What Data Can We Trust?

Wednesday, April 25, 2012, 1:33 am, by charleshughsmith

Modern investing offers the promise that investors who "do their homework" and use data more intelligently than the herd can gain a valuable edge. But what if the underlying data available to the investing public is fundamentally flawed? 

The federal government agencies that issue headline data and the mainstream media that reprints the data without skeptical analysis would have us believe that these indicators -- the unemployment rate and the consumer price index (CPI), for example -- accurately reflect economic realities.

The other indicator that is implicitly or explicitly assumed to reflect the economy’s health is, of course, the stock market, generally represented by the S&P 500 index.

That the government indicators and the stock market are both suspect is now a given.

The chart below, one of many possible examples, proves this suspicion is well-founded. This is a chart of a broad measure of employment in the U.S. published by the U.S. Department of Labor, Bureau of Labor Statistics (BLS). As we can see, when 140 million people had jobs in 2009, the official unemployment rate was 7.3%.

Yet when 140 million people had jobs in early 2012, the unemployment rate was 8.3%. How can the rate change when the number of jobs remain constant? The reason is that the unemployment rate is based not just on the number of jobs but on the number of people who are ready, willing and able to work—the labor force. The unemployment rate is based on the labor force minus the number of employed equals the number of people counted as unemployed.  The government games the unemployment rate by keeping the labor force number artificially low. Despite the working-age population rising by 9.4 million people since 2008, the official labor force has been 154 million since 2008. Where did the government put all those millions new workers? In the “not in the labor force” category, which rose by roughly 8 million since early 2009. In other words, dropping millions of people from the labor force artificially lowers the unemployment rate. 

From Chris Martenson's Free Newsletter 

http://www.chrismartenson.com/blog/what-data-can-we-trust/74361?utm_source=newsletter_2012-04-28&utm_medium=email_newsletter&utm_content=node_title_74361&utm_campaign=weekly_newsletter_68

Life is just a Bowl of Cherries and Money, Power and Wall Street on Frontline

Life is just a bowl of cherries;


Don't make it serious;


Life's too mysterious.


You work, you save, you worry so,


But you can't take your dough when you go, go, go.


So keep repeating it's the berries;


The strongest oak must fall.


The sweet things in life


To you were just loaned,


So how can you lose what you've never owned?


Life is just a bowl of cherries,


So live and laugh at it all. 

Love and Peace from the Queenbee

Money Power and Wall Street Part 1

Watch Money, Power and Wall Street: Part One on PBS. See more from FRONTLINE.

What is Life?

When you think about it, language is very limited in many ways.  Imagine a child or your grandchild or a stranger from another country asking you questions so that they can understand how you perceive life on earth and how they can relate to it. This was an artist's rendition of The Tower of Babel.

Describe for them an emotion, a sense like smell, touch, taste or sound.

Describe the color red.

What is money? Why do we need it when we didn't need it before?

What is death or for that matter, what is life?

Where did we come from? How does the sun warm the earth?

What are so many people afraid?

Try to explain anything that is not quantifiable.

What is important and what is not?

How does a radio, TV or the internet receive its information? What is music?

What is time?

Why is it dark and other times light?

Why do I have to go to bed now?

Most of us are just trapped in patterns of behaviour. We rarely question our reality or belief systems. We are creatures of habit. Until one day when we realize it is over and we never really lived.

One last post for awhile

At first I wasn't going to post this as everyone has their own beliefs. However, it is my blog and nothing that I say is meant to be hurtful. Buddhism is not a religion per se, but a way of living life. In the Buddhist philosophy nothing is permanent. It is our attachment to the things and our cravings that cause suffering. The less attached you are, the less you suffer. Every day try your best to have compassion for others less fortunate than you and I. Most monks only own a bowl from which to eat and one robe. They are some of the happiest people you will ever meet. Shaza is lucky to have been near so many of them as of late.

I have always believed that life (as we perceive it) is merely an illusion. We are all one and that...

