Police Chokehold Ends in Death: Two Videos, Which One is Right?

Here is a pair of videos on the death of Eric Garner via police chokehold.

The first video is by comedian Jon Stewart. The Second is an interview of Senator Rand Paul on Fox News.

Please play them both.

Jon Stewart Tears Into Eric Garner Reactions



Link if video does not play: Jon Stewart Tears Into Eric Garner Reactions

Eric Garner 'Didn't Need to Die'



Link if video does not play: Eric Garner 'Didn't Need to Die'

My Take

Both videos come to the same conclusion: Eric Garner 'Didn't Need to Die'. I think we can all agree on that.

And we certainly should agree that Stewart is correct in that something is truly messed up with the grand jury process.

The grand jury problem is easy to describe:

Prosecutors are in bed with the police. The grand jury is fed info the prosecutor wants the jury to hear. If the prosecutor does not want to go after after a police officer, it will not happen. But, if a prosecutor really wants to go after someone, rest assured the charges will be trumped up.

It's that simple. So on that point I side 100% with Jon Stewart.

Yet, Stewart clearly took a couple of clips of Rand Paul totally out of context to make his point. That's something he should not have done.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

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Gold Drain at the New York Fed: Where's It Going?

Nick at Sharelynx Gold, also known as Gold Charts "R" Us emailed an interesting chart last week showing gold drain at the New York Fed.



Earmarked gold dropped 42 tonnes for the month of October as foreign countries repatriate their gold home.

Here's a link to Earmarked Gold with a second chart that shows all Fed holdings.

Gold Charts "R" Us has 1,000's of pages and over 10,000 charts on a subscription basis, but you can check out the site for free until December 14. Click on the first link at the top for a look.

Where's the Gold Going?

This was the largest monthly drawdown in 13 years and the largest series of drawdowns since 2007 (drawdowns in red on above chart).

So, where's the gold going? Three answers:

Germany

Koos Jansen at BullionStar reports German Gold Repatriation Accelerating.

That article is interesting because it takes to task extremely sloppy Bloomberg reporting regarding German golf repatriation.

Netherlands

On November 21, Jansen reported Netherlands Has Repatriated 122.5t Gold From US.

The Dutch central bank, De Nederlandsche Bank (DNB), has repatriated in utmost secret 122.5 tonnes of gold from the Federal Reserve Bank of New York (FRBNY) to its vaults in Amsterdam, The Netherlands, according to a press release from DNB published today (November 21).

DNB states it has changed allocation policy from 11 % in Amsterdam, 51 % at the FRBNY, 20 % in Canada and 18 % at the Bank Of England (BOE); to 31 % in Amsterdam, 31 % at the FRBNY, 20 % in Canada and 18 % at the BOE. According to the World Gold Council’s latest data DNB has 612.5 tonnes in official gold reserves.



Belgium

Yesterday, Jansen reported Belgium Investigating To Repatriate All Gold Reserves.

Countries want their gold back. Who can blame them?

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

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Global Oil Consumption Report: What Countries Have Increased or Decreased Oil Usage Since 2009?

Reader David Epperson sent in some interesting charts on global oil usage that he produced from U.S. Energy Information Administration (EIA) data. The data is through the end of 2013.

David writes ...

Hello Mish,

I was curious how much oil consumption had declined over the last few years, so I went to the EIA web site, downloaded the consumption data and produced the following charts.

The data represents the percentage change in oil consumption from 2009 to 2013, the latest year non-OECD data were available.  This is an absolute percentage change, and not an annualized change.  For instance, oil consumption in Spain was roughly 20% lower in 2013 than in 2009.  This was about the same rate of decline seen in war-wracked Syria.  Greece was down even more, close to 30%. 

In order to make the data labels readable, I’ve had to separate the charts into three.  One shows countries in the 1 million to 20 million b/d group.  The next shows the 1 million – 4 million club (all large countries excluding the US, China and Japan), and the next shows the 100,000 to 1 million b/d club.

