Thursday, April 30, 2015

The Last Time Initial Jobless Claims Were This Low Was The Peak Of The Dot-Com Bubble (



Submitted by Tyler Durden on 04/30/2015 08:43 -0400


Initial jobless claims have been worse than expected for the last 2 weeks but remained below the magical 300k level, so it was only appropriate that this week all the great economic news of late - record plunge in US macro disappointments and a dismal 0.2% GDP print - would be met with the lowest claims print in 15 years. At 262k (against a 290k expectation), initial claims has only been lower once - the week of April 14th 2000 - which just happened to mark the top of the Dot-Com bubble. While this is great news, we do note that a rolling average of Texas Jobless claims shows the improving trend has stalled.

Outlier or new trend?

But a rolling average of Texas Jobless claims shows the improving trend has stalled...

Perhaps most worrying is this... the last time we were this low - only once in history, marked the week of the top of the DotCom bubble in 2000....

Charts: Bloomberg

Wednesday, April 29, 2015

Is This A Blow-Off Top? Four Ways To Tell (Zerohedge)



Submitted by Tyler Durden on 04/27/2015 23:35 -0400

Those who lived through the last two speculative blow-off tops know the impossibility of predicting the final top.

How can we tell if stocks are in the final blow-off stage of a bubble? There are four basic give-aways:

1. Parabolic rises in stocks and speculative debt.

2. The mainstream financial media claims the clearly visible bubbles are justified by fundamentals.

3. Conventional financial authorities insist this is not a blow-off top.

4. The expressions of regret of those who sat out the latest rally become ubiquitous.

In the past few days, I have read two laughably baseless justifications of the bubble in Chinese stocks by conventional financial analysts:

A) China is a "black box," i.e. unfathomable, so go with what we know, which is that China is a nation of entrepreneurs: this is the green light to buy the bubble here if you want to reap easy profits.

B) The stock market bubble in China is positive evidence of a healthy re-adjustment of China's financial system.

That neither thesis has the slightest foundation in reality doesn't matter, as the real agenda of the analysts is to justify their own attempts to join the crowd reaping vast profits in the bubble.

This denial that a speculative blow-off is clearly occurring is a key indicator that a blow-off top is in its final stages.

Consider the Shanghai stock index (SSEC). Is it truly normal for the stock markets of nations with economies approaching stall-speed to double in less than a year?

Amazon is a large, well-run corporation, but its core businesses are low-margin (as for the cloud business--everybody and their brother is ramping up their cloud biz). Is it truly normal for a low-margin company's stock to rise 50+% in four months?

Margin debt reflects the "animal spirits" of speculation and confidence. When borrowed money is used to buy more stocks, it makes the resulting rise vulnerable to a decline that forces recent buyers to liquidate their positions to cover their margin calls.

Margin debt has reached new highs; what happened when margin debt hit these levels in prior cycles?

The soaring confidence in future advances that define blow-off tops is visible in declining measures of volatility such as the VIX and VXX. (Recall that volatility and stocks are on a see-saw; should the VXX reverse and move higher, stocks would plummet.)

One last method to identify blow-off tops is to look for repeating patterns that marked previous blow-off tops.

Those who lived through the last two speculative blow-off tops know the impossibility of predicting the final top. Those who bet the top is in (i.e. make short bets that will gain if the market reverses and drops) are often forced to cover when the market advances further, and this panic buying pushes the market even higher.

Only when the ranks of bears willing to bet against the market thin will the short-covering boost dissipate. At that point of bearish exhaustion, the market will roll over when the greater fools (last buyers of the blow-off top) run out of margin buying power.



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Thursday, April 16, 2015

The Four Chartsmen Of The Recession (Zerohedge)


Tyler Durden's picture

Submitted by Tyler Durden on 04/15/2015 22:40 -0400

While broadly-speaking, both 'hard' and 'soft' macro data has disappointed, the scale of those 'missed expectations' is stunning - worst since Lehman. While this is blamed on weather, the fact is that America had 30% less snow this year than last and still, as the following four chartsmen of the recession-pocalypse show, the YoY drops are on a scale not seen outside of a recession...

US Macro Data has surprised to the downside on a scale not seen since Lehman...

So here are the four charts that can only be ignored by the likes of Liesman, Kudlow, and Cramer...

Sales are weak - extremely weak. Retail Sales have not dropped this much YoY outside of a recession...

And if Retail Sales are weak, then Wholesalers are seeing sales plunge at a pace not seen outside of recession...

Which means Factory Orders are collapsing at a pace only seen in recession...