May you find peace and joy in all that you do. Try not to judge others or events or hold on to anything too tightly lest it will slip through your fingers. Be Here Now as tomorrow never comes.

Queen Bee's last song

Copying and pasting articles that you all have access to has become tiring for me with all my other obligations. It is time for the comment section to take over and make this a social site that everyone looks forward to reading going forward. I will still post from time to time, but the daily grind has become just that. I love all of comments and that is what makes the hive vibrant. I look forward to your comments. Jennifer aka Queenbee

I will still be involved daily and making comments. May your investments be profitable.

The whispering revolution

Ai Weiwei

April 17, 2012

OPINION

Beijing must understand it can't control the internet - freedom will eventually win.

CHAIRMAN Mao used to say: ''As communists we gain control with the power of the gun and maintain control with the power of the pen.'' You can see propaganda and the control of ideology as an authoritarian society's most important task. Before the internet, all the Chinese people could do was watch television or read the People's Daily. They would carefully read between the lines to see what had happened. Now it is very different. The papers try to talk about things, but even before they appear everyone has talked about it on the internet.

Openness and transparency are the only way to limit dark powers. Chinese citizens have never had the right to really express their opinions; the constitution says you can, but in the real world it is more dangerous. In the West, people think it's a right they're born with. In China, it's a right given by the government, and one that's not really practised.

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Even though we had reform and opening, ''opening'' didn't mean ''openness''; it meant opening the door to the West. It was more practical than ideological. At the beginning, nobody - even in the West - predicted that the internet would have so much to do with freedom of speech and that social media would develop in the way it has. They just understood it was a more efficient, fast and powerful means of communication.

But since we got the net and could write blogs, people have started to share ideas and a new sense of freedom has arisen. Of course, it varies from silly posts about what you've had for breakfast to serious discussions of the news, but, either way, people are learning how to exercise their rights. It is a unique, treasured moment. People have started to feel the breeze. The internet is a wild land with its own games, languages and gestures through which we are starting to share common feelings.

Read more: http://www.smh.com.au/opinion/politics/the-whispering-revolution-20120416-1x3nw.html#ixzz1sIrDF8BA

Wall Street Has Become `Huge Casino,' Cohan Says April 13 (Bloomberg) 

William Cohan, author of "Money and Power: How Goldman Sachs Came to Rule the World" and a Bloomberg View columnist, talks about the investment strategy of Achilles Macris, head of JPMorgan Chase & Co.'s chief investment office in Europe and Asia. Cohan speaks with Erik Schatzker and Stephanie Ruhle on Bloomberg Television's "InsideTrack." Bloomberg's Christine Harper also speaks. (Cohan is a Bloomberg View columnist. The opinions expressed are his own. Source: Bloomberg)

Japan Deepens Ties With Vietnam

There has definitely been a change in the distribution network the in ASEAN + 3 (China, Japan, S. Korea) regional economy after the Fukishima tragedy and the flooding in Thailand in 2011.  Many markets are in upheaval, like rice, where Thailand's exports will be down 30% this year allowing Vietnam to claim, at least for this year, the honor of largest exporter of rice in the world.

Concerning Japan specifically, from the people I have talked with, it is likely that much of what was lost around Fukishima will not be rebuilt anytime soon if ever.  So, the increases in demand for their trading partners from lost infrastructure is very likely to be permanent.  They will be shutting down the last of their nuclear reactors according to Prime Minister Noda, which means a tremendous energy shortage.  It will be difficult for them to shift their energy needs and maintain their standard of living.  But Japan still has tremendous wealth at its disposal so instead of rebuilding in Japan, they are looking to deploy their capital to better effect.

While the trade delegations from Japan that came through Ba Ria-Vung Tau province in December and January did not yield many signed contracts with Japanese SME's complaining about the lack of proper infrastructure, recent news has revealed that:

…in the first quarter of 2012 alone, Japanese capital flow to Vietnam reached 2.3 billion dollars, accounting for 89 percent of the total FDI capital in Vietnam, making Japan the biggest foreign investor among 26 countries which have FDI in Vietnam.

