Currency Flag Patterns ...

by Kimble Charting Solutions

See the original article >>

Jobs crumble! Debt talks failing!

by Martin D. Weiss

Everything we’ve been warning you about is starting to happen — fast! 

The U.S. job market is crumbling … the Washington debt talks are failing … and the unprecedented convergence of both these events is mandating urgent steps by all prudent investors. 

Here’s what I recommend:

Did the Great Recession Ever End?

Obama administration economists have repeatedly sworn that the answer is “yes.” Since early last year, they’ve told you the recession is “history” — and nearly every day since, they’ve had a chant to cheerlead the “recovery.” 

For reasons I’ll explain in a moment, I have always found that quite remarkable. But what’s even more remarkable is that nearly everyone has believed it. 

Widespread belief in the existence of an economic recovery has been the underlying assumption behind virtually every new piece of economic legislation, every new policy initiative by the U.S. Treasury, and every decision by the Federal Open Market Committee (FOMC). 

It has been the basis for estimates of corporate earnings, government tax revenues, and global growth projections. 

It has guided corporate boardrooms, fund managers, and average investors. 

And in the debt debate between the White House and Congress, it has been the fundamental underpinning of every single understanding or misunderstanding, agreement or disagreement. But now …

Suppose — just suppose — that, one day, with no prior warning, it suddenly begins to dawn on millions of financial decision-makers, big or small, that we never had a true economic recovery to begin with. 

Suppose it’s revealed that the U.S. economic growth since 2009 was nothing more than (a) bad data, (b) misinterpretation of numbers, plus (c) some knee-jerk reactions to massive stimulus.

In other words …

Suppose nearly everyone suddenly realizes that the economic recovery was mostly a hoax!

All hell will break loose! 

And that’s essentially what began to happen this past Friday with the release of the official unemployment numbers — the nation’s broadest and most widely watched measures of the state of the economy.

Hard to believe? Then consider the facts …

Fact #1. We have the worst long-term unemployment in recorded history.

On average, once someone loses a job, it takes more than 25 weeks to find a new one. 

That’s not just a wee bit worse than during prior bad recessions.

It’s more than 2.5 times worse than during the mid-1970s, when the U.S. suffered its worst recession since World War II! 

It could even be worse than during the Great Depression, but we’ll never know; no similar records were taken during that period. 

Most important, since the recession officially began in 2008, this all-important measure has NEVER — not once — shown any improvement. Quite the contrary, it has continually telegraphed the message that the U.S. job market has been in a rapid, nonstop decline all along! 

If you find this unbelievable, just check out the chart above. Look how this official stealth measure of the recession’s severity has literally gone through the roof! Note how there was no intermediate improvements — not even the faintest hint of recovery! 

Fact #2. Just as we’ve been warning all along, this dire truth has now begun to finally seep into the more traditional measures as well. As master trader Kevin Kerr highlighted in his video update on Friday …

• U.S. employers added 18,000 workers in June. That was 82% less than the 105,000 job gain that economists had forecast. They missed their target by a country mile!
• A separate government survey, believed to be more accurate, showed that the economy actually lost 445,000 jobs in June.
• Despite the rising cost of living, average hourly earnings didn’t go up by one iota. In fact, they actually fell by 1 cent to $22.99.

Fact #3. The broadest, most reliable measure of unemployment in the United States has gotten progressively worse throughout most of the so-called recovery.

This measure comes from John Williams, editor of Shadow Government Statistics (www.shadowstats.com), who has been persistent in his warnings that data distortions and manipulations have long been hiding the truth about the continually deteriorating job market.

