ECRI Calls for a Recession

ECRI Article by Kirk:

The Economic Cycle Research Institute, ECRI - a New York-based independent forecasting group, released its latest readings for its proprietary Weekly Leading Index (WLI) today.

From ECRI's Weekly Leading Index Falls: Jobs To Get Worse Under Recession-Bound U.S. Economy

• ECRI’s recession call isn’t based on just one or two leading indexes, but on dozens of specialized leading indexes, including the U.S. Long Leading Index, which was the first to turn down – before the Arab Spring and Japanese earthquake – to be followed by downturns in the Weekly Leading Index and other shorter-leading indexes.
  
• ...the most reliable forward-looking indicators are now collectively behaving as they did on the cusp of full-blown recessions, not “soft landings.”
• "if you think this is a bad economy, you haven’t seen anything yet."

best regards 

Kirk Lindstrom http://kirklindstrom.com/ 

Jack Bogle and Vince Farrell Pumping Up the Scam Market

-------- Original Message --------

Subject:	Jack Bogle and Vince Farrell Pumping Up the Scam Market
Date:	Mon, 19 Sep 2011 15:07:09 -0700
From:	Jas Jain

Jack Bogle and Vince Farrell Pumping Up the Scam Market

Because the 10-Year USTs are yielding below 2% and the S&P 500 is yielding above 2%. Another dope dealer, Russell Napier, was making similar claims 9-12 months ago. To Jack Bogle, the total return on the S&P500 would be 7% annual rate over the next ten years based on the expectation of 5% nominal GDP growth and 2%+ yield amounts to doubling your money in ten years. The 10-Year yield, the best predictor of the future nominal GDP growth, of below 2% is forecasting nominal GDP growth of below 2%. So, Jack Bogle, like every other born-and-bred America dope, thinks that he is smarter than the Treasury bond market. Farrell talked about Scams like JNJ that yield 3.6% and have been growing the dividends and that would surely beat the 10-year UST and he arrives at similar conclusions as Bogle in term of returns and attractiveness of the Scam Market. Both were addressing the Homo boobiens on the boob tube this morning.

Let us look at a coterie of Scam Market bulls who are 70+ years old and are born-and-bred American dopes, e.g., Jack Bogle, Bob Brinker, Lazlo Briyni, Warren Buffet, Vince Farrell, Don Hays, Richard Russell, etc., etc. They all talk about returns in 1950s, or 1960s, or 1980, or 1990s, even 2000s, to convince people why now is a great time to buy Scams. All are certifiable morons when it comes to understanding the economy and the whole subject of forecasting. These morons have not recognized the simple fact—today's economy and the fundamentals have nothing in common with any period since 1950 (in their adult lifetime). Just look at the debt levels, you morons. Look at some of the economic competitors, e.g., CHINA and Germany with far superior economic fundamentals. America's relative position has never been worse since the WW I. America's best days are in the past and are never coming back, at least not in anyone's lifetime.

In America, we are dealing with born-and-bred American dopes in denial. And dope dealers like Bogle, Buffett and Farrell want to make sure of that. Please keep in mind that we are dealing with irremediable dopes led by the most dishonest ruling elite in modern history.
Jas

Current US Treasury Rates at a Glance

I-Bonds Currently Pay 4.6%

I Bonds (iBonds):  Inflation Protected Bonds:

• I Bonds Explained - Composite Rates -
•  Current iBond Rates - iBond Rate History
  

Inflation at 3.8%; Core Inflation at 2.0%

Thursday, September 15, 2011

Consumer Price Index - August 2011

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.4 percent in August on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 3.8 percent before seasonal adjustment.

The seasonally adjusted increase in the all items index was broad- based, with continuing increases in the indexes for gasoline, food, shelter, and apparel. The gasoline index rose for the 12th time in the last 14 months and led to a 1.2 percent increase in the energy index, while the food index rose 0.5 percent, its largest increase since March.