And finally - coming full circle - it appears everyone is scrambling for credit to afford to maintain even a semblance of living standards (and lift retail sales) but "rejections" of credit requests have never - ever - been higher...

So the credit available to goose retail sales, which will goose wholesale sales which will drive factory orders... is no longer available to every muppet with a 500 FICO (old or new version) Score!!

*  *  *

But apart from that, given that US equities are at record highs, everything must be great in the US economy.

Bonus Chart: Just in case you figured that if domestic credit won't goose the economy, what about the rest of the world... nope!! Export growth is now negative... as seen in the last 2 recessions.



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Sunday, April 5, 2015

Liberals May Regret Their New Rules ^ | April 5, 2015 | Kurt Schlichter

Posted on ‎4‎/‎5‎/‎2015‎ ‎8‎:‎33‎:‎41‎ ‎AM by Kaslin

That photo is me about ten years ago, standing in the ruins of a land where people rejected the rule of law in favor of the rule of force. I think a lot about my year-long deployment to Kosovo these days. I think a lot about people today who, for short term political points, cavalierly disregard the rules, laws and norms that made America what it is. I think a lot about how liberals, especially those who boo God, should pray to Him that those rules, laws and norms are restored.

I am most certainly not smiling – I am squinting in the winter sun, having doffed my ever-present Ray-Bans. Behind me is – well, was – a village along the Ibar River in northern Kosovo. In the 1990s, it was full of Serbs and gypsies (The new, politically correct term is “Roma”). Back then, after the disintegration of Yugoslavia, Kosovo was a province of Serbia. Without rehashing the centuries of ancient animosities and grievances, the Orthodox Serbs found themselves unrestrained by the political consensus that Josip Tito had enforced and began an escalating series of petty and not-so-petty oppressions against the Kosovar Albanians. The “K-Albs” are about 10% Christian but mostly moderate Muslims (we called them “party Muslims,” and our troops used to love to go on patrol through K-Alb towns during the spring when the gorgeous Albanian women were in full effect). They were a minority in Serbia as a whole, but a majority in the province of Kosovo.

Now, there’s no understanding Balkan hatreds – don’t even try. But basically, the tensions really kicked in after Slobodan Milosevic came to the battlefield at Kosovo Polje in 1989 on the 500th anniversary of the Muslim Ottoman Turks annihilating the cream of Serbian nobility. Thereafter, the campaign of exclusion and harassment against the K-Albs by Serbs ratcheted up. Where they had lived together in peace before, now the Serbs – unrestrained by laws, rules or norms – became increasingly despotic.

Eventually, the Serbs tried to drive out the despised minority K-Albs. NATO intervened and saved the Albanians, who promptly came back and drove the Serbs out. The Roma, perceived as allies of the Serbs, fled too. That village behind me wasn’t blown up by explosives. That damage was done by people, with picks and shovels and bare hands.

Which brings us to America in 2015. It’s becoming a nation where an elite that is certain of its power and its moral rightness is waging a cultural war on a despised minority. Except it’s not actually a minority – it only seems that way because it is marginalized by the coastal elitist liberals who run the mainstream media.

Today in America, we have a liberal president refuses to recognize the majority sent to Congress as a reaction to his progressive failures, and who uses extra-Constitutional means like executive orders to stifle the voice of his opponents. We have a liberal establishment on a secular jihad against people who dare place their conscience ahead of progressive dogma. And we have two different sets of laws, one for the little people and one for liberals like Lois Lerner, Al Sharpton and Hillary Clinton, who can blatantly commit federal crimes and walk away scot free and smirking.

Today in America, a despised minority that is really no minority is the target of an establishment that considers this minority unworthy of respect, unworthy of rights, and unworthy of having a say in the direction of this country. It’s an establishment that has one law for itself, and another for its enemies. It’s an establishment that inflicts an ever-increasing series of petty humiliations on its opponents and considers this all hilarious.

That’s a recipe for disaster. You cannot expect to change the status quo for yourself and then expect those you victimize not to play by the new rules you have created. You cannot expect to be able to discard the rule of law in favor of the rule of force and have those you target not respond in kind.

Liberals ask how a baker can believe that making a cake for a same sex wedding violates his conscience, but they don’t think about how the standard they are setting is that the government now gets to determine the validity of individual beliefs. Do they want us passing judgment on them?

Liberals imagine that their president can simply take whatever actions he pleases – including ones he previously admitted were unconstitutional – and that the next Republican president won’t do the same. Except then it will be to negate their cherished policies.

