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Mike Shedlock

Mike Shedlock

Mike Shedlock (Mish) is a registered investment advisor representative for SitkaPacific Capital Management (http://www.sitkapacific.com/). Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.

Articles by Mike Shedlock

Shedlock: Unemployment Claims Drop For The Wrong Reason

8 days ago

While the recent drop in unemployment claims was celebrated by the markets and media, it shouldn’t have been. The drop in unemployment claims occurred for the wrong reason.

Continued Claims

Continued state unemployment claims lag initial claims by a week, and are more important than initial claims. It is continued claims that determine the official unemployment rate.

The rate is set by survey on the week that contains the 13th of the month, the weeks in boxes.

Suspect Improvement

Last week I reported “Seasonally-adjusted continued claims fell from 11,183,000 last week to 10,018,00 this week.”

This week we see continued claims fell from 9,373,000 to 8,373,000.

We had massive revisions primarily in California which was investigating fraud. 

Continued Claims

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Senate Votes Postponed for Two Weeks: What are the Implications?

27 days ago

Confirmation Hearings for Amy Coney Barrett Will Go AheadThree Republican Senators who attended a White House rose Garden party for Trump’s Supreme Court nominee Amy Coney Barrett have contracted Covid.That would leave Barrett two votes short of confirmation. However, But McConnell said confirmation hearings for Supreme Court nominee Amy Coney Barrett would go ahead as planned starting Oct. 12 even though Scheduled Votes are Cancelled for Two Weeks.Senators Mike Lee of Utah, Thom Tillis of North Carolina and Ron Johnson of Wisconsin had all tested positive for COVID-19 as of Saturday afternoon, after attending a Rose Garden event last Saturday at which most attendees did not wear face masks.Supreme Court ImplicationsThe Senate makeup is 53 Republican to 47-Democrat. The vote total at

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When Does Trump Apologize to the Nation for His Reckless Behavior?

28 days ago

Carl_R3 hrsIt’s impossible to feel sorry for people who don’t take routine precautions to protect themselves or those around them. That doesn’t mean I want them to die, though it’s very possible that some will. In fact, I do hope they all recover. It does mean that I hope they learn something in the process.
Similarly, if Pence gets it, too, and we end up with President Pelosi, it will be exceptionally fitting. In my company, you will almost never find myself and my co-manager in the building at the same time, much less in the same room, and we are a tiny company. What sort of lunatics would have the President and Vice President together, with no masks?
It is especially difficult for me to understand why some of these people, especially ones who are seriously overweight, have no concern

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Doctors Question Trump’s Experimental Covid Treatment and Dosage

28 days ago

Casual_Observer7 hrsTrump’s doctors try to downplay his condition, but blow up the timeline of Trump’s illness
Donald Trump was flown to Walter Reed National Military Medical Center on Friday evening. At the time, he was apparently suffering from coughing, fever, lethargy, and some difficulty in breathing. The decision to send him to the hospital at that point appears to have been made not just out of an abundance of caution, but because, as The Washington Post reports, with Trump’s condition worsening, they wanted to move while Trump was “still able to walk to Marine One on his own.” Even at that point, they were concerned about the “political optics.”
On Saturday morning, Trump’s physician Dr. Sean Conley provided an update on his condition. Appearing 40 minutes late for a scheduled

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Trump Takes Antibody Cocktail, Heads to Walter Reed Hospital

28 days ago

Trump Heads to Walter ReedPlease consider Trump Will Head to Walter Reed Hospital After Testing Positive for CoronavirusPresident Trump is being moved to a hospital on Friday following a positive Covid-19 test that forced officials to cancel White House events and postpone travel, injecting new uncertainty into the final stretch of the 2020 election campaign.Mr. Trump was being moved to Walter Reed National Military Medical Center based on the recommendation of his physician and medical experts and will work from the presidential offices there in the next few days, White House press secretary Kayleigh McEnany said. She said the president’s symptoms were mild and the move was made out of an abundance of caution.Earlier Friday, White House physician Sean Conley said the president was