All items less food and energy up 2.0% year-over-year
http://www.bls.gov/news.release/cpi.nr0.htm

-------- Original Message --------

Subject:	RE: inflation news
Date:	Thu, 15 Sep 2011 08:04:28 -0700
From:	Jas Jain

Date: Thu, 15 Sep 2011 07:17:12 -0700
Subject: inflation news
To: jas_jain

Jas - how come we keep hearing news about inflation ever so often though the fundamentals point the other way around.

http://finance.yahoo.com/news/Consumers-paid-more-on-wide-apf-87741826.html?x=0&.v=2

Inflation and employment are known lagging indicators. YoY inflation rate has been very volatile over the past few years. That is why I look at 3-year and 5-year annualized rates. One has to be able to look into the future based on the fundamentals at hand, i.e., the future path of consumption, or the aggregate demand, by Americans. Interventions in the economy by the Fed and the Federal govt don't, and can't, change those fundamental factors. Americans would not be allowed to consume more than they produce forever, right? Right now the Federal govt is helping them do that, via deficit spending of 10% of the GDP per year, but how long this game can go on? Maybe one year, at most two years. What next? Deflationary depression when the aggregate demand goes down at 3-5% annual rate.
Jas

Kirk's Explore Portfolio TIPS as of					09/14/11
CUSIP	Value	Paid	Buy Date	Interest	$ Gain	% Gain
912828PP9	$34,548	$30,846	3/24/2011	$173.86	$3,876	12.6%
912828MF4	$35,641	$29,847	1/11/2010	$631.65	$6,426	21.5%

Learn the "Core and Explore" approach to investing
with "Kirk Lindstrom's Investment Letter"

Subscribe NOW and get the September 2011 Issue for FREE! !  
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Paul Krugman Calls Social Security A Ponzi Scheme

-------- Original Message --------

Subject:	Blast From Paul Krugman's Past: "Social Security Is A Ponzi Scheme And Will Soon Be Over"--RE: Dishonesty of Paul Krugman
Date:	Wed, 14 Sep 2011 04:29:30 -0700
From:	Jas Jain

Date: Wed, 14 Sep 2011 06:41:45 +0100
Subject: Re: Dishonesty of Paul Krugman: "50 Percent Chance Global Economy Will Enter Recession"

Thanks. Would Krugman have succes as a partisan dope delaer if he were not dishonest? It is a dirty business but there is lot of demand for dope dealers and someone has to do the ditry jobs.
Jas
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Blast From Paul Krugman's Past: "Social Security Is A Ponzi Scheme And Will Soon Be Over"

Submitted by Tyler Durden on 09/13/2011 21:28 -0400

It is one thing (what thing that is we are not sure, but we have heard others say it, so like all good lemmings we will say it too) for Rick Perry to call Social Security a ponzi scheme. After all he is some crazy, foaming in the mouth conservative, as uber-Keynesian liberal Paul Krugman may call him. And that's fine. What confuses us, however, is why Social Security would be called a ponzi by the same liberal noted previously: none other than Paul Krugman himself.

Exhibit A, from a distant 1997, which perhaps one would have expected to remain buried (source):

Social Security is structured from the point of view of the recipients as if it were an ordinary retirement plan: what you get out depends on what you put in. So it does not look like a redistributionist scheme. In practice it has turned out to be strongly redistributionist, but only because of its Ponzi game aspect, in which each generation takes more out than it put in. Well, the Ponzi game will soon be over, thanks to changing demographics, so that the typical recipient henceforth will get only about as much as he or she put in (and today's young may well get less than they put in).

...

Bob Brinker Says Social Security is Not A Ponzi Scheme

Ron Paul Gets Booed by Tea Partiers In the Florida Debate

Alternative Investments

COACECSS

-------- Original Message --------

Subject:	Ron Paul Gets Booed by Tea Partiers In the Florida Debate
Date:	Tue, 13 Sep 2011 08:51:43 -0700
From:	Jas Jain

Ron Paul Gets Booed by Tea Partiers In the Florida Debate

This weekend I talked to two friends, one on the left and one on the right, who liked Ron Paul among the Republican candidates for his principles and relative honesty. I told them that his chances are near zero. Why? Because he is not willing to lie about his positions based on whom he is talking to and his position on military non-intervention in foreign lands is very unpopular among the right wing nuts and the Tea Party, supported by Limbaugh, is to the right of the right. As long as born-and-bred American dopes get to vote, Ron Paul, or any man or woman of principle and honesty, has zero chance.

Dishonesty is the number one characteristic needed to get elected the President of the Dis-United States of America. Americans are disunited because of all the propaganda lies (pandering to the prejudices of various groups) that they have been subjected to from birth onwards. GW Bush and Obama got elected because they were the best liars, who looked believable, among the field of candidates. Some have claimed that Bill Clinton was a good liar. The election of the US President, because of the format, ends being a selection of the most dishonest. If one only represents a thousand people it is lot harder for a dishonest person to get elected because many voters would have known the person from first hand experiences. For example, Ron Paul could only get elected as a Congressman and not as a Senator, or a Governor, from Texas. With a smaller group an honest person has better chance.

At the national level, the most fundamental problem facing America is born-and-bred American dopes. All other problems are derivatives. Maybe, the real problem is democracy where propaganda, or breeding dopes, is the most important vehicle to gain power and wealth.

