John Hussman’s view of the economy is dead on, because he sticks to the facts. The negative 4th quarter GDP announced yesterday confirmed his assessment that the economy went into recession in the 2nd half of 2012. His letter this week addressed the bullshit unemployment claim numbers that have been seasonally adjusted to make it seem like we have a jobs recovery. He predicted this would reverse itself shortly. This morning’s horrific numbers confirmed his analysis. It’s amazing how right you are when you use facts.
“On the economic front, the recent decline in new unemployment claims seems to have added a great deal of steam to the bullish case. But as I noted last week, much of that effect is actually tied to the very heavy downward seasonal adjustment that accompanies initial claims data in January. Beginning this week, and continuing through about mid-March, the seasonal adjustment factors will “think” that they have already corrected for that post-holiday bulge in new claims. Given that we did not see that bulge (particularly the second week of January) and that the jobs typically end up coming off anyway when the bulge doesn’t emerge on schedule, the figures from now until mid-March are actually the ones to watch.” – John Hussman 1-27-13
New U.S. jobless claims jump 38,000 to 368,000
WASHINGTON (MarketWatch) – The number of people who filed new applications for U.S. unemployment benefits climbed 38,000 to a seasonally adjusted 368,000 in the week ended Jan. 26, putting them at a one-month high, according to Labor Department data released Thursday. Economists surveyed by MarketWatch expected claims to climb to 355,000. Initial claims have returned to a level that prevailed through the later stages of 2012 after touching a five-year low earlier this month. Claims are often extremely jumpy in January after the end of the holidays and the start of a new year. Companies let go of temporary hires and some people wait until after the holidays to file claims. Initial claims from two weeks ago were unrevised at 330,000. The average of new claims over the past month, meanwhile, edged up by 250 to 352,000. The four-week average reduces seasonal volatility in the weekly data and is seen as a more accurate barometer of labor-market trends. Also, Labor said continuing claims increased by 22,000 to a seasonally adjusted 3.2 million in the week ended Jan. 19. Continuing claims reflect the number of people already receiving benefits. About 5.9 million people received some kind of state or federal benefit in the week ended Jan. 12, up 255,501 from the prior week. Total claims are reported with a two-week lag.
card802 says:
How many basically decent working people will be decimated? Their only crime is they believe the government works for the people, and not TPTB. (The liberal shills can eat shit)
Between the media constantly reporting all is well, between politicians saying all the right things, the average person just doesn’t see the shit storm that is brewing.
I truly believe the majority of people do not want to know the truth because they can’t handle the truth and they will stand there like a deer in the headlights, they see the lights, they know the lights indicate danger, but are too frozen with fear to jump.
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31st January 2013 at 10:14 am
JIMSKI says:
What Card said and why does it seem to be getting faster and faster. More and more. The whole damn world is waiting for the stick that breaks the back. WMD attack? Bad harvest? Big rock from sky? China calls our bluff?
I might just take a break from all news for a week…….
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31st January 2013 at 10:19 am
BUCKHED says:
I was a deer in the headlights…..then I stop using the Antler Spray and things got better .
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31st January 2013 at 10:22 am
Pirate Jo says:
Speaking for myself, but I’m sure other people feel the same way, I feel like I’m tied to a train track and there is nothing I can do about it. What do you do as the train approaches? Close your eyes.
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31st January 2013 at 10:55 am
card802 says:
Agree 100%.
Seems all the problems are accelerating, which we have been repeatedly warned that it would.
The end will be fast and furious when the house of cards collapse. I never ever thought I would see this in my lifetime, but it’s looking that I will. We all will, whether we want to or not.
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31st January 2013 at 11:06 am
Colma Rising says:
Of course he was right.
Now watch what he says about this spring.
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31st January 2013 at 11:08 am
card802 says:
The time is near at hand which must determine whether Americans are to be free men or slaves.
Government is not reason; it is not eloquent; it is force. Like fire, it is a dangerous servant and a fearful master.
George Washington
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31st January 2013 at 11:09 am
Colma Rising says:
Am I the only one who sees opportunity developing?
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31st January 2013 at 11:10 am
AWD says:
38,000 more people get an unemployment benefit vacation. They need to release disability numbers the same time as job numbers since more people are getting on disability than are getting jobs. On a different topic, our debt bubble is about to go Supernova:
Bill Gross: “Credit Supernova!”