The biggest FDI projects all have been registered by Japanese, including the Tokyu Binh Duong urban area project, the tyre factory Bridgestone in Hai Phong, Oshima Shipbuilding Khanh Hoa, Sumitomo supporting industries development – a project developed by Shimizu Coro and N&G.

In 208 deals in 2011, Japan invested only $1.8 billion in Vietnam.  They are currently on pace to exceed that number by 455% in 2012.

http://www.alphavn.com/2012/04/13/japan-deepens-ties-with-vietnam/

Keep an eye on VNM ( Viet Nam etf) if massive stimulus comes out of China, Japan, EU and USA, Viet Nam could really benefit....Japan is heavily into Viet Nam as is China. Since January this etf is up 41%.  If it goes above the first line of key resistance on high volume, in the company of stimulus out of China and US, go for it! 

Stocks end worst week of the year

The sell-off Friday wiped out most of the gains registered a day earlier and fed the perception among many on Wall Street that share prices could be poised for a deeper decline.

By Walter Hamilton and E. Scott Reckard, Los Angeles Times

April 13, 2012, 7:17 p.m.

The stock market hit its first rough patch of 2012, closing out its worst week of the year with a sharp decline.

Professional investors struggled to determine whether the market's recent bout of weakness was nearing an end or signaling a larger slump. The indecision shaved nearly 137 points off the Dow Jones industrial average Friday, with much of the drop coming in the final hour of trading.

The sell-off wiped out most of the gains registered a day earlier and fed the perception among many on Wall Street that share prices could be poised for a deeper decline.

"I don't think the market is going to get destroyed, but it's still vulnerable to a setback of what could be 7% to 10% from the highs," said Rick Bensignor, chief market strategist at Merlin Securities.

Volatility, the market's chronic nemesis last year, is threatening to return. The Dow has swung by triple digits on four of the last five days and on five of the last seven days. Share prices fell all but once.

After getting off to their best start in 14 years in the first quarter, stocks are being hampered by a glass-half-empty mentality.

The economic optimism that reigned during the first quarter has been supplanted with a nagging sense that stock prices rose too high as soft U.S. employment, slowing growth in China and the latest flare-up in the European debt crisis pose significant threats.

"The market is ready for a little bit of a breather," said Scott Wren, senior equity strategist at Wells Fargo Advisors. "The market has gotten ahead of the fundamentals, at least for this early in the year."

The Dow skidded 136.99 points, or 1.1%, to 12,849.59. The index fell 1.6% on the week and is down 3.1% from its April 2 high.

Broader indexes are tracing similar arcs. The Standard & Poor's 500 sagged 17.31 points, or 1.3%, to 1,370.26. The Nasdaq composite fell 44.22 points, or 1.5%, to 3,011.33.

Wren and other market experts think the S&P could fall to 1,300 or a bit lower, meaning an additional decline of 5% to 7%.

Overseas markets, especially in Europe, have been hit harder. Spanish stocks fell to their lowest level in three years. Even in Germany, Europe's fiscally strongest country, share prices have dropped 8% in the last month.

http://www.latimes.com/business/la-fi-markets-20120414,0,971328.story

Chinese get tough on foreign projects

From the Sydney Morning Herald from Shaza

Peter Cai

April 13, 2012

CHINESE authorities are cracking down on foreign investment after a string of troubled projects that have run up tens of billions of dollars in losses, including two big resources deals in Australia.

In a decision that will have implications for Australia's booming resources sector, China's State Assets Supervision and Administration Commission has published new rules that will hold state-owned enterprises and their executives accountable for bad overseas investment decisions.

The commission's move follows two disastrous investments in Australia's resources sector.

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The largest Chinese investment project in Australia, the $7 billion CITIC Pacific Sino Iron project, conceived by the magnate Clive Palmer, has been dogged by huge cost blowouts and delay. The budget for the project has almost tripled from the initial $2.5 billion estimate.