It is the morality, stupid! (There is absolutely no doubt that immorality has been on the rise in America for decades and Ronald Reagan gave it the biggest currency in politics; it is all a question of how a politician, or a propagandist, or a business leader, lies not that one lies because the assumption is that everyone lies).

Jas

Pacific West Capital Group

Return of the King Dollar—Re: Swiss National Bank Is “Printing Money” Like CRAZY

US Federal tax rates for 2011

-------- Original Message --------

Subject:	Return of the King Dollar—Re: Swiss National Bank Is "Printing Money" Like CRAZY
Date:	Wed, 7 Sep 2011 16:18:17 -0700
From:	Jas Jain

Return of the King Dollar—Re: Swiss National Bank Is "Printing Money" Like CRAZY

Hugh: "They're going to soak up so many Euros that they can bail Greece out since Merkel won't. Problem solved."

 

SNB has done nothing more than burning some speculators in CHF, one of them being Jimmy Rogers, who was crying foul because he didn't sell his Swissies. The same guy has gotten burned at least three times that he shorted long-term US Treasuries. The definition of any dope is that he, or she, cannot admit to being wrong and not knowing what he, or she, doesn't understand. Does Jimmy, the American, understand the US Treasury market? Does he understand the currency market?? What exactly does Jimmy understand??? Other than "Bernanke is Printing Money."

Just wait when all the USD bears get burned because currencies, against the USD, do trend for years and reversals can be painful. Like all markets with a very large number of speculators, the currency markets would inflict the maximum amount of pain on the maximum number of participants. Right now these participants are long-term USD bears.

Bye bye Swissie, see you at $0.70, not anytime soon though. Miss ya. Hint: You were attractive when you were slim; now you have grown way too fat. Ooops. No, dropping 25 lbs wouldn't do. Sorry.

Jas

--------------------------------------------------

Swiss National Bank Is "Printing Money" Like CRAZY—FWC: Swiss FAQs

Far more than the fed, as % of the GDP/GNP. 

"I know, I know, lots of people are going to immediately jump to the possibility that this will cause rampant inflation in Switzerland. But it won't. Inflation is not determined by the amount of money in the economy -- it's determined by the amount of demand. That's why gigantic increases in the US money supply in recent years have had no effect on US inflation. The same will be true for Switzerland." 

Money supply by itself does not create inflation or makes the currency worth less. US Treasuries and USD bears are a bunch of scaremongers. CHF has taken a 20% haircut, from the peak four weeks ago, against the three top currencies—Gold, USD and Euro. Only those ignorant of economic fundamentals and global trade (more than half of Swiss GDP is exports) were holding CHF at the level of $1.25-1.40, or 1.05-1.10 CHF to a Euro. CHF was being driven by speculation and it provided a great opportunity to diversify out of the CHF.

Jas

Beware of Annuities

Best Online Brokerage Accounts 

Swiss National Bank Is “Printing Money” Like CRAZY

Best Online Brokerage Accounts 

-------- Original Message --------

Subject:	Swiss National Bank Is "Printing Money" Like CRAZY—FWC: Swiss FAQs
Date:	Wed, 7 Sep 2011 05:48:00 -0700
From:	Jas Jain

Swiss National Bank Is "Printing Money" Like CRAZY—FWC: Swiss FAQs

Far more than the fed, as % of the GDP/GNP.

"I know, I know, lots of people are going to immediately jump to the possibility that this will cause rampant inflation in Switzerland. But it won't. Inflation is not determined by the amount of money in the economy -- it's determined by the amount of demand. That's why gigantic increases in the US money supply in recent years have had no effect on US inflation. The same will be true for Switzerland."

Money supply by itself does not create inflation or makes the currency worth less. US Treasuries and USD bears are a bunch of scaremongers. CHF has taken a 20% haircut, from the peak four weeks ago, against the three top currencies—Gold, USD and Euro. Only those ignorant of economic fundamentals and global trade (more than half of Swiss GDP is exports) were holding CHF at the level of $1.25-1.40, or 1.05-1.10 CHF to a Euro. CHF was being driven by speculation and it provided a great opportunity to diversify out of the CHF.

