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From SurvivalBlog.com

G.G. flagged this: One in Three Young U.S. Workers Are Underemployed

John Williams: The Real Unemployment Rate: 22%−Not 8.1%–The coming fiscal cliff: hyperinflation on track for 2014

The wrecking ball of hidden inflation and Fed based strategies – food inflation far outpacing overall inflation and eating away at the purchasing power of 46,000,000 Americans on food stamps.

Jim Willie: Gold Cover Clause Guidance

Items from The Economatrix:

Anti-Gold Propaganda Push, Gold Cover Clause For Enabling Competing New Currencies

The Fed, Wall Street Prepare To Unleash Crisis 2.0

Faber Sees Crash Like in 1987 if US Stocks Climb Higher

The Economy Is Muddling Along a Cliff’s Edge

3.6 Million Taxpayer Dollars Being Used To Support The Lavish Lifestyles Of Former Presidents Such As Bush And Clinton

From The Economic Collapse

You are not going to believe how much money is being spent on our former presidents.  At a time when U.S. government spending is wildly out of control, a total of 3.6 million dollars is being used to support the lavish lifestyles of former presidents such as George W. Bush and Bill Clinton in 2012.  For 2013, the plan is to increase that amount to 3.7 million dollars.  But do any of them really need this kind of welfare?  The truth is that all of them are very wealthy.  So what justification is there for giving them so much money?  You can see the GSA budget proposal for former presidents for 2013 right here.  The 3.7 million dollars for 2013 does not even include the cost of Secret Service protection.  Rather, it only covers expenses such as office rentals, travel, phone bills, postage, printing and pension benefits.  Certainly it is not unreasonable to grant former presidents a small pension, but should we be showering them with millions of dollars each year?  At a time when the federal government is drowning in so much debt, the fact that these former presidents are willing to take such huge amounts of taxpayer money really does make them look like parasites.

So why are these former presidents getting this money?

Congress passed The Former Presidents Act of 1958 because they didn’t…

Tsipras Plans to Nationalize Banks, put Moratorium on Debt Payments, Cancel Bailout, Halt Additional 11 Billion in Troikas Mandated Austerity Measures; Spanish Bond Yields Back Above 6%

From Mish’s Global Economic Trend Analysis

Spanish Bond Yields Back Above 6%

Yield on the 10-year Spanish bond is up 22 basis points to 6.06%, having hit a high of 6.08%.

It’s Not Contagion

Expect to hear talk of “contagion” blaming problems in Greece as a spillover into Spain. However, the fact of the matter is Spain is in deep trouble no matter what happens to Greece.

Tsipras Plans to Nationalize Banks, Halt Additional Austerity Measures

Bloomberg reports Greek Leaders Given Bailout Ultimatum

Alexis Tsipras of Greece’s Syriza party squared off with political leaders before talks on forming a coalition, handing them an ultimatum to renounce support for the European Union-led rescue if they want to enter government.

Tsipras said he expected Antonis Samaras of New Democracy and Evangelos Venizelos, the former finance minister who leads the Pasok party, to send a letter to the EU revoking their written pledges to implement austerity measures by the time he meets them today to discuss a government alliance. Samaras and Venizelos rejected the request. Samaras said he was being asked “to put my signature to the destruction of Greece.”

No More Cuts

“The bailout parties no longer have a majority in parliament to vote for measures that plunder the country,” Tsipras told reporters. “There will be no 11 billion euros ($ 14 billion) of additional austerity measures; 150,000 jobs will not be cut.”

Tsipras said he aimed to link up with parties in a

…

The Market Ticker – PPI: Down 0.2% April

From The Market Ticker

Now this is interesting… or is it?

So absent food and energy prices were up.  Meh.

However, crude and intermediate prices are declining — with crude goods being particularly interesting.  More importantly ex foods and energy crude goods declined, although intermediate did not.  The drops in food and energy at the crude level were huge, however, and that should flow through to the CPI in coming months.

