Data Intensive Morning

The Fed gavels in today.  The Big Rate decision is due tomorrow.  My bet, based on historical precedent would have to be on an improbable small hike, with another in three or four months, but the smart money would be on another quantitative easing.

That gets us to the day’s fresh data which includes Housing and Durable Goods.

Let’s start with housing.

New York, October 27, 2015 – S&P Dow Jones Indices today released the latest results for the S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices. Data released today for August 2015 show that home prices continued their rise across the country over the last 12 months. More than 27 years of history for these data series is available, and can be accessed in full by going to Additional content on the housing market can also be found on S&P Dow Jones Indices’ housing blog:  

Year-over-Year  The S&P/Case-Shiller U.S. National Home Price Index, covering all nine U.S. census divisions, recorded a slightly higher year-over-year gain with a 4.7% annual increase in August 2015 versus a 4.6% increase in July 2015. The 10-City Composite increased 4.7% in the year to August compared to 4.5% in the prior month. The 20-City Composite’s year-over-year gain was 5.1% versus 4.9% in the year to July. 
San Francisco, Denver and Portland reported the highest year-over-year gains among the 20 cities with price increases of 10.7%, 10.7%, and 9.4%, respectively.

Fifteen cities reported greater price increases in the year ending August 2015 versus the year ending July 2015. San Francisco and Denver are the only cities with double digit increases, and Phoenix had the longest streak of year-over-year increases. Phoenix reported an increase of 4.9% in August 2015, the ninth consecutive increase in annual price gains. Portland posted a 9.4% annual increase, up from 8.5% in July 2015; this is the biggest jump in year-over-year gains this month. 

Month-over-Month Before seasonal adjustment, the National Index posted a gain of 0.3% month-over-month in August. The 10-City Composite and 20-City Composite both reported gains of 0.3% and 0.4% month-over-month respectively. After seasonal adjustment, the National Index posted a gain of 0.4%, while the 10-City and 20-City Composites both increased 0.1% month-over-month. Eighteen of 20 cities reported increases in August before seasonal adjustment; after seasonal adjustment, five were down, 11 were up, and four were unchanged



Then we have Durable Goods, also hot off the press release:

New Orders  
   New orders for manufactured durable goods in September decreased $2.9 billion or 1.2 percent to $231.1 billion, the U.S. Census Bureau announced today.  This decrease, down two consecutive months, followed a 3.0 percent August decrease.  Excluding transportation, new orders decreased 0.4 percent.  Excluding defense, new orders decreased 2.0 percent.       Transportation equipment, also down two consecutive months, led the decrease, $2.2 billion or 2.9 percent to $75.5 billion.   
   Shipments of manufactured durable goods in September, up three of the last four months, increased $0.4 billion, or 0.2 percent, to $242.5 billion. This followed a 0.5 percent August decrease.  
   Transportation equipment, also up three of the last four months, drove the increase, $0.5 billion or 0.6 percent to $81.0 billion.      

Unfilled Orders  
   Unfilled orders for manufactured durable goods in September, down two consecutive months, decreased $6.6 billion or 0.6 percent to $1,187.4 billion.  This followed a 0.3 percent August decrease.  
  Transportation equipment, also down two consecutive months, led the decrease, $5.5 billion or 0.7 percent to $794.1 billion.

Going into the data this morning, the markets were pretty much flat: Dow futures down 16 is not even close to tradable, unless you own the trading company and front-run everyone else.  After Durables down 50.

Which gets me to an interesting thinking point.

Is There a Time Domain of Economic Crime?

This might have ended up being a whole Peoplenomics focus section, but it’s not that long and involved to explain.  Besides:  It’s a useful warm-up for your brain.

Here’s the background and then you send me the answer, OK?

Fact #1:  We know that front-running everyone’s trade is “legal” in the stock market because it happens so fast that it is impossible to really catch anyone “doing the crime.”

We also know there is no economic incentive to catch anyone because the big names of Wall Street can be found on contributor lists to both parties.  Which, I’d remind you, we constantly refer to the corporate duopoly that really runs America.  Both political parties are up to their butts in favors owed in return for money-raised.

Fact #2:  We also that fiat (paper money) is crooked because it is not tied to anything of value.  Nixon killed that notion when the convertibility window was shut back in the 1970s.

We go back to August 15, 1971 and Slippery Dick Nixon announcing our paper would be worth exactly more paper

The third indispensable element in building the new prosperity is closely related to creating new jobs and halting inflation. We must protect the position of the American dollar as a pillar of monetary stability around the world.

In the past 7 years, there has been an average of one international monetary crisis every year…

I have directed Secretary Connally to suspend temporarily the convertibility of the dollar into gold or other reserve assets, except in amounts and conditions determined to be in the interest of monetary stability and in the best interests of the United States.

Now, what is this action — which is very technical — what does it mean for you?

Let me lay to rest the bugaboo of what is called devaluation.