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Questions of the Day for Trump Supporters

29 days ago

Captain Ahab25 minsThere is a comment below that stands as one of the most insightful comments on the Trump phenomenon. Expectations were formed and not realized, making the letdown so much worse. The same is true for HRC. The expectation was she would win. By not winning, defeating Trump became THE ONLY AGENDA.
Taking Mish’s 14 questions, I’d ask if the issue underlying each question is inherently bad? Anyone think the USA should have open immigration, for example? If you do, you need a lesson in economics and human behavior. Unfettered immigration until continue until the USA has the same living standard as the originating countries.
Regarding the ‘deep state’, should we do nothing about government incompetence; for example the mask fiasco? Or corruption in the FBI and DOJ? Eg. FISA

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Job Recovery Slows and Headwinds Mount for October

29 days ago

BLS Jobs Statistics at a Glance Details from the monthly BLS Employment Report.Nonfarm Payroll: +661,000 to 141,720,000 – Establishment SurveyEmployment: +275,000 to 147,563,000- Household SurveyUnemployment: -970,000 to 12,580,000- Household SurveyBaseline Unemployment Rate: -0.5 to 7.9% – Household SurveyU-6 unemployment: -1.4 to 12.8% – Household SurveyCivilian Non-institutional Population: +184,000 to 260,742,000Civilian Labor Force: -695,000 to 160,143,000 – Household SurveyNot in Labor Force: +879,000 to 100,599,000 – Household SurveyParticipation Rate: -0.3 to 61.4% – Household SurveyInitial ReactionThe Bloomberg Econoday consensus jobs estimate was high at +894,000.The Bloomberg unemployment rate consensus was 8.2% also a bit high.The decline in the unemployment rate was mostly

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Trump and First Lady Test Positive for Covid, in Quarantine

29 days ago

Herkie7 hrsHe is already sick with "mild symptoms," a characterization I am skeptical of. Reminds me of September 1976 when China announced that Mao had a cold.
One thing I think this does mean, Hope Hicks was veyr unlikely to be the source of infection; "…symptoms typically appear within four or five days after exposure."
It has been 3 days since Hicks went with Trump on AF1.
For him to already be showing symptoms last night means he is very unlikely to have been exposed after Monday. It can take up to 14 days for symptoms to appear.
It is a legit question given his obesity and age (as well as probable underlying condition of dementia) whether or not his symptoms will worsen to the point that he has to go the Article 25 route, at least temporarily, or die in office. That is no

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The Airlines, Allstate, and Shell Announce Mass Layoffs

29 days ago

Just in Time for the Election (or a Bailout)American and United Airlines will bring back workers if they get more aid. Otherwise, Say Goodbye to 32,000 Jobs. “We implore our elected leaders to reach a compromise, get a deal done now, and save jobs,” United said Wednesday night. The airline said over 13,400 employees will be out of a job starting Thursday.
 American, which has planned deeper cuts than any other carrier, also told Treasury Secretary Steven Mnuchin that it will bring its 19,000 workers back if lawmakers can approve more aid in the next few days, Chief Executive Doug Parker told employees in a letter.  Mr. Mnuchin and House Speaker Nancy Pelosi (D., Calif.) renewed their stalled negotiations this week, though they failed to reach an agreement Wednesday afternoon. Still,

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Little Progress on Unemployment Claims but Checks Grind to a Halt

October 1, 2020

Initial ClaimsFor the weeks ending August 29, September 5, September 12, and September 17, and September 26 there were 884,000, 893,000, 870,000, 866,000, and  837,000 seasonally-adjusted claims respectively according to the Department of Labor.Given margins of error on seasonally adjusted data there has been no progress for five weeks.Continued ClaimsContinued claims lag initial claims by a week.For the weeks ending August 29, and September 5, September 17, and September 26 there were 13,554,000, 12,747,000, 12,580,000,  11,767,000
seasonally-adjusted claims respectively.The downward slope (pace of progress) has not changed since May. At the same pace of progress, continued claims will be above 10 million for many months.It’s continued state claims that determine the official

