Money Flow Trading Method along with Risk Management

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Four Charts That Suggest Stocks Could Crater Soon
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by Phoenix Capital...
Jun 4, 2017 4:16 PM



The sharp rally from last week feels like a final “gasp” in a bull market move. Stocks are now right at the tip of a bearish rising wedge pattern.
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It would be easy to look at that move chart and believe that this is the start of the next major leg up. The only problem is that the “smart” money in the bond market is not buying this move even for a second.

The long-Treasury Bond ETF (TLT) has erupted higher, breaking out of a six-month consolidation range. This is a major development for perhaps the single most important asset class.
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One of these asset classes is wrong. And it’s likely not bonds. The yield curve has undone the entire election rally. It is now moving towards the BREXIT lows.

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This is a major warning that the system is in fact in “risk off” mode. Stocks are in complete “la la” land… But likely not for much longer. When this pattern finally breaks down, we’re likely going to erase all of the last six months’ gains in a matter of days.

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A Crash is coming… and it’s going to horrific.


Best Regards
Graham Summers
Chief Market Strategist
Phoenix Capital Research

https://yragharris.com/2017/06/04/guide/

Notes From Underground: A Guide For The Perplexed? (Maimonides)


Friday’s unemployment data showed the addition of 138,000 jobs, weaker than the ADP report. Even though the RATE dropped to 4.3% the all-important average hourly earnings rose by a tepid 0.2% and April’s data was lowered by a tenth of a percentage point.

Many readers e-mailed me as to why the S&Ps and NASDAQ continued to rally in the face of weak economic news from the U.S. The BOND rally made sense as investors continued to cover short positions, but what is perplexing is the continued strength in the precious metals and the currencies despite a strong U.S. equity market.

The entire risk-on/risk-off paradigm is breaking down. Even the relationship of a Strong NIKKEI/weak YEN is decoupling. I posit this point as a possibility: The U.S. TRADE DATA was also released on Friday, which showed that the deficit continued growing, a source of angst for the Trump mantra of “Make America Great Again.” Nobody HAS DISCUSSED THE TRADE DEFICIT IN ANY MEANINGFUL TRADING SENSE FOR YEARS, but in an administration that’s trying to roll back Pax Americana, it may be time to begin weighing the U.S. trade numbers in entering currency positions.


There are two points I made back in January that support this view. The first was to pay attention to a quote from former Ford Motors CEO Mark Fields: “Currency manipulation is the mother of all trade barriers.” The other point I made highlighted the difficult Trump would face in dealing with Washington and Pax Americana’s entrenched bureaucracy.

The TRUMP agenda is bogged down in partisan politics thus negating the immediacy of the enactment of health care and tax reform and yet the equity markets power on.


The continued central bank liquidity additions are very powerful, but I pose this query to my readers: Can ETFs rehypothecate their stock purchases? Meaning, can the purchased stock be lent out as collateral? If ETF assets cannot be rehypothecated then the power of ETFs is enhanced because short-sellers will have difficulty borrowing stocks, removing a powerful player form market participation. The same query applies to the Swiss National Bank. Can they lend their assets? If not, think about the powerful impact of all that stock disappearing into the vault of the SNB. This is a question that came to me in trying to guide the perplexed. There’s much to think about.

http://www.zerohedge.com/news/2017-0...ops+to+zero%29

Bond Market Lunacy - Yields Lower With 4.3% Unemployment Rate Than When 10% - by Michael Carino, Greenwich Endeavors
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by Greenwich Endeavors
Jun 4, 2017 6:10 PM


Get out the strait jackets and dole them out to all bond managers justifying today’s levels of yields. Yields are lower than at the depths of the great recession with a 10% unemployment rate. Any bond manager trying to justify the levels of rates today should be fired. The employment market is healthy and tight, GDP is above the long run average and inflation is right on target with the headline numbers running above target. The only justification for investing in bonds at these eye popping levels should be due to poorly thought out mandates requiring such insane investing.

Employment grew at a healthy clip of 138k which is enough to keep the unemployment rate ticking down. The unemployment rate just hit a new low of 4.3%! Yet the bond market rallied and rates dropped more than when most employment numbers come out with a minus sign in front of it.


The Fed’s decade long campaign to manipulate rates to dangerously low levels has created a casino like environment in US Treasury Market. The problem is there are 4 or 5 casinos and no gamblers sitting at the tables any more. When you add up the daily trading volume of cash and futures Treasury trading, the daily volume reaches 1 trillion. There are 14 trillion Treasuries issued. Half are owned by foreigners and 4 Trillion by the Fed. This leaves 3 Trillion in the
hands of the rest of us. And 1/3 of this value turns over daily. This is such a manipulated and nationally dangerous position; the industry needs to be corrected. But as is typical, it will take an unfortunate financial catastrophe before this gets looked into. And even then, the conclusions will miss the point on purpose.

Why is it that such a glaring problem of manipulation in the Treasury market goes uncorrected? The answer lies in nothing more than greed. Since the manipulation is in the direction of the market being overpriced to low yields, investors are losing trillions in interest but the government benefits with hundreds of billions saved in interest payments. These hundreds of billions saved acts as a huge incentive to turn a blind eye to the manipulation taking place. It also acts as an incentive to never correctly place blame on the parties doing the manipulation. Rather the subterfuge of placing blame on the wrong parties ensures this practice will continue in the future.


Manipulation in Treasuries is a paramount problem but not because of the losses that occur in the Treasury market during the normalization from positions unwinding with a parabolic move higher in yields. Yes, bond market losses could be in the Trillions if rates normalized. But more catastrophic is that HUNDREDS of TRILLIONS of bonds across the globe use the Treasury market as a benchmark to set yields and prices. These hundreds of trillions of bonds are grossly mispriced due to the manipulation taking place in the Treasury market.

My last article invoked a reader to comment that the Treasury market was not manipulated, rather price discovery sets yields. Unfortunately, this individual does not
understand who is trading the Treasury market in such a high volume that 1 Trillion trades daily. How can 1 trillion trade with such limited available float, and still there is limited volatility? Worse, out of the 1 trillion that trades daily, 80% of those trades done by 4 or 5 firms. And limited volatility? Are they trading amongst each other? More likely, are they trading with themselves, creating the volume and setting prices where they see fit? Price discovery is when a market place of
buyers and sellers come together and collectively set prices from non-collusive trading.

When 4 or 5 participants represent the reflective thought process on value in the bond market, this is by far anything than a market place setting prices. It is a consortium - monopolistic or oligopolistic at best - that controls a market place. How can so few parties have such a controlling function on hundreds of Trillions in global bonds? Hundreds of Trillions – let that sink in – by very few???


If anyone cared to correct this, it’s easy. Make it mandatory for participants that are 5 or 10% of the daily volume to make their trading public? Make the most liquid and supposedly safest market in the world transparent. Sound crazy? It’s easy. But it would bring to a crashing halt the daily manipulation. The end result would be a normalization of yields where true investors that care to hold bonds over the long term set prices that reflect adequate compensation for the embedded risks. But higher interest rates mean higher expense for the government and less cash going to partisan projects. Such a conflict of interest assures a blind
eye will be turned and incorrect excuses made when the bond market melts down.

The melt down will come. As the Fed continues to raise rates making cash such a comparable yield without the risks, slowly investors will leave the bond market.

The Fed will be winding down their holdings and more supply from the government issuance will be forthcoming. All it takes is one of the bond manipulating consortium participants to take a step back and the resulting volatility will put an end to these practices. Unfortunately, it will be with painful results for the bond market.

My goal is to make sure that those who want to understand the dynamics in the bond market do so without blinders on. I know when the next bond market debacle hits, excuses will be plenty. But the seeds of these bond market crises are definitely sowed in the Treasury market. Watching a manipulated Treasury market rally
back to yields below that of the financial crisis after a healthy employment number makes me want to shout out warning alarms to the world just like I did
in 2007. I just hope more than a couple are listening this time.



by Michael Carino, 6/4/17

Michael Carino is the CEO of Greenwich Endeavors, a financial service firm, and has been a fund manager and owner for more than 20 years. He has positions that benefit from a normalized bond market and higher yields. Do you?

1. Greenwich Endeavors's blog

http://www.zerohedge.com/news/2017-0...ops+to+zero%29

The US Jobs Market Is Much Worse Than The Official Data Suggest: The Full Story
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by Tyler Durden
Jun 4, 2017 5:18 PM



Following Friday's disappointing payrolls report, yesterday we showed another even more troubling fact about the state of the US labor market: since 2008, over 93% of the total 6.7 million net jobs "created" in the past decade, have been statistical, existing simply inside an excel model somewhere in the US Department of Labor, as a result of the BLS' favorite fudge factor, the Birth/Death adjustment.


Unfortunately, that's just the tip of the iceberg for why the US labor market "recovery" is perhaps the biggest 'fake news' of the US economic narrative, and as a comprehensive recent analysis issued by Morningside Hill reveals, the state of the US jobs market is far worse than the official data suggest.


Here is the real story.
The US jobs market has been described as the backbone of the recovery – 80 months of continuous jobs growth with unemployment hitting 4.3% - the lowest since 2001. However the perceived strength in jobs creation is at odds with other economic indicators.

President Trump ran on a campaign that repeatedly touted “jobs, jobs, jobs.” His emphasis on jobs creation and bringing employment back to America struck a chord with voters. Trump’s election in itself contradicts the popular narrative that the US jobs market is tight and robust. Wages, disposable income and real earnings growth along with low productivity and overall slow economic growth all challenge the BLS’s jobs numbers and thus Wall Street’s perception that the jobs market is tight.

Since the monthly jobs report is eagerly awaited as the most important piece of economic data for financial markets, it warrants a deep dive in order to understand what is going on under the hood. Before we delve into the data, here are some highlights of our findings.

 

1. The Bureau of Labor Statistics (BLS) has been systemically overstating the number of jobs created, especially in the current economic cycle.
2. The BLS has failed to account for the rise in part-time and contractual work arrangements, while all evidence points to a significant and rapid increase in the so-called contingent workforce.
3. Full-time jobs are being replaced by part-time positions, resulting in double and triple counting of jobs via the Establishment Survey.
4. A full 93% of the new jobs reported since 2008 and 40% of the jobs in 2016 alone were added through the business birth and death model – a highly controversial model which is not supported by the data. On the contrary, all data on establishment births and deaths point to an ongoing decrease in entrepreneurship.

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1. Jobless claims have recently reached their lowest level in 43 years which purportedly signals job market strength. Since hiring patterns have changed significantly and increasingly more people are joining the contingent workforce, jobless claims are no longer a good leading economic indicator. Part-time and contract-based workers are most often ineligible for unemployment insurance. In the next downturn corporations will be able to cut through their contingent workforce before jobless claims show any meaningful uptick.

Overall, we have found the headline jobs number, unemployment rate and jobless claims to be poor macroeconomic indicators, since they have failed to account for significant shifts in labor market dynamics.

Who computes the jobs report and how
The “nonfarm payroll employment situation” report (NFP) or the “jobs report” as it is widely known, is calculated monthly by the Bureau of Labor Statistics (BLS) and is released every first Friday of the month. The two most important statistics in the report are the number of jobs added each month and the unemployment rate. The data for these statistics are collected through two separate surveys.

Number of jobs added
The number of jobs added to the economy comes from the Establishment Survey. Basically the BLS sends out the following survey to a sample of about 146,000 businesses.
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As per the form, the government gathers the following information: how many employees worked at the firm in that month along with the total employee compensation and hours worked.

