Tag: unemployment

Ep. 568 – March Jobs Report
The Kapital News
The Kapital News
Ep. 568 - March Jobs Report
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The official unemployment rate now stands at 6.0 percent according to the Bureau of Labor Statistics. The jobs reports was released last Friday, which is the standard schedule being that it was the first Friday of the month. Employment rose by some 916,000 jobs. The bulk no doubt is more of a reflection of lockdowns and restrictions being lifted as opposed to new economic and business growth. In short, it is people being called back to work. This is still a good thing generally speaking, however, The Kapital News has some serious concerns as it relates to the true economic damage that has been done, much of which is still hanging in the balance, and the fiscal and monetary policies that have solved nothing, but have filled a void for the time being. Economic growth is not generated via the printing press, but rather through savings, capital formation, investment, and productivity gains. Printed money is not a substitute for real economic growth and activity. These policies are extremely expensive, reckless, and dangerous.

Nonetheless, some of the biggest gains came from the leisure and hospitality sector, which put on a gain of 280,000. This sector was one of the hardest hit due to the pandemic and subsequent lockdowns and restrictions. It is fair to reason that such gains were witnessed last month since such restrictions have been lifted in part or in their entirety. Most other sectors also saw job gains. It is important to note that many of the macro data points with respect to the employment picture, were little changed from the previous month. This signals that structural unemployment and underemployment remains throughout the economy. This can of course reverse course to the positive, but until we see these numbers improve significantly, then it is a hard sell to say that this is a solid jobs report. There is a long way to go and their exists major headwinds. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Jobs #Inflation #FoodPrices #Gold #Silver #Housing #Liberty #USA #Leadership #EndTheFed #bananarepublic #FireCongress #Protests

Ep. 567 – Stock Market Highs + Jobless Up
The Kapital News
The Kapital News
Ep. 567 - Stock Market Highs + Jobless Up
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Despite initial jobless claims going back up from last week’s figures, the S&P 500 closed at an all-time high, north of 4,000 points. This has been the common theme throughout 2020 and into 2021 and that is jobless claims continue to remain at levels above those seen during the depths of the GFC, but nevertheless, equity markets make new all-time highs. It truly is the tale of two economies.

Initial jobless claims for the week ending 27 March came in at 719,000. Last week’s figures were revised downward by 26,000 to now stand at 658,000. In aggregate, amongst all unemployment insurance programs, some 18.2 million Americans continue to file claims. This takes the de facto unemployment rate to 12.8 percent, which is more than double the official rate of 6.2 percent. The official jobs report for March will be released tomorrow by the BLS.

The Federal Reserve’s balance sheet currently stands at $7.69 trillion, which is a week-over-week decline of around $30 billion. However, the Fed remains committed to its policy of QE, and will continue to purchase at least $120 billion worth of Treasuries and mortgage-backed securities on a monthly basis. This will take the balance sheet to north of $8.5 trillion by year end, and if Congress should pass more spending and/or the economy or markets decline to a certain level, then the balance sheet could easily approach $10 trillion!

In attempt to mitigate the effects of a dollar doom-loop, something The Kapital News has been describing over the past year, the US Treasury is perhaps going to be sending $650 billion to the International Monetary Fund, IMF. The purpose would be to assist poor and middle-income countries with their debt burdens. Despite the mammoth figure of $650 billion, Treasury actually does not even have to go to Congress for approval! Talk about checks and balances. This is almost the same size as the Troubled Asset Relief Program, TARP, which was passed during the GFC to help stop the GFC! Now, this much American taxpayer money may be going out the door as early as August if the IMF and others approve. Developing and poorer nations are facing the perfect storm of economic, political, and social issues. Whether it be runaway inflation, supply chain disruptions, coups, protests, or riots, or government corruption taken to its limit, these countries are in dire straits. Their stress can easily turn into global stress. The officials at the Treasury, IMF, and other agencies understand this situation. And while it does not justify giving away US taxpayer money, that is likely going to be what happens. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Jobs #Debt #Inflation #FoodPrices #IMF #USA #Liberty #EndTheFed #bananarepublic #FireCongress #Leadership #Bailouts #Protests

Ep. 563 – Jobless Claims Remain Above GFC
The Kapital News
The Kapital News
Ep. 563 - Jobless Claims Remain Above GFC
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Despite being one full year into lockdowns and restrictions, initial jobless claims remains higher than even during the depths of the GFC. For the week ending 20 March, initial claims came in at 684,000, which happens to be the lowest reading since last year. Last week’s figure was revised upward by 11,000 to stand at 770,000. In aggregate, amongst all unemployment insurance programs, some 18.9 million Americans continue to file claims. This gives a de facto unemployment rate of 13.3 percent, which is more than double the official rate at 6.2 percent.