I’ve excluded the 141 countries in the EIA database whose consumption was less than 100,000 b/d, since these only account for about 3.5% of total global demand.

The sum for the entire world was a 6.5% increase from 2009-13.

Best regards,
David

Large Users: 1-20 Million Barrels Per Day



click on any chart for sharper image

Medium Users: 1-4 Million Barrels Per Day (Above Minus US, China, Japan)



Small Users: 100,00 to 1 Million Barrels Per Day



Observations

• Usage in the US is up only 1% since 2009 
• Usage in most European countries is down since 2009 (Germany, UK, Spain, Italy, France, Finland, Sweden, Denmark, Portugal, Czech Republic, Ireland, Hungary, Netherlands, Poland)
• China, Japan, India, Russia, Brazil, Saudi Arabia are the largest countries where oil usage is expanding
• From a Peak Oil aspect China and Japan are the most troubling

Total Petroleum Consumption (Thousand Barrels Per Day)

Country	2009	2010	2011	2012	2013	% ∆ 09-13	Growth 09-13	% Growth
China	8,539.73	9,330.18	9,504.05	9,874.71	10,116.64	18.5%	1,576.91	28.5%
Saudi Arabia	2,194.54	2,371.38	2,760.91	2,861.00	2,925.00	33.3%	730.46	13.2%
Brazil	2,481.45	2,621.78	2,886.71	2,997.00	3,097.00	24.8%	615.55	11.1%
India	3,112.74	3,255.39	3,280.98	3,450.00	3,509.00	12.7%	396.26	7.2%
Russia	2,950.43	2,992.09	3,115.03	3,195.47	3,320.00	12.5%	369.57	6.7%
Indonesia	1,405.89	1,465.50	1,571.30	1,610.00	1,660.00	18.1%	254.11	4.6%
Canada	2,184.18	2,283.35	2,310.12	2,350.69	2,424.35	11.0%	240.17	4.3%
United States	18,771.40	19,180.13	18,882.07	18,490.21	18,961.13	1.0%	189.73	3.4%
Argentina	588.62	620.26	729.10	737.00	758.00	28.8%	169.38	3.1%
Japan	4,362.79	4,429.24	4,442.45	4,694.76	4,530.82	3.9%	168.03	3.0%

BRICs and Saudi Arabia

Global oil consumption is up 6.5% from 2009-13. China alone accounts for 28.5% of that growth.

The top 5 global oil-growth contributors (China, Saudi Arabia, Brazil, India, and Russia) account for 66.7% of global oil usage growth since 2009.

BRIC (Brazil, Russia, India, and China) GDPs, especially China and India are highly unlikely to grow at projected rates, especially if global oil production does not keep up.

Japan is also on a dangerous path. Abenomics would look far worse were it not for declining energy prices.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

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Nonfarm Payrolls +321K; Unemployment 5.8%; Employed +4,000 (Household Survey), Unemployment +115,000

Initial Reaction

The payroll survey shows a net gain of 321,000 jobs vs. a Bloomberg consensus expectation of 230,000 jobs. September was revised up from 256,000 to 271,000. October was revised up from 214,000 to 243,000.

The unemployment rate was steady although employment only rose by 4,000 in the household survey. Unemployment actually rose by 115,000. Swings in household survey employment and the labor force have been wild lately.

Once again we are in a situation where the establishment survey and the household survey are at odds. Over time these fluctuations tend to smooth out. The question, as always, is "in which direction".

BLS Jobs Statistics at a Glance

• Nonfarm Payroll: +321,000 - Establishment Survey
• Employment: +4,000 - Household Survey
• Unemployment: +115,000 - Household Survey
• Involuntary Part-Time Work: -177,000 - Household Survey
• Voluntary Part-Time Work: +235,000 - Household Survey
• Baseline Unemployment Rate: +0.0 at 5.8% - Household Survey
• U-6 unemployment: -0.1 to 11.4% - Household Survey
• Civilian Non-institutional Population: +187,000
• Civilian Labor Force: +119,000 - Household Survey
• Not in Labor Force: +69,000 - Household Survey
• Participation Rate: +0.0 at 62.8 - Household Survey

November 2014 Employment Report

Please consider the Bureau of Labor Statistics (BLS) November 2014 Employment Report.

