Does the Recent Decline in the Unemployment Rate Reflect An Improving Labor Market?
by Paul Kasriel, The Econtrarian
![]( "ar1134d3")
Two weeks ago the BLS reported that the national unemployment rate declined by two-tenths of a percentage point in July
vs. June. On the surface, that would seem to be good news for the labor market,
right? Not according to the
knee-jerk analysis by a lot of
jerks on cable financial news. You see, to these
jerks, if the unemployment rate declines at the same time that the labor force
and/or the participation rate declines, the decline in the unemployment rate probably is the result of people exiting the labor force because they have given up hope of finding gainful employment. Sometimes the
jerks are correct. Of late, however, they have been wrong.
Read more >>
What We Read Today 19 August 2013
Econintersect: Click Read more >> below graphic to see today's list.
The top of today's reading list points out the spurt in copper prices in China this month ........ and the last article is a 20-year old classic about business fraud by a Nobel economist.
House Of Cards May be Collapsing
Closing Market Commentary For 08-19-2013
Afternoon session brought the 'worry rains' for some investors that didn't heed the warning signals from last week. The averages started tumbling around 1pm in earnest as Mr Market threw in the towel for the day.
By 4 pm volume had picked up to moderate levels with a big red spike at the close. Tomorrow could see more selloff as there isn't any high level financial reporting. Wednesday is another story.
Averages Falls On Anemic Volume
Midday Market Commentary For 08-19-2013
From the surprising reversal opening this morning the averages have been melting down to where they are now all red, except for the small caps. The NASDAQ is up over 0.30% and I expect the large caps to turn around before the end o f this session or at least trim the small losses we see at noon.
By noon the down trend was in place but might not remain that way. At any rate the averages are flat, unattractive and sightly negative - all on anemic volume of course. Where are the HFT computers when you need them?
Bitcoin Bites: Germany recognizes digital currency as 'private money'
Bitcoin is slowly joining the big league of currencies. Germany has become the first country to accept the digital money as legal tender - recognized in law and for tax purposes.
Markets Open Down Then Reverse Direction
Opening Market Commentary For 08-19-2013
Premarket was relatively quiet with a negative slant, but nothing to suggest opening market direction.
Markets opened down with gaps on most of the major indices on moderate volume and just like that it reversed course. As the markets eased back up covering earlier gaps to ~+0.20%. Volume started to taper off and the averages leveled off and started to melt downward. Way too early in the session to tell if this is going to be a trend.
Are Performance Based Scholarships Effective?
Econintersect: Do performance based grants and scholarships lead to better student grades and attendance? A recent study by Lisa Barrow and Cecilia Elena Rouse reveals some answers to this question.
A Word from This Newsletter's Sponsor
Avoid The Collapse - SELL ALERT!
Millions of Americans own shares of three big name companies in
their portfolios. We think it is "Dead Money." These Stocks are
about to collapse... and time is running out for you to sidestep big
losses!
If you do not read this special alert, it could cost you tens of
When Should You Pay Attention to the Hindenburg Omen?
by Albertarocks, Albertarocks TA Discussions
The Hindenburg Omen has put forth one of the strongest signals in its history, as judged by the tightest cluster of signals ever produced... as far as I know. Let's put it this way, with 6 signals in 8 trading days who's going to quibble? That's a strong enough warning for anybody who is at least half lucid.
Consider this... if you and your lovely family were out sailing on the Gulf of Oman some beautiful Saturday afternoon in your 42 footer, and the Iranian navy fired a 6-pounder across your bow, you know darned well you'd take notice.
Strong Improvement In Initial Unemployment Claims Gives Fed Excuse To Taper
by Lee Adler, Wall Street Examiner
![]()
The latest weekly jobless claims data was right on trend again this week. Initial claims for unemployment compensation declined at an annual rate of 11%, which was slightly better than last week's rate and better than the average of the past two years. That data is far too strong to trigger the Fed's print response and allows the Fed an excuse to taper QE in September. However, the data still does not support the stock market's recent gains.
The Urbanization Fallacy
by Michael Pettis, China Financial Markets
Editor's note: See also Documentary of the Week from BBC on a Chinese urbanization project. The latest default bull argument supporting higher levels of growth in China than I believe possible is the urbanization argument. Beijing is planning another major urbanization push, and according to this argument China can resolve the problem of wasted investment by investing in the urbanization process. That is, it can engage in a massive investment program related to the need to build infrastructure for all the newly urbanized.
Documentary of the Week: Urbanization of Rural China
Econintersect: Centuries of traditional rural village life is being uprooted to create new urban centers in formerly remote places. This week is a full length documentary by the BBC of the changes to a remote valley in southwestern China. This film is at times poignant as it documents the simultaneous aspirations of people for economic advancement and anguish over loss of traditional ways of life.
![china-western-village-bbc-380x162]()
Scene in White Horse Village, western Sichuan Province.
