors!
Check those numbers and you’ll see something called DVA (debt value adjustment). DVA records debt securities as an adjustment!
Excerpt from October 17th edition of Barron’s Up and Down Wall Street by Randy Forsyth
“WHO SAYS ACCOUNTANTS DON'T have a sense of humor? The rules for bank earnings are as absurd as anything Monty Python ever came up with, but to the market, they're pretty much an unfunny joke.
Take JPMorgan Chase (ticker: JPM), which posted third-quarter earnings of $1.02 a share Thursday, handily beating the consensus estimate of 91 cents. A big factor: a $1.9 billion gain from DVA, or debit valuation adjustment. DVA reflects the change in value of the company's debt securities. A decline is recorded as an addition to income because the presumption is the company would be able to repurchase the debt at a discount and record a gain. Of course, the same holds if that same company's finances deteriorate, according to this accounting theory.
This principle should be applied to Europe. Think of it: Record the decline in the price of Greek government bonds as revenue. That should eliminate Greece's budget deficit. Repeat in Ireland, Portugal, Spain and Italy. Problem solved.”
Rare to see this situation . . . looks like State of Michigan may have a surplus! I can guarantee you Illinois, California, others aren't in the same neighborhood.
"Lansing, — It turns out Michigan's state government might have brought in more money from taxes and fees than previously expected in the fiscal year that ended Sept. 30.
That likely will set up a battle this fall over what to do with the cash, which could total $285 million or more."
http://detnews.com/article/20111016/POLITICS02/110...
Not sure if this was previously posted. Der Spiegel, MSNBC, NYT mentioned it.
Title: Traders more reckless than psychopaths, study shows
“Traders more reckless than psychopaths, study shows disturbing new research about financial traders and their personalities may shed some light on the behavior of Kweku Adoboli, the so-called “rogue” UBS trader who allegedly lost the bank $2.3 billion through unauthorized trading.”
“A new study from a Swiss university finds that financial traders are more uncooperative than psychopaths and that they have a greater tendency for lying and risk-taking.”
http://tinyurl.com/3odqrmk
Some of the community has made trips to gold miners checking out operations, etc. And Bill has mentioned his upcoming trip to SVM’s operations in China.
This week’s Barron’s has an interesting article on visiting a junior exploration company in British Columbia, CN that you may find informative.
“A company-led tour of a gold mine can yield useful information. But it can't answer the big questions: how much gold is in the ground, and how much value is in the miner's shares?”
"Gold mine visits can yield useful information about geology, drilling prospects and management's plans. But seeing isn't always believing."
http://online.barrons.com/article/SB50001424052702... (may require subscription)
You can try to Bing or Google the title.
Titled: Is There Gold in Them Thar Hills
Speaking of juniors, recall past mention of SVM as one of the top 10 holdings of the GDXJ ETF.
The last semi-annual report (June 2011) shows SVM as the number 5 holding comprising 3.5% of portfolio. The ETF owns 7,512,925 shares as of the date of the report.
GDXJ hit its SEP 2011 high on 9/8 only to slide the last five days including today (although it appears at this time, a doji may be forming).
"Interestingly, the totals are now fairly evenly split between equity options, index options and ETF options whereas a year ago the equity options total was about double the other two types."
Bill, FWIW. The Options Industry Council (OIC) is providing (marketing) free seminars on ETF options. I actually received a mailing today of a specific ETF option seminar coming up later this month.
Judging by the record setting option activity in an increased volatile environment, I'd say they are having success.
Reference the announcement today of GS CEO Blankfein hiring a noted defense attorney,
Chicago Tribune http://tinyurl.com/3jh4bu9 reports
"Goldman earlier in August lowered its estimate for future legal costs to $2 billion from its $2.7 billion estimate three months earlier. It said it expects such costs to remain high for the foreseeable future."
Yes, GS has lots of money, but can't help but recall the old quip attributed to Senator Evertt Dirksen :
"A billion here, a billion there, pretty soon, you're talking real money."