Each additional dollar of credit seems to create less and less heat. In the 1980s, it took four dollars of new credit to generate $1 of real GDP. Over the last decade, it has taken $10, and since 2006, $20 to produce the same result. Minsky’s Ponzi finance at the 2013 stage goes more and more to creditors and market speculators and less and less to the real economy. This “Credit New Normal” is entropic much like the physical universe and the “heat” or real growth that new credit now generates becomes less and less each year: 2% real growth now instead of an historical 3.5% over the past 50 years; likely even less as the future unfolds.
http://www.zerohedge.com/news/2013-01-31/bill-gross-credit-supernova
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31st January 2013 at 11:12 am
Administrator says:
Jobless Claims Jump Most Since Sandy, Now Flat For 13 Months
Submitted by Tyler Durden on 01/31/2013 08:47 -0500
While the popular meme is that jobless claims have been indicating an albeit modestly growing economy, it would appear that facts simply do not reflect that reality. Jobless claims surged this week, missing expectations by the most since Sandy as seasonal affectations are in the rear-view mirror. For 13 months, we have meandered around a flat-line initial claims number in the 365k range – and we remain there. What is most troubling about this total catastrophe that occurred in Emergency Unemployment Compensation. After last week’s record-breaking plunge of over 350k, this week saw a surge of over 418k added to the EUC rolls – the biggest 2-week jump in two months. The noise in this data remains impressive and yet it is the correlated macro data that appears to be at the heart of so many people’s belief in the equity market’s strength…
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31st January 2013 at 11:26 am
Eddie says:
Colma
The short side is a battleground littered with the corpses of small investors. My plan, let the market tank and buy more metals when they bottom.
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31st January 2013 at 11:29 am
card802 says:
Coloma,
Nope, Marc Faber is excited.
“For the first time in four years, since the lows in March 2009, I love this market because the higher it goes the more likely we will have a nice crash, a big time crash,” he said.”
http://blogs.marketwatch.com/thetell/2013/01/31/marc-faber-loves-the-odds-of-a-big-time-market-crash/
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31st January 2013 at 11:46 am
Pirate Jo says:
Opportunities for … ? Violent civil unrest? The violation of everything my little libertarian heart holds dear? Widespread poverty? Subsistence living?
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31st January 2013 at 11:47 am
Hammer says:
Yes coma. You are the only one. Please enlighten us as we are
A small crowd that would revel with your insight.
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31st January 2013 at 11:54 am
AWD says:
Why We Cannot Print/Borrow/Spend Our Way to Prosperity
The Keynesian belief that the government can print/ borrow and spend enough money to trigger self-sustaining prosperity is a nonsensical, magical-thinking Cargo Cult. The following charts show why it will continue to fail, with eventually catastrophic results: the returns on this unprecedented borrow-spend policy are diminishing to near-zero or negative. As long as the interest rate on debt is low, the path of least resistance is to keep borrowing to support politically untouchable fiefdoms, cartels and constituencies. Eventually, the cost of servicing the debt overwhelms the diminishing returns on the debt-based spending.
The debt keeps expanding. Debt service keeps expanding. The economy is shrinking. Do you expect jobs to come back? Think again:
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31st January 2013 at 12:01 pm
Colma Rising says:
Tell me about yourself, Hummer, and I can dial the specifics in fcor you….
In general, I’ll tell you this you fucking plebe:
If you’re just now realizing the condition of the domestic economy, you’re a dullard.
If you’re spazzing out and licking your shifty eyes contemplating your “portfolio”, you’re a sad sack of shit and ought to cry in your pillow…. get it all out, soak your woobie in the tears of ignorance.
If you have so much money you don’t know what to do with it, do me a favor and blow it on some pricey hookers and a ski slope of blow, but don’t expect a fucking ounce of sympathy.
If you have a small pile of scratch, revel in the old and tired adage “Buy Low….”
So with that, here’s a little advice for you: Quit being a wind sock. Stop begging for scraps like a baby-bird chirping and looking up like a cock-hungry choke-fiend.
But don’t tell anyone you haven’t seen it coming.
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31st January 2013 at 12:17 pm
Eddie says:
Market collapses do create financial opportunities for astute traders. There is no doubt of that. But especially since EFT and constant Fed manips, one has to have an excellent trading platform and watch the markets in real time to catch the moves, and even then it isn’t easy. Markets move up over weeks and months, and fall in minutes..and lately in seconds.
