Another Fabricated Jobs Report — Paul Craig Roberts

Update: Tyler Durden points out that income and payroll tax receipts do not support the job claims made for the 2014 economy: http://www.zerohedge.com/news/2014-12-07/something-stinks-inside-bls-jobs-data

Friday’s payroll jobs report is another government fairy tale or, to avoid polite euphemisms, another packet of lies just like the House of Representatives Resolution against Russia and every other statement that comes out of Washington.

Washington is averse to truth. Washington can only lie.

First let’s pretend that the 321,000 new jobs that the government claims the economy created in November are true, and let’s see where these jobs are.

Specialty trade contractors, which I think are home and office remodelers, accounted for 20,000 jobs. I doubt that people are putting money into houses and buildings that are worth less than the mortgage.

Manufacturing accounted for 28,000–a very high monthly figure for recent years, one that is unbelievable in view of the rise in the trade deficit and declines in consumer spending on furniture (-3.8%), major appliances (-8.3%), women’s apparel (-17.7%), and household textiles such as towels and sheets (-26.5%), and when US business investment consists of corporations repurchasing their own stocks.

The rest of the claimed jobs are in private domestic services, that is, they are third world jobs. Retail trade claims 50,200 and transportation and warehousing claims 16,700. These numbers are impossible to believe in view of the closings of middle class department stores and Black Friday and Cyber Monday sales flops.

The Rest Of The Story Here

The “Housing Recovery” Does Not Stand Up To Reality

December 5, 2014 InvestmentResearchDynamics.com

The homebuilders are rolling over here. This is daily 1-yr graph of the stock in my latest homebuilder short-sell report posted last night:

1

Despite the S&P ramping relentlessly higher by the Fed’s hand of intervention, the homebuilder stocks have exhausted themselves, as they are choking on quickly deteriorating fundamentals. This stock has already dropped 6% from its highest close last week, despite the fact that both the S&P 500 and the Dow are higher now than they were last week when this stock topped out. My 3-month short term target is for another 16% decline. My 2-year target: $5 or lower, with bankruptcy possible. This Company has 4x more debt NOW relative to the number of homes it sells than it had at the peak of the housing bubble. In fact OUTRIGHT, it’s debt level is higher than the amount of debt it had in 2005. You can access this report here: Short This Stock For Big Gains.

Here’s some actual “boots on the ground” market information from around the country which verifies that the housing market is starting to deteriorate very quickly (I sourced these first three quotes from The Housing Bubble Blog):

From the Washington Post: Only four cities or counties in the Washington region have fully rebuilt their property tax bases since the 2008 recession, a study from George Mason University’s Center for Regional Analysis says, raising questions about the wisdom of tying local government operating budgets to the real estate market. Property values have stagnated in most suburbs since 2005, said David Versel, the senior research associate who wrote the report.

From the Houston Chronicle (note: the collapse in the price of oil and the shale oil/fracking business will decimate Texas, Colorado, sections of California): For the first time in awhile, real estate observers say some apartments are waiving first month rents and offering other specials to attract new tenants. (On another note, I have noticed that there is a massive surge in apartment supply hitting the Denver market and big apartment buildings are now offering move-in incentives; I’m also seeing a surge homes for rent around the central Denver area).

From CNBC re: northern Virginia: A big jump in listings brought more potential buyers out to northern Virginia’s housing market this summer and fall. The traffic, however, did not translate into a similar jump in sales, and homes are now sitting on the market far longer than they did just one year ago.

Now, despite today’s Government fairy tale about the job market, here’s the reason that the housing market is going to collapse again: A Majority of Americans Make Less Than $20 Per Hour. A recent poll conducted by Trulia showed that nearly 60% of all prospective first-time homebuyers cited the inability to save enough for a down payment as the reason they could not buy a home. Interest rates could go to ZERO and that would still be the case.

The Government, the National Association of Realtors, the National Association of Homebuilders and the Census Bureau can feed us all the made up, statistically manipulated, annualized garbage data they want. BUT they can’t cover up the truth about the actual market conditions unless they shut off the media and close down the internet.

