08 March 2013
Gold Daily and Silver Weekly Charts - God's Mills Grind Slowly
Gold and silver would not be denied, despite some fairly determined efforts.
Silver did the heavy lifting. The intra-day charts are included below.
"Gottes Mühlen mahlen langsam, mahlen aber trefflich klein,
Ob auß Langmuth er sich seumet, bringt mit Schärff er alles ein."
Friedrich von Logau, Göttliche Rache
Have a pleasant weekend. See you Sunday evening.
SP 500 and NDX Futures Daily Charts - Selling Freedom, Playing For Time
I picked up a little volatility insurance near the close today.
My timeframe on this is to the end of March.
It was hard to miss the big non-confirmation in the NDX today.
"The woods decay, the woods decay and fall,
The vapours weep their burthen to the ground,
Man comes and tills the field and lies beneath,
And after many a summer dies the swan."
Alfred Lord Tennyson, Tithonus
I am curious to see which black swan comes home to roost first: Europe or China.
Ed Lazear, the distinguished economist from Stanford, formerly chief economic advisor for G.W. Bush, and now a Senior Fellow at the Hoover Institution, thinks a good approach to immigration reform would be for the US to sell its citizenship on the open market to the highest bidders.
He was expounding this after the close on Bloomberg television, which is a bastion for all things of the swinish persuasion. He calls it 'importing human capital.' It sounds remarkably like indentured servitude.
As related by the Wall Street Journal:
"To ensure that not only the wealthy could gain citizenship, the sale of immigration slots could be coupled with a loan program that allows people to borrow the fee and to pay it back out of their earnings over an extended period. To minimize default, the loan payments would be automatically withheld from their paycheck, just as income and payroll taxes are today."
In a similar vein the US could reinstitute a military draft, but sell exemptions to the highest bidder. And in fairness the government could offer loans to cover the cost of course, adminstered by the Banks of course. This would have the additional benefit of opening up slots in the National Guard which have formerly been taken up by the idle sons of the wealthy.
There are similar proposals for rationing life saving medical care that are already on the table.
Personal air and water meters implanted at birth? Think of the possibilities.
There was a movie written along these lines called In Time. In it people are fixed with meters that measure out their life. They are able to buy additional time to live, at market prices. I wonder if Ed has seen it. It is the perfect market-based, technological solution for maximizing the output of human capital.
"I have always thought that all men should be free; but if any should be slaves it should be first those who desire it for themselves, and secondly those who desire it for others."See you on Sunday evening.
Abraham Lincoln, "Speech to One Hundred Fortieth Indiana Regiment" March 17, 1865
Today's Non-Farm Payrolls Report - The Good News, Bad News - Unadjusted Unemployment at 13%
Today's Non-Farm Payrolls report was encouraging despite the downward revision from last month's headline grabbing number, which in part helped make up today's headline grabbing number.
The seasonality adjustment used in this number was out of the normal bounds from past seasonality adjustments. And as one might have anticipated, the Birth Death model added its customary large number of estimated (imaginary) jobs into the mix.
As you know I prefer to look at the trends, rather than the month to month numbers which can be used to manage perception in the market and the public.
The overall trend shows that the US is not faring as badly as if it might have, at least in the short term, under an austerity regime such as that being followed in Europe.
The most encouraging statistics are the steady although somewhat anemic jobs growth, and the upturn, finally, in average pay. I could not find current median pay numbers in a chart, and this is what is most interesting to me as you know.
The Labor Participation Rate continues its decline. It is a much more significant number than the 'headline' unemployment rate which fluctuates in whom it decides to count as employment-seeking.
According to Bloomberg if the Labor Participation Rate was maintained as steady from before the financial collapse, and 'discouraged workers were not eliminated, the current unemployment rate in the US would be a little north of 13%. But as workers get discouraged the government stops counting them as employment seeking, and the Labor Participation Rate falls.
And finally there is Real Disposable Personal Income Per Capita, which is as close to median as I could get. And just for comparison, a chart showing Total Personal Disposable Income from 1921 to 1939, including the secondary recession of 1937 which was due to a policy error in premature Fed tightening from a fear of inflation.
I think we learned in the 1930's that austerity after a credit bubble induced financial collapse is a destabilizing influence on civil governments. Or at least that was the case in much of the world back then. We seem to have forgotten quite a few lessons from history about regulation, reform, and the consequences of extremes in wealth inequality.
There is little doubt that if the nascent recovery falters, the 'sequester' will be blamed, and not the lack of reform and safeguards in the financial sector which caused the most recent financial crisis in the first place, although it was most certainly a key player in the tech bubble and collapse as well.
One can only speculate that if genuine reform, including restraints on rampant deregulation, had been enacted after the stock market excess of the Tech Bubble, would the people and the world have been spared the Financial Collapse of 2008? And what is yet to come, most likely out of Europe or China?
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