The Layoff Kings Of 2012

If you have a job, be thankful, because more than 1 million American workers were laid off during the first three quarters of the year, according to the Bureau of Labor Statistics. That's better than the same period last year, but not by much, and some companies handed out especially large numbers of layoff notices.

Check out some of this year's layoff kings. Read more >>

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Layoff Kings Of 2012

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USDA Reports Food Shortages: Wall Street 'Caught Off Guard' by Severity

Image by Getty Images via @daylife

Eric Blair
Activist Post

Several recent headlines indicate that food prices will continue their swift climb upward. These troubling new reports show that agriculture production and stored grains are critically low and experts are now predicting food shortages on a grand scale.

Look at a few mainstream headlines: Drought threatens global rice supply in the India Times; VA farmers say heat taking toll on crops, Associated Press; Severe food shortage follows lack of rainfall in Syria; and, finally, Corn prices bolt as USDA downsizes crop estimates, which states that, "Commodity professionals were caught off guard Wednesday by a U.S. Department of Agriculture report showing 1 million fewer acres of corn planted this year than earlier projected, and almost 300 million fewer bushels of corn in storage." And these articles don't begin to address crops being damaged by the toxic rain from the Gulf oil disaster.

We are back to recession economics and rapidly heading toward a deeper, longer “Third Depression.” With all recent economic indicators setting new record lows and deficits at record highs, this ship is only going one way folks, down, down to Chinatown. This WTC-Building 7-style-controlled-demolition of the U.S. economy has long been engineered by the borderless banksters and has been set in the same way to collapse at a free-fall rate. With all of the manufactured confusion it may be difficult to know where best to invest your limited assets, but it seems to be clear that Food is on the march.

There were several trend forecasters and financial firms predicting upwards of $200/barrel of oil before the Gulf oil gusher. The “analysts” said this would occur because of the perception of scarcity and a weakening dollar. The oil disaster and the subsequent outrage at Big Oil will surely take care of selling the perception of scarcity, while the Federal Reserve and Congress will surely take care of weakening the dollar. More...

Double Dip in Action: -2% U.S. GDP in Q3

seekingalpha.com

Do you hear a grinding sound? Listen a little harder. That sound is the brakes being applied to the U.S. economy.

The current price action in commodities markets (as highlighted in my commentary yesterday, “Commodities Growling Like a Bear”) is very much reflective of this braking process. How do we measure the slowing? Where can we gain evidence? Let’s turn to Rick Davis’ fabulous work at Consumer Metrics Institute.

Recall that Rick has not only been way out in front with his calls on the growth of the U.S. economy, but also very accurate especially given that he is projecting GDP a full 4 months prior to its official release. Rick is already on record with his call of -1.5% GDPfor the 2nd quarter 2010. What does Rick see for the 3rd quarter?

May 30, 2010 – BEA Lowers 1st Quarter GDP Estimate as the Consumer Metrics Institute Previews 3rd Quarter GDP:

On May 27th the BEA released its first revision to its 1st Quarter 2010 GDP growth rate measurement, lowering the number from a 3.2% annualized growth rate to 3.0% annualized growth. One day later the Consumer Metrics Institute’s ‘Daily Growth Index’ was signalling what we should expect the BEA’s measurement of the 3rd Quarter 2010 GDP growth rate to be: contracting at about a 2.0% rate.

The prior BEA estimate of 1st Quarter 2010 GDP growth trailed our ‘Daily Growth Index’ by 127 days, and because of the rapid rate that the economy was cooling when the measurements were being made the newly adjusted estimate is now trailing our ‘Daily Growth Index’ by 125 days. Since the 3rd Quarter of 2010 ends 125 days after May 28th (when our ‘Daily Growth Index’ was recording a ‘growth’ rate of -1.99%), if the BEA estimates continue to trail our ‘Daily Growth Index’ in a consistent manner we should expect that the 3rd Quarter’s GDP ‘growth’ rate will be in the -2.0% neighborhood. (Click to enlarge)

Several things were interesting about the BEA announcement, which seems to have been largely ignored by the equity markets on a day when the Dow Industrials were up over 280 points. Not only was the total growth rate revised downward by .2%, but the impact of inventory building was adjusted upward from 1.57% to 1.64%, meaning that the end growth rate of consumer demand (net of inventory build-ups) was dropped from about 1.63% to something closer to 1.36% — a 17% reduction that was hardly worthy of a 280 point rally in the markets. Perhaps the U.S. equity markets should obsess less about Greece and Spain and pay more attention to what is happening with consumers in their own domestic economy.

