Ure’s three biggest worries? Velocity at M2, the Fed decision next week, pending hernia operation. Yeah, in about that order.
Before we pull-apart this morning’s GDP report, let’s kick-it for a sec. and talk ask “What does it all mean?”
Velocity at M2 is essentially the GPD divided my M2 Money. At latest “official” calculation, it was running 1.457 times. But that was for the January number.
To keep it all in perspective, here’s what the long-term view of Velocity M2 looks like:
If you squint a bit, you can see that Velocity was higher than present even going back so far as the Great Depression.
Velocity is like “inventory turns.” In other words, if you’re WalMart-sized, you can look at how many times your inventory is replaced and have a good idea about performance of your enterprise. If WalMart replaces 100% of it’s inventory every week (they don’t) they’d be smoking! But, if there are items that have been on the shelf somewhere in a regional distro center for a year? Well, that’s not a very “good product” because things need to “turn over” and “be sold” because that’s where profit comes from. Products must turn over often enough not only to make a simple profit but to “edge out” competing products that could use that shelf and warehouse space.
A not-very-stylish pair of sandals which might “turn over” only a few times a year is far less attractive (and profitable) than choice aged beef which turns over weekly, or so. Trust you’re following?
The Nation’s money operates much the same way: The more it turns over, the greater the profit. Unfortunately, there are many things that screw with the longitudinal calculation of Velocity.
For one, the interest rates are at record long-term lows. People forget that going into the Great Depression, rates were around 6%. They fell some during the Depression but the levels we have today – and for the length of time – are unprecendented.
Good luck trying to use publicly available data to work out your own M2 Velocity. I make my own data set out of it, but I use the Quarterly GDP by BEA and the following month H.6 Money stock reported by the Fed. Thing is this never works out to the publicaly touted number.
The Q1 GDP figure (*buried because BEA like monthly percentages which shield the math from being double-checked) was 18.9103 Trillion. And the Fed M2 S.A. for April was 14.5414 which gives a Velocity calculated as 1.3004 which is a terrible number.
The good news, such as it is, is that Q4 GDP was reported as 18.76653 and the Dec 2019 Fed M2 (S.A.) was 14.3679. Which is 1.3061. Obviously, I have missed something in the “secret sauce” of how the numbers are figured!
Worse, when I went looking for the Source data, the Federal Reserve Economic Depository (FRED) told me:
Sp yes, one of my ” projects” is to find out why my calculations of M2 Velocity keep coming out in the 1.30 range while the Offishul Number is 1.4 something.
OK, on to the BEA data from today, but we can skip most of the press release save one picture (the chart) and the one number that matters, the bottom line most recent GDP from Table 3…
And, since the M2 keeps getting bigger and the GDP isn’t growing as fast, our nightmare is that M2 has headed back down again. When it goes negative, we will be in Zimbabwe Economics of MMT (modern monetary theory).
Which is crack addict economics but don’t tell the people because there are so many side-shows to distract us from clear thinking none of it matters.
If you like happy-talk? U.S. Economy Grew by 2.1% in Second Quarter.
All of which leaves us looking at present market conditions and wondering if there’s any more air that can be pumped into this old balloon. I’m thinking the answer is yes, but that’s not investment advice.
Think of it more like a reminder that there’s still time to get loose ends tied up (like my pending naval hernai surgery) and as many debts settled as you can before the economic collapse turns ugly.
You don’t really think globalists will allow the US stock market to be at such jovial levels by election day, do you? Think in terms of Trump being “Hoover’ed” and you may be closer to what’s coming methinks.
Dow futures +72’ish.
The Border Shrills Building
Typical of the headlines: “Active-duty U.S. troops are now just feet away from migrants in Texas “The troops “monitor” migrants at a Texas facility. One congressman said they shouldn’t be prison guards, and are close to breaking the posse comitatus law..”
Expect fifth column hand-wringing on this.
Thing is, this is an invasion and that is coming from foreign countries and that’s why we expect apologists for the invasion of America to keep up their shrill OMG-ness and spin this into “humanitarian” gobbledygook. If you buy it, you’re an idiot at best, traitor to the Nation at worst.
If you look at the A.P. story over here, the real question is WHY did all those people start coming here? And the answer is a well-orchestrated campaign by NGO’s to take down America. Same class of people who are turning the U.N. into a globalist (Agenda 2030, son of Agenda 21) to round up Americans and put us in cities and take us off the land. All nice and pseudo-legal . Pseudo because it’s not in the Constitution that foreign entities dictate to America but the weak-willed sissy crowd won’t hear of it. “Takes a villages to raise a child” pap. Yeah, what, to send ’em to take down America?