By surveying just a small fraction of US businesses, the measurement errors around this survey are significant. The 90% confidence interval is +-120,000 jobs. Thus in the March 2017 report which had +79,000 jobs, 90 out of 100 samples fall within the interval of -41,000 jobs to +199,000 jobs. In other words, statistically it is impossible to say with any confidence that the economy added any jobs that month, since the number crosses the zero bound and could therefore be negative.


Here is the official BLS data for the jobs added over the past 11 years, and a monthly breakdown for 2016.
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The main problems with this survey are the double and triple counting of jobs because of a structural shift in labor dynamics and the business birth and death adjustment. We will proceed to tackle both in the following pages.


Double and triple counting of jobs in the Establishment Survey due to the transition to a “gig” economy
The shift to part-time and contract-based work has been a disconcerting development over the past years. This unprecedented growth in part-time work relationships has been dubbed the new “gig” economy, capturing the ad-hoc nature of these work arrangements.

Increasingly employers prefer to add temporary part-time workers instead of full-time employees. The rationale is to save costs by paying less for full-time employment perks like healthcare and paid vacation leave among others, while increasing the flexibility for the employer to downsize the workforce if needed. This shift started a few decades ago and accelerated after the financial crisis of 2008.

This new “gig” economy is taking many forms – from Uber and Lyft drivers to multinationals like Amazon and HP – new employees are hired as contractors. A few decades ago part-time and contractual work was mostly utilized in seasonal industries like retail, food services and construction. It has recently spread to manufacturing, technology, airlines, telecoms, financials – it is a structural shift in almost every sector.

As more people are losing their full time jobs they often have to compensate by working multiple part-time jobs to make up for the lost income. For example a laid-off manufacturing employee might need to work 2 or 3 part-time jobs as a waiter at a restaurant and as an office clerk at a healthcare facility. When the BLS does their jobs count in the Establishment Survey they get 1 lost manufacturing job and 2 new jobs in services. Thus, the same employee is double-counted as if 2 new jobs were created for the single job that was lost.


Here is how the BLS treats multiple job holders according to their own definition:
“Establishments report the number of persons on payroll during the pay period that includes the 12th of the month. A person working multiple jobs at different establishments is counted once at each establishment. A person working different jobs at the same business establishment is counted once.”

This creates a perverse environment – as people lose well-paid full-time jobs with benefits, multiple new part-time jobs are created in the economy. However these new jobs are low paid and insecure positions. While the average worker in the economy is worse-off, this dynamic gives a false sense of economic strength.


Needless to say, part-time jobs are far inferior to full-time positions. Contingent workers are facing many challenges compared to full-time employees:

1. Low pay: contingent workers have a median hourly pay around $13 compared to $18 for full-time workers amounting to 38% lower remuneration.
2. Job instability: 28.5% of part-timers were laid off in the previous year compared to 8.2% for full-time employees.
3. Low access to health insurance: only 18% of contingent workers had employer-provided health benefits compared to 56% of regular workers.
4. High poverty rates: 33.1% of core contingent workers earn $20,000 or less per annum while only 10.8% of full-time workers fall within that category.
5. High reliance on public assistance – part-time employees rely on programs like the Supplemental Nutrition Assistance Program for example.

We would now like to consider the data behind these dynamics of a growing contingent workforce.


US Government Accountability Office Survey
A 2010 report by the US Government Accountability Office (US GAO) states that the actual number of contingent workers in the US economy is a full 37.1% of all employees. More importantly, this number has been rapidly growing. In 2006 the contingent workforce was only 32.4%, which means that in 4 years the number has grown by 4.7%. As the table below shows, most of the increase came from the standard part-time workers category.
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The 4.7% increase translates to 9 million workers shifting to part-time employment in just 4 years. Unfortunately, 2010 was the last year in which the US GAO conducted a survey on the contingent workforce, so there is no current data available. We believe it is safe to assume that the percentage of contingent workers in the US economy has further expanded.

Harvard-Princeton study on employment
A new research paper by economists from Princeton and Harvard found that 94% of the jobs created in the current economic cycle were temporary positions. Lawrence Katz, a Harvard University professor and former chief economist at the US Department of Labor and Alan Krueger, a Princeton University professor and a former chairman of the White House Council of Economic Advisers, found that most of the jobs created under the Obama administration were temporary positions.


The study demonstrates that the percentage of workers engaged in alternative work arrangements (defined as temporary help agency workers, on-call workers, contract workers, and independent contractors or freelancers), rose from 10.1% in 2005 to 15.8% in 2015. Unfortunately, those newly created part-time positions account for the vast majority of all new jobs created over the past decade. To convert percentages into actual numbers – more than 9 million out of the 10 million jobs created in that time frame were in fact part-time. The charts below highlight some of the key findings of this study.
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CEO Sub-Index
The Business Roundtable, a lobbying group composed of CEOs of the largest companies in Corporate America, release a quarterly CEO Economic Outlook Survey. The group includes companies with combined revenues of $7 trillion. They provide their hiring outlook in the CEO employment sub-index. As we can see from the chart below their outlook has been consistently far less optimistic than the numbers we have seen in the official payrolls reports. The blue line tracks the official BLS data, while the black line represents the CEO Employment Sub-Index.
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The BLS’ own measure of part-time employment
The Establishment Survey does not include an estimate for part-time versus full-time employment, but the Household Survey does include one and here is the data:
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As you can see in the chart above, according to the BLS there has been no significant increase in the contingent workforce. We did not have to look far to understand why the BLS has failed to gauge the rise of the “gig” economy.


The way the BLS measures part-time employment is based purely on the number of hours worked:
“Full time is 35 hours or more per week; part time is 1 to 34 hours per week.”

Therefore, as long as one can tally 35 hours of weekly work regardless of the number of jobs they hold, they are counted as full-time employees. Needless to say, many of the part-time employees need to maintain anywhere from 1 to 4 part-time jobs to survive financially, easily reaching the 35 hours per week threshold. They are all counted as full-timers by the BLS.


The controversial birth death adjustments
In order to account for jobs created or lost by new business formations or bankruptcies each month, the BLS introduced the birth/death adjustment. It started during the Reagan administration as Reagan was complaining that the bureau was undercounting the jobs he created. The birth-death model used to have a terrible name – the “bias adjustment factor.” This adjustment is computed using a model based on probability-based sampling methodology.


The table below shows the number of jobs that were added through birth/death adjustments over the past 17 years and the percentage of jobs added through the birth/death model
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Let’s analyze the data.

1. Before 2003 few jobs were added through the adjustment, despite the fact that net business formations were much stronger back then (see data below).
2. Then, what strikes us as odd, is that according to the BLS in the depths of the 2007-2009 recession, the birth/death adjustment continued to add a lot of jobs – 904,000 jobs were added in 2009 alone. One would assume that in the nadir of the Great Recession when business defaults skyrocketed, the birth and death adjustment would be a net negative and subtract from the overall jobs number instead of adding to it.
3. Lastly, it turns out that a full 30% of jobs created since 2010 or 4.5 million out of 15 million jobs were added via the birth/death adjustment. It is also interesting to note that 40% of the jobs added in 2016 came through the adjustment.

The reason the BLS wanted to include this adjustment was a perception that they were undercounting jobs created through new start-up business formations (that were too young and too small to show up in the Establishment Survey). Those start-ups would eventually appear in their data, but with a few months’ lag. Therefore, if there was a steady supply of new start-up businesses and no sudden shifts in the trend, no adjustment would be necessary. Logically, it would only make sense to apply the adjustment if there is a significant increase in the rate of start-up formations, which has not materialized. On the contrary, multiple studies track a consistent decline in new business creation. Literally every study we have found documents the consistently deteriorating entrepreneurial environment in the US.
The following charts trace a clear downward trend in both employment gained from private sector births and the number of business births per year. Notice the suppressed level of births after 2008.
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Furthermore, self-employed persons as a percentage of the working age population and the number of jobs created by establishments less than one year old are also declining.
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A study by Harvard Business School entitled “Problems unsolved and a nation divided” summarizes the findings of its multi-year long project called “The US competitiveness project.” The study is a “fact-based effort to understand the disappointing performance of the American economy.” We found this project to be well worth the read and have selected the following chart (below to the left) depicting the multi-decade slowdown in new business formation. Further supporting the Harvard study findings, a Brookings Institution paper called “Declining business dynamism in the United States: a look at states and metros” shows that business formations slowed down and business deaths accelerated after the crisis of 2008 (below to the right).

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Below to the left we have a chart from the Economic Innovation Group showing the net annual change in the number of US firms. Notice the significant slowdown after 2008, including 3 negative years. This is clearly not captured by the data from the Bureau of Labor Statistics. Below to the right we have a few charts from the Wall Street Journal summarizing some data points that confirm these trends.
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With the data on new business formations and deaths in mind let us now go back to the BLS’s official birth / death adjustments. We have charted the net jobs added through the BLS model and ran a linear trend line to see if it captures the deteriorating entrepreneurial environment. In the chart below, the upward-trending line representing net jobs added through the adjustment is in complete dissonance with all the other data.
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The Bureau of Labor Statistics (BLS) seems to be alone in its belief that the entrepreneurial environment in the US is improving. We believe that the BLS has been artificially inflating the monthly payroll numbers via the birth and death adjustment. This overstatement is not trivial in nature – the adjustment added 30% of all jobs reported since 2010.



Employment by companies in the S&P 500 index as a proxy
Instead of looking at employment surveys, Deutsche Bank compiled employment statistics from the S&P 500 index. The downside to using the S&P 500 as a proxy is that the index is clearly skewed towards very large businesses and it excludes small and medium enterprises.

On the flipside, we are looking at actual data instead of relying on surveys. Since the index employs almost a fifth of the country’s workers (about 17%) it can offer a glimpse into the large business employment situation. As public companies report the total number of employees every quarter, Deutsche simply collected their employment numbers. According to their research, employment growth in S&P 500 companies just turned negative for the first time since 2009.
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Unemployment rate
The unemployment rate is calculated from a separate measure called the Household Survey. The BLS calls about 60,000 households and asks if any members have worked for at least 1 hour during the month or if they have been actively searching for a job. If any household members have worked for at least 1 hour they are classified as employed, if they have been actively searching for a job, they are classified as unemployed.


It is interesting to note that in order to be counted in the labor force, a household member should have either been actively looking for a job or have worked for an hour in the past month. If neither of these conditions is satisfied, the member is not counted towards the labor force and they are not considered unemployed. To be classified as actively seeking employment one must meet the following criteria:

1. Contact employers or employment agencies directly and have job interviews within the last 4 weeks;
2. Submit resumes or fill out job applications within the last 4 weeks;
3. Place or answer job ads within the last 4 weeks.

With such strict criteria for being classified as unemployed many individuals who are looking for a job are not counted in the labor force, thus making the headline unemployment number look artificially low. People who have been unemployed know that there can be long stretches of time when they don’t place or answer job ads. But after 4 weeks have elapsed they simply get removed from the labor force despite the fact that they are still looking for a job.


On the other hand, the criteria to be categorized as employed are as relaxed as possible – just 1 hour of paid work is sufficient. No signed work contract or any formal arrangement is required. This means that if my daughter mowed the neighbor’s lawn or walked their dog for a few bucks she would be counted as an employed person. However, if I am looking for a job, but did not place or answer any job advertisements in the past 4 weeks, I will not be counted as unemployed.