Since we first reported that our "trailing quarter" had slipped into contraction on January 15th, we have charted how the current 2010 version of the consumer contraction event compares with prior similar events in 2006 and 2008. The current event is significantly different; while it is not as severe as the 2008 contraction, it has already lasted longer without forming a clearly defined bottom. We know that if the GDP mirrors consumer activities (as at least 70% of it should, net of inventory adjustments), both the 2nd and 3rd quarters of 2010 should be contracting at a level of between 1% and 2%. If this isn’t a classic "W" shaped "double dip," it is at least the downward glide of a plane with sputtering engines.

From our perspective the ‘economy’ lives where the consumer spends; everything else is merely the consequence of the downstream flow of commerce from the initial consumer "demand." For this reason the official GDP measurements poorly reflect what is happening in the real-time economy, because they merely capture backward-looking factory production levels far downstream, as augmented by governmental redistribution of earlier tax collections and new public debt. Even John Maynard Keynes would have had to admit that governmental stimulus has to ultimately cause increases in aggregate consumer demand for a real recovery to be happening. We simply aren’t seeing that yet.

What is around the bend as we navigate the economic landscape? A double dip on our economic trail. Thanks to Rick Davis and the Consumer Metrics Institute for his fabulous work.

The end of the newspaper business

The Media Death Spiral

The circulation figures for the top 25 dailies in the US are out, and they're horrifying. The median decline is well into the teens; only the Wall Street Journal gained (very slightly).

I think we're witnessing the end of the newspaper business, full stop, not the end of the newspaper business as we know it. The economics just aren't there. At some point, industries enter a death spiral: too few consumers raises their average costs, meaning they eventually have to pass price increases onto their customers. That drives more customers away. Rinse and repeat . . .

For twenty years, newspapers have been trying to slow the process with increasingly desperate cost cutting, but almost all are at the end of that rope; they can't cut their newsroom or production staff any further and still put out a newspaper. There just aren't enough customers who are willing to pay for their product what it costs to produce it.

The numbers seem to confirm something I've thought for a while: we're eventually going to end up with a few national papers, a la Britain, rather than local dailies. The Wall Street Journal, the Washington Post, and the New York Times (sorry, conservatives!) are weathering the downturn better than most, and it's not surprising: business, politics, and national upper-middlebrow culture. But in 25 years, will any of them still be printing their product on the pulped up remains of dead trees? It doesn't seem all that likely.

I met a freelancer this weekend who is doing all the things that most journalists did to get where they are, writing on the margins of the news business in the hopes of getting up enough of a portfolio to worm her way into the center. I wanted to give her hope . . . but the fact is, at the center there are now more existing journalists than jobs for them, meaning the outsiders have very little chance.

Maybe there will be jobs, online. But if so, more web outfits are going to have to get into the habit of paying salaries that will support an adult middle-class life. Right now, a lot of web outfits tend to churn through twenty-somethings who are also building their resumes . . . but I'm not sure how well this works in a world where a job churning out blog copy for pennies a word is the last stop in a journalistic career, rather than the first.

Fed and Treasury Set Up Scam of the Century

Image via Wikipedia

Lee Adler

While working on the Street in the early 1980s, thanks to reading people like Joe Granville, Richard Ney (The Wall Street Jungle), and Charles Mackay (Extraordinary Popular Delusions, etc.) I realized that the financial media was nothing more than the marketing arm of the Wall Street retail distribution network. Wall Street’s job is to distribute paper and transfer wealth from the many to the few, including, most importantly, itself. The media’s job is to transmit the sales pitch.

The financial infomercial media plays a crucial and integral role in that system, providing a platform for Wall Street’s professional shills to reach the masses. It is the greatest manipulative system in the world since Goebbels, mastering the art of repeating the Big Lie to perfection. When a shill comes on CNBC and says buy XYZ, his in house traders are the ones doing the selling.

One of the Big Lies is that the stock market discounts the future. We’ve had a big rally, so the economy must be about to get a lot better, so the story goes. But the truth is that the stock market is nothing more than a liquidity meter. It measures a very particular type of liquidity. It mostly measures how much cash is burning a hole in the pockets of the dealer community.

Right now, thanks to the Fed, the dealer community, particularly the Fed’s Primary Dealers who dominate not only the Treasury market but the stock market as well, are rolling in oceans of cash, pumped directly to them by the Fed. They are using most of it to pay down debt by selling much of their questionable assets to the Fed, particularly mortgage debt and corporate debt, but they are using some of it to manipulate stocks higher. They do that because, one, it’s easy for them to do it, and two, because it’s much easier to get the suckers, oops, I mean the buy side institutions, to take the other side of the trade when prices are rising.