The 2 Billion Dollar Loss By JP Morgan Is Just A Preview Of The Coming Collapse Of The Derivatives Market

From The Economic Collapse

When news broke of a 2 billion dollar trading loss by JP Morgan, much of the financial world was absolutely stunned.  But the truth is that this is just the beginning.  This is just a very small preview of what is going to happen when we see the collapse of the worldwide derivatives market.  When most Americans think of Wall Street, they think of a bunch of stuffy bankers trading stocks and bonds.  But over the past couple of decades it has evolved into much more than that.  Today, Wall Street is the biggest casino in the entire world.  When the “too big to fail” banks make good bets, they can make a lot of money.  When they make bad bets, they can lose a lot of money, and that is exactly what just happened to JP Morgan.  Their Chief Investment Office made a series of trades which turned out horribly, and it resulted in a loss of over 2 billion dollars over the past 40 days.  But 2 billion dollars is small potatoes compared to the vast size of the global derivatives market.  It has been estimated that the the notional value of all the derivatives in the world is somewhere between 600 trillion dollars and 1.5 quadrillion dollars.  Nobody really knows the real amount, but when this derivatives bubble finally bursts there is not going to…

TrimTabs on Debt and Disability Claims: How Much Debt Does it Take to Generate $1 in GDP? Disability Fraud vs. Expiring Unemployment Benefits Revisited

From Mish’s Global Economic Trend Analysis

In response to 2.2 Million Go On Disability Since Mid-2010; Fraud Explains Falling Unemployment Rate I received a nice email from Madeline Schnapp, Director, Macroeconomic Research at TrimTabs Investment Research.

Madeline Writes …

Hello Mish,

I loved your disability graph so decided to expand on that theme some more and took a look at the relationship between the trend in disability recipients and the roll off of recipients of emergency and extended unemployment insurance programs.

Should we dare say there is a stunning relationship!

Enjoy,

Best, Madeline

Amazing Achievement is Fraud

 First consider a few snips from my previous post, then we will take a look at what TrimTabs has to say.

In the last year, the civilian population rose by 3,638,000. Yet the labor force only rose by 945,000. Those not in the labor force rose by 2,693,000.

In the last month, actual employment fell by 169,000, but the unemployment rate dropped by .1%.

That is an amazing “achievement” to say the least.

Since Mid-2010 2.2 Million Went on Disability

Notice the jump in claims after the recession was allegedly long-over.

The timing coincides with unemployment benefits expiring at 99 weeks.
Supposedly higher taxes will fix the problem. I say “nonsense”.

Trim Tabs Weekly Macro Analysis 

Please consider snips from the TrimTabs Weekly Forecast for May 8, 2012.

A recent post

…

More Derivatives Market Mayhem: The JPMorgan Debacle

From SurvivalBlog.com

The mainstream media is abuzz with stories about JPMorgan’s $ 2 Billion in trading losses in just the past six weeks. Here some typical coverage: JPMorgan Hit by ‘Egregious’ Trading Loss of $ 2 Billion. The culprit? It was derivatives.

Ah yes, those pesky derivatives. Ich habe es Ihnen gesagt (way back in 2006.)

I won’t re-hash the details of the JP Morgan debacle that have come to light, because they have already been spelled out by many journalists. The best analysis that I’ve found thusfar came from the editors of Zero Hedge, in this piece: The "World’s Largest Prop Trading Desk" Just Went Bust. The facts are all there. There is also some good commentary at Fierce Finance: JPMorgan "hedges" look like prop bets.

What are the implications of this mayhem? They are all bad, especially for Mortgage Backed Securities (MBS), Credit Default Swaps (CDSes) and other collateralized debt obligation (CDO) derivatives. The band of fools in JPMorgan’s Chief Investment Office (CIO) were buying up CDOs at the same time wiser heads in the banking world were avoiding them like proverbial hot potatoes. It is noteworthy that most of these derivatives were purchased after the 2008 credit crisis. In the greedy eyes of the JP Morgan derivatives trading staff, buying this paper after it had taken a 20% haircut appeared to be a bargain. To compound their problems, not only they take…

German Central Banks Signals Willingness for Higher Inflation; Catastrophic Uncertainty vs. Catastrophic Certainty

From Mish’s Global Economic Trend Analysis

As Europe careens towards catastrophic certainty, German finance minister Wolfgang Schäuble admits he is more worried about the uncertain rather than the certain.

