Here Come the Money Helicopters!

Submitted by William Bonner, Chairman – Bonner & Partners

$10 Trillion Goes to Money Heaven

LONDON – We interrupt our series on what to do if you have no money to bring you an update on those who are losing it. (You can catch up on Parts I and II of that series here and here.)

What was the best place for your money so far in 2015? Cash! Compared to cash, almost everything is down. We are headed for the worst quarter for stocks since 2011, says the lead story in today’s Financial Times.

Global stock markets have lost $10 trillion of their value over the last three months. What? Where did all that paper wealth go? The old-timers say it went to “money heaven.”

money heavenOne fine morning in money heaven….will it ever rain down again? Of course, no money has actually disappeared. Only make-believe values have.

Image credit: Salvatore Vuono Continue reading

Party Crashing

Submitted by Doug Noland – Credit Bubble Bulletin 

October 2 – Reuters (Ann Saphir): “Letting the U.S. economy run at ‘high-pressure’ for a while by keeping interest rates relatively low will help push inflation back up to the Federal Reserve’s 2% goal faster, a top Fed official said… But the Fed probably needs to raise rates this year to begin to slow the economy before it develops risky financial imbalances, San Francisco Fed President John Williams told reporters… ‘It’s okay to have the party. It’s okay to get the party going — but we just don’t want it to go too far,’ he said. If it were not for the global slowdown, the U.S. economy would be growing much faster, he added.”

This week provided further evidence that the bursting global Bubble has progressed to a critical juncture, afflicting Core markets and economies. Ominously, few seem aware of the profound ramifications – or even the unfolding hostile market backdrop. Even many of the most sophisticated market operators have been caught off guard. There is, as well, scant indication that Federal Reserve officials appreciate what’s unfolding.

I was again this week reminded of an overarching theme from Adam Fergusson’s classic, “When Money Dies: The Nightmare of Deficit Spending, Devaluation, and Hyperinflation in Weimar German”: throughout that period’s catastrophic monetary inflation, German central bankers believed they were responding to outside forces. Somehow they remained oblivious that the trap of disorderly money printing had become the core problem.

Dr. Williams’ comment, “It’s okay to have the party. It’s okay to get the party going…”, would be laughable if it weren’t so tragic. At this point, let’s hope the true story of this period gets told. I’m trying: monetary policies for almost 30 years now have been disastrous, a harsh reality masked by epic global market Bubbles. Continue reading

From Payroll Shift to Broad Sentiment Shift?

Submitted by Jeffrey Snider  –  Alhambra Investment Partners

Even before the payroll report was issued, there was already an effort underway to downplay any negative potential. Global markets have been upset and in turmoil, but the US consumer and the consumer economy are supposedly undeterred by all that. So any weakness in September, as August, is being suggested as “residual seasonality.” This view was amplified by a Bloomberg article published yesterday with the sub-head stating boldly, “Private employers are taking on more workers to meet US demand.”

The initial September print may suffer from the same “downward bias” as the previous month, according to analysts at Stone & McCarthy Research Associates. August and September payroll readings have each been revised up by the Labor Department in 12 of the past 14 years, they said in a note. Fr [sic] that reason, economists may dismiss a lower-than-projected reading, particularly if hiring in August is revised up.

Once again we find economists supremely disappointed. August payrolls were not revised upward as expected but significantly downward. That makes two quite subpar months that actually reflect much worse than that since the internals were much, much uglier.

Employers added a mere 142,000 jobs in September, the Labor Department said on Friday, suggesting that the American economy is losing momentum after a similarly lackluster report for the previous month.
The official unemployment rate held steady at 5.1 percent, but hourly wages for private sector workers actually fell slightly after jumping by a relatively robust 0.4 percent in August.

So economists that actually think, “Private employers are taking on more workers to meet US demand” are once more mystified by “unexpected” weakness even though markets have been projecting as much since July; and, of course, the “dollar” since themiddle of last year.

“Disappointing across the board,” said Brad McMillan, chief investment officer at Commonwealth Financial Network. “This is not what the markets were looking for, this is not what pretty much anybody expected.”

Continue reading

The Daily Debt Rattle

Submitted by Raúl Ilargi Meijer  –  The Automatic Earth

US Job Growth Disappoints Even More than Usual (NY Times)
US Payrolls Disaster: Only 142K Jobs Added In September With Zero Wage Growth (ZH)
Fed: The 94.6 Million Americans Out Of The Labor Force ‘Don’t Want A Job’ (ZH)
Companies Are Cutting Jobs And Buying Back Stock At The Same Time (MarketWatch)
Credit Investors Bolt Party as Economy Fears Trump Low Rates (Bloomberg)
Market Signals Mean Investors Must Start To Question Assumptions (John Authers)
Jeff Gundlach: Expect ‘Another Wave Down’ In Markets (Reuters)
The Reality Behind The Numbers In China’s Boom-Bust Economy (Mises Inst.)
China Imposes New Capital Controls (Chang)
VW Scandal Deepens As France And Italy Launch Deception Inquiries (Guardian)
Volkswagen: Full Chronology of The Scene of the Crime (Handelsblatt)
VW Tsunami: Falsified Emissions Push Company to Limits (Spiegel)
VW Emissions Cheating Scandal Heading To US Congress (CNBC)
VW Financial Services Arm A Risk Investors May Be Overlooking (CNBC)
Canada Opposition Warns TPP Deal Not Binding Ahead Of Imminent Election (G&M)
Australia Is “Going Down Under”: “The Bubble Is About To Burst”, RBS Warns (ZH)
Half of World’s Coal Output Is Unprofitable (Bloomberg)
From Here On Out, This Is Not A Video Game – This Is Real (Martin Armstrong)
Channel Tunnel Closed As Migrants Occupy Complex (AFP)
UN Refugee Agency: Over 1.4 Million To Cross Mediterranean To Europe (Reuters)

Read much more here: Debt Rattle October 3 2015 – TheAutomaticEarth.com