In The News Today

Posted at 2:07 PM (CST) by & filed under In The News.

The budget should be balanced, the Treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance to foreign lands should be curtailed lest Rome become bankrupt. People must again learn to work, instead of living on public assistance.
–Roman philosopher and statesman Marcus Tullius Cicero (106-43 BC)

Jim Sinclair’s Commentary

Abbott and Costello explain unemployment accounting. This is very instructive if you are trying to understand how the figure varies.

COSTELLO:  I want to talk about the unemployment rate in America .
ABBOTT:  Good Subject. Terrible Times. It’s 9%.
COSTELLO:  That many people are out of work?
ABBOTT:  No, that’s 16%.
COSTELLO:  You just said  9%.
ABBOTT:  9% Unemployed.
COSTELLO:  Right 9% out of work.
ABBOTT:  No, that’s 16%.
COSTELLO:    Okay, so it’s 16% unemployed.
ABBOTT:  No, that’s 9% .
COSTELLO:  WAIT A MINUTE. Is it 9% or 16%?
ABBOTT:  9% are unemployed. 16% are out of work.
COSTELLO:  IF you are out of work you are unemployed.
ABBOTT:  No, you can’t count the "Out of Work" as the unemployed.  You  have to look for work to be unemployed.
ABBOTT:  No, you miss my point.
COSTELLO:  What point?
ABBOTT:   Someone who doesn’t look for work, can’t be counted with those who look for work.  It wouldn’t be fair.
COSTELLO:  To whom?
ABBOTT:  The unemployed.
COSTELLO: But they are ALL out of work.
ABBOTT:  No, the unemployed are actively looking for work.  Those who are out of work stopped looking.    They gave up. And, if you give up, you are no longer in the ranks of the unemployed.
COSTELLO:  So if you’re off the unemployment rolls, that would count as less unemployment?
ABBOTT:  Unemployment would go down.   Absolutely!
COSTELLO:  The unemployment just goes down because you don’t look for work?
ABBOTT:  Absolutely it goes down. That’s how you get to 9%. Otherwise it would be 16%. You don’t want to read about 16% unemployment, do ya?
COSTELLO:  That would be frightening.
ABBOTT:  Absolutely.
COSTELLO:    Wait, I got a question for you. That means there are two ways to bring down the unemployment number?
ABBOTT:  Two ways is correct.
COSTELLO:  Unemployment can go down if someone gets a job?
ABBOTT:  Correct.
COSTELLO:  And unemployment can also go down if you stop looking for a job?
ABBOTT:  Bingo.
COSTELLO:  So there are two ways to bring unemployment down, and the easier of the two is to just  stop looking for work.
ABBOTT:  Now you’re thinking like an economist.
COSTELLO:  I don’t even know what the hell I just said!
ABBOTT: Now you’re thinking like a politician.


Jim Sinclair’s Commentary

Finally that which was dead has taken birth again. You will note that I entered the lake with style. The same style that says when hunting the short who is the author of the dirty tricks knows the prime broker is his/her beard.

What you want to know is the identity of the short and go against that, not the prime broker.

Click here to watch the video…


Jim Sinclair’s Commentary

I don’t think this is our famous CIGA Wolfgang.



Jim Sinclair’s Commentary

John Williams of reports the following.

– Bernanke Bemoans GDP Not Reflecting Common Experience
– Trade Data Place Upside Pressure on Second-Quarter GDP Revision
– Consumer Credit Growth Remains All in Student Loans



Jim Sinclair’s Commentary

It is worse.

High Frequency Trading is computerized illegal cheating that specializes in front running legitimate orders with bids and offers to force the legitimate buyer or seller to change their limits and profit the automatic front runners.

The people who use it know it illegal. The exchanges know it is illegal but it creates volume for them and that is all they give a damn about. Regulators know it is illegal and do not gice a damn.

We are all being attacked from every side so that investment success depends on you being the meanest SOB in valley will to fight anyone who touches you.