The Federal Reserve’s balance sheet hit another all-time high to now stand at $7.719 trillion. The Fed remains committed to its policy of QE, by purchasing $120 billion per month of US Treasuries and mortgage-backed-securities. This will likely take the balance sheet above $8.5 trillion by year end, which would be a 10x fold increase to the balance sheet since the GFC! Other monetary measures such as M1 and M2 also hit all-time highs. And lastly, the Suez Canal traffic jam continues into the weekend. Some estimates state that this blockage is costing the global economy $400 million per hour! A staggering figure no doubt and highlights the vulnerabilities that exist within some of these trading routes and the sizes of some of these vessels. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Jobs #SuezCanal #FoodPrices #Protests #Inflation #Leadership #USA #EndTheFed #bananarepublic #FireCongress #Taxes #Gold #Silver #Liberty

Ep. 558 – Market Losses + Job Losses
The Kapital News
The Kapital News
Ep. 558 - Market Losses + Job Losses
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One day after the Federal Reserve gave the markets a pot of gold, it appears that it was just as quickly taken away. The major US indexes all closed in the red, with the tech heavy Nasdaq leading the way. This is also on the continuation of rising yields, with a focus on the US 10 year note, which hit levels above 1.7 percent during the trading session. With equity prices at or near all-time high valuations, rising yields and interest rates could pull the rug out from under this massive bubble. Recent history suggests that it can happen, as we witnessed such an episode in Q4 of 2018. This is why so much attention is being paid to rising global bond yields, and the rhetoric and actions of central bankers are being closely monitored. This in and of itself indicates how centrally planned the financial markets and economy have been – as the world, and trillions of dollars of financial assets await the words of only a handful of people. This is dangerous and will end in destruction.

Initial jobless claims for the week ending 13 March were 770,000, which remains over 100k higher than the figures we witnessed during the depths of the GFC. And this has been the case for one full year! The numbers from the prior week were revised upward by 13k and now stand at 725,000. In aggregate, there still remains 18.2 million Americans collecting some form of unemployment insurance. This gives us a de facto unemployment rate of 13 percent as opposed to the official rate at 6.2 per cent. And lastly, the Fed’s balance sheet has hit a new all-time high and now stands at $7.69 trillion. New highs are to be expected on a near weekly basis as the Fed remains committed to purchasing $120 billion per month of US Treasuries and mortgage-backed-securities. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Jobs #Inflation #FoodPrices #Protests #USA #Liberty #Leadership #Gold #Silver #EndTheFed #bananarepublic #FireCongress

Ep. 557 – Fed Gives Markets A Pot Of Gold
The Kapital News
The Kapital News
Ep. 557 - Fed Gives Markets A Pot Of Gold
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The knee-jerk reaction to the conclusion of the press conference by Federal Reserve Chair, Jay Powell, was positive for the equity markets, as they closed in the green after trading in the red for much of the day. So for the time being, a pot of gold was given to the markets. Now one day does not make a trend and this could easily reverse. However, when the Fed is seemingly committed to keeping interest rates low until at least 2023 and probably longer if they can, they are sending conflicting signals. On the one hand, they want to note how resilient the economy is and how it is likely to grow at a solid rate this year; and yet on the other hand, despite record high equity and real estate markets, an economy they claim is resilient and growing, still somehow needs the Fed to keep interest rates at record lows for the next few years at least?! Something does not add up. This is no surprise, as the Fed is always talking out of both sides of its mouth. They are also well aware that markets nor the economy like higher interest rates and yields on notes and bonds. Recall what occurred during Q4 of 2018 as the Fed attempted to reduce their balance sheet and raise the Federal Funds Rate. All it took was a Funds Rate of 2.4 percent and a 10-year Treasury note slightly above 3 percent to bring equity markets down 20 percent. Now, with the economy weaker, and trillions of dollars more in debt, even lower rates and yields will prick this bubble. However, such increases are exactly what is needed to help rid the markets of malinvestments and zombie corporations. There is no easy way out of this quagmire.

Since the GFC and the implementation of QE, the global economy has been living through the largest economic experiment ever conducted and it also happens to be the biggest wealth transfer in human history as well. Policymakers and central bankers are aware of the fragility in the system. This is evidenced by their actions of attempting to keep interest rates low and to put downward pressure on yields, should they begin to rise. They know the patient, the economy, is weak. But they cannot state this obvious truth because it is they who would be to blame for the mismanagement of the economy and financial markets. So instead of leadership and accountability, we shall have cowardice and more of the same implementation of one asinine policy after the next. How will this end – in blood and tears. When will this end is up for debate. But if yields and interest rates continue to climb higher, and one nation after the next continues to protest and riot because of the now brutal intersection of economic, political, and societal problems, then the end of this economic charade may be fast approaching. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Inflation #Markets #EndTheFed #bananarepublic #FoodPrices #FireCongress #USA #Liberty #Leadership #Gold #Silver #Bonds #Debt #Commodities #Protests

Ep. 556 – Stagflation + Social Unrest
The Kapital News
The Kapital News
Ep. 556 - Stagflation + Social Unrest
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As we discussed global food prices hitting a six-year high during yesterday’s podcast, it proved good timing as a couple news articles were published today highlighting this situation in Nigeria and Lebanon. Both of these countries have been discussed at length for a while on the podcast, and these articles serve as further evidence as to what we have been monitoring.