We would like to focus on two measures of unemployment. The first one is the headline unemployment rate, which the BLS calls U3 and is the official rate you read about in newspapers. The second one is the broader unemployment rate (U6) which adds marginally attached and discouraged workers to the U3 rate. The chart below portrays the large difference between the measures with the U6 rate being close to 10% while the official rate is at 4.5%.
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The major difference between these two rates can be explained by the labor force participation rate. As we explained, unemployed persons are easily excluded from the labor force given the strict criteria set by the BLS. These individuals are therefore excluded from the labor force participation rate. As depicted in the chart below, currently about 63% of the working-age population is counted toward the labor force, down from 67% a few years ago. Over the past decade this number has been steadily decreasing. It has recently reverted back to its level from the 1970s when women were underrepresented in the labor force.
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The current very low unemployment rate of 4.5% is at least partly explained by the low labor force participation rate.


Slow wage and disposable income growth
A strong labor market is usually characterized by robust growth in wages and disposable income. This is simply not the case in the current cycle. Nine years into the recovery, both wage and disposable income growth in the US are still trailing previous cycle levels.
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In addition, data from the Economic Policy Institute breaks down wage growth by educational level. While the employees with advanced degrees were able to preserve their levels of compensation, all other categories have seen their wages decline in the current cycle.
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The chart above to the right represents the total wages and accrued salaries for US workers as a percentage of GDP. After peaking in the 1950s and 1960s, the trend has been downward sloping


The transition to a “gig” economy is a global phenomenon
The rise of part-time work arrangements has not been limited to the US. According to a study by McKinsey Global Institute between 20% and 30% of employees in Europe are contingency workers.


The following charts represent the worsening employment-to-population ratios for a few advanced economies, including the US. This is especially interesting for economists who blame the declining labor force participation rate on deteriorating demographics.

Demographically challenged Japan has seen an improving employment-to-population ratio, unlike the US. The second chart dispels another popular myth – having a higher education does not lead to secure employment.
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Part-time work arrangements are set to expand further. A new report by the Economist Intelligence Unit entitled “Global firms in 2020: the next decade of change for organizations and workers” has conducted a survey of 479 senior executives on how they see their businesses developing by 2020. They expect more positions to be automated or outsourced, they foresee an increasingly contingent workforce with more mobile or flexible work hours. 62% expect a growing proportion of workers to be contract-based while only 12% expect a higher share of permanent staff. A flexible workforce will make it easier to scale up or down as business needs dictate - “just in time” resourcing. As Robert Orth, HR director for IBM, explains, it is not easy to forecast HR needs, especially in high-tech fields where skills have a short lifespan. The goal is to build a business model “that is flexible enough that even if you don’t get the forecasting exact, you can find and move skills and capability at shorter notice.


Why is the US Government still using surveys to assess employment?
We find it interesting that in this day and age of infinite computational power, the internet, “big data” and electronic services and payments, the US government is still using phone surveys to assess the jobs market.


Despite being a non-US fund based in Europe with non-US investors, Morningside Hill still has to file FATCA documents with the US Internal Revenue Service (IRS). While the IRS has up-to-date information on a European fund and its non-US investors, another branch of the government, the BLS, has to call random households to extrapolate employment numbers in the States.



This issue was raised directly with the head of the BLS by RealClear Radio host Bill Frezza:
“In today’s computerized world why do sampling surveys at all, why not log on to the social security metrics and computers and ask them how many people they collected the FICA taxes from that month?”

Erica Groshen, Commissioner of the Bureau of Labor Statistics [answers with a chuckle]:

“Actually, that information takes a long time to get from these administrative data sources.”

We are not quite sure if we can take this answer seriously but we will leave it at that.

Usually government agencies are under constant political pressure to report better-looking statistics. The rationale is fairly obvious – it makes politicians look better. The BLS is no exception. Over the years it has been subject to many changes in practice and methodology that have always resulted in better-looking numbers. Keep in mind that the chief of the Bureau is directly appointed by the president.


Reagan’s administration insisted on including some sort of an adjustment for newly created businesses which resulted in the birth and death adjustment. Then under pressure by the Clinton administration, the BLS redefined the workforce to exclude all but a small percentage of discouraged workers. This resulted in the statistical disappearance of about 4 million unemployed persons, now classified as long-term discouraged. Clinton also reduced the sample size of the household survey, thus excluding a disproportionate share of inner-city households who were less likely to hold jobs. Furthermore, George W. Bush’s administration introduced the probability-based sampling methodology which, as we have seen, increased the birth and death adjustment figures.


Alterations like these have driven economics-data skeptic John Williams to describe them as “Pollyanna creep” – the inclination of statistics agencies to make adjustments that over long periods of time make the data look better than the economic reality.


Jobless Claims
Initial jobless claims is another widely followed economic indicator which represents the number of people who are filing to receive unemployment insurance benefits, as reported weekly every Thursday by the US Department of Labor. It is important to note that this number includes only new filings i.e. individuals who have just lost their employment. Therefore, the number has been an important early-warning indicator – when it increases it portends trouble in the economy as layoffs surge.


In the past few years, the jobless claims indicator has been stellar. As visible in the chart below, the claims recently fell to 234,000 per week – the lowest number since 1973, even though the US population has increased by 50% since then.
http://www.zerohedge.com/sites/defau...art%2013_0.jpg
Is it possible that while the US population increased by 50% in 43 years, the jobless claims remain at the exact same level? Above to the right we have posted a typical explanation by the FT, which mirrors most other media – the low number is a sign of a tightening labor market.

It is hard to believe that today’s sluggish economy (growing at less than 2%) is the strongest we have seen in 43 years. As our research reveals, there are structural reasons for this indicator’s subdued levels. As employees move to the “gig” economy with contingent work arrangements, fewer people are eligible for unemployment insurance.


Here is a list of factors that suppress initial jobless claims:

1. The economy has added mostly part-time jobs and fewer workers are eligible for unemployment benefits.
2. Employees in contingent work arrangements tend to hold multiple jobs to maintain financial solvency. Even if they lose one of their part-time positions, they often do not qualify for unemployment insurance.
3. After the last crisis, due to budget constraints many states have cut unemployment benefits, thus lessening the incentives to apply for them.

Consequently, the low number of initial jobless claims is a misleading indicator. In the next downturn corporations will be able to cut through their increased contingent workforce, before they need to lay off any full-time workers. Therefore, when economic conditions deteriorate, initial jobless claims can remain low for a protracted period of time.


Conclusion
There has been an ongoing macroeconomic debate on the BLS’s job numbers and why they are at odds with so many economic indicators. After presenting the evidence on new business formation dynamics, we believe this table merits another look.
http://www.zerohedge.com/sites/defau...eath%201_0.jpg
We won’t call the jobs added through the birth and death model fictional, but they can be described as hypothetical, unaudited data, with no support from actual business birth / death statistics.


Beyond the birth and death model, no one knows how many of the BLS jobs were double and triple counted part-time positions. According to some studies (Harvard-Princeton, etc.) most of the jobs added after 2005 were indeed part-time jobs. Therefore if, according to official numbers, we added a net 6.7 million jobs over the past 9 years and most were part-time jobs, while the birth and death model added 6.3 million of these jobs, this means that the actual number of full-time jobs has declined significantly. By this measure the jobs market has never recovered from the 2008 recession. In this case, US workers have every right to be discontented. This may explain why so many of them voted for Trump and his ‘bring back the jobs’ platform.


The NFP jobs and the initial jobless claims reports are flawed indicators. If tomorrow General Motors lays off 1,000 full-time workers and they end up working two part-time jobs each, the BLS will report a net gain of 1,000 jobs. If, further down the line, those same workers lose their part-time jobs, they will not be eligible for unemployment insurance and will not show up in the initial jobless claims report.


Fretting over whether the next jobs number will be 160,000 or 211,000 adds little value to any fundamental analysis.

COMMENTS FROM BENJAMINIS: Whether you took the time to read this very important and well researched article the NFP is what we can now call "FAKE NEWS"

Look what it does to change PERCEPTIONS the First Friday of each month...

5 Minute Chart From Finviz - US 30

http://finviz.com/futures_charts.ashx?t=YM&p=m5

5 Minute Chart From Finviz - USD/JPY

http://finviz.com/forex_charts.ashx?t=USDJPY&tf=m5

5 Minute Chart From Finviz - US Dollar Index

http://finviz.com/futures_charts.ashx?t=DX&p=m5

5 Minute Chart From Finviz - EUR/USD

http://finviz.com/futures_charts.ashx?t=6E&p=m5

5 Minute Chart From Finviz - Gold

http://finviz.com/futures_charts.ashx?t=GC&p=m5

5 Minute Chart From Finviz - Silver

http://finviz.com/futures_charts.ashx?t=SI&p=m5

5 Minute Chart From Finviz - 10 Year US Bonds

http://finviz.com/futures_charts.ashx?t=ZN&p=m5

Comments from Benjaminis: Now you can see it is all about RISK ON or RISK OFF and that determines the MONEY FLOW.

More comments later after the Equity Markets OPEN at 9:30 AM (New York Time)

I made my point only about Fed's payments to foreign Governments. I'm 100% agreed on fucked up financial markets. Most of the banks are in state of insolvency. Equity bubble is almost same as in 2009. Short term USD will soar, then tank, after USA will default on its debt (in some 5-7 years from now).

https://www.armstrongeconomics.com/i...s-only-choice/

Britain Under Attack Exiting EU is Only Choice



Blog/BRITAIN
Posted Jun 5, 2017 by Martin Armstrong
https://armstrongmedia.s3.amazonaws....ee-Welcome.jpg
As we approach June 8th and the elections in Britain, one must wonder how is Britain going to remain inside the EU. The British never voted on allowing the refugees into Europe. That was a unilateral decision by Merkel to save her failing polls due to he harsh stand against Greece. Now Europe is engulfed in a clash that is tearing the continent apart between the liberals who think everybody is just wonderful and those who simply want security.



Now three attackers drove a van into pedestrians on London Bridge before stabbing revelers nearby on Saturday night, killing at least seven people and least 48 people were injured. This was the third terrorist attack to hit Britain in less than three months. With the snap parliamentary election on Thursday. Mays gamble on the June 8 snap election was cast into some doubt after a Survation poll showed her Conservative Partys lead had dropped to a new low of just one percentage point.


Three attackers drove a van into pedestrians on London Bridge before stabbing revelers nearby on Saturday night, killing at least seven people in what Britain said was the work of Islamist militants engaged in a new trend of terrorism.


At least 48 people were injured in the attack, the third to hit Britain in less than three months. Police killed the three male assailants within eight minutes of receiving the first emergency call shortly after 10 p.m. local time. Prime Minister Theresa May announced: We believe we are experiencing a new trend in the threat we face as terrorism breeds terrorism.

Perpetrators are inspired to attack not only on the basis of carefully constructed plots and not even as lone attackers radicalized online, but by copying one another and often using the crudest of means of attack.

The Prime Minister then said: It is time to say enough is enough.

Most of the main political parties suspended national campaigning on Sunday, but May said campaigning would resume on Monday and that the snap parliamentary election on Thursday would go ahead as planned.

https://armstrongmedia.s3.amazonaws....7-1024x407.jpg
The British Pound exceeded the Breakout Line, fell back, and then retest it as it then provided support in the 127 level. We see resistance at the 13026 area with the important technical resistance at the 134 area where the Weekly Bullish Reversals begin. This patter tends to warn about a pop to the upside, but the timing models also show this could be the end of the rally.
https://armstrongmedia.s3.amazonaws....7-1024x455.jpg
When we look at our computer model, what is fascinating is how it has targeted this week as a turning point even before May called the snap election. Of course it has merely intensified for this target, which appears in both the dollar as well as the euro.

https://armstrongmedia.s3.amazonaws....n-1024x410.jpg
https://armstrongmedia.s3.amazonaws....7-1024x458.jpg
We can see that the week of June 5th is also the main target for the Euro against the pound and we have a Directional Change at this time as well.


Categories: BRITAIN, Refugees, Terrorism
Hamburg Still Seizing Property for Refugees
Is Trump Becoming More Popular in Europe than America?