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In a Fiery Tweetstorm, Ann Coulter Blasts Trump Over Taxes

October 1, 2020

Zardoz1 dayHer fame is based on getting people’s knickers in a twist, and up until the last couple years it was the liberals who were easiest to bait. Now we have a world full of hyper sensitive, ready to rage trumplings, and Coulter saying vaguely liberal things will grant her a a rich vein of outrage to monetize for years to come.
For those that dispute the tenderness of the trumplings, would direct you to reddit.com/r/conservative, and invite you to make a post in any way critical of trump and see how fast you get banned.
Does anyone have a link to a pro-trump message forum that isn’t a trumpling safe space? I’d like to have a hypothesis disproved…

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Income Declines But Spending Up as Stimulus Runs Out

October 1, 2020

Herkie1 dayWhat could possibly account for this?
I just came back from Whalemart and they FINALLY have a decent stock of toilet paper and not a day too soon either. But is also now $15 where it was $9 last year. Soon it will be cheaper to use dollar bills. Had to stop and buy a carton of cigarettes also, they were $60.99 in April, today $68.87, a haircut, from $12 at SuperCuts in January to $18 now. Gas for my car is now back to $3, hamburger is double what I was paying at the start of the year, we in Florida have been told to prepare for towering increases of 20% and more for car insurance on our renewal dates.
Incomes can stay the same but if the prices for the things you must buy are going up by double or even triple digits then that will show up as increased spending even though

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Death of the Department Stores and the Alleged Retail Recovery

September 30, 2020

Realist2 daysHi Mish. Thanks for your post. It got me thinking about many of the things we have been discussing for quite some time on your site. It inspired me to write down a couple of thoughts about:
THE NEW NORMAL
Being a realist means one has to view the world as it is, not as how one wants it to be.
One of the most important things an individual can do, is to realize that the world keeps changing, and it isn’t going to go back to the way it was. Those that can best adapt to change, survive. Those who refuse to even acknowledge change, or spend their time trying to fight change, are doomed to failure.
There is a phrase that captures this concept succinctly: The new normal.
I see many on this site who want to go back to a world that no longer exists. This leads them open to believing

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How Well is China Honoring Its Trade Deal With Trump?

September 30, 2020

Hopelessly BehindThe PIIE US-China Phase 1 Tracker shows China is hopelessly behind commitments made to Trump for 2020.Phase-1 Tracker by CategoryIn case you forgot, here are a few reminders of Trump’s trade claims.Trade Wars are Good and Easy to WinTrade War With the EUDon’t Trade, We Win BigCan’t LoseThink What Happens When I WinLove Collecting Big TariffsTrump remains totally clueless on trade."Big Tariffs" are a tax on US consumers and importers of goods. US Trade Deficit in Goods Swells to a Whopping $82.9 BillionMeanwhile, please note US Trade Deficit in Goods Swells to a Whopping $82.9 BillionTrade Deficit in Goods and ServicesPromises PromisesTrump pledged to shrink the budget deficit and the trade deficit. How is he doing?Mish

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Mass Airline Layoffs On Deck and They Will Hurt Trump

September 30, 2020

Mass Airline Layoffs in Swing StatesPlease consider Mass Airline Layoffs in Swing States Would Further Imperil Trump by Bloomberg writer Joshua Green. If the government’s payroll support program for airlines is allowed to expire as scheduled on Wednesday, the airlines say they’ll cut tens of thousands of jobs—many concentrated in battleground states including North Carolina, Florida, Arizona, Pennsylvania, and Texas.For months, airlines and workers’ unions have been imploring Congress and the president to extend that payroll aid, without any success. Over the summer, airlines including American, United, Spirit, and Delta filed notices under the Worker Adjustment and Retraining Notification (WARN) Act that they are planning to lay off tens of thousands of workers beginning Oct. 1. Together,