WORLD WAR III IS ALL THAT’S LEFT TO SAVE THE AMERICAN ECONOMY

05 Dec, 2014 by Dave Hodges

I despise the Federal Reserve and those who have run our economy into the ground. However, those of you who think that abolishing the Federal Reserve is the key to eliminating the oppression of the American people, are sadly mistaken. Right now, the only reason you have a job to go to, a roof over your head, and food on the table is because of the Federal Reserve. I have some really bad news, the people associated with “The end the Fed movement”, our survival depends on the Federal Reserve and the rest of the Western banking establishments to survive in the upcoming months. No, I have not sold out, but I would suggest reading on and thing about taking a “graduate” course in prepping because I am not sure the West can survive what is unfolding.

The Birth of the Petrodollar

Before explaining how imperiled our economy is, I have to start at the beginning for people who do not understand the significance of the Petrodollar. The Petrodollar is the baseline of our economy and it is in big trouble.

A novel system for monetary and exchange rates were established in 1944. The Bretton Woods Agreement was developed at the United Nations Monetary and Financial Conference held in Bretton Woods, New Hampshire, from July 1-22, 1944. This conference established the US dollar as the reserve currency of the world.

The Banksters (e.g. Rockefellers’) reveled in their new found fortune. As a result of the Bretton Woods Conference, all nations desiring to purchase Middle East oil had to first purchase dollars and use these dollars to complete the purchase of oil.

Nearly everyone inside of our country benefited from this system. Americans basically enjoyed a stable currency minus the inflation rates of about 5% per year which served as an informal tax that went into the Federal Reserve banksters’ pockets. Thus, the Petrodollar was born. If the Petrodollar was to ever be successfully undermined, our currency would sink faster than a submarine with screen doors because there is nothing backing up our money. Put on your life jackets because the ship is sinking fast. The BRICS, led by Russia and China, are growing in influence by leaps and bounds and they are months/years away from being able to effect a collapse of the United States economy.

Since 1944, America has become the most hated nation in the world as we have dominated every single economy on the face of the earth, until now!

The Tables Are Being Turned On the West

The haughtiness of the West as they impose sanctions on Russia over Ukraine is almost laughable. The sanctions are a boomerang in disguise and will come back at us to destroy the American economy which will lead to World War III.

1

At the heart of the American economy and the Petrodollar is energy and Russia and China just cemented an agreement where they do not need the dollar. The Russia –China US $400 billion energy deal, signed in May this year will by 2018 have some 38 billion cubic meters of gas flow through the so-called ‘Holy Grail’ pipeline from the largest gas producer, Russia, to the largest energy user, China. This deal is many things at once: It is, of course a symbolic step in the process of decoupling hydrocarbon trading from the dollar, as it foresees payments in local currencies, rubles and yuan. It sidesteps the Petrodollar for hydrocarbon trading. Over one-third of the planet just moved away from the dollar when this recent deal was cemented.

This one deal spells the end of dollar dominance on the planet. Much of the economic exchange between the two countries will be conducted in gold instead of the dollar.

The Rest Of The Story Here

Fed says ‘no inflation’ but middle class reality says otherwise

The middle class is feeling the squeeze, cutting spending on discretionary items and activities while costs on larger-ticket necessities have risen.

The Wall Street Journal analyzed consumer-spending data from the Bureau of Labor Statistics between 2007 and 2013, finding while incomes have remained flat, the cost of essentials such as housing and healthcare have increased. This translates to a 12% increase in inflation for middle-income households over this five-year period--a stark contrast to the Federal Reserve’s claims of low inflation.

Journalist Lizzie O’Leary, who is the host of Marketplace Weekend, discussed the economic challenges faced by the middle class with Yahoo Finance Editor in Chief Aaron Task. “The way the Fed measures inflation and the way that the average American experiences inflation are two very different things,” she says. “The Fed doesn’t count energy, they don’t count food, they don’t count a lot of the stuff where prices move around the most.”

According to the analysis, middle class spending on health care costs rose 24% from 2006-2013 rent increased 26% and education 23%. Another major budget blow—staying connected—home Internet costs soared 81% and cell phone plans rose 49%.

The Rest Of The Story Here

Five Facts About Who Is Really Behind the Food Stamp Program

TruthstreamMedia.com December 4th, 2014

More than one in seven people.