So as long as the Fed pumps this cash to them, stock prices will go up. It has nothing to do with the economy. It has nothing to do with discounting the future. The idea that stock prices discount the future is ridiculous. Stock markets are comprised of people, or at least the people who wrote the computer programs that do most of the millisecond trading that dominates price action. People, by and large, are not very good at predicting the future. That’s especially true of economists, pundits, and most of all, portfolio managers, whose only real interest is in not doing anything different than what the majority of portfolio managers are doing. How in the world can a portfolio manager properly manage money when one of the mandates of the industry is to stay fully invested. The best they can hope for is to do better than their peers. They can do nothing to protect your assets in the event of systemic collapse, such as we are now facing.

In continuing to spread the lies this time around, the media helps to insure that for the foreseeable future there will be no recovery from this economic and financial mess. The media continues to feature the same people telling the same idiotic stories, pursuing the same tried and true practices of distributing insider stock, especially their own, at high prices to the masses. The cash goes right from our pockets to the pockets of the financiers, with the media getting a huge cut in the process. They are co conspirators in a massive criminal scheme, some of it legal, some of it not, to separate people from their money.

This time they did it a little too well, and therein lies a problem for the economy. Few have any money left to transfer. The Fed and Treasury have set up a scam over the past year to make it look as if there’s still money, but what they have actually done is to transfer risk from the private sector to the public sector, in other words us, current and future generations of US taxpayers. In the process they’ve pumped a couple of trillion of new government debt into the economy and the markets over the past couple of months making it look as though everything is gonna be all right.

All right.

All ri-i-ight.

But it’s not gonna be all right. In fact, things are getting worse as we speak, and they will continue to get worse for the short term, the intermediate term, and the long term– for as long as the same people are in charge who caused this mess in the first place; for as long as the media continues to give a platform to those same people who were responsible for all the–let’s call them what the are–crimes– that put us where we are. For as long as those in power in Washington give those same people the same power they have always had, rather than punishing them for their “mistakes”, we are going to be in this mess.

So now we have transferred trillions of bad debt, some of it completely worthless paper, on to the books of the Fed and the Federal Government. What can the outcome possibly be? Ultimately default? Devaluation? Hyperinflation? Slow motion economic collapse such as that which is currently under way? Even finally the collapse of government and society? Anything is possible, given how insane these policies are and how clueless our policy makers have been and continue to be.

For example, the government has committed to take on $1.45 trillion of mortgage debt in various forms. In most cases the equity has been wiped out. There’s no margin of safety in those mortgages. The government will lose countless billions on its investments. We, the people, will somehow have to pay for that. Meanwhile, the financiers in the middle of the mess in the first place are still there. If they’re not still running the show, they’ve run off somewhere with the billions that they have skimmed and scammed off the top.

Now the media reports that, gee! the government is actually making money from the investments it has made in bailing out the banks. But the Fed and the Government are just playing the same game the banks played, reporting the “operating profit” while not reporting the mushrooming mountain of bad debt on their books. This is the very same garbage that got us here in the first place, except now the government is taking a page from the banks and financial institutions that mastered the art of hiding bad debt. It’s sickening, but no one in the mainstream media questions it.

Where are the real journalists? Not working for the mainstream media, that’s for sure. They’re still giving a free pass to the power brokers.

Forbes has asked me what data I like to look at. One of the things I featured just today in one of my reports to subscribers is Federal tax collections so far in August. They were down 13% versus last August to date. July was down less than 6% year to year. Where are the green shoots? The government has disbursed $227 billion more into the economy this month than it did at the same point last August. And yet tax collections continue to collapse, indicating that economic activity is doing likewise.

Source: US Treasury One of the problems is that zero interest rates forces both people and businesses to liquidate principle in order to pay the bills. So the capital pie shrinks. A shrinking capital base means shrinking income. Shrinking income means that people will need to liquidate even more capital. The system collapses in a chain reaction. Government programs have done nothing to change that. They’ve masked the degenerative process for a time with all that spending, but they’ve done it only by adding more debt to the government’s balance sheet. At the same time, debt in the private sector, and hence money, is being destroyed. We see it in all manner of lending statistics, from bank loans, to mortgage credit, to commercial paper. And we see it in the rising tide of mortgage defaults. People can’t pay or won’t pay. So they don’t. This is what’s backing our “money”.

