Trade deficit climbs, initial jobless claims high, Dow and S&P set new record closes

posted at 7:46 pm on November 14, 2013 by Steve Eggleston

The economic news over the last month seems to have followed a pattern of “one step forward, one step back”. After last week’s good Gross Domestic Product and (at least on the toplines) jobs reports, one should have expected this batch of bad news, unlike the CNBC headline writer who broke out the “unexpectedly” word for this Reuters dispatch:

The number of Americans filing new claims for unemployment benefits fell last week, but an upward revision to the prior week’s figure suggested the labor market recovery remained gradual.

Initial claims for state unemployment benefits fell 2,000 to a seasonally adjusted 339,000, the Labor Department said on Thursday. Claims for the prior week were revised to show 5,000 more applications received than previously reported. Economists polled by Reuters had expected first-time applications to fall to 330,000 last week….

Separate data showed the U.S. trade deficit widened more than expected in September as imports rose to their highest level in almost a year, which could probably see third-quarter growth estimates trimmed.

The Commerce Department said the trade gap increased 8.0 percent to $41.8 billion, the largest since May. August’s shortfall on the trade balance was revised slightly to $38.7 billion from the previously reported $38.8 billion. Economists polled by Reuters had expected the trade deficit to widen a bit to $39.0 billion in September.

ZeroHedge noted that the trade deficit with China is the worst on record, and that this fresh data from the last month of the third quarter will likely reduce, on its own, the 3rd-quarter Gross Domestic Product by 0.2-0.4 percentage points from the advance 2.8% real growth.

In the not-so-distant past, initial jobless claims establishing a new higher normal and a trade deficit that, as ZeroHedge noted, was worse than the worst estimate from Bloomberg’s group of economists, would have put the bears in charge on Wall Street. That didn’t exactly happen:

The Dow and the S&P 500 index ended at new highs on Thursday after comments from Janet Yellen, the U.S. Federal Reserve Chair nominee, suggested the Fed’s accommodative policies would continue as long as the economy remains fragile.

I think Roger Waters captured it best in “Have a Cigar” – “If we tell you the name of the game, boy, we call it ‘Riding the Gravy Train’.”


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We’re in the final looting stage.

Murphy9 on November 14, 2013 at 7:48 PM

How’s that dollar doing?

I’d rather have the Dow at 11,000 and the dollar worth something than the Dow at 16,000 with the Weimar Republic just around the corner.

viking01 on November 14, 2013 at 7:51 PM

I’d rather have the Dow at 11,000 and the dollar worth something than the Dow at 16,000 with the Weimar Republic just around the corner.

viking01 on November 14, 2013 at 7:51 PM

Just wait until tomorrow.

davidk on November 14, 2013 at 7:54 PM

QE, QE2, QE3, QE4, QE5, QE6

Economy is all pumped up and waiting for someone to come along with a pin.

ElectricPhase on November 14, 2013 at 7:56 PM

QE, QE2, QE3, QE4, QE5, QE6

Economy is all pumped up and waiting for someone to come along with a pin.

ElectricPhase on November 14, 2013 at 7:56 PM

You’re in good hands with Yellen.

/

Murphy9 on November 14, 2013 at 7:58 PM

The stock market has decoupled from actual economic performance and has hooked up with monetary policy.

If you can call buying securities with trillions of fake dollars over 5 years a “policy”.

This will end in tears.

forest on November 14, 2013 at 7:59 PM

The Dow and the S&P 500 index ended at new highs on Thursday after comments from Janet Yellen, the U.S. Federal Reserve Chair nominee, suggested the Fed’s accommodative policies would continue as long as the economy remains fragile.

In real words, this means “print more money”.

KMC1 on November 14, 2013 at 8:01 PM

The stock market has decoupled from actual economic performance and has hooked up with monetary policy.

I wish I knew what this means. I can see it happening, but the resulting effect eludes me. I’m sure it’s bad.