It is a part of the larger narrative that The Kapital News is attempting to weave. One that links together economics, politics, and society. In this instance, we are analyzing how past and current policies are leading to social unrest, political instability, and economic weakness. Highlighting the protests and riots that were sweeping the globe during 2019, The Kapital News stressed the importance of paying attention to these events, analyzing their causes, and warning that such events would likely take place in developed markets, and even the United States. In time, we were proven correct. Now, with the pandemic seemingly making its way to the rear-view mirror, and no sound solutions being implemented during 2020, has caused many people around the world to once again take to the streets against their governments. This will be a common theme throughout 2021 and beyond until there are true structural changes.

Some countries may be able to traverse these rough waters without much chaos or violence. However, such countries will likely prove the exception and not the rule. This means that a lot of geopolitical risks have not been fully discounted into the markets, which are trading at or near all-time record high valuations. The pandemic has already caused severe supply chain disruptions that will likely continue throughout this year and into the next. However, should more countries take to the streets, then this will put further pressure on global supply chains and result in higher prices for major commodities, which will further strain the economic situation. This will be a vicious cycle until the system has been exhausted, which will leave millions if not billions of people negatively impacted. The globe is awash in trillions of dollars of new debt and with little to show for it. As inflationary effects start to make their way into real goods, these problems will no longer be able to be avoided. The monetary cat-and-mouse game will be over and market forces will take charge and lead the correction. There is no easy solution to what plagues us and these market forces will be brutal – even though they are what is needed.

Other items discussed today were economic data releases for US retail sales and industrial production. Also, the daily market performance wrap-up and a brief mention of the Federal Reserve concluding their FOMC policy meeting tomorrow. Global markets will be anxiously awaiting to hear what Chairman Jay Powell has to say – because we are a centrally controlled global economy. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Inflation #Stagflation #Debt #Markets #Jobs #Protests #USA #Liberty #Gold #Silver #Revolution #EndTheFed #bananarepublic #FireCongress #Bonds #FoodPrices

Ep. 553 – Markets Rally, $1.9T Signed, & Jobless Up
The Kapital News
The Kapital News
Ep. 553 - Markets Rally, $1.9T Signed, & Jobless Up
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The $1.9 trillion spending bill was signed today by President Biden, even though it was expected to be signed on Friday. The White House claims that checks/direct deposits may begin to go out as early as this weekend. Meanwhile on Wall Street, the major indexes made all-time highs, apparently happy to see another $2 trillion that we do not have being borrowed, printed, and thrown into the system. However, this sort rally of calls into question the recent narrative of investors and traders rotating out of tech names and growth stocks and into value plays, because tech stocks rallied big during the trading session. Again, we note how this is one of the shortest rotations ever. Of course we also argue that this is and was a bogus narrative to begin with. The real narrative is all about liquidity. So long as this relationship remains positive, meaning more liquidity equals higher equity prices, then this will continue. However, nothing lasts forever and once this relationship breaks, and it will, it will be utterly devastating.

In other news, the initial jobless claims report was released today, and another 712,000 Americans filed an initial claim for the week ending 6 March. The prior week’s figure was revised higher by 9,000 to now stand at 754,000. These numbers still remain well above the numbers seen during the GFC, which saw 650,000 for a couple of weeks. As we are now in the second week of March, this means we have been experiencing initial jobless claims worse than the depths of the GFC for one full year! All persons claiming some form of unemployment insurance for the week ending 20 February, stands at 20.1 million. This represents a week-over-week increase of nearly 2.1 million and gives us a de facto unemployment rate of 14 percent. This is more than double the official unemployment rate at 6.2 percent and 40 percent higher than what the Federal Reserve claims is the real unemployment rate, which is closer to 10 percent. Any way you want to look at it, this is not a good picture. All of this structural unemployment and underemployment is occurring while the country spends and has spent several trillions of dollars. So it begs the question, where is all the money going? Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Jobs #Debt #Spending #USA #Liberty #Inflation #Gold #Silver #Commodities #Oil #Leadership #EndTheFed #bananarepublic #FireCongress

