Trickle Be Dammed Is Not Misspelled
by Lee Adler, Wall Street Examiner
A huge gain in individual income taxes collected in September suggests that the effects of bubble friendly Fed policy are trickling down to the owners of small businesses. Unfortunately, wage and hour data tells us that the trickle is dammed there. Will our dammed nation will be our damnation?
This is an extended free excerpt from the Treasury Update. Subscribers click here to download complete report in pdf format (Professional Edition Subscribers).
Federal Government Cash Flows -
Click to enlarge
What We Read Today 09 October 2013
Econintersect: Click Read more >> below graphic to see today's list.
The top of today's reading list reports on the soaring public debt in Spain ........ and the last article describes how Goldman Sachs helped Greece disguise its debt problems.
Market Commentary: Indices Move To A Flat And Lackluster Finish
Closing Market Commentary For 10-09-2013
Small caps took it on the chin today and they need to lead the way upwards if we are to see this market continue the bull run of the past several years, but that is really wishful thinking.
By 4 pm the markets turned around from a solid upwards trend to dismal, lackluster, flat mixed market. This is to be expected during the 'Middle Finger Negations' going on in Washington.
September 2013 FOMC Meeting Minutes: "Not Yet Adequately Confident of Continued Progress"
Econintersect: The 18 September 2013 meeting statement presented the actions taken. This post covers the economic discussion during this FOMC meeting between the members. The Fed's Balance Sheet (which we report on weekly) continues to grow at record levels.
Overall, the meeting participants generally seem confused about the current economic conditions:
... economic activity had continued to expand at a moderate pace, albeit somewhat more slowly than earlier anticipated, and they generally indicated that the broad contours of the outlook further out had not changed materially since their July meeting.
...downside risks to the outlook for the economy and the labor market were generally viewed as having diminished;
... the effects of the federal sequestration appeared to be less pronounced than previously anticipated.
Overall, the tapering timeline appears unchanged as indicated below.
Day 9 of a Shutdown Government - Dysfunction Continues, No Wholesale Report
Econintersect: The markets likely missed a "good news" wholesale data report from US Census, as the government shutdown continues for the ninth day.
Market Commentary: Averages Continue To Keep Investors Guessing
Midday Market Commentary For 10-09-2013
Markets slipped down to new lows and recovered to where they are now testing the resistance created by this morning's lows. Volume is light and we may have seen the bearish action for the day. Middle finger negotiations going on between the US political factions have gone nowhere and appear to be just a side show the real issues facing the financial markets.
By noon investors were getting increasingly edgy wondering when the bottom will fall out.
Big Bird Avian Predator Drone May Be New Threat To Privacy
Big Bird may be watching you and that is not just paranoia. A new surveillance drone dressed up as an avian predator and with the same flight performance is being marketed to armies across the globe.
Market Commentary: Markets Open Lower, Test Yesterday's Lows
Opening Market Commentary For 10-09-2013
Premarkets were higher this morning, about level with yesterday's late afternoon's activity but giving no indication where Mr. Market was going to go.
Markets opened flat and in the green, but quickly slipped below yesterday's low point. Just as quickly, the averages inched back up to mixed and flat status beginning the familiar sea-saw motion.
By 10 am the market direction was trending downward on low to moderate volume with the small caps leading the way at -0.75%.
Nonfinancial Leverage NFCI Declined w/e 04 October 2013
The Nonfinancial leverage subindex of the National Financial Conditions Index increased slightly (less good) this week but still remains well inside of economic expansion territory. Econintersect focuses on non-financial tools to monitor the economy.
This index remains on a "less good" trend line, and is believed to be a good forward indicator a recession is coming. A value above zero is a recession warning. This week there was a moderate revision to the entire series.
Twenty-Eight Money Market Funds That Could Have Broken the Buck: New Data on Losses during the 2008 Crisis
by Marco Cipriani, Michael Holscher, Antoine Martin, and Patrick McCabe - Liberty Street Economics, Federal Reserve Bank of New York
During the financial crisis in 2008, just one money market fund (MMF) 'broke the buck'-that is, its share price dropped below one dollar. The Reserve Primary Fund announced on September 16 that the value of its shares had dropped to 97 cents. As we discussed in a previous post, Reserve's announcement helped spark a widespread, damaging run on MMFs that slowed only when the federal government intervened three days later to backstop the funds.