Let me explain …

As you can see in the chart, Williams tracks three unemployment rates:

1. The “official unemployment” number that the government and the press headline (called “U-3″). This is the most narrow and least accurate, because it includes only workers actively looking for full-time work. But even that number rose from 9.1% to 9.2% last month.
2. The all-inclusive unemployment according to the government (“U-6″). This measure does include workers who are not currently looking for jobs or have been forced to accept lower-paying, part-time jobs. And even the government admits this number is terrible, surging in June from 15.8% to 16.2%, the highest this year.
3. But what I want you to focus your attention on is Williams’ Shadow Government Statistics estimate of the true, all-inclusive unemployment (the “SGS Alternate”). Why are the government’s numbers wrong? Because in 1994, the Clinton administration decided to stop counting workers who had been looking for a job for more than a year. If you include them, says Williams, the true unemployment rate in the U.S. is now about 22.7%!

Here’s the key: While the government’s numbers improved somewhat during the recent “recovery,” this broadest measure of all continued to deteriorate — another confirmation that the recovery was largely bogus.

Fact #4. The housing market!

This is where the Great Recession began. And this is where it would have to end. But it has done nothing of the kind!

In fact, except for a momentary pop in response to massive government infusions of capital and tax incentives, it’s been getting worse almost every quarter since the “recovery” supposedly began.

Now, U.S. median home prices have fallen BELOW their lowest level of the debt crisis (see chart). And now, home foreclosures are at or near their worst level of all time.

Does this look like a recovery to you?

How much longer do you think Washington and Wall Street can maintain the “recovery” charade?

The Real Reason the Debt
Ceiling Talks Are Failing

As I said at the outset, the entire assumption of the debt talks in Washington was that we did have a recovery of sorts, albeit a weak one. 

Now, as the realization sinks in that the recovery was bogus to begin with, any chance of a grand compromise has been dashed.

Instead of the $4 trillion in cuts discussed last week, both the 

White House and Republican leadership now admit that, at best, they’ll probably wind up with $2 trillion in cuts.

What’s worse, it looks like our leaders are getting ready to pull the same trick they’ve pulled for decades — promise big savings in later years, but do little more than tinker with the deficits of current years.

Bottom line: We can expect …

Too little, too late in savings — far from enough to save the country from fiscal Armageddon, but …

Too much, too soon in cuts — a big blow to an economy with sinking job and housing markets.

Too pessimistic for you? Sorry, but until and unless America faces the facts and collectively makes the needed sacrifices, that’s the dire reality of our era.

You have only one choice: To ignore the Wall Street hype and prepare for the worst.

Here’s What to Do …

See the original article >>

Siamo di nuovo al sell off, Milano -2,50%

by WSI

Milano - Tornano di nuovo pesanti le vendite sia sul mercato azionario che sui titoli di stato italiani, dopo il tonfo del 3,5% registrato lo scorso venerdì dal Ftse Mib; sempre venerdì l'indice di riferimento dei bancari Ftse Italia All-Share Bank Index  è crollato fino al 4,5%, scivolando al minimo in tre anni, con Unicredit (che in totale la scorsa settimana ha lasciato sul terreno il 20%) che ha perso venerdì fino al 8%, testando il livello più basso dall'aprile del 2009.

 Dopo la speranza che oggi le cose potessero andare diversamente, il Ftse Mib torna a cedere pesantemente terreno. Siamo punto e a capo.

 L'indice Ftse Mib torna a perdere verso le 13.30 ora italiana più del 2% circa, il 2,50% e continua ad arrancare sotto quota 19.000 punti. La misura comunicata ieri dalla Consob  alla fine non sortisce effetti: la Commissione ha deciso che, a partire da oggi, gli investitori che detengano posizioni ribassiste rilevanti sui titoli azionari negoziati sui mercati regolamentati italiani sono tenuti a darne comunicazione alla Commissione. Da segnalare comunque che la Consob non ha imposto un divieto stretto alle vendite allo scoperto, ma ha solo imposto nuove norme di trasparenza. Inoltre, dagli Usa è arrivato tra l'altro un giudizio molto negativo anche sull'operato della Consob. Critiche sulla manovra tardiva della Consob sono arrivate anche da un analista italiano.

