Gold Daily and Silver Weekly Charts - Shaken, But Not Stirred - Credibility Trap

"This strange, weak obstinacy, this persistence in the wrong path of progress, grows weaker and worse, as do all such weak things. And by the time in which I write its moral attitude has taken on something of the sinister and even the horrible.

Our mistakes have become our secrets. Editors and journalists tear up with a guilty air all that reminds them of the party promises unfulfilled, or the party ideals reproaching them. It is true of our statesmen that socially in evidence they are intellectually in hiding. The society is heavy with unconfessed sins; its mind is sore and silent with painful subjects; it has a constipation of conscience.

There are many things it has done and allowed to be done which it does not really dare to think about; it calls them by other names and tries to talk itself into faith in a false past, as men make up the things they would have said in a quarrel. Of these sins one lies buried deepest but most noisome, and though it is stifled, stinks: the true story of the relations of the rich man and the poor in England. The half-starved English proletarian is not only nearly a skeleton but he is a skeleton in a cupboard."

G. K. Chesterton, Eugenics and Other Evils

That is a very good description of the credibility trap.

The ruling elite find themselves temporarily embarrassed, even shaken, by their repeated failures in economic and public policy over the past twenty years or so.

However, since they themselves are doing so well, they have not yet stirred themselves to do anything yet about it.

And so they continue to repeat their failures, from bubble to crash to bubble, stretching the fabric of society to hide their terrible errors, to blind themselves as they teeter towards the abyss.

Have a pleasant weekend.

 

 

 

 

SP 500 and NDX Futures Daily Charts - Labor Games

Some days I just do not have the words.

I would like to point out just one anomaly in the Jobs Report.

The 'plug' that the BLS puts in for jobs that were added and subtracted by small business being created and failing is called 'the Birth/Death Model.' It is a fairly substantial number in some months. I refer to it as the 'imaginary jobs number.'

This number is added to the unseasonalized, unadjusted raw jobs number, and then is seasonalized and adjusted to form the basis for the 'headline number.'   You can think of this BLS Birth/Death model as one part of a 'double adjustment' on the jobs.

One thing that stood out on this report was that the imaginary jobs added were exactly 213,000 for both April and May.

I cannot recall seeing a number repeat so exactly like this in all the years I have been watching these reports.  I just thought that it was interesting.  Normally the numbers are much more volatile.

 

If you back out the imaginary jobs with the second layer of seasonality the economy added about 64,000 jobs.  I tend to watch this each month.  

 

I am sure that there are a number of jobs being added by companies being created and going out of business.  But I think what the BLS comes up with is best looked at over a long period of time, and is inappropriate as a monthly indicator of just about anything. 

 

The 'jobs' in the US tend to be growing, slower than the increasing workforce, and also tend to be low paid.   The Administration was quick to say that this is why we should be cheering for the TPP, because any export jobs it might create are likely to be higher-paying.

 

And except for media drones and politicians, no one over the age of seven is likely to have found any of that to be credible.

 

Have a pleasant weekend.

 

 

 

 

 

 

Gold Daily and Silver Weekly Charts - Financialization: Reaping Profits Without Prosperity

“Corporate profitability is not translating into widespread economic prosperity. Five years after the official end of the Great Recession, corporate profits are high, and the stock market is booming. Yet most Americans are not sharing in the recovery.

While the top 0.1% of income recipients—which include most of the highest-ranking corporate executives—reap almost all the income gains, good jobs keep disappearing, and new employment opportunities tend to be insecure and underpaid. The allocation of corporate profits to stock buybacks deserves much of the blame.”

Harvard Business Review, Profits Without Prosperity

Non-Farm Payrolls tomorrow.

 

Fundamentals do not matter to The Bucket Shop, in either direction. 

 

It is all about the game, and keeping it going, while placating the money masters.

 

The game is the thing.

Have a pleasant evening.