1 Hour Chart - EUR/GBP

http://finviz.com/forex_charts.ashx?t=EURGBP&tf=h1



1 Hour Chart - EUR/USD

http://finviz.com/forex_charts.ashx?t=EURUSD&tf=h1

1 Hour Chart - GBP/USD

http://finviz.com/forex_charts.ashx?t=GBPUSD&tf=h1


Benjaminis

Здравствуйте, Benjaminis! Интересная статья , какие выводы должны быть сделаны? http://theeconomiccollapseblog.com/a...not-have-a-job https://dollarcollapse.com/debt/soar...stemic-crisis/

Thank You wayfarer

Nice to see you post here again. Any charts to share with us ? Next few days will be very interesting and anything can happen. Watch the RISK OFF and RISK ON where can and will change to Risk ON and then Risk OFF.

The MONEY FLOW will tell you which one it is...


Benjaminis

http://www.internationalman.com/

http://www.internationalman.com/articles/feeding-frenzy

Feeding Frenzy
by Jeff Thomas
https://d24g2nq85gnwal.cloudfront.ne...ing_Frenzy.jpg
Subscribe to International Man



We’ve all seen the National Geographic specials featuring an animal that’s been isolated and brought down by a pack of carnivores. The pack tears out its throat to assure death, then proceeds to rip the carcass to pieces.


Occasionally, we see similar behaviour in politics, and we’re witnessing it presently in the US.


In 2016, it became clear that a Washington outsider, Donald Trump, would be the Republican candidate. Both Democrats and Republicans within the beltway looked upon this development with horror. This was a man who had not sold himself to one party or the other and therefore was not a puppet of the Deep State—the aggregation that actually owns and controls the US.


Republicans in particular panicked, as it became possible that their candidate, of whom they wanted no part, might actually win.

Some pretended to support him; others vilified him. Ironically, this only served to further embolden the American voting public that Mister Trump was indeed their man—someone who might actually “drain the swamp,” as he repeatedly claimed he would do.


It should be remembered that the six corporations that own and control 80% of the media, are, in turn, owned by the Deep State itself, so it shouldn’t have been surprising that, when Mister Trump actually won the election, the media immediately sought to discredit him by any means possible, in order to get him out. They began their attack immediately, and the attack quickly ramped up into a feeding frenzy.


Those of us outside of the US have looked on with amazement, since we receive our news not only from the US, but from other countries. As such, we observe the “Russian scandal” as being ridiculous. However, as Joseph Goebbels said, “If you tell a lie big enough and keep repeating it, people will eventually come to believe it.”


In addition, on a daily basis, the media have heaped on further accusations as often as they can, with pundits appearing nightly on the evening news, repeating incessantly that Mister Trump must be removed as soon as possible.


To make matters worse, the man that so many Americans thought of as their great hope has reacted by screwing himself into the ground. He’s behaved arrogantly and defiantly, repeatedly putting his foot in his mouth, providing further incentive for the hyenas that are biting at his flanks. Every time the press goads him, he makes some new self-destructive statement, behaving like a rank amateur and assuring that, one way or another, he will self-destruct.


In a discussion with Doug Casey and Nick Giambruno recently, each of us drew the same conclusion.
“I increasingly see Trump as an accelerating disaster. How can this not turn really ugly?”


“Trump is not only embracing—but turbocharging—the same destructive policies that every other president has embraced. This will only lead to a really ugly disaster... and probably soon.”


So what’s going on? Who is this guy really, and what does he think he’s doing?


Well, back in 2016, as Mister Trump began to build up a head of steam against his opponents, I repeatedly observed body language that reminded me of Benito Mussolini. Each had the odd habit of jutting out his chin in a defiant and imperious manner.
https://d24g2nq85gnwal.cloudfront.ne...ump-benito.jpg
So I looked into his past to see if it would offer any insight into his character. His siblings said that, from a young age, it was already clear that no one could tell him anything. His behavior suggested that he was the boss of the world and that was it. Peers observed that he would say anything that came into his head, then would refuse to admit mistakes, no matter how obvious it was that he was wrong. He would sit with his arms folded, daring others to defy him.


Later, as a businessman, his primary fixation was winning, getting the best of others. It was said that he wasn’t interested in mutually beneficial partnerships; he had to outsmart and belittle others. He appeared to have little regard for truth and found that he could keep others off-kilter by dramatically changing his story, then digging in his heels that there was only one truth and it was whatever he just said it was. Then, seemingly at random, he’d change it again.


In considering pathology, Mister Trump fits well into the category of “productive narcissist.” As such, he has strengths that are created by and driven by his ego, but he also has inherent weaknesses as a result. He can’t cope with being dismissed, laughed at, or derided. He may toss out a poorly considered con, assuming that his greatness will get others to accept it instantly, since it came from him. If the con is immediately dismissed by others, he may retaliate with a replacement con… and anger.


Since his inauguration, Mister Trump has made huge leaps from the stated policies of his campaign. Does this mean that he’s abandoned his core beliefs? Probably not. Narcissists tend not to actually believe in anything except themselves. It may well be that, during his campaign, he simply took a stance that would allow him to win and, after taking office, found that the president is not in charge—the Deep State is.

Their goals tend to remain the same regardless of the party or the president in office. Since his inauguration, Mister Trump has jumped all over the board on policy. The media have responded by attacking both his original positions and his reversed positions.


Clearly, their attacks have nothing to do with policy; they have to do with discrediting and removing the president. It’s unclear as to whether the media recognize his psychological Achilles’ heel, but they’re most certainly attacking it on a daily basis. The approach seems to be working, as the president becomes increasingly unnerved and makes evermore frequent gaffs, digging himself deeper into the hole that he’s in.


We’ve said on many occasions that the world economy is on the cusp of a series of major crashes—markets, currencies, and, very possibly, entire governments. Many people in the US appear to see the likelihood of this eventuality—enough so to vote for a man whom they hoped would “drain the swamp.” That will not happen. If the Deep State play their cards right, they’ll wait until the first of the crashes, and, just as they did in 1929, blame the outsider—the wealthy conservative who has the misfortune of holding office at the time. Only then would they gain maximum traction in calling for the resignation of the “failed” leader.


They would then be able to push forward a new, collectivist leader. Just as they presented Franklin Roosevelt as the savior after the “failed” Republican Herbert Hoover, the US would be primed for its second collectivist “President for Life.”


Editor’s Note: Although the US is headed for a “really ugly disaster,” many investors will come out far richer than they are today.
New York Times best-selling author Doug Casey and his team know how you can be part of this exclusive club. We’re sharing our breakthrough strategies in this urgent video. Click here to watch it.

Tags: economic collapse,

COMMENTS FROM BENJAMINIS: I was correct in calling his election victory on November 8, 2016 and I now PREDICT that he will defeat the DEEP STATE and even if they KILL him and they might hopefully not however it is TOO LATE So..... WATCH HIS VICTORY on June 8, 2017 when Comey is shown to be full of shit.

http://www.whatdoesitmean.com/index2310.htm

June 5, 2017
Arab Nations Break Ties With Qatar After $150 Million Contract Offered To Kill President Trump
By: Sorcha Faal, and as reported to her Western Subscribers


Another stunning Foreign Intelligence Service (SVR) report circulating in the Kremlin today states that Bahrain, Saudi Arabia, Egypt, the United Arab Emirates, and Yemen have broken all diplomatic and travel ties to the State of Qatar after their receiving confirmation that Qatari Emir Sheikh Tamim bin Hamad Al Thani was behind the “dark web” offering of $150 million to anyone assassinating President Donald Trump—and that this Qatari Emir had secretly vowed to his supporters “would not be in power for long”. [Note: Some words and/or phrases appearing in quotes in this report are English language approximations of Russian words/phrases having no exact counterpart.]

http://www.whatdoesitmean.com/sdsd1.jpg

Hillary Clinton (left) and Qatari Emir Sheikh Al Thani (right)

According to this report, on 11 May the SVR reported that a “kill order contract” worth 89,200 Bitcoin’s (now worth $217 million) had been issued on the “dark web” to anyone who could successfully assassinate President Trump by the end of the month—and that was followed 6 days later (17 May) by the mysterious release of a highly-coded “dark web” conversation held between approximately 5 of these conspirators in the United States intelligence communities “Deep State” conspiring to assassinate President Trump, and whose “conversations” are reproduced herein (see below):

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http://www.whatdoesitmean.com/ajaj3.jpg

http://www.whatdoesitmean.com/ajaj4.jpg

http://www.whatdoesitmean.com/ajaj5.jpg

Codes used in this “dark web” “Deep State” exchange include: "RR" for Robert Mueller, "MF" for Michael Flynn, and "Limey" for Christopher Steele, a former British MI6 intelligence officer

The moniker “Palpatine” used by these “Deep State” conspirators seeking President Trump’s death, this report explains, refers to a fictional movie character popularized in the famous Star Wars movie trilogy who is also known as “Darth Sidious”, or simply “The Emperor”—whom Qatari Emir Sheikh Al Thani is known as too as revealed by recently hacked emails that show his support for Islamic terror groups all across the Middle East, but that Qatar quickly labeled as “fake news”.


Important to note about Qatar, this report says, is that it has the 3rd largest natural gas proven reserves in the world after Russia and Iran—but with the proposed 5,600 km (3,500 mi) pipeline project known as South Pars agreed to by Iran, Iraq, and Syria to ship natural gas to Europe, “established/created” the Islamic State (ISIS/IS/ISIL/Daesh) to throw the entire Middle East into chaos and bloodshed so that Qatari Emir Al Thani, instead, could build his own pipeline.

http://www.whatdoesitmean.com/sdsd2.jpg

Aligned with Qatari Emir Al Thani in establishing the Islamic State in order to destroy Syria, Iraq, Lebanon and Iran, this report continues, were radical Islamic Wahhabism sects within Saudi Arabia and the Obama regime—and with them all believing that Hillary Clinton would become the next US president, funneled tens-of-millions of dollars into her failed campaign, her money laundering organization called the Clinton Foundation, and even gave her husband, former US President Bill Clinton, a $1 million birthday present.
To the horror and bloodshed unleashed by Qatar upon the entire Middle East so that they could build their pipeline, this report grimly states, was noted by the Obama regime who in one of their secretly released emails stunningly acknowledged what was occurring by their stating “we need to use our diplomatic and more traditional intelligence assets to bring pressure on the governments of Qatar and Saudi Arabia, which are providing clandestine financial and logistic support to Isis and other radical groups in the region”—and that Wikileaks founder Julian Assange warned was “the most significant email in the whole collection”.

http://www.whatdoesitmean.com/sdsd3.jpg

Neither the Obama regime, or Hillary Clinton, did anything to stop Qatar’s reign of Islamic terror choosing, instead, to create a “Deep State” military-intelligence base there—where today over 10,000 American troops, CIA operatives and private mercenaries remain stationed at that nations Al-Udeid Airbase.


