The Mess That Greenspan Made - Part 414

Rising Debt and the Rising Gold Price

Now, here are few data series that I’ve never seen on the same chart before – U.S. debt, the debt ceiling (just for fun, apparently), and the price of gold. This is from a presentation yesterday by Nick Barisheff, President & CEO of Bullion Management Group, at the 2012 Empire Club of Canada Investment Outlook Luncheon.

Perhaps today, gold is acting more like a hedge against debt than inflation…

Nick’s presentation “Why Rising Debt Will Lead to $10,000 Gold” can be viewed at YouTube here and is available for download here.

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About those 42,200 New Courier Jobs

Now, here’s a case where seasonal adjustments are badly trailing developments in the real world as the recent increase in online purchases around the holidays – and the resulting delivery of those goods – has, presumably, caused the hiring of couriers to spike along with other holiday-related activities in December.

Here’s what the Labor Department’s “Couriers and messengers” subcategory looks like before and after seasonal adjustments are applied to the data:

Seasonal adjustments are supposed to “smooth” out these regular trends, but, for this data series, they are failing badly. Unfortunately, this is not good news for the jobs data that will be reported a month from now because, as shown above for both  2010 and 2011, those outsized seasonally adjusted job gains for couriers in December suddenly turn into big job losses – 40,800 and 48,700, respectively – which should put a damper on the January data.

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The Labor Department reported that nonfarm payrolls in the U.S. increased by 200,000 in December, the biggest gain in three months and the fourth best gain for all of 2011, as the unemployment rate fell from 8.6 percent to 8.5 percent.

After holding steady at about 9 percent during most of 2011, the jobless rate has now declined by 0.6 percentage points in just the last three months as the number of unemployed persons has fallen from 13.9 million to 13.1 million. During that same time, the size of the labor force has decreased from 154.0 million to 153.9 million, reducing the participation rate from 64.1 percent to 64.0 percent.

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Friday Morning Links

MUST READS
Euro zone’s economy slumps at year-end – Reuters
Fitch cuts Hungary rating one notch to BB plus – MarketWatch
Banks in Europe Park Record Deposits at ECB – Bloomberg
MF Global Inquiry Turns to Its Primary Regulator – NY Times
Ponzi Planet: The Danger Debt Poses to the Western World – Spiegel
Cordray moves forward despite appointment challenges – Washington Post
Records Show Romney Campaign Bought And Paid For By Big Banks – CAA
Fed’s New Wordplay to Yield Negligible Results – Baum, Bloomberg
Fed Will Be Forced to Ease Again Soon: Morgan Stanley – CNBC
IRS audited 1 in 8 millionaires last year – CNN/Money
Subtle Fleecing of the U.S. Currency – Ounce of Silver
Renter Nation Rages On As New Reality – CNBC

MARKETS/INVESTING
Oil rises to $102 ahead of jobs report – AP
Gold Prices Gain Ahead of Jobs – The Street
Even the Best Bond Investors Face a Scary Future – WSJ
Bonds beat stocks! Dealing with the unexpected – USA Today
U.S. Stocks Funds Have Second-Worst Year – Bloomberg
What if the 2009 bull market is still alive? – MarketWatch
Trading oil on Iran: untangling rhetoric from reality – Reuters
Gartman Flip Flops Again, Now Sees Gold Bull Market – Zero Hedge
Are gold prices dropping for good? – CSM
Why has gold been down? – Stockhouse

ECONOMY/WORLD/HOUSING/BANKING
Need jobs? Call on government – LA Times
Procrastinating shoppers boost December sales – Washington Post
Apartment rents heading higher for 3rd year in a row – USA Today
Venezuela’s annual inflation at 27.6 percent – AP
Lifting consumption top priority for 2012 – China Daily
Japan buys 300 mln euros of EFSF bonds -MOF official – Reuters
Global finance: Save the City – Economist
Hong Konk Propert Market Tipped to Fall – ninemsn
MBS Market Roiled as Fed Report Fuels Speculation – Bloomberg
Bernanke’s Housing Solution: Rent Foreclosed Homes – HuffPost
Central banks: Crazy aunt on the loose – Economist
Fed Nears Adoption of Inflation Target – Bloomberg

 

North Americans On the Move

Atlas Van Lines provides this summary (hat tip to the WSJ economics blog) of where Americans moved last year (well, at least the ones who used their moving services) and it should come as no surprise that places like North Dakota and Texas saw big inflows.

The “rust belt” continues to see an exodus as do high tax states like New Jersey and New York, a reminder that people “voting with their feet” hasn’t gone out of style. Anyone have any idea what the attraction is for the mid-Atlantic states of Virginia, North Carolina, etc.? Those are some pretty large inflows.

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