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Presidential Debate Synopsis: Pitiful and Painful to Watch

September 30, 2020

Pitiful, Painful, NauseatingThis was one of the worst debates in history if not the worst. Moderator Chris Wallace lost control early and never regained it.If you insists on a winner I would suggest Trump won the first 20 minutes or so, but the score was something like -10 to -30. There were no winners in the middle but enough messiness to give a score of -20 each, a tie. Each candidate looked ridiculous at times and OK to good at times, but good only for fleeting moments.Biden won the final two questions easily. His response on a peaceful transition gets a genuinely positive score. Let’s call it +20 to -20. That makes the final result -50 for Trump to – 20 for Biden. That is based on Trump’s refusal to honor the result of the election and his poor handling of white supremacy.  But how

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What Major Stores Went Bankrupt in 2020?

September 29, 2020

U.S. Retail Bankruptcies and Store Closures in 2020Please consider An Overview of U.S. Retail Bankruptcies and Store Closures in the first half of 2020In the first six months of 2020, 18 retailers filed for Chapter 11 bankruptcy, with an additional 11 filing in July through mid-August . These defaults were concentrated in apparel and footwear, home furnishings, food and department stores, with many prominent retailers filing during this time period, including Pier 1, J. Crew, Neiman Marcus, Stage Stores, J.C. Penney, Tuesday Morning, GNC, Lucky Brand, RTW Retailwinds (New York & Co.), Brooks Brothers, Ascena (Ann Taylor, LOFT, Lane Bryant, Justice, Catherines), Le Tote (Lord & Taylor), Tailored Brands (Men’s Wearhouse, Jos. A. Bank, Moores Clothing, K&G) and Stein Mart.From January through

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US Trade Deficit in Goods Swells to a Whopping $82.9 Billion

September 29, 2020

MishEditor3 daysRegarding long comments and getting logged out
Replay from the Maven:
For the first issue with longer comments, it sounds like his browser is refreshing automatically, causing his comments to disappear. I wasn’t able to reproduce this on my end when typing a longer comment directly into the comment box over a 10 minute period, so it might be something he has installed or dependent on the type of browser he’s using. Could you have him open the site in incognito mode and see if that gets rid of the problem? If it does, there’s likely something installed in his browser like an add-on causing this to happen. This could also be a cache-related problem though, so I would suggest clearing the cache as well to be sure.
For the second issue (getting logged out after every comment),

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Fed Study Shows the ECB Made a Huge Mistake With Negative Rates

September 29, 2020

Please consider Commercial Banks under Persistent Negative Rates by the Federal Reserve Bank of San Francisco.Do extended periods of negative policy interest rates continue to encourage commercial bank lending? A large panel of European and Japanese banks provides evidence on the impact of negative rates over different lengths of time. Analysis suggests that both bank profitability and bank lending activity erode more the longer such negative policy rates continue, primarily due to banks’ reluctance to pass negative rates along to retail depositors. This appears to negate one of the main arguments for moving policy rates below the zero bound.Our results suggest that banks can only mitigate losses on interest income through charging fees on deposits and enjoying capital gains on securities

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2nd High-Quality Poll Has Biden Ahead By 9 In Pennsylvania

September 29, 2020

PecuniaNonOlet3 daysI have had comments go missing, i dont think they are being deleted. I think what happens, especially for long comments, is the page refreshes and if you dont hit submit before that happens your comment is gone!
Here is a tip: If you have a very long comment, write it outside the webpage, when ready, copy and paste and submit. This has eliminated all my missing comments.
Of course, Mish could have deleted the comment too but only if it breaks the rules.
If you dont know the rules, they are here:

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Election 2020 What States are In Play?

