TrimTabs’ Charles Biderman was on CNBC Monday morning with Rick Santelli discussing stock and bond inflows.
Great interview! It’s finally becoming clear to me how the market can keep going up, despite fundamentals. Politics are controlled by those who create the wealth. First, it was landowners, then manufacturers, and now it’s the Banks and Finance types. And since business is consolidated down to just a few retailers, a few banks and a few manufacturers, they just keep getting wealthier, and the 99% are the serfs and sharecroppers. Seems the only way to earn any return is to invest in these few? Comments?
First, allow me to say that I envy you living in Sausalito.
But to my point, see the following chart showing month-end Treasury withholding receipts, which no doubt you track closely:
Curiously, despite 2% higher payroll taxes since Jan. ’13 and a reported 2 million in additional employment (civilian employment shown, including self-employment) since Jan. ’12, withholding receipts are where they were in May, a year ago, and in Jan. ’12.
Something does not compute.
Among the possible causes of the discrepency is that (1) self-employment is overreported in the household survey by 2 million or more since Jan. ’12; (2) those claiming self-employment are not reporting income (or not earning much, if any); (3) employment in general is being overreported; or (4) perhaps some combination.
Moreover, below are charts of the 12- and 6-month annualized rates of the NBER Business Cycle Indicator and real final sales and real final sales per capita, suggesting that the economy is where it was at the onset of recessions since the 1960s, including before 9/11 and before Lehman, when the stock market proved to be a “lagging indicator”:
Finally, here are charts of the 4-year change rate of ECRI’s WLI against real final sales per capita and the 4-year change of the S&P 500:
And, if you can bear one more chart for good measure, here is US, EU, and China’s annual real GDP per capita through Q2 ’13, implying the largest economies are at or near the historical recession threshold in aggregate:
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