WitchDoctor on November 14, 2013 at 8:02 PM

US jobless see setback; trade imbalance widens unexpectedly

.
I’m buying banking sector stocks and ETFs next week… if they pay dividends. I swear, I am tired of swimming upstream against all this mess.

ExpressoBold on November 14, 2013 at 8:03 PM

The Fed is printing more money, devaluing the dollar, everything costs more…..INCLUDING EQUITIES.

Inflation has hit hard……in the market.

PappyD61 on November 14, 2013 at 8:04 PM

LOLZ

Wait till the feds stop loaning money out at next to zero interest rates… that will make the housing bubble seem like kids play.

watertown on November 14, 2013 at 8:09 PM

The stock market has decoupled from actual economic performance and has hooked up with monetary policy.

If you can call buying securities with trillions of fake dollars over 5 years a “policy”.

This will end in tears.

forest on November 14, 2013 at 7:59 PM

Yep!

Generational Crisis

workingclass artist on November 14, 2013 at 8:11 PM

From The Burning Platform:

Maybe 2015 will be the year of the collapse.

Our entire economy runs on debt creations, vis-a-vis financialization, since we import $500 billion a year more than we export.

2015 is the year when increasing debt results in ZERO GDP growth. The end of the line. But that won’t stop the Federal Reserve and the criminals in Washington. Enjoy what time we have left before it all collapses.

Murphy9 on November 14, 2013 at 8:12 PM

Brayam and UrbanDefeatist think this is AWESOME.

CWchangedhisNicagain on November 14, 2013 at 8:15 PM

bailout bernanke has given a new meaning to QE = “The ‘Food Stamps’ for Wall Street Millionaires and Billionaires Welfare Program.”

Nassim Taleb, the Black Swan author, December, 2011:
“Quantitative Easing is a transfer of wealth to the rich. It brings up the housing prices. The state is subsidizing the rich, it is the top 1 per cent that benefit from quantitative easing, not the 99 per cent. Quantitative easing really is flooding banks with money so they pay themselves bonuses with it. Banks have money and assets so now they can borrow easily. The poor guy here who is unemployed and can’t borrow is not going to benefit from QE.”

In other words, the irresponsible, treasonous actions of bailout bernanke and his feckless Fed (aka, a taxpayer-funded OBOZO-supporting Political Action Committee) help only BIG BANKS, Wall Street and the 1%-ers, while posing significant future harm for the poor and the middle class.

Establishment stooge yellen, of course, supports this outrageous Fed behavior – and all the d-cRATs that brought America the OBOZOCARE catastrophe, support yellen.

TeaPartyNation on November 14, 2013 at 8:18 PM

The stock market has decoupled from actual economic performance and has hooked up with monetary policy.

If you can call buying securities with trillions of fake dollars over 5 years a “policy”.

This will end in tears.

forest on November 14, 2013 at 7:59 PM

I wouldn’t say that the stock market’s hooked up with monetary policy so much as it’s latched onto the (quasi-)government teat.

Steve Eggleston on November 14, 2013 at 8:18 PM

LOLZ

Wait till the feds stop loaning money out at next to zero interest rates… that will make the housing bubble seem like kids play.

watertown on November 14, 2013 at 8:09 PM

The scary thing is they can’t do that as long as they keep piling on $650+ billion in deficit spending per year.

Steve Eggleston on November 14, 2013 at 8:23 PM

That $85 billion every month of new money creation being credited to banks reserve accounts has to go somewhere. The Fed requires it go into Treasuries, and that means every bond issued by the U,S. government is being bought by newly printed currency holders. All the money private investors might have tried to park in Treasuries has to go someplace else, and the stock market is as good a place as any.

MTF on November 14, 2013 at 8:24 PM

This will end in tears.

forest on November 14, 2013 at 7:59 PM

This will end in blood …

ShainS on November 14, 2013 at 8:26 PM

Steve Eggleston on November 14, 2013 at 8:18 PM

That’s probably a better way of describing it. The one thing I’m sure of is that it’ll end in tears.

forest on November 14, 2013 at 8:28 PM

ZeroHedge noted that the trade deficit with China is the worst on record, and that this fresh data from the last month of the third quarter will likely reduce, on its own, the 3rd-quarter Gross Domestic Product by 0.2-0.4 percentage points from the advance 2.8% real growth.