 E un altro esperto tntervistato da Class, Cnbc Marco Capurro di Banca Carige SGR, afferma che, nonostante le misure della Consob, "la situazione delle banche in Italia rimane sempre la stessa. Certo, in un'ottica di investimento se si guarda alle valutazioni dell'indice le valutazioni non sono così tremende, ma per il risparmiatore privato andare sui titoli rappresenta un rischio altissimo, se ci considera anche l'elevata volatilità. Noi siamo stati venditori e abbiamo sull'azionario una view neutral che va verso il negative".

 Niente di buono neanche dal mercato dei titoli di stato italia, con lo spread BTP/Bund, che ha toccato un nuovo massimo. E non solo. La tensione sui mercati dei titoli di stato porta i rendimenti del decennale a balzare fino al 5,4%, al nuovo record assoluto di 11 anni, cioe' dall'introduzione dell'euro nel 1999. Il BTP 4 3/4 21 quota 95.385. E il prezzo dei CDS, (credit default swap) a 5 anni relativi al debito sovrano dell'Italia non ferma la sua corsa, e tocca anch'esso il nuovo massimo assoluto.

 I motivi di questi continui attacchi all'Italia vanno individuati nella debolezza del governo, negli scontri continui ra ministri economici, e soprattutto (e' almeno questa la visione da Londra) per l'arresto di Marco Milanese, il piu' stretto collaboratore del ministro dell'Economia Giulio Tremonti, per corruzione e associazione a delinquere. Un fatto molto preoccupante, intollerabile per la comunità dei grandi investitori esteri.

 Intanto arriva anche la conferma secondo cui gli hedge funds americani starebbero scommettendo al ribasso contro i bond italiani. La notizia e' del Financial Times, che nell'edizione online scrive: "I fondi speculativi di New York stanno piazzando massicci ordini scommettendo sul calo dei titoli di stato emessi dal governo italiano, shortando direttamente i bond della terza maggiore economia dell'eurozona".

 Oggi però non si può dire che la maglia nera spetti a Milano. Tra gli altri listini europei, Madrid cede infatti il 2,22, Lisbona è arrivata a perdere il 2,6%, anche Atene ha fatto -2%; meglio Parigi (-1,69%), Francoforte (-1,19%) e soprattutto Londra, che si limita un calo di poco più di mezzo percentuale circa. Da segnalare oggi l'incontro straordinario dell'Unione europea, per discutere sugli aiuti alla Grecia e anche del caso Italia, anche se le informazioni a tal proposito sono molto contrastate.

 Il quadro azionario globale è in generale negativo: i listini asiatici hanno chiuso in calo, e lo scorso venerdì anche Wall Street è stata oggetto di vendite, causa il dato "inaccettabile" del rapporto sull'occupazione.

 Sul fronte valutario l'euro continua a perdere terreno, scontando i timori sul rischio italiano e in generale sul futuro dei Piigs. Il rapporto usd/usd scende così sotto quota $1,42, a $1,4106, al livello più basso dallo scorso 27 giugno. La moneta unica scivola anche a 113,78 nei confronti dello yen.

 Tornando a Piazza Affari, ad alimentare di nuovo le tensioni sono i bancari, che in mattinata avevano segnalato, in alcuni casi, un lieve tentativo di recupero, e che ora tornano invece a perdere terreno. Unicredit vira infatti in rosso e fa ora -0,24%, dopo aver ceduto il 20% la scorsa settimana; ancora peggio fanno BPM (-2,02%), Mediolanum arretra del 3,17%, così come anche Mediobanca. Azimut Holding cede il 3,14%, Mps perde l'1,65% e Intesa SanPaolo ora arriva a fare -3,75%.

See the original article >>

June's Abysmal Jobs Report is Just the Beginning

By Kerri Shannon

The June jobs report was abysmal - bud sadly it's just the beginning.

After just a few months of modest, stimulus-induced improvement the jobs market is again sliding backwards into a "new normal" characterized by even higher rates of unemployment.

