Monday, March 30, 2015

April 2 Low to negative global interest rates have given deadbeat corporate executives virtually free money to replace wasted money and to give themselves bonuses, travel, and parties because a near 0% rate costs nothing and a negative rate gives every dying business a beautiful face lift. But not just deadbeat executives and failing corporations get the benefits. Deadbeat consumers continue to borrow money to make payments on old loans and with today’s new “Stupid Party” credit standards, stupid people continue to loan deadbeats more money. Stupid party bankers have now lowered credit standards and now keep loaning as long as the deadbeat just makes the payments. So all the deadbeat does is get new loans from other stupid party bankers to keep up their payments to the original stupid party bankers who give out the stupid party FED’s newly minted free cash supported by existing worthless debt obligations. That is basically what Obama’s new redistribution of your wealth is doing and why there appears to be no consequences for this stupidity as long as interest rates stay low or go negative. It has of course a tragic ending for the American stock market because it hides the fact that American companies are so far underwater that they would now be virtually bankrupt even at an interest rate of 5%. During Obama’s stupid party cousin Jimmy Carter’s reign of economic terror, inflation broke out and the prime interest rate went over 15% before President Ronald Regan of the “Intelligent Party” got elected and worked on the supply side to get inflation down. The problem with the “stupid party” FED is they are as stupid and incompetent as the Weimar Republic politicians in Germany were in the 1920’s. The FED may yet bankrupt not just America but the free world with their flooding of the world with US currency and debt.

With national debt, either you end up like Greece where they have so much debt they cannot continue to make debt payments or you end up like Germany in the 1920’s.  Hyperinflation occurs when your national debt becomes impossible to pay but the debtor forces you to continue making the payments like the EU is forcing Greece today.  In the case of Germany it caused Hitler’s socialist “Stupid Party” to honestly win his election majority because the people were infuriated by the pound of flesh demanded and the foreign occupation of land and the theft of their resources by foreign occupiers.  The current EU demands for Greece to sell their ports and islands to foreigners are not unlike the demands of the WWI allies that Germany surrender the resources of the Ruhr valley.  In Germany’s 1923 case, Germany with its aggression acted more like Ackman, a market manipulating bully, who is now being investigated for his Herbalife stock manipulations.   Germany probably got what it deserved but it caused WWII and the rise of “stupid party” socialism (NAZI GR and USSR communism) which were worse.   In the case of Greece we have the classic overextended under motivated deadbeat borrower who cannot manage to pay the interest on their debt.  The EU should indefinitely drop their interest rate to a point they can afford to pay without loaning them any more money.  If that interest rate is zero it would be an act of generosity just as the US was generous to both American allies and former enemies in Europe with the Marshal plan.   The evil socialist USSR stole the factory machines of Germany and Poland ruining most of them in the process and took them back to the USSR.
http://www.latimes.com/business/la-fi-herbalife-stock-manipulation-probe-china-20150401-story.html
       The U.S. trade gap in February shrank to its lowest level since October 2009, largely reflecting the West Coast ports dispute that created a bottleneck of goods.
            April 1  Lindsey Piegza, chief economist at Sterne Agee & Leach Inc. in Chicago, said “There is little hope for noticeable momentum in manufacturing activity” due to weak economic growth and the strong dollar. The factory index declined in spite of the resolution of the dockworkers work stoppage at West Coast ports, implying the slowdown was a national economic problem not a labor problem. Consumer sentiment is now 40% lower than it was just before the DotCom bubble broke in 2000.
Total manufacturing is at its lowest level since Obama took office.
ADP Employment Report Mar for new hiring fell to 189K from 214K last month.
The manufacturing ISM Index for Mar fell to 51.5 from 52.9 where 50 signify zero growth.
International trade is now in decline but has reduced the US trade deficit to -$35.4B, down from -$42.7B last month.
     Construction Spending for Feb fell to -0.7% after falling -1.1% last month.  The government tried to hide the bad numbers shifting the bad news back to last month from this month but we refused to change the raw data.
     Mar 31 February pending home sales rose to their highest level since June 2013.  That sounds pretty good at first doesn’t it?  But just how good were the actual sales in early 2013?  In 2013 they were about 65% of the 2007 sales and almost as bad as 1997 home sales.  But this news is distorted to justify a ridiculously high market PE of about 60 today when you do it more correctly.   As described by a guest on Squawk Box, they ignore all the corporations that have zero earnings because they have infinite PE ratios.  They now use a median (midway stock PE) because the average PE would be close to 60 today but the median they is less than 30.   It is even more foolish to believe Wall Street than the office of the presidency.  The PE today, when done consistently, is higher than during the Dot Com bubble.  Some of the biggest stocks today are evaluated not on the basis of income but on revenue or worse yet hits and tweets.
Jobless claims seem to have bottomed out and are rising again.
Jobless claims seem to have bottomed out and are rising again.
Consumer sentiment is 40% lower than it was just before the DotCom bubble broke in 2000,
Total manufacturing is at its lowest level since Obama took office.
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