Liberals praise Harry Reid for lying about Mitt Romney and for ensuring the GOP’s voice can’t be heard on Capitol Hill, but they don’t think about what happens to them when they are out of power in an environment where slander is the norm and where minorities have no say. Conservatives have principles, but human nature is a powerful thing, and human nature favors payback.

The revolt has begun, peacefully. In 2010, and again in 2014, the Silent Majority returned and sent an unmistakable message to the liberal elite. When Bill Clinton got that message in 1994, he recognized that opposition and worked with it. But under Obama, the liberal elite acts to ignore and delegitimize the opposition. 2014 was not a tantrum; it was a warning, and the liberals are betting that they can bluff and bluster their way through it.

When you block all normal means of dissent, whether by ignoring the political will of you opponents or using the media to mock and abuse them, you build up the pressure. In 30+ years as an active conservative, I’ve never heard people so angry, so frustrated, so fed up. These emotions are supposed to be dissipated by normal political processes. But liberals are bottling them up. And they will blow. It’s only a matter of how.

Liberals need to understand the reality that rarely penetrates their bubble. Non-liberal Americans (it’s more than just conservatives who are under the liberal establishment’s heel) are the majority of this country. They hold power in many states and regions in unprecedented majorities. And these attacks focus on what they hold dearest – their religion, their families and their freedom.

What is the end game, liberals? Do you expect these people you despise to just take it? Do you think they’ll just shrug their shoulders and say, “Well, I guess we better comply?” Do you even know any real Americans? Do you think you’ll somehow be able to force them into obedience – for what is government power but force – after someone finally says “Enough?”

In my book Conservative Insurgency, I offer a scenario set in the late 2010s where the Texas governor refuses to allow Hillary Clinton to enforce an unconstitutional handgun ban within his state. It devolves into a brief, bloody spasm of violence, after which a sobered country walks back from the precipice and returns to resolving conflicts through the Constitution (albeit, with some lingering damage to our political and social norms). But there is no guarantee that things might not spin out of control the other way. And then liberals would be well advised to ask themselves who will be willing to fight and die to preserve their power and policies. In contrast, there are an awful lot of people willing to fight and die for their religion and our Constitution.

And let’s be blunt – these are the people with most of the guns and the training to use them. That’s the reality of the rule of force. I’ve seen it – it’s there behind me in that photo.

Now, this will no doubt draw the lie that I am somehow advocating violence. The current liberal habit of shamelessly lying about their opponents makes civil debate impossible. Similarly, the mockery of non-liberals before stacked audiences of trained seals a la Jon Stewart is part and parcel of the same strategy of delegitimizing any opposition. Closing down the option of discussion leaves their opponents with only the option of action. So far, the action has only been in funding campaigns for oppressed pizzerias and in the voting booth – though they’ve trying to nullify that too.

I’m not advocating violence – I am warning liberals that they are setting the conditions for violence.

And that better worry them, for the coastal elites are uniquely unsuited to a world where force rules instead of law. The Serbs were, at least, a warrior people. The soft boys and girls who brought us helicopter parenting, “trigger warnings” and coffee cups with diversity slogans are not.

I know the endgame of discarding the rule of law for short-term advantage because I stood in its ruins. Liberals think this free society just sort of happened, that they can poke and tear at its fabric and things will just go on as before. But they won’t. So at the end of the day, if you want a society governed by the rule of force, you better pray that you’re on the side with the guns and those who know how to use them.

Saturday, April 4, 2015

Singapore Has Found A Workable Alternative to the Welfare State ^ | April 4, 2015 | John C. Goodman

Posted on ‎4‎/‎4‎/‎2015‎ ‎9‎:‎29‎:‎22‎ ‎AM by Kaslin

Lee Kuan Yew, the first prime minister of Singapore, died last week at age 91. Almost every obituary has remarked on the radical transition his leadership heralded. As John Fund wrote at National Review:

“By embracing free trade, capital formation, vigorous meritocratic education, low taxes, and a reliable judicial system, Lee raised the per capita income of his country from $500 a year to some $52,000 a year today. That’s 50 percent higher than that of Britain, the colonial power that ruled Singapore for 150 years. Its average annual growth rate has averaged 7 percent since the 1970s.”

Part of the reason for Singapore’s remarkable climb up the international income ladder is bread and butter capitalism. The Frasier institute’s Freedom of the World report lists Singapore as the second freest economy in the world -- right behind Hong Kong. As Frasier scholars have demonstrated year after year, economic growth and free markets go hand and hand.