Ep. 552 – Inflation for February
The Kapital News
The Kapital News
Ep. 552 - Inflation for February
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The Bureau of Labor Statistics, BLS, released their consumer price index summary for the month of February this morning. In today’s podcast we take the time to read through some of the material. It is not so much the official numbers that were reported that we are focused on, but rather using this report as a benchmark. The month of February takes us to around the one year anniversary of lockdowns and restrictions. This also means that this is near the one year anniversary of the Nobody CARES Act, and several months into other spending measures that were passed last year. It also designates the last full month prior to the passage of the $1.9 trillion spending bill that made its way through Congress earlier this afternoon. The bill is expected to be signed by President Biden on Friday. However, the President is supposed to give remarks tomorrow on the next phase of the pandemic recovery. The Kapital News has been saying for months that these spending measures are just getting started. Nonetheless, the February inflation report is discussed today so we can use this report to perhaps provide us with some context and perspective as we make our way through 2021 and into 2022. All of this spending, borrowing, and printing is inflationary by definition. The follow through questions to ask is where will these inflationary pressures be experienced, do what degree, and its duration. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Inflation #Debt #USA #Liberty #EndTheFed #bananarepublic #FireCongress #Gold #Silver #Commodities #Oil #Protests #Leadership

Ep. 551 – Stock Market Rotation
The Kapital News
The Kapital News
Ep. 551 - Stock Market Rotation
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All the recent talk in the financial media has been about the rotation out of growth and tech stocks into value stocks. While this narrative may have worked yesterday as the Nasdaq sold off and the DJIA gained, this story did a complete 180 as the Nasdaq and big tech names rallied today. That is quite a short rotation! Even Tesla (TSLA) rallied about 20 percent today alone! This happened off of no major or minor news event, and this type of movement is more akin to a penny stock as opposed to one of the largest corporations in the world by market cap. Of course this is all a bunch of nonsense at the end of the day. It is not the narrative that really matters, but rather how much liquidity is being thrown into the system and whether or not the markets continue to buy it and grind higher.

This is why The Kapital News has been stressing the importance by policy makers and media outlets to promote various narratives, in the hopes that it will distract investors from the underlying economy, reckless policy decisions, and cause them to bid up equity, bond, and real estate prices. So far, this has been working, which is why they continue to jump from one narrative to the next. However, story time can only last for so long. And as we have been witnessing in recent weeks, global bond markets may be waking up from their years of central bank manipulation, as yields begin to rise. Even more recently would be Chinese authorities entering into their equity markets in order to bid prices higher, but failing to do so. It is crucial to understand that while central governments and central banks are powerful institutions, they are not bigger than nor more powerful than the markets. The day will come, when market forces overwhelm central planning policies, and it will not end well. Some of the signs as to when the markets have or are about to hit levels of exhaustion, are when yields rise, and financial asset prices fall, despite the best efforts of policymakers. If current events are any indicator, then we may be nearing these limitations. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Stocks #Markets #Debt #Jobs #EndTheFed #Liberty #USA #bananarepublic #FireCongress #Bonds #Inflation #Gold #Silver #Commodities

Ep. 549 – Markets Overnight
The Kapital News
The Kapital News
Ep. 549 - Markets Overnight
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A focus on the overnight trading session on Sunday evening as markets around the globe begin to open. What is of particular interest, is the price increase in WTI and Brent crude oil. Where WTI is trading at over $67 per barrel, levels not seen since 2018, and Brent is trading near $71 per barrel, levels not seen since 2019. Of course, the global economy was quite different only 18-24 months ago. There was no pandemic and there were greater numbers of people employed globally. Now, we are living in a pandemic world with lockdowns, restrictions, and millions unemployed. It would make sense in an environment of full or near full employment to see energy prices increasing. However, with so many people still without work, it becomes a little more of a head-scratcher. That is, when analyzing the energy market from a demand perspective. However, if looking through the lens of inflation and inflationary pressures, then it makes complete sense to see prices rising across the commodity spectrum – from energy, to industrial metals, to agricultural goods.

You see, there is no free lunch and there are consequences to printing trillions of dollars, euros, yen, yuan, et cetera globally. Now, once economies begin to re-open and restrictions are lifted, there is likely going to be a rush of people who want to go out and attempt to live as they were prior to the pandemic. This is understandable, yet this will contribute to the price increases, as inflationary pressures are met with demand for goods and services. And on the other side of the equation is supply. There remains supply chain disruptions, geopolitical risks, and production levels of OPEC+ that will likely contribute to energy prices remaining at elevated levels for the foreseeable future. This will squeeze corporate profit margins for small, mid, and large firms, and also squeeze the consumers’ balance sheet as well due to higher prices. As we stated last year, free was never so expensive! And we are about to find that out the hard way. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Oil #Inflation #Gold #Silver #USA #Liberty #EndTheFed #bananarepublic #FireCongress #Leadership