Total nonfarm payroll employment increased by 321,000 in November, and the unemployment rate was unchanged at 5.8 percent, the U.S. Bureau of Labor Statistics reported today. Job gains were widespread, led by growth in professional and business services, retail trade, health care, and manufacturing.

Click on Any Chart in this Report to See a Sharper Image

Unemployment Rate - Seasonally Adjusted



Nonfarm Employment January 2011 - November 2014



Nonfarm Employment Change from Previous Month by Job Type



Hours and Wages

Average weekly hours of all private employees rose by 0.1 hours to 34.6 hours. For three consecutive months I said the exact same thing. Twice in a row, a correction now put the previous month at 34.5 hours. Average weekly hours of all private service-providing employees was flat at 33.4 hours.

Average hourly earnings of production and non-supervisory private workers rose $0.04 to $20.74. Average hourly earnings of production and non-supervisory private service-providing employees also rose $0.04 to $20.53.

For discussion of income distribution, please see What's "Really" Behind Gross Inequalities In Income Distribution?

Birth Death Model

Starting January 2014, I dropped the Birth/Death Model charts from this report. For those who follow the numbers, I retain this caution: Do not subtract the reported Birth-Death number from the reported headline number. That approach is statistically invalid. Should anything interesting arise in the Birth/Death numbers, I will add the charts back.

Table 15 BLS Alternate Measures of Unemployment



click on chart for sharper image

Table A-15 is where one can find a better approximation of what the unemployment rate really is.

Notice I said "better" approximation not to be confused with "good" approximation.

The official unemployment rate is 5.8%. However, if you start counting all the people who want a job but gave up, all the people with part-time jobs that want a full-time job, all the people who dropped off the unemployment rolls because their unemployment benefits ran out, etc., you get a closer picture of what the unemployment rate is. That number is in the last row labeled U-6.

U-6 is much higher at 11.4%. Both numbers would be way higher still, were it not for millions dropping out of the labor force over the past few years.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

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Roubini Sees "Mother of All Asset Bubbles", But Claims Bubble Will Not Burst Until 2016

How big can the current asset bubble get? Stocks, bonds (especially junk bonds), and equities are all in huge bubbles.

I know full well that calling the end is problematic. Economist Nouriel Roubini thinks he knows.

Roubini says we are in the "mother of all asset bubbles" but it's going to get even bigger, not popping until 2016.



Link if above video does not play: Roubini: We're in an asset bubble and it won't pop until 2016

We’re currently in the mid-late stretch of this boom, “so next year we’ll see economic growth and easy money. This frothiness that we’ve seen in financial markets is likely to continue from equities to credit to housing,” says Roubini. He predicts an eventual crash, but not for at least a few years.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

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Putin Threatens Currency Speculators; Six Ways to Know a Currency is in Deep Trouble

Here's a lesson about various ways to spot a currency that is in deep-deep trouble.

1. Crackdown on "currency speculators"
2. Accusations of foreign interference
3. Measures to stop capital flight
4. Repatriation amnesty in hopes money will return home
5. Currency action itself
6. Currency controls

Ruble Analysis

Let's check those six measures starting with today's report Putin Threatens Crackdown on Currency Speculators.

1. Putin Blames Currency Speculators

Vladimir Putin threatened to crack down on speculators against the rouble as he called on Russia to put its economic house in order to fight what he called an attempt by outside enemies to bring the country to its knees. “We have asked the central bank to take measures to make sure that speculators can no longer take advantage,” Russia’s president said in a speech on Thursday. “We know who those people are, and we have the means to rein them in. It’s time to use these instruments.”