No, the NGO’s need to be scrutinized by the US-DoJ yesterday for their role in this invasion.
Immigration of the unchecked sort is also what BREXIT is all about at its core. Globalists trying to use immigration to hold captive entire populations. Language and bullshit is the new Weapon of Mass Destruction and you are being subjected to the though-virus version of irradiation every time you turn on shil media.
In Other News
Blah, blah, blah…
Nancy Pelosi and Alexandria Ocasio-Cortez set to meet. Can we recommend a hotel in Caracas?
McDonald’s U.S. same-store sales top forecast on new deals, revamped stores. Maybe it’s all we can afford?
As if you don’t feel like a prized pullett living in your coop yet,. the big squeeze down on free people is coming to airlines in spades as Legroom on Planes Has Been Shrinking for Years. It’s About to Get Much, Much Worse. Stack ’em like cord wood or send ’em as cargo will be along next.
Crooks of social media and the web dept. Reputation management companies are faking court orders to suppress Google results.
Vacation Notes: How National Parks Are Faring in the Age of Instagram.
OK, off to feed the runaway tomatoes… moron the morrow…
George
” And the answer is a well-orchestrated campaign by NGO’s to take down America. Same class of people who are turning the U.N. into a globalist (Agenda 2030, son of Agenda 21) to round up Americans and put us in cities and take us off the land. All nice and pseudo-legal . ”
Thanks for the effort you put into this !!
The UN should be abolished for FAILURE to deliver!
G – Whats that Smell, that smelly smell, that smelly smell that smells smelly…
Credit Card rates are their highest/greatest Spread from Fed Funds rate/prime to Rate applied to carried Balances..the largest spread in the history of such things..
Credit Card Balances are at historical highs as well..good times, no?
What could possibly go wrong?
Of course thats not the only thing that smells nasty –
NYC blackout said to be part of attempt to “get” mossad nogoodnik Epstein..”eyes on” -Q
Human Compromise – Zio Nazis fav form of entertainment..”these people are sick” – Q
Enjoy the warm water while we can – afraid its about get hotter, much hotter.
Talk about hiding in public places… I crapped the first time I saw this. Illegal Immigrant has lived on American welfare for 20 years (and now she’s complaining it’s not enough?).
https://www.youtube.com/watch?v=mDqKwCy7wrE
Like many Americans, I have been so screwed when I was laid off of my job, treated like crap trying to apply for unemployment insurance, etc. Nothing for me. Geeze. I want my social security that I have PAID for … (I’m 63 right now). Sickening.
Many of Trump’s businesses prefer to hire illegals….ever wonder why there’s no talk about strengthening the E Verify system???
http://www.chicagotribune.com/nation-world/ct-undocumented-immigrants-trump-20190208-story.html
https://www.motherjones.com/politics/2019/07/trump-breaks-his-silence-about-undocumented-immigrants-working-at-his-properties/
https://www.univision.com/univision-news/immigration/exclusive-trump-vineyard-also-hires-undocumented-workers
https://thehill.com/hilltv/rising/423465-attorney-says-more-undocumented-workers-are-employed-at-trump-golf-course
http://www.msnbc.com/rachel-maddow-show/trump-did-more-just-hire-many-undocumented-employees
anon… I worked with a guy that got a guaranteed full time job while I had to work six jobs to survive.. at the end of the year he got everything he paid in everything the company paid in and the EIC tax credits… his check was more than what I grossed.. not to mention he got a free home free van.. college tuition.. and food stamps medical and help with his utilities.. its been a pet peeve of mine for years.. I don’t mind is someone comes to work raise a family legally… but then they should pay the same taxes we do.. and not have access to any of the benefits that are meant for tax paying citizens down on their luck as a hand up.. not a living.. but assistance to get back up on their feet..
I worked with a guy from Pakistan to.. the only reason he was here was to save enough money to buy twelve wives.. ( he thought the men on the shift should be put to death because we let women tell us what to do.) the govt.. gave them benefits to live on as well..
Welfare was never meant to be a way of life.. but a way to help those in need get back on their feet by giving them a temporary hand up…YET today businesses even go out of their way to let you know that you qualify for some of them. i interviewed for a position and was told that hey I would qualify.. I laughed and informed him that wasn’t a company benefit .. he should be ashamed to think that..
last year it was estimated that one in three are on federal benefits meant for those in dire need.. I read someplace that the figure was quickly heading towards one in two laborers..
illegal refugees should not have access to any of them at all.. companies hiring them should be along with the whole management staff fined huge and assets seized just like they do with someone caught selling alcohol to a minor..green card should not have access to any of the benefits either until they become an american citizen.. they should pay all taxes associated with the laborers in the USA and pay a non resident tax.. any illegals should be incarcerated and quickly sent back to their country of origin..but then that is my opinion..
