Do Not Use The Stock Market To Claim An Economic Recovery

http://www.economicnoise.com/2013/06/03/do-not-use-the-stock-market-to-claim-an-economic-recovery/

The food stamp economic recovery – Food stamps increase by over 600,000 in last month of data. GDP at record levels yet US employment is 4 million below start of recession

http://www.mybudget360.com/food-stamp-economic-recovery-2012-21-million-food-stamp-adds-recession-employment-ratio/

UK economic recovery on the verge of collapse

The UK isn't faring any better either. 

http://www.independent.co.uk/news/business/news/uk-economic-recovery-on-the-verge-of-collapse-2292854.html

Spinning the Economy to a Recovery

http://usawatchdog.com/economy-recovering/

Former OMB Director Debunks The Economic Recovery Myth

Lori Ann LaRocco must-hear interview

This is a must-hear interview from Lori Ann LaRocco, which is surprisingly but now predictably gloomy about our chances for an economic recovery. It is predictable because it's becoming quite obvious our government's stimulus programs are failing to create jobs and stimulate the economy, something us naysayers have been forecasting all along, at the risk of sounding dogmatic. With the benefit of hindsight, we were right.

But why is Ms. LaRocco's candor surprising? She happens to be CNBC's Senior Producer for Squawk Box, so one should expect her to be a cheerleader pandering to our government's propaganda on an economic recovery. Yet, she shares her honest, behind-the-scenes interactions with CEO's pessimistic about the path our country has taken. And in case readers may forget, CEO's of companies do make employment decisions.

http://kingworldnews.com/kingworldnews/Broadcast/Entries/2010/9/9_Lori_Ann_LaRocco_files/Lori%20Ann%20LaRocco%209%3A9%3A2010.mp3

David Rosenberg refutes Erin Burnett on a "recovery"

http://www.zerohedge.com/article/david-rosenberg-refutes-erin-burnetts-misconceptions-about-recovery

Fed reverses exit plans

http://www.bloomberg.com/news/2010-08-11/fed-reverses-exit-plans-sets-floor-of-2-trillion-for-securities-holdings.html

The Federal Reserve reversed plans to exit from aggressive monetary stimulus and decided to keep its bond holdings level to support an economic recovery it described as weaker than anticipated.

Central bankers meeting yesterday adopted a $2.05 trillion floor for their securities portfolio, pivoting toward a quantitative target for monetary policy.

Further job losses may spur quantitative easing

This is what I have been predicting all along: another round of quantitative easing due to a non-existent economic recovery, despite incessant cheerleading by government economists to the contrary.

http://www.guardian.co.uk/business/2010/aug/06/us-jobs-fall-double-expected

The sharp drop in jobs, which follows news of slowing economic growth in the US, is likely to prompt discussions at the Federal Reserve over implementing more quantitative easing – a way of pumping money into the financial system. The central bank's Federal Open Market Committee (FOMC) meets on Tuesday and Fed chairman Ben Bernanke has already hinted to markets that its programme of asset purchases could be resumed.

"The big picture is unfortunately that the downtrend in US economic growth is once again obvious, and these figures will probably do little to deter the FOMC from ultimately implementing fresh stimulus in the near future," said Nick Beecroft at Saxo Bank.

"I'd expect them to reinstate a quantitative easing programme - buying either US Treasuries or mortgage-backed securities - either at next week's meeting, or more likely at the following meeting on 21 September."

Goldman Sachs is now in the same camp, predicting QE 2.0 will be announced in Tuesday's FOMC meeting. They also lowered their forecast for GDP growth for 2011 from 2.5% to 1.9%, and raised their estimate for the unemployment rate from 9.7% to 10%.

http://www.zerohedge.com/article/goldman-explains-imminent-launch-1-trillion-qe-2-muses-dreaded-double-d

Government creates--and destroys jobs

http://www.campaignforliberty.com/blog.php?view=10248

A year and a half later, unemployment still remains high, and the economic recovery is a myth.

http://www.knx1070.com/Fed--Full-Economic-Recovery-Could-Take-5-6-Years/7689645

The headline reads: "Fed: Full Economic Recovery Could Take 5-6 Years".

Gee, it took this long to finally admit it? Notice how financial TV (i.e. government mouthpiece) is spinning it as if they had called this all along. What about hope and change? What about green shoots? What about Keynesian stimulus? What about the V-shaped recovery? Oh, that's right: that's so five minutes ago.

http://www.knx1070.com/Fed--Full-Economic-Recovery-Could-Take-5-6-Years/7689645

Financial media and government economists are pathological liars. They missed the two biggest bubbles in human history: the internet bust and subprime mortgage crisis. At least the Fed is now making an attempt to restore its credibility, espousing fiscal discipline and responsibility. This call for austerity will last about 3 months.

It's an election year, after all, and states, counties and municipalities are going belly up. Don't be surprised if a financial crash is engineered, as justification for a gargantuan bailout in the trillions. Indeed, "We're the government; we're here to help."