High Frequency Traders Are “Parasites” That Erode Investor Confidence: Polcari
By Matt Nesto | Breakout – Tue, Aug 7, 2012 10:36 AM EDT

It was inevitable. No sooner had word gotten out that Knight Capital (KCG) had managed to find a way to survive, and the focus of debate has changed to something more sinister. As stupid or careless as Knight’s admitted software glitch or mistake was, it would never have happened had it not been for the legion of computer-assisted, high-speed traders who prowl the markets in search of opportunities exactly like this – then pounce. Knight’s blunder was their bounty.

Whether you call them high frequency traders, H-F-T’s or algos (shorthand for algorithmic or computerized trading programs), by any name they are "parasites" says Kenny Polcari, Managing Director at ICAP.

"When you sit down and look at really what is the role that high frequency traders play, it’s frustrating," Polcari says in the attached video. "What are they really here for? They’re buying and selling 100 share lots, up and down for pennies all day long."

It’s certainly not the first time a floor broker has complained about interference from HFT’s, but in light of the recent drama – and losses – incurred by Knight Capital, the issue is resurfacing with a vengeance. As always, any argument to constrain technology, from within an industry dominated by – and reliant upon – technology, can be a little tricky. But for those who have lived and traded through this crisis, and the Facebook IPO, and the BATS flap and the Flash Crash and many, many more that never earned a catchy nickname, the problem is about technology and maintaining confidence in the markets.


Jim Sinclair’s Commentary

You have to love statistics as they say whatever you want them to.

Wait, the U.S. economy actually lost 1.2 million jobs in July?
Posted by Brad Plumer on August 5, 2012 at 10:18 am

The U.S. economy lost 1.2 million jobs between June and July. But that’s not how it got reported. When the Bureau of Labor Statistics (BLS) released its jobs figures for July, it said the economy gained 163,000 jobs. So what gives?

BLS isn’t hiding anything. The discrepancy just has to do with what’s known as “seasonal adjustments.” The U.S. economy follows certain predictable patterns in hiring and layoffs every year. School districts always let workers go for the summer and hire in the fall. Retailers always staff up for the Christmas holidays and lay people off afterwards. Students always flood the labor market in June.

So if we want to know how well the economy is doing, we want to know how many jobs were added after taking these predictable fluctuations into account. Some seasonal adjustments are necessary before the data can tell us anything useful.

And this is exactly what BLS does in its monthly jobs reports. As Jacob Goldstein of Planet Money points out, the U.S. economy had 1.2 million fewer jobs (pdf) in July than it did in June. But, according to the bureau, the economy still had 163,000 more jobs than one would’ve expected, given seasonal trends. That’s a sign of a steadily recovering labor market. So BLS reported it as a 163,000 gain in jobs.

In theory, that makes sense. But some economists and analysts now wonder if the BLS seasonal adjustments are somehow off a bit. If the financial crisis and recession mucked with the seasonal ebb and flow of the economy, then the adjustments that BLS makes for its monthly reports might be a bit skewed. Some jobs reports might look much better than they actually are. And others might look worse.


Jim Sinclair’s Commentary

A sign, or maybe a rule of the times. Are you prepared to protect yourself?

Camden mayor: County police will replace city police force; 270 officers could be laid off
Published: Wednesday, August 08, 2012, 6:43 PM  

CAMDEN — Mayor Dana Redd on Wednesday announced the city will lay off its entire police force in order to make way for a county-wide police department.

Camden’s 270 police officers could receive their layoff notices by the end of the year. According to officials, the county police force would include a new Camden Metro Police Division, with 400 officers. Current plans would permit no more than half of the city’s 270 officers to be hired for the new division.

“I commend the mayor for taking a bold step toward improving public safety with a Camden County police force,” said Camden County Freeholder Director Louis Cappelli. “This may be the boldest action ever taken by a mayor of Camden in order to protect the residents of the city.”

According to Cappelli, Camden is the only municipality to show interest in joining a county-wide police department as soon as possible.

He stated others have “expressed interest,” but added he could not say which municipalities were interested.