That’s how many people are on food stamps in America these days. More than one in seven people.

In fact, the number of recipients of federal food assistance rose a whopping 171% between 2000 and 2011 alone, to an all-time record of more than 47 million Americans across the country now on the food stamp dole.

That means more U.S. citizens are receiving food stamp benefits now than in the entire history of the food stamp program ever.

One-sixth of the country is now receiving food stamps and the number just continues to climb.

Most argue this increase simply has to do with the terrible recession and resultant unemployment; but the food stamp program, now known as the Supplemental Nutrition Assistance Program or SNAP, is yet another crony capitalist scheme (surprise, surprise).

Many blame the people who need help instead of pointing the finger at a system designed to get as many people on the dole as possible. The government and the corporations it represents literally advertise to get as many people on food stamps as they can and then keep them there as a captured market for Wall St. banks, mega food corporations that churn out a bunch of crap food, and mega box and grocery stores that sell all that crap.

Here are a few more crony facts most people might not realize about our nation’s food stamp program.

The Rest Of The Story here

Housing Fraud is Back – Real Estate Industry Intentionally Inflating Home Appraisals

Submitted by Mike Krieger via Liberty Blitzkrieg blog,

Almost 40% of appraisers surveyed from Sept. 15 through Nov. 7 reported experiencing pressure to inflate values, according to Allterra Group LLC, a for-profit appraiser-advocacy firm based in Salisbury, Md. That figure was 37% in the survey for the previous year.

“If you thought what was happening before was an embarrassment, wait until the second time around,” said Joan Trice, Allterra’s chief executive and founder of the Collateral Risk Network, which represents appraisers employed by lenders and other companies and has been meeting with regulators to discuss concerns about appraisers being pressured into inflating values.

– From the Wall Street Journal article: Dodgy Home Appraisals Make a Comeback
When in doubt, just make shit up.
That seems to be the mantra of the U.S. real estate industry. A place where home values must always rise no matter what. After all, there’s nothing better for an economy than pricing out average citizens from their means of shelter.

As the WSJ reports, inflated home appraisals have become such a concern that the Office of the Comptroller of the Currency is looking into it. Which means precisely nothing will be done to stop it. After all, it is official government policy to encourage risky loans to keep housing bubble 2.0 inflated. Recall: Mel Watt, Federal Housing Finance Agency Head, is Pushing Banks to Make Extremely Risky Home Loans.

The WSJ reports:

Home appraisers are inflating the values of some properties they assess, often at the behest of loan officers and real-estate agents, in what industry executives say is a return to practices seen before the financial crisis.

An estimated one in seven appraisals conducted from 2011 through early 2014 inflated home values by 20% or more, according to data provided to The Wall Street Journal by Digital Risk Analytics, a subsidiary of Digital Risk LLC. The mortgage-analysis and consulting firm based in Maitland, Fla., was hired by some of the 20 largest lenders to review their loan files.

The firm reviewed more than 200,000 mortgages, parsing the homes’ appraised values and other information, including the properties’ sizes and similar homes sold in the areas at the times. The review was conducted using the firm’s software and staff appraisers.

Bankers, appraisers and federal officials in interviews said inflated appraisals are becoming more widespread as the recovery in the housing market cools. While home prices are increasing generally, their appreciation is slowing, and sales have been weak despite low interest rates. The dollar amount of new mortgages issued this year is expected to be down 39% from last year, at about $1.12 trillion, according to the Mortgage Bankers Association.

That has put increasing pressure on loan officers, who depend on originating new mortgages for their income, as well as real-estate agents, who live on sales commissions. That in turn is raising the heat on appraisers, whose valuations can make or break a sale. Banks generally won’t agree to a mortgage if the purchase price or the refinancing amount is higher than the appraised value.

The Rest Of The Story Here

John Williams-America and Dollar in Trouble

John Williams of ShadowStats.com says, “We are still living in the throes of the panic of 2008. What the central banks did at that time, specifically the Fed and the Treasury, was to take actions to push all the issues into the future. They didn’t do anything to solve the basic problem. The banking system is still in trouble. It is far from solvent, far from normal. You don’t have regular bank lending. If you had regular bank lending, the economy would really be much stronger. It’s not.” Williams goes on to say, “People outside the United States know America is in trouble, and they know the dollar is in trouble. It’s not going to take much to trigger a reversal of the current circumstances. It could be an unusually weak economic statistic, and believe me, those are coming.”