Please consider Bundesbank signals softening on inflation

The Bundesbank, the most hawkish of central banks, has signalled it would accept higher inflation in Germany as part of an economic rebalancing in the eurozone that would boost the international competitiveness of countries worst-hit by the region’s debt crisis.

A future German inflation rate above the eurozone average could be part of a natural adjustment process as crisis-hit countries pulled themselves out of recession, the Bundesbank argued in evidence to German parliamentarians submitted on Wednesday.

It followed comments at the weekend by Wolfgang Schäuble, German finance minister, backing stronger wage increases, which would boost domestic demand – benefiting other European countries exporting goods and services to Germany – but could drive German inflation rates higher.

Despite the Bundesbank’s conciliatory stance on inflation, German policy makers have been among the toughest in insisting that Greece sticks to its agreed reform programme underpinning its bailout in the aftermath of Sunday’s Greek election in which most voters rejected the plan. Speaking in Brussels, Mr Schäuble said that changing the bailout terms would unleash ‘’catastrophic uncertainty’’ in financial markets.

Catastrophic Uncertainty vs. Catastrophic Certainty

For starters, higher inflation in Germany is not likely to stoke much demand. Such is the nature of German demographics. Furthermore, the idea Spain and Greece will be…

Tea Party Ousts 6-Term Republican Senator in Indiana Primary for Not Being Conservative Enough; Extreme Polarization of Politics in Greece, Europe, and US; Tweedledee vs. Tweedledum

From Mish’s Global Economic Trend Analysis

On Tuesday, six-term Republican senator Richard Lugar was ousted  in shocking defeat in the Indiana primary to Tea Party activist Richard Mourdock, Indiana state’s treasurer.

Mourdock sent Lugar down in flames as he questioned Lugar’s policies on immigration, Supreme Court nominees, the “Dream Act”, and bank bailouts. Mourdock said Lugar was “not conservative enough”.

As proof of how extreme things have gotten, the Indiana Democratic Party released a statement Tuesday evening thanking Mr. Lugar for his service and criticizing Mr. Mourdock as an “extremist” who is “out of touch with Hoosiers.”

The New York Times has details in Mourdock Defeats Lugar in Indiana Senate Primary

Clearly, there is increasingly little chance for moderates anywhere.

In Europe, 11 governments have collapsed over austerity measures. German chancellor Angela Merkel may be the next to go.

Chaos in Greece

Extreme polarization in Greece is such that no political party could gather as much as 20% of the vote. Indeed the top two parties combined could not even muster 33% of the vote.

For details and further discussion, please see

• Greeks Political Parties Prefer Chaos Over Compromise; June 17 Elections on the Way; Next Bailout Tranche at Risk

 

• SYRIZA’s Tsipras Lists Bailout Rejection as Key Demand; Don’t Rule Out a SYRIZA Coalition; Eventually May Be At Hand; Why SYRIZA Will Win the Next Election

Polarization in US

For polarization in the US, look no further than the surprising showing of…

11 Quotes That Show How Worried The Financial World Is About Europe Right Now

From The Economic Collapse

The recent elections in France and in Greece have thrown the global financial system into an uproar.  Fear and worry are everywhere and nobody is quite sure what is going to happen next.  All of the financial deals that Greece has made over the past few years may be null and void.  Nobody is going to know for sure until a new government is formed, and at this point it looks like that is not going to happen and that there will need to be new elections in June.  All of the financial deals that France has made over the past few years may be null and void as well.  New French President Francois Hollande seems determined to take France on a path away from austerity.  But can France really afford to keep spending money that it does not have?  France has already lost its AAA credit rating and French bond yields have started to move up toward dangerous territory.  And Greek politicians are delusional if they think they have any other choice other than austerity.  Without European bailout money (which they won’t get if they don’t honor their current agreements), nobody is going to want to lend Greece a dime.

And all of this talk about “austerity” is kind of silly anyway.  It isn’t as if either France or Greece was going to have a balanced budget any…