Only President Trump, in fact, this report notes, warned the world and the American people what was occurring, when during his campaign for the US presidency, he publicly stated that President Obama and Hillary Clinton were the founder and co-founder of ISIS—and that he reiterated to the leaders of over 50 Arab nations in Saudi Arabia during his historic visit there last month.
As to why Qatari Emir Al Thani and the Hillary Clinton aligned “Deep State” wanted President Trump assassinated by the end of May, this report explains, was to keep him from meeting these Arab leaders in Saudi Arabia—and where Trump and these Arab leaders established the Global Center for Combatting Extremist Ideology and, most importantly, formed a new group to cut off all funding for Islamic terrorists.

http://www.whatdoesitmean.com/sdsd4.jpg

Egypt President Abdel Fattah el-Sisi (left), King Salman of Saudi Arabia (center) and President Trump (right) commemorate alliance against Qatar and US “Deep State”

With Qatar now being isolated by President Trump and his Arab nation backers, this report concludes, the US propaganda mainstream media is, once again, failing to tell the American people the important truths that are now occurring, choosing, instead, to continue manufacturing “fake news”—like CNN, who this past weekend after the horrific radical Islamic terror attack in London, were shockingly discovered to be staging “fake news” demonstrations that horrified the entire world.

http://www.whatdoesitmean.com/sdsd5.png

Other reports in this series include:
FBI Nabs Hillary Clinton “Lost” Emails In Surprise Raid On Huma Abedin Home
Obama’s CIA Director Michael Hayden Said Ready To Flee To Ireland As FBI Closes In
Seth Rich “Trap” Fallen Into By FBI Directory Comey Warned Ready To Be Sprung
Most Secret Grand Jury In American History Paralyzes Washington With Fear
US Mainstream Media Unwittingly Plunges Into “Trump Trap”—Learns “Art Of War” Is Real
“Deep State” War Against President Trump Takes Bizarre Turn Down China Road
FBI Joins Trump’s “Deep State” Counterattack To Horror Of “Fake News” Media
Young Russian Offered $15 Million And US Citizenship In “Deep State” Plot Against Trump
US Federal Prison Ordered By Trump To Prepare For 23 “High Security Political Defendants”
Dark Web “Kill Order Contract” On President Donald Trump Issued For $150 Million

June 5, 2017 EU and US all rights reserved. Permission to use this report in its entirety is granted under the condition it is linked back to its original source at WhatDoesItMean.Com. Freebase content licensed under CC-BY and GFDL.


[Note: Many governments and their intelligence services actively campaign against the information found in these reports so as not to alarm their citizens about the many catastrophic Earth changes and events to come, a stance that the Sisters of Sorcha Faal strongly disagree with in believing that it is every human beings right to know the truth. Due to our missions conflicts with that of those governments, the responses of their ‘agents’ has been a longstanding misinformation/misdirection campaign designed to discredit us, and others like us, that is exampled in numerous places, including HERE.]


[Note: The WhatDoesItMean.com website was created for and donated to the Sisters of Sorcha Faal in 2003 by a small group of American computer experts led by the late global technology guru Wayne Green (1922-2013) to counter the propaganda being used by the West to promote their illegal 2003 invasion of Iraq.]


[Note: The word Kremlin (fortress inside a city) as used in this report refers to Russian citadels, including in Moscow, having cathedrals wherein female Schema monks (Orthodox nuns) reside, many of whom are devoted to the mission of the Sisters of Sorcha Faal.]
“Deep State” In Disarray As Trump’s “Fathomless Federation” Gains Ground
Americans Now Outlawed From Knowing The Laws They Live Under

Return To Main Page

GREAT RESOURCE

http://www.whatdoesitmean.com/


Benjaminis

http://www.zerohedge.com/news/2017-0...ops+to+zero%29

USDJPY Breaks Key Support After Wage Data
http://www.zerohedge.com/sites/defau.../picture-5.jpg
by Tyler Durden
Jun 5, 2017 9:54 PM



Wages in Japan continue to limp extremely slowly higher (for the third year) with real wages unchanged.
As Bloomberg reports, Japan’s tight labor market continues to push wages higher, especially the hourly pay per part-timer. Yet, full-timers are not getting much of a bump, even as the government continues to call for higher pay, partly because permanent workers themselves and their unions tend to value job security over getting a raise. The April figures also indicate employers still prefer to offer bonuses, rather than making permanent hikes to bases wages.
http://www.zerohedge.com/sites/defau..._usdjpy2_0.jpg
This appears to have triggered some selling in USDJPY, running stops at 110...


http://www.zerohedge.com/sites/defau..._usdjpy1_0.jpg

Breaking down to its lowest level since the first round of the French election in April.

http://www.zerohedge.com/sites/defau...5_usdjpy_0.jpg
And breaking below the key 200-day moving-average at 110.39.

COMMENTS FROM BENJAMINIS: My point is made MTV and others that you DO NOT TRADE AGAINST THE TREND ONCE YOU KNOW THE TREND... USD/JPY is going back to 100.000 as US 30 goes below 18,000.

5 Minute Chart From Finviz - US 30

http://finviz.com/futures_charts.ashx?t=YM&p=m5

5 Minute Chart From Finviz - USD/JPY

http://finviz.com/forex_charts.ashx?t=USDJPY&tf=m5

5 Minute Chart From Finviz - US Dollar Index

http://finviz.com/futures_charts.ashx?t=DX&p=m5

5 Minute Chart From Finviz - EUR/USD

http://finviz.com/futures_charts.ashx?t=6E&p=m5

5 Minute Chart From Finviz - Gold

http://finviz.com/futures_charts.ashx?t=GC&p=m5

5 Minute Chart From Finviz - Silver

http://finviz.com/futures_charts.ashx?t=SI&p=m5

5 Minute Chart From Finviz - 10 Year US Bonds

http://finviz.com/futures_charts.ashx?t=ZN&p=m5

Comments from Benjaminis: Now you can see it is all about RISK ON or RISK OFF and that determines the MONEY FLOW.

More comments later after the Equity Markets OPEN at 9:30 AM (New York Time)

FOR JUNE 6, 2017 - Good Evening - Benjaminis

https://www.jsmineset.com/

Posted June 6th, 2017 at 2:54 PM (CST) by Bill Holter & filed under Bill Holter.


As an addendum to yesterday’s subscriber article, the topic of “time and sales” needs to be discussed. “Time and sales” is a very simple report that can be requested by literally anyone in any market. For example, when I was a young broker I had a large client who traded a minimum 10,000 shares at a clip. From time to time he would request a time and sales report to make sure his order was a good fill. Over a year’s time and asking for close to a dozen orders to be checked, he did have one trade where he was ripped off for an 1/8th ($1,250) of a point (we still traded in 1/16ths and 1/8ths so you can guess how long ago this was). The order was rectified and the client was reimbursed.


The reason I bring this up is because the CFTC, NYSE, NASDAQ, SEC or any other agencies have this tool of “time and sales” available to them. All exchanges are required to keep these reports. The CFTC can pull a time and sales report to investigate ANY time period they choose going back to the 1970’s …which of course includes many of the obvious and blatant precious metal waterfall events since 1996.

The report will tell them EXACTLY how many contracts were bought or sold and which firm(s) performed the trade. Then, they can query the firm to find out who the buyer (or gross seller) was. They have the ability to track ANY trade back to the source, end of story!


But, they have not ever done this no matter how loudly the public cried out. Why not? This is fairly obvious, can you imagine if we truly knew “who”? I guess you could say because the public could NEVER handle the truth in their opinion?


So what is the point here? I wrote yesterday commenting on the settlement between the CFTC and David Liew and said I hoped they would “pull on that thread”. The more I thought about it, the CFTC never needed David Liew (though he would be helpful). All they need (needed) to do is pull a time and sales report before, during and after any of the plentiful waterfall events in precious metals.

This would lead them to the clearing firm and thus the ultimate client. I might add, there was gross negligence after 911 for the airline put trades never to have been tracked back to the source. I would also add, if anyone in law enforcement is reading this, many people were MURDERED that day and there is no statute of limitations for murder. Please demand a time and sales for who bought all of those puts, follow the money (even though the winnings were never collected). The firms were required to “know their customer”, the identities can still be discovered if someone within law enforcement truly wanted to know. Perhaps, just as above …the public cannot handle the real truth?


The question still remains, is the CFTC now “changed” with a new administration and are they serious about following the rule of law?


If this is the case, all they need to do is follow the paper trail to discover who sold time and time again into the paper gold and silver markets to “e”ffect (no not a typo) and suppress price?

Time and sales is in no way rocket science, any B grade broker has heard the term and knows what it is …does the CFTC? I am certain they do!


Standing watch,
Bill Holter
Holter-Sinclair collaboration

https://philosophyofmetrics.com/the-...der-narrative/

The Scripting of the New World Order Narrative


JcollinsJune 5, 2017Cultural, FREEPOM, Geopolitical 22 Comments
https://philosophyofmetrics.com/wp-c..._42403793.jpeg
Dismantling the Post-World War Two International Order
Update: I’m getting a lot of requests from members to make this post a FREEPOM because it captures the broad strokes and accuracy of the POM thesis. Since POM has the best members I will take their advice. Thanks everyone for the encouraging comments and interest in helping spread the word on POM.


While watching CNN this morning an interesting segment focused on how Trump is dismantling the international order which has existed since the end of the last world war. Fareed Zakaria used America’s exit from the non-binding Paris Climate Agreement as the springboard for further discussion around how Trump is shifting the global position of the United States. This concept of course is old news for POM readers, as we have been discussing the transformation of the international governance framework since Dec 31, 2013.


Two years ago when Donald Trump announced his candidacy for the office of President I presented the idea that his purpose was to sell the multilateral framework to the American people and realign Anglo-American economic and governance policies with those of the international banking interests.


Ever since the first Gulf War I have been hooked on CNN. Over the years my awareness and understanding of the information-engineering aspect of its broadcasts became a filter through which I would analyze each broadcast and media trend. The overabundance of air time which CNN gave Trump throughout the election, and in fact still do, is not an accident. Standing back and studying the whole forest we can begin to see that Trump has been casted in the role of bad cop for one demographic while serving as the good cop for another. This diametric is a powerful weapon which can control and manipulate both public opinion and public expectation.
https://philosophyofmetrics.com/wp-c...89112908_n.jpg
The end of World War Two was the previous turning point for the international banking interests. It was when the Bretton Woods Monetary Conference designed the economic and banking system for the rest of the century. The creation of the International Monetary Fund and World Bank were directly related to this agreement, but also served as seeds for a future transformation.


Zakaria’s reference to the post-war dismantling has everything to do with the reserve role given to the US dollar under Bretton Woods. The dominance of the USD for eight decades has contributed to the evolution of economic and governance policies which served as an extension of the political, industrial and academic interests of the Anglo-American establishment.


These interests built wealth and organizations around the role of the USD which acted as self-serving vehicles and moved separate from the broader international banking interests. This was allowed to continue because it served a purpose and American hegemonic strength was kept in check through a large contingent of geopolitical and economic strategies.


This American world and its infrastructure became the dominant weapons used against nations and regions which did not evolve along the lines demanded by the international banking interests.

NATO, the United Nations, Bilderberg, the IMF, World Bank, and a host of other think tanks and non-governmental organizations all represent this post war international order.


Now that the multilateral monetary and governance frameworks have been agreed upon by the rest of the world there is no need for the Anglo-American establishment to maintain total control and influence over the world.

Those in business, politics and academia resisted the reforms and policy adjustments required to transform the international order into a true multilateral framework. Power and access to endless wealth is never willing relinquished.


This was expected and planned for, which brings us to Donald Trump and his well scripted platform which began in the 1980’s. Every one of Trump’s talking points are finely engineered to communicate a complex message in simple plain speak. The dismantling of the post war international order is now the mandate of the international banking interests and cannot be stopped.


There have been those within the American establishment who were likely caught by surprise with Trump and his agenda. But it is beginning to appear that there is a common message being communicated with variations over negotiations.


All the while the American people are being sold on something they never would have agreed with if it had been communicated directly. The threat of globalism and a New World Order were so hammered into us through an alternative media which sprung out of nowhere with the emergence of the internet.

This is the same alternative media which is now supporting Trump and is beginning to grow with the populist wave of anti-globalism.