2. Putin Blames Foreigners and Plays Hitler Card

“Hitler with his misanthropic ideas tried to destroy Russia and throw us back behind the Urals. Just remember how that ended,” Mr Putin said. “If [Russia’s annexation of Crimea] had not happened, they would have found another excuse for holding Russia back and Russia down. This has been happening for centuries — every time the west thinks Russia is getting too strong, they use these policies.”

3. Measures to Stop Capital Flight

“We need to reverse the history of capital flight from our country, we need to end this era,” Mr Putin said.

4. Amnesty for All

Putin promised an amnesty for offshore capital returning home, saying Russians bringing back money from abroad would not have to prove where they got it from.

5. Currency Action



Since July 2008 the Ruble had gone from 24Rub-per-US$ to 54Rub-per-US$. That is a decline of 55.55%. In the last six months alone, the Ruble has gone from 34Rub-per-US$ to 54Rub-per-US$. That is a 6-month decline of 37%.

6. Currency controls

Anton Siluanov, finance minister, reiterated the government’s commitment to abstain from currency controls after Mr Putin’s speech, but said that the government and the central bank would “co-ordinate” the actions of exporters on the foreign exchange market to reduce their collective influence on the rouble exchange rate.

Does that sound like the start of currency controls to you? It does to me.

If the US and Iran come to agreement ending sanctions on Iran, more Iranian oil will flow on the markets, likely pressuring prices further (assuming all other factors remain the same). A slowing global economy also pressures oil prices.

In turn, falling oil prices pressures the Ruble.

As bad as things look for Russia on the Ruble front, there is potential for things to get much worse.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com 

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4 Million Homeowners Still Underwater, Total Negative Equity $157 Billion

In spite of a sustained rally in home prices, the October Black Knight Financial Services Mortgage Monitor shows Four million borrowers currently underwater.

Highlights

• Black Knight found that even though underwater mortgages are now less than 8% of all mortgages, there are still roughly 4 million borrowers in negative equity positions, who are, on average, $39,000 underwater.
• Underwater borrowers, representing nearly $800 billion in unpaid balances and $157 billion in negative equity, are 10X more likely to be delinquent than those with positive equity.
• Underwater borrowers exhibit a 40% delinquency rate, as compared to just 4% for borrowers with equity
• For those with combined LTVs of 150% or greater, more than 3 out of every four (77%) are delinquent
• There are approximately 1.3 million underwater GSE-backed mortgages representing an aggregate $39 billion in negative equity; of these, 365K are delinquent
• Much-discussed principal reductions on delinquent underwater borrowers would require up to $89 billion in write-downs; the GSE share alone would require up to $18 billion
• Black Knight found some relaxation in credit requirements for refinance originations (though these are still high by historical standards)
• Weighted average credit scores for GSE refinances have come down to 742 from a high of 766 in late 2011, while credit requirements on GSE purchase mortgages have remained tight since 2009
• GNMA backed originations have also seen some relaxation in refi credit requirements, with weighted average credit scores down from 727 at the end of 2012 to 701 (which is still significantly higher than 2005's average of 628)
• Looking at the refi market as a whole, Black Knight found that borrowers with 740+ credit scores make up 55% of 2014 refi market, as compared to just 29% in 2005

Sustained Improvement in Negative Equity




Over the past two and a half years, there has been a sustained and continual improvement in negative equity, from 33.5 percent of borrowers being underwater in January 2012 to less than eight percent today

Only 1.2 percent of active mortgages have current CLTVs of 150 percent or higher, down from 9.5 percent in January of 2012 (the bottom of the market in terms of national home prices).

Delinquencies by Bucket



While the overall share of underwater mortgages continues to decline, delinquency rates are increasing among the remaining negative equity mortgages.

For the severely underwater – 150 percent or higher current CLTVs – over three out of every four borrowers (77 percent) are delinquent.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

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