Five complete lies about America’s new $18 trillion debt level

December 2, 2014 Simon Black Sovereignman.com

On October 22, 1981, the government of the United States of America accumulated an astounding $1 TRILLION in debt.

At that point, it had taken the country 74,984 days (more than 205 years) to accumulate its first trillion in debt.

It would take less than five years to accumulate its second trillion.

And as the US government just hit $18 trillion in debt on Friday afternoon, it has taken a measly 403 days to accumulate its most recent trillion.

There’s so much misinformation and propaganda about this; let’s examine some of the biggest lies out there about the US debt:

1) “They can get it under control.”

What a massive lie. Politicians have been saying for decades that they’re going to cut spending and get the debt under control.

FACT: The last time the US debt actually decreased from one fiscal year to the next was back in 1957 during the EISENHOWER administration.

FACT: For the last several years, the US government has been spending roughly 90% of its ENTIRE tax revenue just to pay for mandatory entitlement programs and interest on the debt.

This leaves almost nothing for practically everything else we think of as government.

2) “The debt doesn’t matter because we owe it to ourselves.”

This is probably the biggest lie of all. Two of the Social Security trust funds alone (OASI and DI) own $2.72 trillion of US debt.

The federal government owes this money to current and future beneficiaries of those trust funds, i.e. EVERY SINGLE US CITIZEN ALIVE.

I fail to see the silver lining here. How is it somehow ‘better’ if the government defaults on its citizens as opposed to, say, banks?

3) “They can always ‘selectively default’ on the debt”

Another lie. People think that the US government can pick and choose who it pays.

They could make a bing stink about China, for example, and then choose to default on the $2 trillion in debt that’s owed to the Chinese.

Nice try. But this would rock global financial markets and destroy whatever tiny shred of credibility the US still has.

Others have suggested that the government could selectively default on the Federal Reserve (which owns $2.46 trillion of US debt).

Again, possible. But given that the Fed (the issuer of the US dollar) would become immediately insolvent, the resulting currency crisis would be completely disastrous.

4) “It’s the NET debt that’s important”

Analysts often pay attention to a country’s “net debt” instead of its gross debt. If you have a million bucks in debt, and a million bucks in cash, then your ‘net debt’ is zero. It washes out.

Problem is, the US government doesn’t have any cash. The Treasury Department opened its business day on Friday morning with just $71.9 billion in cash, or just 0.39% of its total debt level.

Apple has more money than that.

5) “They can fix it by raising taxes”

No they can’t. Just look at the numbers. Since the end of World War II, US government tax revenue has consistently been roughly 17% of GDP.

They can raise tax rates, but it doesn’t move the needle in terms of revenue as a percentage of GDP.

In other words, the government’s ‘slice of the pie’ is pretty consistent.

You’d think with this obvious data that, rather than try to increase tax rates (ineffective), they’d do everything they can to help make a bigger pie.

Or better yet, just leave everyone the hell alone so we’re free to bake as much as we can.

But no. They have to regulate every aspect of people’s existence: How you are allowed to educate your children. What you can/cannot put in your body. How much interest you are entitled to receive on your savings.

All of this costs time, money, and efficiency. So do never-ending wars. The bombs. The drones. The airstrikes.

This isn’t about any single person or President. The problem is with the system itself.

History shows that every leading superpower from the past almost invariably fell to the same fate.

Great powers often feel that their wealth and success entitles them to spend recklessly and wage endless, arrogant wars. The Romans. The Ottoman Empire. The British.

History may not repeat but it certainly rhymes. And the lesson here is very clear: debt weakens a nation. It weakens a society.

Generations that will not even be born for decades will inherit these debts by complete accident of birth.

And the people in charge of the system have backed themselves into a corner where there is no way out other than to default– either on their creditors (creating a global financial crisis), the central bank (creating a currency crisis), or on the citizens themselves (creating an epic social crisis).

Bottom line: this is not a consequence-free environment. And while you can’t fix the debt problem, you can certainly reduce your own exposure to what happens next.