But these alternative media personalities are doing nothing to cover the actual transformation of the international order and the true purpose of the Trump agenda. The thesis presented here on POM has been proven accurate for so long now, and on so many points, that it is illogical that the large alternative media have not picked up on the themes.


When I saw the headline on CNN this morning I looked over at Marianne and said “there is another verification of everything I have been writing for four years”. But the message isn’t getting out. Both the mainstream media and alternative media do not discuss this intentional and planned dismantling of the international order which has built up on the back of the USD.


As far as I can tell the alternative media is complicit in the engineering and spread of the Trump narrative. The purpose of the alternative media has been to build up the cognitive dissonance and Hegelian Dialectic within the Western mind of the disorganized masses.

It is my conclusion that many of these websites and personalities are manufactured and maintained through intelligence agencies and other covert groups which operate outside the confines of national interests. The scripting of the New World Order narrative and the threat to America are too aligned with the unfolding dismantling and transformation of the international framework to be a coincidence.


The POM thesis will continue to be the most accurate analysis available but will remain on the margins of alternative media for the simple fact that the site is owned and operated by just me.

There is no involvement with agencies, think tanks, or other groups and organizations which support the narrative described above. It is just me reading, researching, and writing as a sideline to my career in mining. There are no advertisers on the site who I have to worry about offending. There is only the small army of POM subscribers and members who I am committed to providing accurate and thoughtful information.


Fellow Canadian writer and researcher Henry Makow recently posted an article on his site which discussed the role of the Canadian Securities Intelligence Service in the creation of the neo-Nazi Heritage Front.

Operation Governor took place between 1988 and 1994 and instigated racists acts across the nation. These tactics evolved with the internet and provided such agencies with a whole new battlefield from where they could orchestrate cultural and socioeconomic engineering. To think that such agencies and organizations haven’t created the alternative media and its host of personalities would be a miscalculation.


Logic follows that the alternative media (who pumped the New World Order threat narrative for years) are supporting Trump, and Trump in turn represents the scripting of the international banking interests.

The connection flows from one to the other with relative ease but is completely ignored by the large presence and influence of both the mainstream and alternative media. Both serve opposing sides to the dialectic engineering.

Within the middle ground between both the dismantling continues. – JC


JC Collins can be contacted at [email protected]


This article is copyrighted by POM Media2017. As non-Premium content it can be shared and reposted without further permission.

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22 Comments on “The Scripting of the New World Order Narrative”

1. https://secure.gravatar.com/avatar/f...=identicon&r=g
   Log in to Reply
   Carpe Diem06.05.2017 AT 12:56 AM
   Kudos to you noble JC,
   You are providing the best analysis anywhere on this planet as far as I am concerned. I am a devout follower of POM, your first class perspective and contributions ofPOM members and you all help me to make sense of this strange and chaotic world.
2. 
   
   I read and follow your views and ideas, because of everything you stated here”“…simple fact that the site is owned and operated by just me. There is no involvement with agencies, think tanks, or other groups and organizations which support the narrative described above. It is just me reading, researching, and writing as a sideline to my career in mining. There are no advertisers on the site who I have to worry about offending. There is only the small army of POM subscribers and members who I am committed to providing accurate and thoughtful information.”
   Thank you and God Bless you, Sir,

https://www.armstrongeconomics.com/i...ish-elections/

Comey to Testify Thursday June 8th – Same Day as British Elections



Blog/Politics
Posted Jun 6, 2017 by Martin Armstrong
https://armstrongmedia.s3.amazonaws....ey-arrives.jpghttps://armstrongmedia.s3.amazonaws....-impeacher.jpg
Comey is to testify Thursday before the Senate Intelligence Committee. He will most certainly be asked about conversations with Trump and the FBI probe into former national security adviser Michael Flynn. But this is the Intelligence Committee, so the focus is supposed to be about about Russian election meddling in the 2016 election while nobody will ask about the Obama Administration getting briefs from the CIA/NSA/FBI as to what Trump’s people were talking about for the campaign.


I have prepared an in-depth report on how Congress can impeach Trump. The plain truth is shocking. Congress has played the impeachment card normally for political purposes and has RARELY ever followed the constitution.

They have put people on trial in the senate to impeach them after they left office just to score points. The impeachment process is perhaps the most corrupt exercise of raw power Congress likes to play.


There are so many issues circulating around Behind the Curtain that it’s just impossible to blog about this much stuff particularly when the fate of the nation rests upon the rule of law, that Congress is unlikely to follow. I have written this report in one week. It was a lot of work. It is being priced at $35 because this is important to everyone.
https://armstrongmedia.s3.amazonaws....R-1024x796.jpg

Categories: Politics
Tags: Comey, Impeachment of Trump, Trump
« Corruption was Crazy during 19th Century
Political Forecasting – $35 The Impeachment of Trump »

http://www.zerohedge.com/news/2017-0...ops+to+zero%29

$200 Billion Asset Manager Warns "There's Danger At The Door" As Markets Lose Focus On Fundamentals
http://www.zerohedge.com/sites/defau.../picture-5.jpg
by Tyler Durden
Jun 6, 2017 7:20 PM



There was a time "when central banking was an honest profession," remarks TCW Group's fixed income CIO Ted Rivelle, warning that "asset prices are not meant to be arbitrary quantities that are to be steered or targeted by central bankers."
http://www.zerohedge.com/sites/defau...70606_fed1.jpg
In his latest letter to investors, Rivelle, whose firm overseas $195 billion in assets details The Fed's quixotic journey to kill the business cycle.. and in fact any other cycle except higher asset prices. However, As Rivelle warns,


"The signs of late cycle excess continue to spread, but faith abides in central banking “stimulus”. We all do well to remember that when markets lose focus on the fundamentals, there is danger at the door."
http://www.zerohedge.com/sites/defau...70606_fed2.jpg


The global financial crisis is so nine years ago, and still the central banks can’t seem to find a way to “normalize” policy. Measures that had been introduced as emergency responses have morphed into permanent fixtures without which, we are told, growth would become impossible. And, so, not only do the balance sheets of the world’s central banks continue their relentless expansion, the rate of expansion has actually accelerated to a rate of $2 trillion per year, i.e., more than the GDP of Italy (see following exhibit). Since the 2008 meltdown, the technocrats have “minted” a collective $10 trillion worth of new balance sheet in a failed attempt to achieve “escape velocity.” Yet, what these extraordinary measures have failed to achieve in terms of wages and incomes, they have more than “made up” for in terms of leverage and asset prices.



The global capital markets have proven adept at transmitting newly created credit from one region to the next and from this asset class to that. Hence, the central banking “stimulus” programs have had a deep and very widespread scope of impact. Rates are set negative here, driving a reach for yield there. Corporate debt removed from circulation in Europe supports narrow risk premia in the U.S. But, to what end? Without a sustainable rise in GDP and incomes to match this global levitation in asset prices and leverage, the central bankers are only ensuring that when the inevitable cycle denouement comes, the down trade will be omnipresent.


Central Banks Are Adding Stimulus At The Highest Rate For This Cycle
http://www.zerohedge.com/sites/defau...70606_fed3.jpg
Source: National Central Banks, Bloomberg, TCW.
*ECB injections include gross LTRO and TLTRO balances.

All the while, the Fed doth protest that it will surely “normalize” rates over time, yet never seems to find just the right combination of unemployment, inflation, and asset prices that would justify a credible march towards “normalization.” The reason for this is as simple as it is portentous: after having acclimated the global economy to an artificially low rate and risk premia environment, “normalization” is no longer possible without a severe retrenchment in asset prices.


So, if the Fed can just hold off raising rates and the rest of the central banks keep stimulating, is the risk-on trade safe indefinitely? That does seem to be the consensus logic. Yet, alas, if this cycle doesn’t end badly, it will be the first one in the history of financial capitalism that hasn’t.


Cycles don’t just live on because central banks can temporarily evade the market’s self-correcting impulses, just as breaking the thermometer doesn’t cool the oven. This cycle’s grand experiment in centralized rate suppression has taught investors to “just look the other way” rather than attending to those late cycle signs that warn of impending risk.


If you are willing, we’ll have you look at just these six signs:
1. Low rates have incentivized managements to “arbitrage” their earnings yield against the low cost of the borrow through such re-leveraging activities as share repurchases. As a result, corporate leverage has grown, even as profit growth has sputtered. The median U.S. investment grade company now sports three units of (gross) debt per unit of EBITDA, a level that traditionally has strained the very definition of what constitutes investment grade.
http://www.zerohedge.com/sites/defau...70606_fed4.jpg
Source: JP Morgan, TCW
*Weighted by amount of debt outstanding.


2. High yield bonds provide thin compensation against the risk of default. Imputing a historically low annual loss adjustment assumption, the median high yield bond provides only marginal yield premium relative to a BBB investment grade bond. We don’t see the value in extending multiple turns of leverage for an extra 20 bps of yield.
http://www.zerohedge.com/sites/defau...70606_fed5.jpg
Source: Barclays, TCW
*As of May 23, 2017


3. The bellwether auto industry has passed its cyclical peak. Auto sales are falling from their plateau even in the face of a cycle peak in manufacturers’ incentive payments that now foot to over 10% of the typical new car purchase price. Meanwhile, the used car market demonstrates signs of “saturation,” eating away at the pricing power of the seller in both the new and used car markets.
U.S. Car Sales Have Been Artificially Supported By Manufacturers’ Incentives
http://www.zerohedge.com/sites/defau...70606_fed6.jpg
Source: Bloomberg, TrueCar, TCW
Used Car Values Have Fallen Precipitously
http://www.zerohedge.com/sites/defau...70606_fed7.jpg
Source: J.D. Power Valuation Services


4. Retail employs more people in the U.S. than does manufacturing, accounting for some 11% of the workforce. Unless you live in a cave, you know that both restructuring and distress are coming to a store near you. The number of retail outlets expected to close in 2017 will exceed that of 2008. Meanwhile, as retail comprises some 30% of the commercial real-estate (CRE) market, don’t expect CRE valuations to survive unscathed.
Retail Store Closings
http://www.zerohedge.com/sites/defau...70606_fed8.jpg
* Estimated based on actual YTD closings through April 2017 and historical annual closing trends.
Source: Credit Suisse, TCW
A Falling Price for the 2012 Vintage CRE Debt Index Reflects Expectations for Rising Losses
http://www.zerohedge.com/sites/defau...70606_fed9.jpg
Source: Markit, TCW


5. 10 largest banks: then and now. Laying claim to having the biggest banks might seem to be a source of national pride. It isn’t. Your banking system gets to be the biggest by originating more loans than “everyone” else.

At the height of the Japanese equity/real-estate bubble, its banks towered over the competition. Today, four of the five largest banks in the world are the Chinese state banks. History doesn’t repeat, but perhaps it rhymes.
10 Largest Banks: 1987*
http://www.zerohedge.com/sites/defau...0606_fed10.jpg
Source: LA Times, American Banker
*Largest 10 banks in the world by deposits
10 Largest Banks: 2016**
http://www.zerohedge.com/sites/defau...0606_fed11.jpg
Source: Statista
**Largest 10 banks in the world by assests


6. Spreads on Emerging Market sovereign and quasi-sovereign debt have remediated to mid-2013 levels, despite the fact that the percent of below investment grade bonds in this universe approaches 50%, a level nearly double of what it was in 2013.
http://www.zerohedge.com/sites/defau...0606_fed12.jpg
Source: JP Morgan, TCW


Conclusion
Times were when central banking was an honest profession. Asset prices are not meant to be arbitrary quantities that are to be steered or targeted by central bankers. The signs of late cycle excess continue to spread, but faith abides in central banking “stimulus”. We all do well to remember that when markets lose focus on the fundamentals, there is danger at the door.