If you want to buy a foreign car or take a trip abroad, market conditions may cause your dollar to buy slightly less. But if you are among the overwhelming majority of Americans who buy American-made products in America, your dollar will be worth just as much tomorrow as it is today.

The effect of this action, in other words, will be to stabilize the dollar.

What Ol’ Slippery didn’t bother telling anyone is that we are not buying goods in America so here we are, 40-odd years later, totally in hock to the rest of the world ands this second Fact is now abundantly clear:  If a currency is hollowed out slowly enough,  crooks in charge (of banking and national finance) can get away with anything.

As one astute reader pointed out t’other day:  Watch what is going on in Portugal where a leftist government has been barred from holding power because they aren’t swallowing the blue pill.

Read over here how the crooked right-wing corrupt government has suspended constitutional governance in order to keep the Bankster class and Meglo Eurocrats of the EU in power and thus enslaving the formerly free people of that country.

The key thing in Portugal (as it could come HERE) is this:  Democracy has been trashed to provide ongoing CROOKED profit of the EU.

Don’t see how that could happen here?  We’ll get to that in a moment.  Let’s wrap up this other thought first.

Fact #3:  When economic crimes are committed, their lowest success rate is at perhaps the three or four minute mark.  If you’re robbing a bank, about then is when the SWAT team shows up and so on.

What we can hypothecate is Ure’s 17th Axiom which states:  The success rate of economic crime is lowest in the 1-minute to 1 year range.

Drawn as a graph, it might look like this:


You see how simple crime and politics are?

So:  How Do We Stiff China?

Meantime, off in background, we have to presume that the Chinese are rolling over US bonds as fast as they can, realizing that we are running out of money as a country next week.

And with the congressoids unable to do anything but rubberstamp the Obama wing of the GOP’s agenda (watch Puppet Ryan closely on this) China will continue taking US bonds, mixing them in with some drug money and using the aggregated piles of dough to buy our country out from under us.

Important to see how this scheme works:  We give China bonds that we will never return full value on (we can’t afford that!).  So China says I will take the bonds you just stiffed me on, and I will turn around and buy up huge hunks of America.

Since we are a country with no clue about how borders work – either physical as in Mexico or economic as in foreign land ownership – we are hopelessly screwed.

To keep the story interesting, though, we have been running U.S. Navy ships in the vicinity of the Chinese island creation project which is designed to give them a forward base from which to project power.

When western countries do this, as in the Falklands, Guam, Hawaii, or Diego Gracia it is labeled Protecting Freedom.  When  China does it, it’s territorial expansionism.

And China fires back that what we’re doing in a provocation.  To quote a bit this morning from Chinese official press commentary:

First, Beijing holds no “excessive claim” of sovereignty in South China Sea. Its entitlement to relevant South China Sea islands and reefs is well documented and validated in history. Those U.S. officials who dispute that either need to make up missed history lessons or choose to ignore historical facts.

Second, the freedom of navigation and overflight has never been jeopardized, despite the complicated territorial rows between China and some of its neighbors. That is in large part due to the shared resolve of relevant parties to keep the sea peaceful, and in no smaller part thanks to China’s restraint.

Third, China does not seek to militarize the Nansha Islands in South China Sea, and its construction activities there do not target any other country and will not hinder the international passages all countries are entitled to under international law. As Chinese President Xi Jinping has recently reaffirmed, Beijing will never be the party to stir up chaos.

With trillions of dollars’ worth of goods traversing the patch of water every year, South China Sea is vital both to global trade and to China’s development. Beijing has no reason to make trouble that might block one of its own arteries of trade.

On the other hand, such aggressive behavior is highly irresponsible and dangerous. First of all, it breaches Washington’s pledge of not taking sides in the South China Sea disputes.

Gimmicks like conducting patrols around South China Sea features built up by Vietnam and the Philippines — which have illegally occupied some of China’s islands — cannot conceal to which side the United States is tilted.

The U.S. has a problem that is the 900-pound gorilla – and that is Taiwan which China has never ceded as independent but the US has…This morning Taiwan is ranting about how China is preparing an attack presently.

So that’s where trouble will come from.  Maybe a feint from North Korea, too.  We face a world war in the future with half a dozen fronts:  The South China Sea is only part of it.  There is Syria, the militant aims to take over Turkey, the Ukraine flashpoint, economic implosion of the bankrupt European Union, and then we have the Russian-US tit-for-tat in the skies.  And who will seize Africa’s resources in all this noise?

Popcorn and flash goggles always at the read, be sure to drop by Thursday for another does of hard economic reality and dueling propaganda outlets.

Just wait a dozen or fewer years when corporatist America decides to impound foreign-owned property in the US – right about the time China, the US, and Russia light up WW III.  My, won’t that be a grand time?

We can only fight a limited number of wars with conventional arms (3-4 max) and after that, we have to bring out the Skil saw of warfare which makes a lot of glass. Or, warfare’s version of the chain saw which is highly contagious.   Events unresolved are leading us down that path.

But that’s OK…since economic history teaches us that the only way to regeneration and renewal after a crash is through the valley of death and destruction.  My, what an advanced species we are!