September 28, 2020

What States are In Play?The above map from Nate Silver’s Winding Path to Victory.Here are Nate Silver’s Odds on 9 states.In Play DiscussionGeorgia, Iowa, and even Texas are more "In Play" for Biden than Pennsylvania and Wisconsin are for Trump.In fact, if we define "In Play" as a 25% or better chance, Pennsylvania and Wisconsin are not even "In Play" for Trump.You can dispute the percentages and make reasonable claims like "Biden is unlikely to win Georgia" and I would agree. But it is far less likely that Trump wins Wisconsin than Biden wins Iowa or Georgia.Odds of WinningSilver has Trump’s odds of winning at 22%. I think that is about right based on the polls. Moreover, Trump can take none of those states for granted. He will have to spend money defending Iowa and Georgia, even Texas

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Trump Says Taxes are “Fake News”: He Has an Easy Way to Prove It

September 28, 2020

Fake News?New York Times BombshellThe above set of Tweets is in response to a New York Times bombshell on Trump’s taxes released yesterday.Please consider LONG-CONCEALED RECORDS SHOW TRUMP’S CHRONIC LOSSES AND YEARS OF TAX AVOIDANCE.The tax returns that Mr. Trump has long fought to keep private tell a story fundamentally different from the one he has sold to the American public. His reports to the I.R.S. portray a businessman who takes in hundreds of millions of dollars a year yet racks up chronic losses that he aggressively employs to avoid paying taxes. Now, with his financial challenges mounting, the records show that he depends more and more on making money from businesses that put him in potential and often direct conflict of interest with his job as president.
The New York Times has

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If the Velocity of Money Picks Up Will Inflation Soar?

September 28, 2020

Velocity of Money DefinitionThe St. Louis Fed Defines Velocity as the ratio of GDP to Money Supply.There are several components of the money supply,: M1, M2, and MZM (M3 is no longer tracked by the Federal Reserve); M1 is the money supply of currency in circulation (notes and coins, traveler’s checks [non-bank issuers], demand deposits, and checkable deposits). A decreasing velocity of M1 might indicate fewer short- term consumption transactions are taking place. We can think of shorter- term transactions as consumption we might make on an everyday basis.
The broader M2 component includes M1 in addition to saving deposits, certificates of deposit (less than $100,000), and money market deposits for individuals. Comparing the velocities of M1 and M2 provides some insight into how quickly the

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Senate Surprises: What to Look Out For in the Election

September 27, 2020

Potential Surprises I created the above map starting from a 270-to-Win Senate projection based on current polls.270-to-Win had Alaska and South Carolina as tossups. I felt that was a bit far-fetched although it is "possible".  Even Texas is "possible" but I discount anything under a 20% chance.Meaning of Circles A red circle on a brown state designates a tossup state but one that I expect Republicans will win.A green circle on a brown state indicates a state that I believe can easily go either way.A red circle on a blue state indicates that I believe the Democrats will win the state. The state is in play for the Republicans, but not close enough to call a tossup.A blue circle on a red state indicates that I believe the Republicans will win that state. The state is in play for the Democrats

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An Easy Way to Solve the Mail-In Vote Dilemma

September 26, 2020

Vote As Soon as You CanOne thing Democrats could do—with basically no strategic downside—is to hammer home the message that voters should ask for and return their mail ballots as early as possible, which makes it more likely they’ll be included in tallies on election night.In most states, mail ballots received by Election Day will be counted with other ballots on election day; in some states they’ll even be counted first, in fact. It’s ballots postmarked by E-Day but not yet received (allowed in some states but not all) that can cause a late shift.But if Democrats return their ballots sooner, the late shift could be mitigated or even reversed. There’s maybe the slightest hint of that already in North Carolina, where Democrats represent 49% of absentee ballot *requests* but 54% of ballots

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Trump Taps Amy Barrett to Replace Ginsburg on the Supreme Court