COMMENTS FROM BENJAMINIS: These HARD COLD STARK POINTS CANNOT BE DEBATED. Most traders and citizens are living in a Fool's Paradise and there is no doubt that we are near the end and the start of the beginning of a new financial world and NO KING or PRESIDENT or CENTRAL BANK can stop this disaster.

My thoughts are that we will not recognize where we are on June 6, 2017 as compared to the month December 31,2017.

PREPARE NOW OR BE LEFT BEHIND...

http://hussmanfunds.com/wmc/wmc170605.htm


June 5, 2017
Three Factors

John P. Hussman, Ph.D.
All rights reserved and actively enforced.


Reprint Policy
Having extensively detailed my concerns about market conditions in prior comments, my impression is that the best course at present is to discuss the status of the more important elements of our discipline. Overall, my impression remains that the market is in the process of tracing out the blowoff finale of the third speculative financial bubble since 2000.

Still, as is true for the market cycle as a whole, the broad outline of this top formation is likely to be shaped by three factors: 1) valuations, which primarily affect total market returns over a 10-12 year horizon, as well as the magnitude of potential losses over the completion of the market cycle; 2) the uniformity or divergence of market internals across a broad range of stocks and security-types, which remains the most reliable measure we’ve identified of the psychological preference of investors toward speculation or risk-aversion (when investors are inclined to speculate, they tend to be indiscriminate about it); and 3) overextended market action highlighting extremes of speculation or fear - in the advancing portion of the market cycle, these are best identified by syndromes of overvalued, overbought, overbullish conditions.


Recall the central lesson and adaptation we had to introduce during the recent advancing half-cycle, as a result of deranged central bank intervention: in prior market cycles across history, “overvalued, overbought, overbullish” syndromes could be immediately relied on as a warning of steep and abrupt market losses. In the recent half-cycle, however, investors became compelled that zero interest rates created a situation where there was no alternative to equities, and yield-seeking speculation persisted long after even the most extreme “overvalued, overbought, overbullish” syndromes emerged. In the presence of zero interest rates, one had to wait for market internals to deteriorate explicitly, before adopting a hard-negative market outlook.


Put simply, in prior market cycles across history, a hard-defensive outlook was appropriate either when rich valuations were joined by divergent market internals, or at the point that severely “overvalued, overbought, overbullish” syndromes emerged. In the presence of zero interest rates, however, “overvalued, overbought, overbullish” syndromes were not enough, and had to be explicitly prioritized behind our measures of market internals.


Understand that distinction, and you understand virtually everything that was necessary to avoid our own difficult experience in the recent half-cycle, without losing the capacity of our discipline to anticipate the 2000-2002 and 2007-2009 collapses, which we demonstrated in real-time; without losing the capacity to adopt a constructive outlook at the point that a material retreat in valuations is joined by an early improvement in market action, which I’ve done after every bear market decline in over 30 years as a professional investor (though my late-2008 shift was truncated by my insistence on stress-testing our methods against Depression-era data); without losing the capacity to tolerate an extended further market advance if the recent period of speculation continues; and without abandoning the capacity to avoid what we fully expect to be extraordinary market losses over the completion of the current cycle.


Three factors
Valuations: From a long-term and full-cycle standpoint, I continue to view current market valuations as obscene.

Based on measures we find most tightly correlated with both actual subsequent 10-12 year S&P 500 total returns, and prospective market losses over the completion of the market cycle, the outlook for investors is easily the second most offensive in history. From the standpoint of individual stocks, the median price/revenue ratio of S&P 500 components is now more than 50% beyond the 2000 extreme, and establishes the present moment as the single most extreme point of broad market overvaluation in U.S. history.


The chart below offers a good sense of where current valuations stand from a historical perspective. Our most reliable measures range between 135-165% above historical norms that have regularly been visited or breached during the completion of market cycles across history, including those featuring relatively low interest rates. I’ve extensively reviewed the “justified” impact of interest rates on valuations, so I won’t review that analysis here, except to reiterate that the argument is vastly overstated, and does nothing to change the dismal prospects of the equity market in the coming 10-12 years.


From the standpoint of downside risk over the completion of the current cycle, merely touching historically run-of-the-mill valuations in the next few years would presently require a decline in the S&P 500 on the order of 57-62%.

Even coming within 25% of historical norms (which no market cycle in history has failed to revisit, even since 2000) would require a market decline on the order of 47-53%. Suffice it to say that a 50-60% loss in the S&P 500 over the completion of the current market cycle would not be a “worst case” scenario, but instead a run-of-the-mill outcome.
http://hussmanfunds.com/wmc/wmc170605a.png
On a 12-year horizon, our estimate of prospective S&P 500 nominal annual total returns has now dropped below 0.5% annually. The low interest rates accompanying these valuations create not a favorable situation but a brutal one for investors.

Unlike the market peak in 2000, when Treasury bonds provided a relatively safe and acceptable alternative to hypervalued equities, investors presently face dismal prospective returns in every component of a passive portfolio mix (even as investors continue their frantic exodus into passive investments, based on a rear-view, performance-chasing response to the very price advance that has created these dismal future return prospects).


The chart below shows our estimate of the forward-looking reality. The blue line presents the 12-year average annual total return that we estimate for a passive, conventional portfolio mix invested 60% in the S&P 500, 30% in Treasury bonds, and 10% in Treasury bills (blue line). The chart also shows the actual 12-year total return for this portfolio mix (red line). Our current estimate has now plunged to just 1% annually, the lowest prospective return that passive investors have faced in history.

I remain convinced that investors with the discipline and flexibility to vary their exposure to market risk over the course of the market cycle are likely to be well-served by that flexibility, as frustrating as it may be over the near term to refrain from speculation in the face of hypervalued new highs.
http://hussmanfunds.com/wmc/wmc170605b.png


Market Internals: The second factor to consider is the uniformity or divergence of market action across a wide range of individual stocks, industries, sectors and security-types (including debt securities of varying creditworthiness). Valuations provide an extraordinary amount of information about long-term and full-cycle investment prospects, but have little impact on near-term market behavior over shorter segments of the market cycle.

For most of this half-cycle prior to mid-2014, market internals displayed uniform strength, despite persistently overvalued, overbought, overbullish market conditions. In doing so, market internals indicated a continued willingness of investors to speculate, despite conditions that had historically created immediate risk for stocks. The ability of zero interest rates to encourage persistent yield-seeking speculation, despite the most extreme overvalued, overbought, overbullish syndromes, was our Achilles Heel in this half-cycle.

The proper response was not to abandon the information from valuations, but to instead require confirmation from deteriorating market internals. Even here, with U.S. interest rates off the zero bound, we are inclined to do so, because interest rates remain near zero abroad. While the relative strength of the U.S. dollar should dissuade capital inflows into overvalued U.S. securities, we can’t rely on that.

This possibility doesn’t create any difficulty for our approach. It simply means that in the event our measures of market internals improve materially from here, we would be inclined to soften our immediate market outlook to neutral (that is, we would defer our presently negative outlook) despite the presence of extreme overvalued, overbought, overbullish conditions.


Overextended Market Action: The third important factor relates to those overvalued, overbought, overbullish syndromes, which currently reflect the most severely negative conditions we define. Given that valuations remain extreme, and our measures of market internals remain divergent, our present assessment of market risk is steeply negative.


The recent advance market has gone some distance, though not enough, to improve those measures of internals. Though these measures extract a signal from the behavior of thousands of securities, my impression is that a few weeks of uniformly favorable market action could shift these measures to a more favorable condition. We wouldn’t become bullish at that point, but we would not be inclined to raise our defenses further on market advances (as we remain moderately, but not aggressively, inclined to do here).


Given the recent advance, I reviewed history for points where overvalued conditions were in place, market internals had already deteriorated, and a recent market advance was strong, but insufficient to trigger the thresholds we use to shift our measures to a favorable condition. My objective was to check whether these instances were regularly followed by further strength. If they were, it would argue that we should already defer our negative views. As it happens, there are three points that match those specific criteria: July 1998, November 2011, and February 2015. Only the 1998 instance was memorable enough to recall the market outcome immediately; the S&P 500 dropped by -19.3% over the following 6 weeks. The November 2011 instance initiated a drop of -9.2% in a period of less than 3 weeks, and the February 2015 instance initiated a -5.0% decline over the next two weeks.

That’s a rather small set of instances, and we prefer to respond to observed changes in market conditions rather than making forecasts about those changes. Still, the exercise leaves me somewhat more comfortable maintaining our current negative outlook despite the recent advance.


As usual, our market outlook will change as conditions shift. Our measures of market internals remain important here, and we’ve embraced the lessons of the recent half-cycle to a far greater extent than observers may assume. Long-term and full-cycle market prospects are aggressively negative, in my view, but our near-term outlook is more flexible. I don’t expect that we’ll shift to a constructive or aggressive outlook until a material retreat in valuations is joined by an early improvement in our measures of market action, but we’re open to a softening of our hard-negative views if improvements in market internals support that shift.


Run of the mill outcomes and worst-case scenarios

For now, our outlook does remain hard-negative, and regardless of near-term market behavior over the course of this extended top-formation, I continue to have every expectation for a 50-60% loss in the S&P 500 over the completion of the current market cycle.

Nothing in that range would require the most reliable valuation measures to breach their historical norms. For that reason the 50-60% range of losses should be considered a run-of-the-mill cycle completion.

I’ve been asked what I would consider a “worst case” scenario from a valuation standpoint. You may not want to know, but the chart at the top of this comment offers some perspective as a matter of historical record. On the most reliable measures, the current level of valuations stands at about 2.5 times historical norms (i.e. an average of 150% above those norms), and the lowest point for valuations reaches about 0.45 of historical norms at the 1982 secular low (i.e. -55% below those norms). The journey from one to the other would involve a market loss of -82%. That outcome strikes me as extraordinarily unlikely in the foreseeable future.

Still, I view the following outcome as plausible enough to give investors pause at current valuation extremes: assume that a secular low like 1982 does not occur for another 25 years, and assume 5% nominal annual economic growth between now and then. In that event, the loss in the S&P 500 Index between today and the year 2042 would be (0.45/2.50) x (1.05)^25 - 1 = -39%, though dividend income would be expected to bring total returns to nearly 2% annually. Alternatively, if valuations were to take another 25 years merely to touch historical norms, the same arithmetic implies S&P 500 nominal total returns averaging less than 5% annually over the coming quarter-century.


The arithmetic linking valuations and expected returns is straightforward, but is also unpleasant at current levels. It offers insight into why, despite an advance to the second most offensive valuation extreme in history, the total return of the S&P 500 has averaged just 4.7% annually during the more than 17-year period since the 2000 peak, with two intervening collapses of 50% or more, and most likely a third one on the way. Unless investors can rely on rich valuations a decade from now, the intervening returns of the S&P 500 are likely to average zero or worse between now and then.


The foregoing comments represent the general investment analysis and economic views of the Advisor, and are provided solely for the purpose of information, instruction and discourse. Please see periodic remarks on the Fund Notes and Commentary page for discussion relating specifically to the Hussman Funds and the investment positions of the Funds.
---
Prospectuses for the Hussman Strategic Growth Fund, the Hussman Strategic Total Return Fund, the Hussman Strategic International Fund, and the Hussman Strategic Dividend Value Fund, as well as Fund reports and other information, are available by clicking "The Funds" menu button from any page of this website.