Just as soon as the last blow-off is complete, we should be dropping into the depths of disaster.  Lots of money to be made in that, eh?


Data Intensive Morning — 12 Comments

  1. With 70 countrys that have US military presence in shurly if we pick on the smallest we could win at least 1 war with out DC screwing it up until we get thrown out again

  2. Careful of the false equivalency argument again. Ted Cruz flew from his announcement of his run for office in Virginia to a party in a very expensive duplex apartment in New York, where the father of the owner of the apartment wrote a $10 million check. That $10 million came from HFT. Some animals are more equal than others. Bernie has no super PAC, and HFT hedge fund contributions are running more than 10-1 in favor of one political party.

  3. So good ol Uncle Sugar puts the stiffy to China in the Bond markets, they respond by buying (aka grabbing) up everything they can lay their hands on while the numbnuts on Washington fiddle around putting on a good show for the masses who are too busy watching dancing with the stars or the voice. In the meantime we are having Chinese navy visitors in Jacksonville while Hildebeast with her maniacal cackling wants to consider turning us into another Australia or a land of kneelers.

    When was the last time a US Warship payed a “good will visit” to mainland China?

    I call Bull Dookey.

  4. I may be a ‘know-it-all’, but who ever said that the United States had the patent on the concept of ‘Manifest Destiny’? That political nicety was so popular with our country pre-WWI . . . who’s to say that China hasn’t discovered their ‘sphere of influence’ – and yes, we walked right into their ‘game’. Isn’t it a given that the easiest person to ‘con’ is another con-man? China may fall prey to another con themselves, but it won’t be for a long time . . .

  5. during the depression Germany’s money had no value except for more money.. it was cheaper to burn money than to buy wood.. my father once told of a story of two kids.. each was given an inheritance after their father passed on.. the one invested in German bonds and savings the other was a womanizer and partied it all away on wine women and beer.. then the depression hit.. the son that invested his money in banks ended up with stacks of worthless money.. while there was a shortage of brown glass and the son that had partied it all away had a whole basement full of wine bottles..

  6. “We go back to August 15, 1971 and Slippery Dick Nixon announcing our paper would be worth exactly more paper…”

    Here is what the germans did during the last depression since their money wasn’t tied to any durable goods just money it was actually cheaper to burn money than it was wood to heat their homes.. not to mention images of people with baskets of gold and silver to buy food..

  7. Love it how Americans keep falling back on america’s allegedly superior military strength to maintain their belief in American’s exceptionality. China has no intention of ever confronting the USA militarily. As one wise student of the Chinese mindset said, the USA will lose the war and then start fighting. The Chinese will win the war and then act like they are starting to fight. Keep in mind that more than 100 USA military weapons systems contain Chinese components. Which is in violation of federal law, BTW. At least USA military uniforms are no longer made in China. They are manufactured by USA prison labor instead, labor that is paid less than any of the Chinese “slaves” Americans like to tsk tsk about.

    I might add that it is literally impossible to find an electronic device today that does not contain one component labeled made in Taiwan. Control of Taiwan, and control of the world’s rare earth markets (also used in EVERY electronic device today) kind of allows China to control the fate of western civilization if you get my gist.

    And George, I have to warn you, you are my canary in the coal mine to see exactly how long you will keep holding the belief that there are any real markets out there to invest in. Used to be that markets were a place where things were acquired and price was determined by supply and demand. Try applying that concept to the USA dollar. And please, George, tell us the last time that you found any CURRENT government statistics that 1) were accurate and truthful, and 2) had any real relevance to anything in your life other than digital and paper.

  8. Let us not forget that Portugal called a Cease Fire 14 years ago in the War on Drugs, perhaps it takes a decade and a half for a populations critical thinking to regain prominence and we may be able to add Portugal with Iceland as countries to watch regarding how well their populations can overcome the elites games. Whichever way this turns out, it bares keeping a close eye on.

  9. George: What in your opinion would happen if the US just pulled out of every where and concentrated all that effort in the creation of a stable state of the art society?

  10. Sometimes, I think we’re living on a hell planet. When we aren’t killing one another off in job lots, we kill one another off mano y mano. If a tornado, hurricane, tsunami, earthquake or volcano doesn’t kill you, a poisonous critter, a germ or virus will. Then, once you leave the sidewalks behind, you become a part of Darwin’s world; that is, you’re a mobile meal waiting for something to eat you. Pfft. Gravity will do the job, for that matter. Eventually, somewhere along the line, your own body turns against you (aging).

    Most people around the globe prefer to choose psychopaths and sociopaths to lead us all around by the nose and use manipulation, coercion and force to order us around.

    When none of that happens, we spend our time ruining one another’s lives over trifles, e.g. religions, ideologies, the corner office or for merely having a weird paint job on our homes.

    …and, like Diogenes, I’ve yet to meet an honest human being, that is, someone who isn’t lying about something, if only to themselves.

    “any place or state of torment or misery:”