A second big investment project, the $2 billion Sinosteel Midwest project, was shelved last year after a string of difficulties. The head of Sinosteel, Huang Tianwen, reportedly lost his job because of investments that had gone awry in Western Australia.

The commission has demanded more due diligence and risk management on all overseas investment deals by state-owned companies. No penalties have been announced but executives will be held ''accountable'' for foreign investments that result in significant losses for the state.

Since the start of China's ''going out'' initiative in 2003, which encouraged Chinese companies to invest overseas, Australia has been a favourite hunting ground for them.

The Labor government is believed to have approved more than $70 billion worth of investments from Chinese companies since it was elected in 2007.

That growing investment in Australia will be affected by the commission's new regulations.

''Failed Chinese investors are likely to point their fingers at Australia and there is the potential for the ill-judged investments to become part of the tone of the bilateral relationship,'' the former president of BHP Billiton China, Clinton Dines, said.

But he said there should be a long-term benefit. ''That the Chinese government is putting some filters and hurdles in place to ensure that more proper due diligence is done is a good thing.

Read more: http://www.smh.com.au/business/chinese-get-tough-on-foreign-projects-20120412-1wwob.html#ixzz1rsVjTtKK

North Korea Launches Rocket in Defiance of Warnings

North Korea defied international condemnation and launched a rocket today that may have failed minutes after liftoff, South Korea and Japan said.

“North Korea’s missile appears to have fallen after breaking up into multiple pieces,” South Korean Defense Ministry spokesman Kim Min Seok said at a televised briefing in Seoul. He said the rocket was fired at about 7:39 a.m. local time today and flew for “several minutes.” South Korean President Lee Myung Bak called an emergency Cabinet meeting. The benchmark Kospi index rose as much as 0.8 percent, while the won gained 0.7 percent.

http://www.bloomberg.com/news/2012-04-12/north-korea-launches-rocket-in-defiance-of-warnings.html

China’s Less-Than-Forecast 8.1% Growth May Signal Easing

China’s growth slowed more than forecast last quarter to the least in almost three years, prompting economists to predict a rebound as Premier Wen Jiabao loosens policy to counter weak domestic and European demand.

Gross domestic product in the world’s second-biggest economy expanded 8.1 percent from a year earlier after an 8.9 percent gain in the fourth quarter, the National Bureau of Statistics said in Beijing today.

An unexpected surge in March new yuan loans shows the ruling Communist Party is trying to avoid a deeper growth slide amid a once-a-decade power transfer to younger leaders. Pickups in industrial production and retail sales reported today may limit concerns that the world recovery is losing steam after job gains in the U.S. lagged forecasts and Europe’s sovereign-debt crisis threatened to worsen.

“The Chinese economy may be starting to bottom out and possibly will reaccelerate going forward,” said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd., which has almost $100 billion under management. “The pickup in lending in March and the slight gain in momentum for industrial production and retail sales suggest that growth might pick up in the months ahead.”

http://www.blogger.com/blogger.g?blogID=6138796855686546909#editor/target=post;postID=7941780708491548014

The financial psychopath next door

http://viewer.zmags.com/publication/9de78eea#/9de78eea/36

Guru Grades

Can experts, whether self-proclaimed or endorsed by others (publications), provide reliable stock market timing guidance? Do some experts clearly show better intuition about overall market direction than others?

We have accumulated reviews of the public U.S. stock market forecasts of various investing/trading experts for more than two years. With approximately 6,000 measurements for more than 60 gurus, including bulls and bears and technicians and fundamentalists, we have critical mass for: (1) assessing the forecasting acumen of the stock market gurus as a group; and, (2) ranking experts according to the accuracy of their past forecasts. This kind of forecasting ability is different from, but may be related to, stock picking expertise.

Note that the overall assessment of the stock market forecasting ability of experts in aggregate is far more reliable, based on sample size and duration, than the evaluations of individuals.

Note also that this study is not a test of whether the outputs of the experts are interesting, stimulating or useful in ways other than predicting the behavior of the overall U.S. stock market.