September 25, 2020

Njbr20 hrsWow, this is so funny.
Trump proposes a conservative devout Catholic, not knowing the actual tenets of Christianity. He thinks it’s all a con-game like the Falwell’s love-boat antics.
What if she actually believed what it is written in the Bible about how Jesus wanted us to live our lives.
You guys are IN TROUBLE !!!
AHAHAHAHAHA!!!
What a bunch of hypocritical dummies!
Isaiah 1:17
Verse concepts
Learn to do good;
Seek justice,
Reprove the ruthless,
Defend the orphan,
Plead for the widow.
Proverbs 31:9
Verse Concepts
Open your mouth, judge righteously,
And defend the rights of the afflicted and needy.
Matthew 22:39
Verse Concepts
The second is like it, ‘You shall love your neighbor as yourself.’
James 1:27
Verse Concepts
Pure and undefiled religion in the sight of our God and

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Durable Goods New Orders Spotlight a Manufacturing Slowdown

September 25, 2020

The Census Bureau report on Durable Goods New Orders and Shipments shows growth in new orders has slowed to a crawl.New Orders Month-Over-Month  These month over month comparisons are wildly distorted. But for those interested, the recovery continued for a fourth month with new orders up a tiny 0.4% vs an econoday consensus of 1.5%.Durable Goods New Orders 1993-PresentDurable Goods New Orders Percent Change From Year AgoThe above chart is the worst looking yet. It shows a rolling decline in manufacturing that stated mid-2018.  Percent changes month over month for aircraft were so wild I had to remove them to prevent severe chart distortions.One of the best ways to see the covid impact is to look at year-to-date totals on new orders and shipments.Year-to-Date HighlightsNew Orders:

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The Fed Now Owns Over $2 Trillion in Mortgages, What Else?

September 25, 2020

Fed’s Balance Sheet SummaryTotal Balance Sheet: $7.093 TrillionTreasuries Owned Outright: $4.431 TrillionMortgage Backed Securities Owned Outright: $2.025 TrillionTreasuries Plus Mortgages: $6.456 TrillionGold: $11 BillionGold Comments The gold certificate account reflects the receipts issued to the Reserve Banks by the Treasury against its gold holdings. In return, the Reserve Banks issue an equal value of credits to the general account of the Treasury, computed at the statutory price of $42.22 per troy ounce. Because nearly all of the gold held by the Treasury has been monetized in this fashion, the Federal Reserve Banks’ gold certificate account of $11 billion represents the nation’s entire official gold stock.
If the Fed valued gold at $2,000 per ounce instead of $42.22 per ounce it

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Trump’s $300 Lost Wage Assistance Benefit Ended in 10 States

September 25, 2020

Weekly Check BackgroundOn August 8, I noted Trump Signs 4 Executive Orders, One Requires States Pay 25% of the Cost.The LWA executive order provided $400 weekly pandemic assistance to the unemployed, retroactive to August 1, but required states to kick in $100 of it. Only West Virginia did.Effectively, the $400 weekly benefit morphed into $300. The executive order made up for 50% of the loss of the $600 weekly pandemic assistance benefits that expired on July 25.Out of Time and Money The max amount of the Trump’s LWA executive order payout was $44 billion.The money (and the clock) just ran out.CNET reports the $300 Unemployment Payment Ended in Some States.Trump’s executive memo called for the federal government to supply $300 a week in extra unemployment benefits for six weeks, starting

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No Progress in Unemployment Claims for 4 Weeks

September 24, 2020

Initial ClaimsFor the weeks ending August 29, September 5, September 12, and September 17 there were 884,000, 893,000, and 870,000 and 866,000 seasonally-adjusted claims respectively according to the Department of Labor.

Given margins of error on seasonally adjusted data there has been no progress for four weeks.Continued ClaimsContinued claims lag initial claims by a week. For the weeks ending August 29, and September 5, and September 17 there were  13,554,000, 12,747,000, and 12,580,000 seasonally-adjusted claims respectively.The downward slope (pace of progress) has not changed since May. At the same pace of progress, continued claims will be above 10 million for many months.It’s continued state claims that determine the official unemployment rate, not that anyone of intelligence

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