Jas

-x-x-x-x-x-x-x-x-x-x-x-

http://streetlightblog.blogspot.com/2011/09/swiss-faqs.html

Tuesday, September 06, 2011

Swiss FAQs

In proper analogy format, today's news that the Swiss National Bank (SNB) is going to buy "unlimited quantities" of foreign currency in order to keep the Swiss Franc (CHF) from appreciating beyond 1.20 CHF/euro can be expressed as follows:

China:US :: Switzerland:Eurozone

Just as China has for years steadily purchased US dollars in order to keep its currency from appreciating, Switzerland has now promised to buy euros in order to keep the CHF from appreciating. To help understand what that means, here are some FAQs:

1. Why did the SNB decide to do this?
The SNB had to act because the strong CHF had basically been strangling the Swiss economy by making Switzerland a horrendously expensive place to manufacture or buy things. So it's not surprising that the SNB decided it was time to take steps to prevent a dangerous deflationary spiral from taking hold.

2. Is the SNB's new exchange rate policy credible?
Yes, it is absolutely credible. There's no technical or economic limit to the ability of the SNB to sell CHF and buy euro to keep the exchange rate above 1.20, simply because the SNB can create as many CHF as it wants. So the exchange rate will only go below 1.20 if and when the SNB decides to allow that to happen.

3. What will this do to the Swiss money supply?
Chances are high that Switzerland's money supply will explode. There's probably no getting around this one; the only way the SNB can keep its exchange rate at the desired level is to offer unlimited CHF at an exchange rate of 1.20 CHF/euro to anyone who wants to use Switzerland as a safe haven for their money. Given that lots of people are seeking safe havens for their money right now, it's likely that there will be a lot of takers, which means that the SNB will have to create lots and lots of new CHF.

However: please remember that this doesn't matter. I know, I know, lots of people are going to immediately jump to the possibility that this will cause rampant inflation in Switzerland. But it won't. Inflation is not determined by the amount of money in the economy -- it's determined by the amount of demand. That's why gigantic increases in the US money supply in recent years have had no effect on US inflation. The same will be true for Switzerland.

4. But what if (just for the sake of argument) inflation did start to pick up in Switzerland?
In that case -- which could happen if demand for Swiss goods and services picks up in a serious way -- then investors will begin to realize that all those CHF they accumulated are losing purchasing power, and they will start to sell them. And the process of the SNB creating CHF to buy euros can simply be reversed. Furthermore, in that case the SNB will be perfectly content to let the CHF appreciate again, if there's still a tendency for it to do so.

5. Will this stem the flow of cash into Switzerland? At the announced exchange rate floor of 1.20, I doubt it. Banks and other financial institutions are still seeking refuge from perceived risks in Europe, and they seem to be moving their money out of other European countries at a rapid clip. Much of that is going to the US, but not all of it, so investors will continue to seek other safe places to park their funds. Switzerland's attractiveness as a safe haven will not be diminished just because the SNB is enforcing what will effectively be a fixed exchange rate. However, there is one possible additional step that the SNB could take to help stem the tide of cash...

6. Will the announced exchange rate floor of 1.20 CHF/euro be modified?
It's possible, and in fact, the announcement by the SNB indicated that they would like the CHF to weaken further over time. This is a very sensible strategy by the SNB, and I wouldn't be surprised if they soon make an explicit promise to gradually ratchet up the exchange rate from 1.20. The reason is because only by promising investors that their CHF portfolio will suffer exchange rate losses over time can the SNB really do something to staunch the flow of funds into Switzerland -- a fixed exchange rate of 1.20 won't do it. The SNB will probably give it a little time to see if the flow of funds into Switzerland slows as a result of today's action, but if it doesn't, then look for the SNB to set a gradually rising target exchange rate going forward.

7. How will this affect the eurozone?
That depends in part on what the SNB decides to do with all of those euro it will be accumulating. Some reports suggest that the SNB (typically cautious) had decided to only buy German and French government bonds with those euro, and not bonds from other eurozone countries. That will have the effect of exacerbating the interest rate differentials between the eurozone core and periphery, potentially making things worse. It would be reasonable to interpret this as indicating that the SNB believes that there's a good chance that eurozone is going to lose the periphery countries.

Alternatively, the SNB could decide to place a bet on the survival of the eurozone, or at least on continued Spanish and Italian inclusion. If so, then it could help to make that positive outcome happen by using some of its growing stash of euros to buy Spanish and Italian government bonds. Not only would this directly help to narrow interest rate spreads between the core and periphery, but it would be interpreted by the markets as a major vote of confidence.

Either way, Switzerland's fate is now substantially tied to the eurozone. This was always true to some degree, of course, but the linkages will now be even deeper and more explicit, as the SNB begins rapidly accumulating a big pile of eurozone bonds. It's yet another example of how the eurozone debt crisis has had, and will continue to have, effects far beyond the eurozone itself.

Black Friday 2011

US Treasury Rates at a Glance