To interpret these grades correctly, please be sure to read our notes and the questions and answers section, both of which highlight our reasoning and address reader concerns.

http://www.cxoadvisory.com/gurus/

Sent to us by what me worry?

The Watson Institute presents Mark Blyth on Austerity from The Global Conversation on Vimeo.

What Does It Take to Be a Successful Trader Today?

By Daniel J. Zanger

Every year when preparing for the annual ChartPattern.com stock trading conference, I have a chance to look back on which trades worked best over the past year and what trends are emerging for the year ahead. Designed for serious traders, the conference gives attendees the opportunity to hear first-hand what I am seeing in markets, see my latest strategies and techniques as well as discover which ones have worked best. Many attendees are subscribers of The Zanger Report newsletter but the conference is open to all technical traders who are serious about making money in stocks and networking with successful traders.

This exercise gives me the luxury of looking at markets from 30,000 feet. And every year it provides some very useful ideas and insights that will help you refine and hone your trading skills whether you’re a day trader or a longer-term swing trader.

So what are the most important trading lessons we can take away from this exercise? Here are some of the factors required to become successful. This list is by no means complete but it’s a great place to start!

Know your chart patterns.

A stock chart can speak volumes to those who know how to interpret what they are saying. I’ve written about this before but it’s worth discussing again in greater detail.

Charts represent the sum total of what those invested in the stock are thinking, feeling and doing. But like any language, learning it can’t be done in a week or a month – it takes years of study. If you’re still reading this, congratulations! Your chances of succeeding in this business are zero if hard work scares you. And don’t worry the ChartPattern.com member’s website and chatrooms are great places to get lots of help and input but more about that later.

Stocks are my buddies so it’s important I fully understand how they are feeling and acting. One big mistake many market participants make is to rely primarily on corporate and economic fundamentals. Fundamentals have their place, but don’t expect them to help you get in and out of trades. Why? By the time you realize earnings and revenues are rising for example, you’ve usually missed the most powerful part of the move. And by the time you rely on fundamentals to get you out ahead of a major correction like we saw in 2007, you’re toast.

One of the most powerful chart patterns is the Head & Shoulders. It can warn of a stock getting ready to drop, as is the case with the Head & Shoulders or Head & Shoulders top pattern (Figure 1) or at market bottoms, in the case of the Inverted Head & Shoulders pattern (Figures 2 & 3). These patterns are better known as reversal patterns but they can also be continuation patterns to show you when the primary trend is getting ready to resume. The Inverted H&S can appear at a major low but it can also be a continuation pattern. We see two good examples of this pattern in the process of forming in Figures 2 & 3.

http://www.traderslog.com/successful-trader-today/

Gold rallies as nervousness takes hold

By Claudia Assis and Chris Oliver, MarketWatch

SAN FRANCISCO (MarketWatch) — Gold futures ended higher Monday, catching some safe-haven flows after a soft U.S. jobs report Friday and as traders were nervous ahead of a busy week for corporate earnings.

During his Easter Sunday address, Pope Benedict XVI backed a U.N. peace plan calling for an April 12 cease fire in Syria. (Video: Reuters/Photo: Getty Images.)

Gold for June delivery GCM2 +0.15% rose $13.80, or 0.9%, to end at $1,643.90 per ounce on the Comex division of the New York Mercantile Exchange.

Some support for gold was coming from investors who may have judged recent losses “overdone,” said Stephen Platt, analyst with Archer Financial Services in Chicago.

Other metals futures were mixed, with some of those more oriented toward industrial production reeling in the wake of the disappointing jobs report.

Silver for May delivery SIK2 +0.70% retreated 21 cents, or 0.7%, to $31.52 an ounce, adding to losses as the session progressed.

May copper HGK2 +1.02% declined 8 cents, or 2%, to $3.72 a pound.

Earnings season has its unofficial kickoff with Alcoa Inc. reporting after the close on Tuesday. The week also brings earnings from heavyweights such as Google Inc. and J.P. Morgan Chase & Co.