Click to enlarge

Source: Federal Reserve

Click to enlarge

Meanwhile lending institutions and now the government pretend that the losses don’t exist, reporting unbelievably, that the money supply hasn’t collapsed along with everything else. They have no choice. They have to keep the con going, lest there be one final, fatal run on the banks and/or the money market funds.

The Fed’s zero interest rate policy is causing the very contraction it is seeking to avoid because it does not allow anyone to earn a fair and reasonable return on their investments. In order to pay the bills people and business must liquidate assets. At the same time, they are desperately trying to pay off debt. So the pie shrinks and money disappears.

The media is fond of saying that no one in the mainstream saw this coming except Roubini. How stupid is this? The media is the sole decision maker about who we get to pay attention to. If they feature only liars and fools, then of course it will seem that no one saw this coming. And they feature almost entirely liars, fools, and criminal manipulators.

Let’s consider who got this right in addition to Roubini. How about Professors Case and Shiller, and Niall Ferguson. How about Nassim Taleb. What about Warren Buffet’s warnings about derivatives? How about George Soros? Jimmy Rodgers?

What about Ron Paul, whose warnings fell on deaf ears for years. Congressional hearings? Ron Paul? Oops, time to cut to a commercial!

What about Doug Noland of the Prudent Bear Funds’ Credit Bubble Bulletin who has correctly been chronicling and forecasting this mess for a decade. What about Bill Fleckenstein and David Tice, and Peter Shiff? What about John Hussman? What about Robert Prechter? Bill Bonner of the Daily Reckoning? Mark Faber? What about Martin Weiss? There were many more like them. Why did we almost never see these guys on the tube or in print. And why, when we did see them, was the usual purpose to ridicule and harass them?

Because the media was and is a co-conspirator, witting or unwitting, with the Wall Street criminal distribution machine. The media is populated by conformist morons, too fat and lazy, too coddled by their Wall Street sponsors to be bothered by anything so mundane as to search for the truth. I mean, it’s not like it was hard to find.

What about all those guys in the wackosphere like my colleague Russ Winter, or Mike Shedlock, or even me for goodness sakes? I know I don’t count because only a few thousand people have ever heard of me, and half of them only know me as Dr. Stepan N. Stool. But there were dozens, if not hundreds, of bloggers who saw this coming for years. I was far from alone.

What about all the thousands of ordinary people who have participated on our message boards down through the years? They knew. But again, the media decides what the public gets to see and hear. The media decided that the “Cassandras” were only to be featured on occasion as objects of ridicule. And now that the economic data has stopped going down for a couple of months and the stock market has been going up, they are once again the subject of scorn.

Click to enlarge

Then there’s the 5,000 people surveyed by the Conference Board every month. Look at how many of them had soured on things in 2006 and 2007, versus their level of optimism in 1999 and 2000.

A whole lot of ordinary people “got it.” Only the mainstream infomercial media didn’t get it, because they are, after all, on the payroll of the Wall Street Mob.

The fact is that the economy is not getting better. It is not healing. Nothing goes down in a straight line, especially when a government throws a couple trillion in debt at it. But those trillions are not endless. The kindness of strangers, namely foreign central banks who buy that debt, is not without limit. The time will come when the government will not be able to float more debt to pay off the existing debt, when the burden of paying back these wildly reckless bets will fall directly on the back of the US taxpayer.

We are facing a crisis much greater than any we have faced so far. The Fed will not continue to pump cash into the pockets of the Primary Dealers indefinitely as they have been doing since March. When that cash gusher stops, or even slows, the stock market will again collapse. It simply cannot be sustained at these levels without that subsidy.

As for the economy, over the next year, it will get worse, for all the reasons enumerated above. How much worse, I have no clue. I’m not an economist, thank goodness. What an embarrassment that would be. Obviously they have no clue either. They pretend. That’s all. They missed the biggest collapse in the last 75 years. Knowing what’s likely to happen is not their job. Their job is to talk a good game so that Wall Street can continue its game.

Ripping off the rest of us.

So Good Night, and Good Luck.

You’re going to need it.

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Michael Pento Senior Market Strategist: End The FED

Michael Pento says abolish the FED. Michael Pento serves as Senior Market Strategist for the California-based investment firm, Delta Global Advisors, an S.E.C.-registered investment advisor. He is a well established specialist in the Austrian School of economic theory, and his commentaries are read on various forums across the Web.