Now that is worth panicking about.

Stoic Patriot on November 14, 2013 at 8:33 PM

On a related front, the October monthly federal deficit was a bit short of $92 billion. While it was the lowest October deficit since 2008, which saw the start of TARP, it was also nearly twice the pre-2008 record deficit.

Notably, it was nowhere near the $400+ billion addition to the national debt, thus proving the majority of that was due to replenishing the “extraordinary measures” that were used to finance the deficit spending between mid-May and mid-October.

Steve Eggleston on November 14, 2013 at 8:39 PM

This will end in tears.

forest on November 14, 2013 at 7:59 PM

This will end in blood …

ShainS on November 14, 2013 at 8:26 PM

Why does sweat always get short-changed? :-)

Steve Eggleston on November 14, 2013 at 8:40 PM

The Dow and the S&P 500 index ended at new highs on Thursday after comments from Janet Yellen, the U.S. Federal Reserve Chair nominee, suggested the Fed’s accommodative policies would continue as long as the economy remains fragile.

.
Whether the Fed’s unending QE is the cause of the economy being fragile (it is) may be too nuanced of a discussion for the general populace (it is), there is NO DOUBT the Fed’s QE policy’s stupidity can easily be explained to the public.

Using the overstated 2.8% growth rate for a nominal GDP of $ 16 trillion = $ 448 billion in growth.

Even CNBC, the financial propaganda arm of the Obama administration, acknowledges that “without QE we would be experiencing NEGATIVE growth” (a recession – like the one we all know never ended)

The Federal Reserve is spending $ 1,020 billion per year on “assets” (which are also known as “liabilities”)

Hmmmmmmmm, ($ 1,020 billion – $ 448 billion) = $ 572 billion the Fed is LOSING per YEAR on its “investment”

Janet Yellen testified today she PLANS to keep losing money.

Topic for another day: Why QE devalues the dollar, exports inflation and makes every country you trade with HATE your country.

This does NOT in tears.

History shows a 100% correlation rate – this ALWAYS ends in WAR.

PolAgnostic on November 14, 2013 at 9:00 PM

This is why investors have to be careful. Sure, it’s a good time to invest right now. But as soon as the government stops printing money, the stock market will tank. But nobody knows when that will be.

SoulGlo on November 14, 2013 at 9:03 PM

PolAgnostic on November 14, 2013 at 9:00 PM

Minor correction on the math – the 2.8% is annualized real GDP growth between the 2nd and 3rd quarters of 2013. Nominal GDP growth between 3Q2012 and 3Q2013 was 3.07%, or $502 billion. Nominal GDP growth between 2Q2013 and 3Q2013 was an annualized 4.84%, or an annualized $807 billion.

It still is less than QE-Forever.

Steve Eggleston on November 14, 2013 at 9:30 PM

The printed monopoly money must flow.

Punchenko on November 14, 2013 at 9:31 PM

This does NOT in tears.

History shows a 100% correlation rate – this ALWAYS ends in WAR.

PolAgnostic on November 14, 2013 at 9:00 PM

Like I said…Generational Crisis

workingclass artist on November 14, 2013 at 9:37 PM

Like I said…Generational Crisis

workingclass artist on November 14, 2013 at 9:37 PM

That’s fair, but let’s remember the target audience – that’s why my long form is:

Global economic collapse

Multiple regional wars

Tens of millions dead from starvation

Sixty years of recession/depression

PolAgnostic on November 14, 2013 at 10:07 PM

It still is less than QE-Forever.

Steve Eggleston on November 14, 2013 at 9:30 PM

.
I won’t quibble about the math because I don’t think you disagree with my “overstated” qualifier – the “annualized real GDP” also now includes fairytale R&D ‘allowances’.