Small companies who need skilled experienced workers are starting to hire American citizens again, for the first time in many years. Don’t expect the rates to be as good as they were in your prime (75 – 80 %), but the jobs for mature workers are starting to open up again. Hiring foreign quid pro quos doesn’t make any sense for small companies doing work in the domestic markets.
Slow velocity is just one more aspect of absurd levels of inequality. All the money is hoovered up to the top.1%, where is just sits, aside from the occasional 200′ yacht or private jet.
Most likely, it sits in a secret account in the Caymans. Where it never moves.
If you want velocity to go up, you have to put some of that money in the hands of people who will spend it….
When I was a kid, I had a came called Billionaire which was like Monopoly except the deeds were for giant companies. Sometimes I wonder if the richest of the rich are playing a similar game in real life… A different, but related, rabbit hole are the Illuminati cards.
George,
-The Climate Denier crowd is going to hate the story below. That NASA scientific consensus — it has likely grown — from 97% to 99%. (Yikes. You couldn’t get a 99% consensus from a bunch of Priests that the Devil was bad.)
-Do you still think that hundreds of real scientists (like ones that don’t work for the cigarette or oil companies, for example) all got together to fudge the findings?
-To me, it’s only good prudence to stop using a bridge that has been questioned by a multitude of engineers (my simple analogy) until it’s definitively ruled safe. To “play it hot,” as the still living electricians say, (until proved certain there is no high voltage flowing).
-I appeal to your sense of logic, and fair play, at least where safety is involved. Isn’t that just good commonsense?
Best, Mike
https://www.theguardian.com/science/2019/jul/24/scientific-consensus-on-humans-causing-global-warming-passes-99
Mike
All I have to say is right here.
http://c3headlines.typepad.com/.a/6a010536b58035970c01287656565a970c-pi
We are living in one of the coldest climate periods in the history of the earth. Among other things the “Climate Change” hoax is a huge distraction from the massive pollution and destruction of our environment. That’s what we should be focused on. Unfortunately public opinion is heavily influenced by the monolithic mass media.
https://en.wikipedia.org/wiki/Geologic_temperature_record#/media/File:Phanerozoic_Climate_Change.png
Thank you – I get tried of repeating exactly this
Unfortunately, “Mike” never gets tired of repeating the discredited “97%” thing or his flawed bridge analogy…
So NASA and the university research industry wants your money, and has a revised scare story for funding solicitation. What’s new? Do any of these people have a solution to anything which doesn’t involve genocide?
*Yawn* Same Mike BS, different day. Your brain get pickled?
According to the BBC, the Arctic is on fire. I noticed the increase in fires began around the same time coal fired cars were introduced into the ecosystem. Includes a juicy satellite photo.
Arctic wildfires: What’s caused huge swathes of flames to spread?
How bad is it?
There are hundreds of fires covering mostly uninhabited regions across eastern Russia, northern Scandinavia, Greenland and Alaska.
https://www.bbc.com/news/world-europe-49125391
“The Arrival” with Charlie Sheen. A good example of brains over brawn, and not necessarily our brains. Check it out. For some reason, the aliens always prefer a hot climate.
If the world is denominated in dollars. And the FED Can print as many as they want. Can’t US GDP be anything?
Double dollars. Double prices. Double GDP. Am I missing anything?
Speaking of border shrills.
We see one set of marines on TV blocking entry while another set of marines in back smuggle them in.
“Sixteen US Marines were arrested Thursday for alleged involvement in various illegal activities ranging from human smuggling to drug-related offenses, according to a statement from the Marine Corps.”
20 years or so at Leavenworth or Fort Knox should fix their ability to comprehend their Oath…
“Double dollars. Double prices. Double GDP. Am I missing anything?” Yes, lacking intelligence folks!
Good points on turnover. What makes the financial markets, insurance companies, banks, etc happy is money in motion. Each time one of their cutomer’s investment is replaced by another of the same, everybody makes money. Remember the good old days when your stockbroker had you buy one stock, sell it, & then buy another. Your insurance agent replaced your life, car, home insurance, annuity, etc for a better product with another company, thereby generating commissions. It is a shell game, & depending on the honesty of your financial advisor good or bad for your financial health. One financial advisor told me, “If you break even & don’t lose your client money, they will stay with you, so keep churning”. That is why there is always new, better financial products coming out. To support the churn.