Estimates of prospective return and risk for equities, bonds, and other financial markets are forward-looking statements based the analysis and reasonable beliefs of Hussman Strategic Advisors. They are not a guarantee of future performance, and are not indicative of the prospective returns of any of the Hussman Funds. Actual returns may differ substantially from the estimates provided. Estimates of prospective long-term returns for the S&P 500 reflect our standard valuation methodology, focusing on the relationship between current market prices and earnings, dividends and other fundamentals, adjusted for variability over the economic cycle (see for example Investment, Speculation, Valuation, and Tinker Bell, The Likely Range of Market Returns in the Coming Decade and Valuing the S&P 500 Using Forward Operating Earnings ).

COMMENTS FROM BENJAMINIS: There you have another VIEW from one of the best fund manager in the world. He could not be any clearer on the status of our financial world.

https://en.wikipedia.org/wiki/John_Hussman

http://www.businessinsider.com/stock...-crash-2013-10

Yes, I Know, But It's Not Just Earnings — Lots Of Measures Suggest Stocks May Crash
http://static5.businessinsider.com/i...ry-blodget.jpg

1. Henry Blodget
2. Oct. 22, 2013, 10:57 AM

Last month, I explained why I think there's a decent chance that the stock market will crash in the next year or two.


I also explained why, even without a crash, I think it's likely that stocks will deliver poor returns from today's level over the next 10 years. Notnegative returns, but poor returns — average annual returns (including dividends) of only about 3% per year. Given that stocks are usually expected to return about 10% per year, that's pretty crappy.


Lastly, I explained why, even though these expected returns are pretty crappy, I'm not dumping my stocks: I expect bonds and cash to deliver lousy returns over the next 10 years, too — maybe even worse than stocks. And I'm also scared we'll eventually get some rapid inflation, which stocks should provide some protection from (unlike bonds). But I'm not expecting the double-digit gains we've had from stocks over the last few years to continue much longer.


The reason I think stocks will deliver crappy returns is that valuation measures that have been actually predictive — as opposed to valuation measures that people just think are predictive — suggest that stocks will deliver crappy returns.


These valuation measures include the cyclically adjusted P/E ratio, which was devised by Yale Professor Robert Shiller, who just won the Nobel Prize. As you can see from the chart below, the Shiller P/E is almost 25X, which is the highest level in history with the exception of the bubble at the end of the 1990s and the end of the 1920s.
http://static6.businessinsider.com/i...21.40%20am.pngS&P 500 price-earnings ratio, 1870-2013 (blue) Professor Robert Shiller, Yale University

The Shiller P/E takes into account the impact of the business cycle, in which corporate profit margins rise and fall depending whether we're at a peak or a trough. Right now, corporate profit margins are at the highest level in history.

In the past, when profit margins have hit peaks or valleys, they have eventually regressed (or beyond) the mean. I think the same thing will probably happen this time. The chart below, for example, shows profits as a percent of GDP. See how high they are? See how, in the past, they have regressed to the mean?
http://static6.businessinsider.com/i...56.57%20pm.pngAfter-tax corporate profits, 1947-2013 Business Insider, St. Louis Fed

But some people don't think today's profit margins will regress to the mean.

Why not?

They think it's different this time!

Now, it might, in fact, be different this time. Sometimes it is.
But usually, when people justify valuations by saying "it's different this time," it turns out not to be different. That's why "it's different this time" are referred to as "the four most expensive words in the English language."


Back in the late 1990s, as a Wall Street analyst, I remember justifying the valuations of some Internet companies by saying, effectively, "it's different this time." It turned out it wasn't that different. That was a searing lesson, one I will never forget.

But, anyway, some people aren't worried about today's high profit margins, because they think it's different this time. They also think that the Shiller PE is misleading because of the low profits companies earned during the financial crisis. And so forth.


(The folks who think it's different this time have lots of compelling-sounding explanations for why it's different this time. And that's an important thing to understand: The explanations for why it's different this time often sound compelling.)

Here's my message today, though.
It's not just earnings that suggest that stocks are drastically overvalued and will have lousy returns for the next decade.

Let's look at some other metrics.

The charts below were produced by fund manager John Hussman, who also thinks that long-term stock performance from this level is going to be crappy.


(If you haven't heard of John Hussman, you soon will. In the comments below this article, you will soon read that John Hussman's returns have been lousy in recent years and that, therefore, you should heap ridicule on him and ignore everything he says. One important counter-point, however, is that the reason John Hussman's returns have been lousy is that he is one of the few fund managers who is not arguing that "it's different this time." Instead, he's sticking by his guns. Right now, with the market soaring ever higher, John Hussman looks like a moron. But, watch. If the market does, in fact, crash, the same people who are now trashing John Hussman will suddenly start lionizing him as a hero. In any event, instead of attacking John Hussman, please just argue with his logic. If you think his valuation charts are wrong, explain why.)


John Hussman thinks it's possible that the stock market will go higher from here — in the final speculative blow-off of a speculative bubble — but then he thinks stock performance is going to stink.


Hussman has produced a few charts that explain why.
First, here's a chart in which Hussman focuses on earnings, as I do above. This chart compares profit margins (blue) to future earnings growth (red). The profit margin line (blue) uses the left-hand scale and shows profit margins at any given time. The earnings growth line (red) shows annualized future 4-year earnings growth from that point in time.

What the chart shows clearly is that high profit margins today produce lousy earnings growth over the next several years, and vice versa. And the chart also shows, again, that today's profit margins are the highest they have ever been.

For what it's worth, John Hussman expects earnings to shrink by 5%-15% per year for the next 3-4 years. Imagine what stocks will do if earnings do that!
http://static4.businessinsider.com/i...25.02%20am.pngHussman Funds
And now for stocks ...


In case you're skeptical about the value of earnings analysis, John Hussman includes two charts comparing stock performance with other valuation measures. The first compares price-to-revenue (blue line) with subsequent 10-year stock performance. It tells the same story as the earnings analysis. In fact, this analysis suggests that stock price performance will be negative for the next 10 years. (Fortunately, we should collect some dividends, which should boost returns to about 3% per year.
http://static6.businessinsider.com/i...23.11%20am.pngHussman Funds
Hussman's second valuation analysis compares the market value of non-financial stocks relative to GDP with future 10-year stock performance. It tells the same story: lousy future stock performance.
http://static6.businessinsider.com/i...23.38%20am.pngHussman Funds
Lastly, for those who argue that today's stock prices are perfectly fair because of today's low interest rates, "equity premium," and prices relative to "forward operating earnings estimates" (which are often wrong), Hussman includes a chart that shows that these valuation measures are actually not particularly predictive.
http://static3.businessinsider.com/i...58.34%20am.pngJohn Hussman, Hussman Funds
So, yes, it might be "different this time."

If you want to persuade yourself that it's different this time, though, you might at least want to know which valuation measures are good predictors of future performance and which aren't. And lots of the ones that bulls are throwing around — Fed Model, "forward operating earnings," equity risk premium, etc. — aren't very good predictors.

In summary, as this last chart from Hussman shows, a whole bunch of valuation measures suggest that stocks are going to have lousy returns over the next 10 years. If you don't like one of them, use another. And then, if you disagree, ask yourself why it will be "different this time."
http://static4.businessinsider.com/i...57.35%20am.pngJohn Hussman, Hussman Funds
SEE ALSO: Here's Why I'm Not Selling Even Though Stocks Might Crash

COMMENTS FROM BENJAMINIS: Good Evening...

https://www.armstrongeconomics.com/i...t-on-schedule/

Qatar & the Rising Tensions in the Middle East – On Schedule


Blog/Middle East
Posted Jun 7, 2017 by Martin Armstrong
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Qatar is know for its ultra-modern architecture. In the respect, Doha is something to be viewed at least once in life. However, Qatar is a strict religious country that follows sharia law, in which homosexuals and adulterers face a possible death penalty, life imprisonment, or flogging. Qatar is a Salafi version of Sunni Islam, which is an ultra-conservative reform branch that developed in Arabia during the first half of the 18th century. It advocated a return to the traditions of the “devout ancestors” in reaction to the spread of European ideas. Qatar is one of the two Salafi states in the Muslim world, the other being Saudi Arabia.
http://s3.amazonaws.com/armstrongeco...i-of-Qatar.jpgThat said, Qatar is said to be the duplicitous country in the world. On the one hand they embrace the West, yet on the other hand many have called it “Club Med” for terrorists. Qatar is the richest nation on Earth on a Per capita basis. Abu Nakhlah Airport (Arabic:مطار أبو نخلة) in Qatar houses both Qatari Air Force, U.S. Air Force and other Coalition personnel and assets. It is also the headquarters of United States Central Command. I was a friend of Sheikh Saud bin Mohammed al-Thani who was a member of the Royal family of Qatar. Yes, he came to our office to see me with the royal bodyguards and the whole bit a few weeks before he died in 2014 and yes, I visited him at his home in London. Because of our friendship, he offered Qatar as the headquarters for our operation, but could not grant me a citizenship because I was Christian. We set up our office instead in Abu Dhabi where my relationship with the government dates back 30 years+. We were probably the two biggest collectors of ancient coins in the world.

Behind the Curtain, the Obama Administration tried releasing people quietly from the Guantanamo Bay, Cuba facility but there we being killed as people assume they were condtioned into spies. The Qatar was used as a front to release five people from Cuba in exchange for Sgt. Bowe Bergdahl.
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Qatar is also a huge investor in property. Most people do not know, but Qatar is part owner of the tallest building in London known as the Shard. They have a wealth fund of $335 billion and a portfolio that is amazing including from stakes in Volkswagen to Tiffany & Co. There stock portfolio is about $30 billion.
http://armstrongeconomics-wp.s3.amaz...2/Pipeline.jpg
There has been a very longstanding war of words between Saudi Arabia and its neighbor Qatar. It was Obama who championed invading Syria and that was all for Qatar to get a pipeline through to compete with Russia in delivering gas to Europe. has just exploded into open diplomatic warfare, threatening the US-led fight against ISIS and setting off a new wave of instability in the Gulf region.

Nevertheless, what has happened boils down to the fact that Saudi Arabia and three of its biggest allies — Egypt, the United Arab Emirates, and Bahrain — all announced that they were severing diplomatic ties with Qatar, as well as suspending air, land, and sea travel to and from the country. Qatari citizens were given 14 days to leave their countries. The move came after Riyadh accused Qatar of backing radical Islamist groups like the Muslim Brotherhood and ISIS. Since then, Libya, Yemen, and the Maldives have also joined the diplomatic boycott.
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Qatar is one of the wealthiest countries on earth. Nonetheless, you cannot eat money. The peninsular nation imports most of its food through its land border with Saudi, which is now closed. Al Jazeera, a Qatar government-owned news network, has been reporting that trucks carrying food appear to be stranded on the Saudi side of the border. And in Doha, the people are in a state of panic “stockpiling perishable goods,” according to Al Jazeera.

Many ships carrying food to Doha first stop in the UAE’s biggest cities, Dubai and Abu Dhabi; it’s unclear what effect the new bans will have on their movements. Ships from Europe seem to be unaffected just yet.
https://armstrongmedia.s3.amazonaws....15-518x600.jpgTensions between Qatar and its neighbors exploded last month after Qatar’s state-run news agency published an article in which the Qatar’s ruling emir, Tamim bin Hamad Al Thani, was quoted praising Israel and Iran. These two are Saudi Arabia’s biggest adversaries in the region. Qatar swiftly disavowed the article as fake news manufactured by hackers. The Saudis remained unconvinced. Then on top of that, Sheikh Tamim made things even worse when a few days later he called Iranian President Hassan Rouhani to congratulate him on his reelection.

This new diplomatic crisis in the region is the biggest since the Gulf War in 1991. In our Cycle of War Part II, we focused on the Middle East and warned that there was a rift in the region that could lead to a serious war.


Categories: Middle East, War