Besides, t target audience’s take away should be: If you run JCP like this – you get fired.

Maybe you could do a post on this latest bit from Citi?

http://www.zerohedge.com/news/2013-11-14/citi-warns-fed-kicking-can-over-edge-cliff

PolAgnostic on November 14, 2013 at 10:13 PM

http://www.youtube.com/watch?v=pLJk7OZ-maY

Published on Jun 17, 2013

June 5, 2013 talk by Kevin Freeman at the North Lake County Tea Party in Tavares, FL on Economic Warfare. He had a very interesting overview of how outsiders (like Obama supporters) are using the internet to initiate Economic Warfare – using the internet to electronically attack systems to bring chaos to US governments and businesses. Freeman reveals: The evidence linking Communist China and Islamic finance to economic warfare against the United States.

Murphy9 on November 14, 2013 at 10:29 PM

PolAgnostic on November 14, 2013 at 10:13 PM

The question is whether I can do anything ZeroHedge didn’t with that. It looks like he did a very thorough job.

Steve Eggleston on November 14, 2013 at 10:35 PM

Pol, Egg, have either of you read this?

Secret Weapon: How Economic Terrorism Brought Down the U.S. Stock Market and Why It can Happen Again

Murphy9 on November 14, 2013 at 10:27 PM

Can’t say I have. I don’t know Kevin Freeman’s reputation.

Steve Eggleston on November 14, 2013 at 10:39 PM

Trade deficit climbs, initial jobless claims high, Dow and S&P set new record closes

Crooks usually do quite well for themselves as a result of stealing massive amounts of money from others.

Not a big mystery.

Dr. ZhivBlago on November 14, 2013 at 10:57 PM

The question is whether I can do anything ZeroHedge didn’t with that. It looks like he did a very thorough job.

Steve Eggleston on November 14, 2013 at 10:35 PM

.
I was thinking more along the lines of packaging the Citi message for the Hot Air reader.

PolAgnostic on November 14, 2013 at 11:19 PM

Pol, Egg, have either of you read this?

Secret Weapon: How Economic Terrorism Brought Down the U.S. Stock Market and Why It can Happen Again

Murphy9 on November 14, 2013 at 10:27 PM

.
I have not.

I have spent 4+ years over on ZeroHedge where the “Tyler’s” have done a been ahead of the information curve from January 2009 till now.

I filter those types of books through the four plus years of ZH growing from an obscure page on blogspot.com to now being perenially ranked as the best source for detailed financial information the politicians, bankers and “investment advisors” advisors DON’T want you to know.

Be forewarned, the comments run the gamut from interesting perspectives to completely insane.

PolAgnostic on November 14, 2013 at 11:28 PM

Yellin + weak economic news = continuing QE.

Why does the market get more excited over QE than good strong economic news?

Traditionally the total bond market has been roughly four times the value of the total equities market. Bond investors tend to be too conservative for the risk of equities, willing to accept a lower return for the security. But continued low interest rates mean bond returns are stuck near the bottom of memory, and some of those investors expect better returns, so in desperation more and more bond fund managers move capital into equities to hedge their jobs.

More capital = more demand = higher equity prices. ECON 101.

It’s a party at the Fed, Freddie!

Adjoran on November 15, 2013 at 12:26 AM

…enjoyed this thread…where was everybody?

KOOLAID2 on November 15, 2013 at 12:54 AM

OK! Perfect time to Raise the minimum wage to $15.00

- O’Bozo

WryTrvllr on November 15, 2013 at 10:13 AM

This is why investors have to be careful. Sure, it’s a good time to invest right now. But as soon as the government stops printing money, the stock market will tank. But nobody knows when that will be.

SoulGlo on November 14, 2013 at 9:03 PM

Your shiiteing me right? Now is a good time to invest? It may be a necessity to invest, because the money market funds will go before they let preferred share holders suffer, but it is really a good time to completely get off the grid.

WryTrvllr on November 15, 2013 at 10:19 AM