Reminds me of the scene in “The Wolf of Wall Street” where Matthew McConaughey lectures Leonardo DiCaprio during lunch about how the only real money in investing is the commissions going to the traders. It’s easy to miss that the rest of DiCaprio’s career as the wolf is built on this one lesson. Well acted, especially with the hand flutter…
“Can we recommend a hotel in Caracas?”
“El Morgue” would be adequate answer. ;-)
Climate change.. What if Global Warming is a fake, and Cooling is going to be the real thing? The earth’s biggest problem is us _people.. By eliminating the need to prepare for very cold temperatures, unemployment, a basic lack of food, meds not making it to those needing them. The rate at which people will expire will be huge.. Could the PTB be behind a deliberate genocidal plot to reduce government spending, pollution, establish 1984 systems? Stranger things have happened, like the US Moon rockets not having the push to get into space then and now. We use Russian rocket motors ,because the US still has not been able to replace them. I’m old, getting senile, and, every day, I find more things that disconnect from reality…Maybe, the water????
Now there’s a conspiracy theory that’s pretty far “out there!” The grain of truth in it is: “Hot weather makes people uncomfortable, but unless you’re lost in a desert or old and stupid, it doesn’t kill anybody. Cold weather kills…”
We lose a lot more people to heat stroke than we do to cold here locally. Throw in lack of potable water and dehydration and even healthy people in their prime start dying.
Shelter from climate excursions, and availability of potable water are important regardless of where you live.
Watch the movie “The Day After Tomorrow”. The science in the movie is global warming melts the ice which dilutes the sea water and slows the ocean currents which trigger global cooling and the rapid advent of an ice age. Stars Dennis Quaid (hero) and Jake Gyllenhaal (his son and hero in training). It’s actually a good movie.
Where did you get the idea that our rockets could not reach space?
In July of 1969 myself, my fiancee, and several members of the University of New Orleans engineering club witnessed the static ground test of the S1C first stage for the Apollo 16 moon mission at the NASA Mississippi Test Facility. 500 feet of flame, smoke, and fury for about 140 seconds. The ground shook. You had to put your hands over your ears. It was F******G IMPRESSIVE!! We were one mile from the test stand. Way too close! Seven and one half million pounds of thrust! No Problemo putting stuff into space!
I am extremely familiar with the Titan II rocket. That vehicle can put 10,000 pounds anywhere on the planet from Cape Canaveral. It can also put a satellite in orbit around the moon as it did with the Clementine mission.
We use the Russian rocket motors because we got them cheap and because our politicians did a lot of smoocthing with the ruskies.
The locals in my area dubbed me Rocket Mike because I got the creds when it comes to rockets. Believe me our rockets have the juice to get the goods to orbit.
Very much agree!! It’s the price, stupid! ;-)
This is exactly what I thought at the beginning of the global warming scam. If the PTB persuade us that we need to prepare for excessive heat, possibly by moving to a colder area, but then global cooling occurs instead, people will be totally unprepared for it and may not have time to adjust to the opposite environment, so will die in droves. The depopulation enthusiasts will be ecstatic! The carbon tax nonsense would just be icing on the cake for them.
Hey George! Why no “Mark” today? Guess after yesterday’s fiasco he’s curled up in a ball licking his wounds! ROFL
Sir,
Climate change gods have dealt a harsh hand to the yellow jersey French cyclist demoted to second place following an abbreviated Stage 19 shortened by winter weather-like conditions at The Tour de France.
C’est la vie!
https://www.zerohedge.com/news/2019-07-26/what-americans-spent-most-money-second-quarter
That spending growth on RV’s is skyrocketing makes perfect sense to me, especially if tiny homes are included in the statistic, and said Americans intend to live in those RV’s. If those same Americans are buying those RV’s for cash, and parking them on a piece of land that they own, better still.
Buying the smallest house on a low interest loan in a neighborhood full of mansions was once the American dream. Maybe the new American dream is becoming parking the cash RV on a wholly-owned rural lot, with the nearest neighbor a half mile away. Cash living in a new model RV beats debt slave living in tents while running from the repo man and miscellaneous leg breakers. I wonder if hospitals dispatch leg breakers to deal with delinquent debt slaves, recycling them back through the emergency room ? Wow, what a business model.
interestingly the largest contributor to GDP was RV Sales – incredible as the RV industry is in one of the worst if not worst markets ever – Gov’t lie much? Just make it whatever yu want it to be it’s so frickin laughable.