But Singapore has done something even more remarkable than its economic accomplishments. It has built an alternative to the European style welfare state. Think of all the reasons why people turn to government in other developed countries: retirement income, housing, education, medical care etc. In Singapore people are required to save to take care of these needs themselves.

At times the forced saving rate has been as high as 50 percent of income. Today, employees under 50 years of age must set aside 20 percent of their wages and employers must contribute another 16 percent. These funds go into accounts where they grow through time until specific needs arise. For example, one of the uses for these savings is housing. About 90 percent of Singapore households are home owners – the highest rate of home ownership in the world.

In health care, Singapore started an extensive system of “Medisave Accounts” in 1984 – the very year that Richard Rahn and I proposed “Medical IRAs” for America in the Wall Street Journal. Today, 7 percentage points of Singapore’s 36 percent required savings rate is for health care and is deposited in a separate Medisave account for each employee. Individuals are also automatically enrolled in catastrophic health insurance, although they can opt out. When a Medisave account balance reaches about $34,100 (an amount equal to a little less than half of the median family income) any excess funds are rolled over into another account and may be used for non-health care purposes.

For many years, the only two scholars in the Western world who paid much attention to Singapore were Washington University economist Michael Sherraden and me. Michael approached the Singapore experience from a left-of-center perspective and I came from the opposite direction. We both ended in the same place: this is an alternative to the welfare state that works.

Lately, quite a number of other scholars have discovered Singapore, especially its health care system – again, with both right and left finding a lot to admire. It’s taken almost three decades, but Singapore is now the subject of a book by Brookings Institution, a whole slew of posts by Austin Frakt and Aaron Carroll, and a good overview by Tyler Cowen, with links to other studies and comments.

Sherraden recently summarized some of Singapore’s major social policy innovations as follows:

“Step by step, the Singapore state created a new social policy system that had asset building as its central structure…. In the world of social policy, it would be hard to overstate the exceptionality and the extent of this innovation…. During the past 25 years, Singapore policy has taken important steps toward lifelong asset building, beginning very early in life. These innovations include EduSave, the Baby Bonus, Child Development Accounts, and related asset-building incentives.”

For John Fund, Singapore’s most significant accomplishment is the avoidance of the mistakes of other countries:

“I believe that the least appreciated part of Lee Kwan Yew’s legacy is his method of ensuring that one generation won’t bankrupt future generations by selfishly living beyond its means. It’s a welfare state that works, and one he always said was available to any political leader with the courage to tell his people the truth about the limits of government’s power to pass out goodies.”

For my part, I would summarize the philosophy of Singapore as follows:

  • Each generation should pay its own way.
  • Each family should pay its own way.
  • Each individual should pay his own way.
  • Only after passing through these three filters should anyone turn to the government for help.

If the United States had adopted a similar approach to public policy, there would be no deficit problem in this country.

Thursday, April 2, 2015

Let's hear it for a Quebec mayor...


Or as the commercial promoting pork says
“put some pork on your fork”



Muslim parents demanded the abolition of pork in all the school canteens of a Montreal suburb.

The mayor of the Montreal suburb of Dorval ,has refused, and the town clerk sent a note to all parents to explain why...

“Muslims must understand that they have to adapt to Canada and Quebec , its customs, its traditions, its way of life, because that's where they chose to immigrate.

“They must understand that they have to integrate and learn to live in Quebec .

“They must understand that it is for them to change their lifestyle, not the Canadians who so generously welcomed them.

“They must understand that Canadians are neither racist nor xenophobic, they accepted many immigrants before Muslims (whereas the reverse is not true, in that Muslim states do not accept non-Muslim immigrants).

“That no more than other nations, Canadians are not willing to give up their identity, their culture.

“And if Canada is a land of welcome, it's not the Mayor of Dorval who welcomes foreigners, but the Canadian-Quebecois people as a whole.

“Finally, they must understand that in Canada ( Quebec ) with its Judeo-Christian roots, Christmas trees, churches and religious festivals, religion must remain in the private domain.

The municipality of Dorval was right to refuse any concessions to Islam and Sharia.

“For Muslims who disagree with secularism and do not feel comfortable in Canada , there are 57 beautiful Muslim countries in the world, most of them under-populated and ready to receive them with open halal arms in accordance with Shariah.

“If you left your country for Canada , and not for other Muslim countries, it is because you have considered that life is better in Canada than elsewhere.

“Ask yourself the question, just once, “Why is it better here in Canada than where you come from?”

“A canteen with pork is part of the answer.”

If you feel the same forward it on, if not, hit the delete key!