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U.S. Government Shutdown
Written by Frank Li
The U.S. government has been shut down, albeit partially, since October 1, 2013. Is it a good thing for America? No, not for the short term, as it has been causing some inconvenience to some people at least! But for the long term, it is likely to be a good thing. Here is why: The U.S. has been on a wrong track (e.g. out-of-control spending) for a long time. It's time to change the course, whatever it takes. No pain, no gain!
Ignore Headlines: Investors Flock into T-Bills
by Lee Adler, Wall Street Examiner
Mainstream media pundits have been crying in their beer over the past several days over investors running away from short term Treasury paper because of default fears. They cite the huge rise in the rates on T-bills, which exploded all the way up to six one hundredths of one percent on the 26 week bill. That's right .006 on the 6 month bill and .0035 on the 13 week bills. Those rates, by the way, have only been lower in 5 auctions this year. I mean, you can just see the mass panic in those rates. Run away! Run away!
Housing Smoke and Mirrors (21) - 'I'll Be Back'
Written by Adam Whitehead, KeySignals.com
The sector reports from July signal the point at which the rise in interest rates started to erode the strength of the housing market. The most attrition was evident in the mortgage lending business itself.
Read more >>
Investing.com: Technical Analysis 08 October 2013
Investing.com Technical Analysis (as of Tue, 08 October 2013 05:00pm EDT)
by Investing.com Staff, Investing.com
Below, technical overviews and analysis for key stock indices, commodities and
currency pairs, based on market activity at the close of the 08 October 2013 U.S. session. This information is a comprehensive summary derived from simple and exponential moving averages along with key technical indicators shown for specific time intervals.
It's Yellen
Econintersect: Federal Reserve Board Vice Chairman Janet Yellen will be nominated tomorrow to replace current Chairman Ben Bernanke at the end of January. President Obama is scheduled to make the formal announcement at 3 pm at the White House. The intention was announced in an email from the White House according to
Bloomberg and other sources. Econintersect does not receive emails from the White House and no announcement has been posted at
WhiteHouse.gov which bears a message that much of the federal government is shut down.
Infographic of the Day: 10 Things to Know About Torture
Humans can be very sick animals. When we want something, we will go to extreme measures to extract that information no matter how much pain the other person is feeling. Torture has been used for centuries by military leaders and enemies to get the information they need. This infographic looks at the numerous (and gruesome) ways people have extracted information from each other over the centuries.
France: Taxes and Investment
Written by Hilary Barnes
What's good for Ireland, to the annoyance of the French, is certainly not something that the French want for themselves, even if it might perhaps be good for France.
Ireland has a corporate income tax rate of 12.5%, which has proved to be a useful instrument for attracting foreign business investment to the emerald isle. To the French, it is just another example of the unfair competition with which France has to put up.
HIX: Data is Hard to Find
Econintersect: Obamacare public health insurance exchanges (HIXs) have been open for a week. After this period of time one might expect to have some sense of how the program is progressing. That does not seem to be the case. It does seem that the difficulties in actually just being accessible or operational is a continuing problem.
Prometheus: Stocks Break Below Short-term Support Levels
Mosler: QE is Bad for Banks
Econintersect: It is widely argued that QE (quantitative easing) is a bailout for banks and not for the broader economy. The QE process involves the purchase of Treasury Securities by the Federal Reserve. This involves the replacement of Treasuries on the banks' books with cash reserves at the Federal Reserve. Economist Warren Mosler argues that this is actually bad for banks, contrary to popular belief.
Facebook and Google Dominate Social Sign Ins
by Felix Richter, Statista.com
The reach of Facebook and Google in the online world stretches way beyond the companies' own services. Together, both companies account for 78 percent of social logins. Social logins enable web users to sign in on a third party website using an existing social media or email account.