The government expects us to have the memory of a gnat, so it would not surprise me if they will use another financial crisis to help us forget cries for fiscal and monetary discipline. This time it won't be banks that are too big to fail. It will be states too fat to starve. Wash, rinse, repeat...

BIS warns financial system vulnerabilities

Speaking of the BIS, their report warns of another impending financial system collapse if structural debt problems aren't treated.

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2010/6/28_Secretive_and_Powerful_BIS_Annual_Report_Released.html

“When the transatlantic financial crisis began nearly three years ago, policymakers responded with emergency room treatment and strong medicine: large doses of direct support to the financial system, low interest rates, vastly expanded central bank balance sheets and massive fiscal stimulus. But such powerful measures have strong side effects, and their dangers are beginning to become apparent.”

“Here are the worst problems arising now from the continued use of the extraordinary programmes: Direct support is delaying vital post-crisis adjustment and runs the risk of creating zombie financial and non-financial firms. Low interest rates at the centre of the global economy are discouraging needed reductions in leverage, thereby adding to the distortions in the financial system and creating problems elsewhere.”

“The sustained bloat in their balance sheets means that central banks still dominate some segments of financial markets, thereby distorting the pricing of some important bonds and loans, discouraging necessary market-making by private individuals and institutions, and increasing moral hazard by making it clear that there is a buyer of last resort for some instruments. And the fiscal stimulus is spawning high and growing government debt that, in a number of countries, is now clearly on an unsustainable path.”

“The financial disruptions in the first half of 2010 have brought the fragility of the industrial world’s financial system into stark relief: a shock of virtually any size risks a replay of the events we saw in late 2008 and early 2009. The sovereign debt crisis in Greece is clearly jeopardising Europe’s nascent recovery from the deep recession brought on by the earlier crisis.”

“Unlike then, however, we have hardly any room for manoeuvre. Policy rates are already at zero and central bank balance sheets are bloated. Although private sector debt has started to decline, public debt has taken its place, with sovereign fiscal positions already on an unsustainable path in a number of countries. In short, macro-economic policy is in a vastly worse position than it was three years ago, with little capacity to combat a new crisis – it will be difficult to find a source of further treatment should another emergency arise. Regaining the ability to react to economic and financial crises, by putting policies onto sustainable paths, is therefore a priority for macroeconomic policy.”

Bernanke's dilemma

Fed Chairman Ben Bernanke and Treasury Secretary Tim Geithner are walking a tightrope. Keep interest rates low and keep the printing presses humming along are stimulative to the economy and help exporters remain competitive. But it also induces asset bubbles and devalues the USDollar.

Raise interest rates and tighten monetary policy, and equities and bond markets will tank, roiling any chance of an economic recovery.

The 800-pound gorilla is the huge debt--and servicing that debt, which increases the deficit--which forces debt monetization again. And round and round we go...

http://www.nytimes.com/2009/11/23/business/23rates.html?_r=1

Why the economy still stinks

Despite proclamations of green shoots, a pending recovery (and a surging stock market), I am skeptical of any economic recovery. Here are a couple articles on two common themes: bank insolvency and lack of transparency of toxic assets, and under-reporting of unemployment:

http://www.bloomberg.com/apps/news?pid=20601039&sid=a5BsXz90CMso

http://money.cnn.com/2009/07/17/news/economy/unemployment_benefits/index.htm

Is Obama's Recovery Plan Working?

You decide.

Is it time to take profits on the reflation play?

We've participated in a strong rally in commodities, including energy, crops, and precious metals, achieving triple digit gains in some cases.

Actually, I've already lightened up on some major gold mining positions, and replaced them more speculative gold prospectors with impressive track records and land holdings. This should give me more upside on any advances in rallies in gold, but also gives me more exposure should gold correct. Short-term, this could be a mistake on my part, but long-term, it should pay off if they continue to find more gold deposits.

Is this rally in hard assets sustainable, given my bearish outlook on an economic recovery? The rally can be explained due to dollar weakness and poor participation in long-dated US Treasury bond auctions. In other words, we called it right. But has this rally gone too far too fast? Will I be able to pick up these same assets at a lower price in the future, once this phantom economic recovery is exposed? Personal and corporate debt is still strangling the US consumer, and government debt is at an all-time high with no end in sight. Can China's recent upsurge in demand replace continued demand destruction in Europe and the US?

I'll continue to play the binary-event driven biotechs, hoping for continued outsized gains. The overall market could become irrationally extended despite deteriorating fundamentals, climbing the "wall of worry". But I feel the need to lighten up just a little more to lock in profits. I may miss out on the absolute top, sacrificing another 10-20%, but at current levels, I believe there is more downside risk. I hope I'm wrong, but I can't act on hope alone.

Most people are terrible market timers, and I am one of them. Generally, I will miss the exact bottoms and tops of markets. But if I can participate in the majority of a big move, like the rally since March 2009, and if I can avoid the majority of a big decline like I did in 2008, I can live to see another day.

Investing is risky and you can lose most or all your investment. Please do your due diligence. Good luck to all.