Japan: Exports Up, Imports Up Even More
![breakingnews130px]()
Econintersect: In July 2013 Japan recorded the third worst monthly trade balance deficit on the 34-year data history. Rising energy cost was the primary driver of the 19.6% year over-year increase in imports which fed a Yen1.02 trillion ($10.5 billion). Season adjustment brought the imports number down to $9.7 billion. Exports surged by 12.2% for July (Y-o-Y), up from 7.4% rise in June.
U.S. Business Credit Quality Continues to Improve
Econintersect: So far 2013 has produced a continuing improvement in the credit quality for the nearly 18 million businesses tracked by the Wain Street Business Default Index. This sample base constitutes 60% of the nearly 30 million businesses in the U.S. The results for July showed a default index reading of 6.07%, up insignificantly from June's 6.03%. Nearly 10% more companies had an improvement in credit quality than saw a degradation.
No Country Incarcerates More People Than the U.S.
by Felix Richter, Statista.com
According to the International Centre for Prison Studies, no country worldwide incarcerates more people than the United States. By the end of 2012, the U.S. prison population had reached 1,571,013, representing 25 percent of the entire world's prisoners.
The U.S. now jails 716 people per 100,000 of its population, quite a distance ahead of second placed St. Kitts and Nevis. This small state in the West Indies has 649 prisoners per 100,000 of its population. The prisoner rate in the Seychelles is slightly better, at 641 per 100,000.
Central Banks Easing Trend Continues
Monetary Policy Week in Review (Aug 12-16, 2013)
4 Small Central Banks Cut Rates, 1 Raises while 3 Hold Rates by Peter Nielsen, Central Bank News
This week global monetary policy was characterized by heightened activity by smaller central banks, with four (Ukraine, Mozambique, Georgia and Botswana) cutting rates and Armenia raising its rates while the central banks of Indonesia, Chile and Sri Lanka left rates on hold.
Sizing Up Currency Manipulation by China
The Chinese Government may be holding down its currency to increase exports. But it is not clear what - if anything - the United States should do about it.
Insider Trading 16 August 2013: Kinder Morgan Director Buying
by Asif Suria
![]()
Insider buying decreased with insiders purchasing $94.72 million of their stock last week compared to $168.85million in the week prior. Selling also decreased with insiders selling$1.43 billion of stock last week compared to $2.23 billionin the week prior.
Sell/Buy Ratio: The insider Sell/Buy ratio is calculated by dividing the total insider sales in a given week by total insider purchases that week.The adjusted ratio for last week decreased to 15.14. In other words, insiders sold more than 15 times as much stock as they purchased.The Sell/Buy ratio this week compares unfavorably with the prior week, when the ratio stood at 13.19.
Lowell Ponte Interview
Econintersect: Author and talk radio host Lowell Ponte was interviewed by Merlin Rothfield and John O'Donnell on Power Trading Radio on Friday, 16 August 2013. The discussion ranged over many factors that Ponte sees eroding the financial stability of the U.S. and the global economy.
Some of the statements made by Ponte can be viewed after the Read more >> jump, along with the video of the interview.
![Lowell-Ponte-380x198]()
Power Trading Radio is sponsored by
Online Trading Academy.
Infographic of the Day: Epidemic of Chronic Diseases
Good news, bad news: We're living longer, but extended lifespans also make us more susceptible to chronic diseases like cancer, diabetes and heart disease. In fact, chronic diseases account for 70 percent of deaths every year. Let's explore the conditions that have us shelling out cash for medications and keeping our doctors' offices busy.7 in 10.
Two weeks ago the BLS reported that the national unemployment rate declined by two-tenths of a percentage point in July vs. June. On the surface, that would seem to be good news for the labor market, right? Not according to the knee-jerk analysis by a lot of jerks on cable financial news. You see, to these jerks, if the unemployment rate declines at the same time that the labor force and/or the participation rate declines, the decline in the unemployment rate probably is the result of people exiting the labor force because they have given up hope of finding gainful employment. Sometimes the jerks are correct. Of late, however, they have been wrong. 
The latest weekly jobless claims data was right on trend again this week. Initial claims for unemployment compensation declined at an annual rate of 11%, which was slightly better than last week's rate and better than the average of the past two years. That data is far too strong to trigger the Fed's print response and allows the Fed an excuse to taper QE in September. However, the data still does not support the stock market's recent gains.
Econintersect: In July 2013 Japan recorded the third worst monthly trade balance deficit on the 34-year data history. Rising energy cost was the primary driver of the 19.6% year over-year increase in imports which fed a Yen1.02 trillion ($10.5 billion). Season adjustment brought the imports number down to $9.7 billion. Exports surged by 12.2% for July (Y-o-Y), up from 7.4% rise in June.
Insider buying decreased with insiders purchasing $94.72 million of their stock last week compared to $168.85million in the week prior. Selling also decreased with insiders selling$1.43 billion of stock last week compared to $2.23 billionin the week prior.