"Unfortunately, I expect chronic high unemployment to be with us for years, and to borrow a phrase from Bill Gross of PIMCO, that's the real ‘new normal,'" said Money Morning Chief Investment Strategist Keith Fitz-Gerald.

The dismal job growth boosted the unemployment rate to 9.2% in June from 9.1% the month prior. The labor force declined by 270,000, and the total amount of people out of work, including those who have stopped looking, is up to 16.2%, from 15.8% the month before.

"It is about as bad as anyone could imagine," Nigel Gault, chief U.S. economist for IHS Global Insight, told MarketWatch. "On face value it does suggest we are grinding to a halt," he said.

Indeed, the meager 18,000 jobs added in June actually led some analysts to question the report's accuracy.

"At first, when I heard it, I thought maybe they had announced the wrong numbers, they were so bad," Robert Brusca of Fact and Opinion Economics told CNN.

Economists had expected an increase of 125,000 jobs, just enough the economy needs to compensate for population growth.

Worse yet, May and April job numbers were revised to show results that were even worse than previously reported. The May gain of 54,000 jobs was lowered to 25,000, and the number of jobs added in April fell to 217,000 from 232,000.

"You look at the charts for private sector growth and you could see we were building a nice, steady crescendo," Brusca said. "All of a sudden the bottom fell out!"

The total number of unemployed workers who are actively looking for work is now 14.1 million, with 6.3 million out of work for six months or more.

Some economists had high hopes for the June jobs report, since alternate measures of employment statistics had shown promise. The ADP payrolls report last Thursday showed 157,000 private-sector jobs had been added.

But according to the Labor Department the private sector added just 54,000 jobs, and that gain was offset by a loss of 39,000 government jobs.

No More Jobs to Give

Private-sector employees account for 70% of the workforce. And as more government jobs are cut, private employment won't be able to bolster job numbers since it's experiencing a long-term slowdown of its own.

The new problem facing the workforce is not that U.S. companies don't have money to hire, it's that they don't need as many workers. Businesses are learning to survive with fewer employees, relying more on increased productivity and efficiency. When companies do have enough cash to spend, they put it toward new technology or M&A activity instead of hiring.

Companies have been regaining profitability, but the increase is not mirrored in the labor market, widening the gap between capital spending and employment.

"Today companies are producing more goods and services than ever before," said Bernard Baumohl, chief global economist at The Economic Outlook Group. "The GDP now is bigger than it ever has been before. And the economy is able to do that with 7 million fewer workers. If we can do so much with so much less, where is the incentive to hire?"

A Bank of America Merrill Lynch report released in March stated inventory rebuilding, low borrowing costs and equipment tax breaks had encouraged companies to spend - not hire.

And the companies that are hiring aren't doing so in the United States. They're looking elsewhere.

"America's stubbornly high unemployment rate is not likely to drop much in the future because - among other reasons - the biggest employers in this country have been exporting jobs overseas," said Money Morning Contributing Editor Shah Gilani. "General Electric Co. (NYSE: GE), Caterpillar Inc. (NYSE: CAT), and Cisco Systems Inc. (Nasdaq: CSCO), are just a few of the U.S. stalwarts that in the past decade have expanded their overseas operations at the expense of U.S. employment."

Jeffrey Immelt, GE's chief executive, told The Wall Street Journal that this shift doesn't reflect a relentless search for the lowest wages, but instead a search for active consumers.

"We've globalized around markets, not cheap labor," said Immelt. "The era of globalization around cheap labor is over," he said in a speech in Washington this spring. "Today we go to Brazil, we go to China, we go to India, because that's where the customers are."

What Investors Need to Watch

As the U.S. job market continues to disappoint, and U.S. companies shift their business focus to overseas markets, investors need to watch where the money goes.

