In The News Today

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Jim Sinclair’s Commentary

Mr. Williams of Shadowstats.com shares the following with us.

– As With December, January’s Small Headline Jobs Gain Was Statistically Insignificant
-  Annual Upside Bias in the Birth-Death Model Increased by 140,000, Despite Last Year’s 119,000 Overstatement of Jobs Growth
– Spurious Revisions Used to Spike Payroll Employment Levels Renewed Concurrent Seasonal Adjustments and New Population Controls Make Comparisons of Monthly Unemployment Detail Meaningless
– January Unemployment: 6.6% (U.3), 12.7% (U.6), 23.2% (ShadowStats)

Year-to-Year M3 Growth Slowed to 3.0% in January

"No. 598: January Employment, Unemployment and Employment Benchmark Revision, M3"
Web-page: http://www.shadowstats.com

Jim Sinclair’s Commentary

The Great Leveling to come.

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Jim Sinclair’s Commentary

The Great Leveling.

The Death Of The U.S. Middle Class: No Longer A Greatly Exaggerated Rumor

The companies Dollar Tree and Michael Kors don’t have much in common. Although they’re both retailers, they cater to a very different customer base.

Dollar Tree is a discount retailer that offers merchandise at the fixed price of $1.00. It caters to the low-income class. Michael Kors, on the other hand, is a luxury retailer that sells high-end clothing and accessories, such as handbags.

But they do have one thing in common: they’re both thriving in the current economic environment.

Dollar Tree has added 323 stores just in the last 12 months. Sales have grown at a compounded annual growth rate of about 12% over the last five years. And the stock has jumped 550% since 2008.

Since going public in 2009, Michael Kors’ sales have jumped more than 650%. This past week alone, the stock rallied 20%, after the company wowed Wall Street with a blowout third quarter.

While discount and luxury retailers are doing well, companies that cater to the middle class are in trouble. Perhaps JC Penney is the best example. Last month, the company announced the closing of 33 stores and 2,000 layoffs. The stock has lost more than 90% of its value since 2007, and many analysts believe the company is heading to bankruptcy.

This performance discrepancy is now rippling through the retail industry. Companies that sell goods to the 1%, such as Tiffany, Coach and Nordstrom, are booming. Discount retailers, such as Dollar Tree and Dollar General, are also experiencing tremendous growth. But those selling goods to the middle class, such as Sears and JC Penney, are struggling.

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Iran sending warships close to US borders
Feb 8, 10:14 AM EST

TEHRAN, Iran (AP) — A senior Iranian naval commander says his country has sent several warships to the Atlantic Ocean, close to U.S. maritime borders for the first time.

The commander of Iran’s Northern Navy Fleet, Admiral Afshin Rezayee Haddad, is quoted by the official IRNA news agency as saying Saturday that the vessels have already begun the journey to the Atlantic Ocean via waters near South Africa.

Iranian officials said last month that the fleet consisted of a destroyer and a logistic helicopter carrier, which will be on a three-month mission.

Haddad says the fleet is approaching U.S. maritime borders for the first time. The Islamic Republic considers the move as a response to U.S. naval deployments near its own coastlines. The U.S. Navy’s 5th fleet is based in nearby Bahrain.

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Payroll Data Shows a Lag in Wages, Not Just Hiring
By NELSON D. SCHWARTZFEB. 7, 2014

For the more than 10 million Americans who are out of work, finding a job is hard. For the 145 million or so who are employed, getting a raise is even harder.

The government said on Friday that employers added 113,000 jobs in January, the second straight month of anemic growth, despite some signs of strength in the broader economy. The unemployment rate inched down in January to 6.6 percent, the lowest level since October 2008, from 6.7 percent in December.

But the report also made plain what many Americans feel in their bones: Wages are stuck, and barely rose at all in 2013. They were up 1.9 percent last year, or a mere 0.4 percent after accounting for inflation. Not only was that increase even smaller than the one recorded in 2012, it was half the normal rate of wage gains in the two decades before the last recession.

The stagnation helps explain why many people feel apprehensive even though the economy grew at a robust pace in the second half of 2013, corporate profits rose, the stock market boomed and the housing market continued to gain ground. The issue cuts across the American work force. In fact, white-collar workers did a bit worse than blue-collar workers last year in terms of wage growth.

“People are running in place in terms of their living standards,” said Ethan Harris, co-head of global economics at Bank of America Merrill Lynch. “There’s almost no growth in spending power.” As recently as 2008, when the economy sank deeper into recession and Lehman Brothers collapsed, wages still managed to rise by 3.5 percent, before inflation. But the combination of a backlog of workers left behind in the recession’s wake, as well as productivity gains resulting from new technologies, means salaries may not rebound anytime soon.

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JPMorgan loses 44% of its Comex gold in 5 days
A couple of charts from Comex suggest that a “bank run” against JPMorgan’s gold inventory might be in progress.
February 6, 2014

•  The first chart reflects gold bullion inventories at Comex for Thursday, January 23rd, A.D. 2014:

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Comex Gold Inventories
January 23rd, A.D. 2014

At the start of business (Thursday, Jan. 23rd) JPM had 1,459,028 ounces of gold.  During the day, JPM’s inventory declined by 321,500 ounces leaving an end-day balance of 1,137,528.

That’s a one-day loss of 22% of JPM’s gold bullion inventory.  A 22% loss of inventory in one day should be cause for alarm since four more similar losses might exhaust JPM’s entire gold inventory.

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China frigate locked radar on Japan navy
A Chinese military frigate locked its weapon-targeting radar on a Japanese navy vessel on at least one occasion, Japan’s defence minister has claimed, as the bitter territorial row threatened to escalate.
11:53AM GMT 05 Feb 2013

Itsunori Onodera claimed that on January 30, "something like fire-control radar" was directed at a Japanese Self-Defence Maritime escort ship in the East China Sea.

Mr Onodera said a Japanese military helicopter was also locked with a similar radar a few days earlier.

"Directing such radar is very abnormal," he said. "We recognise it would create a very dangerous situation if a single misstep occurred.

"We will seek the Chinese side’s self-restraint from taking such dangerous action."

The move is an apparent ramping up of an already tense situation in the East China Sea, where Asia’s two largest economies are at loggerheads over the sovereignty of an uninhabited island chain. 

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