My assumption was that Colma was itching to put money on a short or two. All I can say is I haven’t made money that way. I have lost a few bucks.
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31st January 2013 at 12:25 pm
Eddie says:
“HFT”
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31st January 2013 at 12:28 pm
BUCKHED says:
Then more folks get food stamps and the FSA goes ever larger . Thankfully most of the FSA is fat,lazy,on meds for a variety of reasons and last but not least poor . It is the lack of funds that will keep most of them unarmed and thus unable to survive when TSHTF .
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31st January 2013 at 12:37 pm
Eddie says:
IMHO this new piece by Bill Gross is a primer for how to invest in these times. Pay particular attention to the possible choices he recommends, and pick your poison.
Regardless of what you think of Gross and his funds, I think he is dead on as far as his macro outlook here, and how that should influence your investments.
http://www.pimco.com/EN/Insights/Pages/Credit-Supernova.aspx
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31st January 2013 at 1:44 pm
card802 says:
Anyone care to explain how this will help increase revenue.
“A territorial system would exempt most domestic companies’ offshore profits from U.S. tax. That contrasts with the worldwide system now in place, whereby all offshore profits are taxed when they are brought back into the United States.
John Engler, president of the Business Roundtable, said that in meetings with Obama during a year-end budget standoff between the White House and Congress, the president left the impression he was moving in that direction.”
http://www.reuters.com/article/2013/01/31/us-usa-tax-territorial-idUSBRE90U15J20130131?feedType=RSS&feedName=politicsNews&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Reuters%2FPoliticsNews+%28Reuters+Politics+News%29&utm_content=Google+Feedfetcher
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31st January 2013 at 2:52 pm
Llpoh says:
Card – at the moment, due to the laws, the money never comes back, and so is never taxed. So a change to the system will see capital flow back to the US, where it will be put to use, creating jobs and eventually flow through to tax revenue.
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31st January 2013 at 3:07 pm
card802 says:
Llpoh,
What am I missing? The current system only taxes offshore corporate profit if it is brought back onshore, so I agree, it never comes back, why should it.
What makes this new territorial system any different if it exempts offshore profit from US tax?
Is it the word “most” so some of the offshore profit is taxed?
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31st January 2013 at 3:39 pm
Administrator says:
Rich Yamarone:
“The year-over-year change in real GDP was 1.5 percent. There has never been a time since measurement commenced in 1948 when the annual pace of real GDP has fallen that low without the economy ultimately slipping into recession. Sub-2.0 percent readings are historically the warning signal.”
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31st January 2013 at 4:19 pm
Llpoh says:
Currently, if a corp brings the money back, it gets taxed. If they change the laws, there is something like four or five TRILLION dollars in profits, in cash, perched in overseas banks. Imagine the possible inflows if they change the rules. Also, imagine the hit to the foreign entities if they suddenly lose the use of all that capital.
The idea is to encourage capital to return to the US where it would be used – resulting in a huge boon to the US economy. The capital perched overseas is equivalent to around a third of a year of GDP.
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31st January 2013 at 4:30 pm
Administrator says:
Ten Reasons for Declining GDP Growth
Changing social attitudes towards consumption and debt in all age groups
Demographics of an aging workforce
A severe lack of high-paying jobs for college graduates
Kids fresh out of college have delayed marriage, family formation, and home purchases
Many coming out of college are effectively debt slaves having no way to pay back student loans
Debt overhang from the housing bust
Boomers headed into retirement have insufficient savings
Shrinking middle-class plagued by declining real wages
Rapidly changing technology negates skills
Technology, especially robots, currently eliminates more jobs than it creates
Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com
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31st January 2013 at 4:48 pm
Hammer says:
Colma I have been here far longer than your shit stain of a name has.
That was some epic slap down I received.
I was hoping your question wasn’t one of those ” Mommy, Mommy, look at me bullshit comments. I actually thought you might offer up a idea or two instead of the shit nugget you provided.
Thanks for confirming your utter fuckin uselessness for all to see.
Since you covered both ends of the spectrum I suppose your hate filled summation of my being was dead on the money.
Going forward you have saved me the time spent reading your drivel.
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31st January 2013 at 1:14 am