The much-expected jobs report on Good Friday showed the U.S. economy created only 120,000 jobs in March, well below market expectations.

Hiring failed to top 200,000 for the first time since November. The unemployment rate fell to its lowest level since January 2009, but only because people dropped out of the labor force.

http://www.marketwatch.com/story/gold-rises-on-policy-easing-expectations-2012-04-09

6 Mind-Blowing TED Talks About Psychology & Human Behavior

http://www.makeuseof.com/tag/6-mindblowing-ted-talks-psychology-human-behavior/

China and Japan agree to join forces in assisting IMF
Gareth Hutchens April 9, 2012

CHINA and Japan will work more closely together to help support the International Monetary Fund as it attempts to prevent the euro debt crisis dragging down the global economy.

But the Asian region's two biggest economies have yet to decide to provide the IMF with more money, even though the fund's member countries have been asked for up to $US500 billion ($485 billion) in additional lending resources to help shield the global economy from Europe's financial woes.

Finance ministers from Japan and China met in Tokyo at the weekend, before a meeting of the Group of 20 countries in Washington this month.
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Japan's Finance Minister, Jun Azumi, said the two countries had agreed to hold high-level talks over financial contributions to the IMF.

''Rather than make decisions independently, we've agreed to consult each other very closely,'' Mr Azumi said after meeting Xie Xuren, China's Finance Minister. ''Europe's crisis hasn't ended … this still needs careful monitoring.''

IMF members have been reluctant to pitch in until European nations do more to help themselves. The United States, which has the biggest financial stake in the IMF, has refused to increase its contribution.

http://www.smh.com.au/business/china-and-japan-agree-to-join-forces-in-assisting-imf-20120408-1wjfh.html

Found this on Jesse's if you have to time and bandwidth. Bill Moyer's Journal interviews Paul Volker. Gambling with your money.


   

RIM’s woes pose tough questions for government

BARRIE MCKENNA

OTTAWA— From Monday's Globe and Mail

Published Sunday, Apr. 08, 2012 7:00PM EDT

Last updated Sunday, Apr. 08, 2012 7:14PM EDT

With Jim Balsillie gone, a lot of people are wondering what the future holds for Research In Motion. (RIM-T12.62-0.08-0.63%)

Here are some logical follow-up questions: What would Canada’s economy look like without its technology flagship? And to what lengths should governments go to save the BlackBerry maker?

As recently as a year ago, the notion that cash-rich RIM might simply go “poof” seemed fantastical.

MORE RELATED TO THIS STORY

• The case for a trillion-dollar Apple
• RIM’s new security service will work for iPhones, Android devices
• Balsillie’s exit clears RIM's path for new strategy

Research In Motion  (RIM-T)

12.62     -0.08   -0.63%

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More bruising for BlackBerry

Not any more. The company has acknowledged that all options are on the table, including jointventures, licensing agreements and even an outright sale.

RIM’s importance to Canada shouldn’t be understated. The company is more than a homegrown global tech brand.

The firm has been a wealth-creation machine for Canada in the past decade. Clustered around RIM’s Waterloo, Ont., headquarters is one of the largest concentrations of math, science and engineering brain power in North America. In fiscal 2012, the company spent $1.6-billion onresearch and development – more than twice the budget of the National Research Council.

Prime Minister Stephen Harper mused in February that he would not look kindly on a hostile foreign takeover of a company such as RIM, in whose technology Ottawa is so heavily invested.

“RIM … is a strong Canadian company. It’s been an important part of the Canadian business landscape, and obviously we want to see that company succeed and continue to grow as a Canadian company,” Mr. Harper told Reuters.

It’s unclear if Mr. Harper’s comments are a subtle warning to potential acquirers, or a pledge not to let RIM fall, as Nortel did.

Finance Minister Jim Flaherty has shown less enthusiasm for intervention, pointing out that RIM shareholders are ultimately “masters of their own destiny.”

http://www.theglobeandmail.com/report-on-business/rims-woes-pose-tough-questions-for-government/article2395423/