"It doesn't take more than a quick glance to see that the capital flowing out of the United States and into other countries has been very beneficial for a lot of corporations," said Gilani. "Those are the corporations whose shares you should be buying."

Some of the companies with the best opportunities are those that invest in foreign consumer growth, as the United States continues to struggle with high unemployment and a rocky recovery. Netflix Inc. (Nasdaq: NFLX) is one of the latest companies to charge into emerging markets, announcing last week it will start service in 43 countries in Latin America and the Caribbean.

"Continue to buy global growth and global income because the U.S. is holding things back even as other markets with adult supervision charge ahead," said Money Morning's Fitz-Gerald.

See the original article >>

Misure Consob, non funzionerà

by PierGiorgio Gawronski

Scrivo nella notte fra domenica e lunedì. Le misure della Consob contro la speculazione ribassista sono doverose. Riguardano il periodo estivo, quando i volumi dei titoli scambiati si assottigliano, prestando il fianco a manovre speculative illegali delle ‘mani forti’. Ora, se qualcuno bara, sarà più facile individuarlo.

Tuttavia le misure adottate – o altre simili – non fermeranno l’ondata di ribassi. Perché è sul mercato dei titoli pubblici di Portogallo, Irlanda, Italia, Grecia e Spagna (PIIGS) che si gioca la partita decisiva.

È appena iniziato un incendio. Gli incendi si sviluppano in modo non lineare. Per fermarli, è decisivo quello che si fa (o non si fa) all’inizio.

Le cause principali dell’incendio sono due: i debiti pubblici, e la crescita anemica (o negativa) della base imponibile. Per spegnere il fuoco sul nascere bisogna agire rapidamente, e in modo decisivo, su entrambe le cause.

I paesi summenzionati dovrebbero ridurre il debito, tagliando la spesa pubblica e/o alzando le tasse. L’Italia dovrebbe fare subito la manovra per il 2013 e 2014, che per ora è solo un vago libro dei sogni. Tremonti: “Chi ci chiede di fare di più, o di anticipare ad oggi le misure previste per il prossimo triennio, non ha capito nulla. Se lo facciamo, ammazziamo il paese”. Eh no! Signor Ministro, è lei che non ha capito. Non Le si chiede di concentrare i sacrifici in un anno, ma di votare subito misure concrete e credibili, che mettano a posto i conti anche negli anni a venire.

Ma in questa congiuntura depressa, post ‘crisi finanziaria globale’, la spesa pubblica ‘tagliata’ non viene sostituita da nulla, e si traduce perciò inesorabilmente in una nuova caduta delle vendite delle imprese, della base imponibile, e delle entrate fiscali. Lo si è già visto in Grecia, in Irlanda, in Portogallo. Fare austerità in questo modo è inutile e dannoso: ci si ritrova quasi con lo stesso deficit, e tanti disoccupati in più.

Manca una gamba della strategia: il sostegno alla domanda privata, per compensare i tagli alla spesa pubblica e stabilizzare le vendite delle imprese . Sono convinto che oggi solo la Banca Centrale Europea ha i mezzi per stimolare la domanda del settore privato. Qualcuno dovrebbe dirglielo.

Oppure ci vorrebbero ministri economici talmente competenti in macroeconomia da sostenere la domanda ‘a costo zero’.

See the original article >>

It Looks Like Greece Is Angry At All The Attention Italy Is Getting

by Joe Weisenthal

Everyone has moved on to Italy -- it even got the NYT treatment today -- but Greece seems miffed at no longer being the center of attention.

We only say that because Greek yields are surging to totally brand new records: over 31% for 2-year debt, after having briefly dipped to near 25% right after the Hellenic Parliament passed the bailout.

Of course, now that "selective default" is on the table as a Greek option, it makes sense that bondholders are eager to dump whatever they're still hanging onto.

And yes, this blowout is the story across Europe today.

Italian short-term yields are at fresh highs vs. German Bunds.

Portuguese yields up.

You get the drill...

See the original article >>