Charts: Saudi Riyal, Dow Jones Industrials, OPEC Basket, Baltic Dry and Commodity Returns

The Zero Hedge posted some terrific charts today.

Has this week's market turmoil been a "China only problem"?

Not so says the Saudi Arabian currency, the riyal.

The Zero Hedge notes

Saudi riyal forwards hit their highest level in almost two decades as oil plummeted: twelve-month forward contracts for the riyal climbed 260 points, and set for the steepest close since December 1996 on growing speculation the world’s biggest oil exporter may allow its currency to slide against the dollar for the first time since 1986 (incidentally, Bank of America's "Number One Black Swan Event For The Global Oil Market In 2016").

Should the current pressure be sustained, the USD-SAR peg may break. What happens next? [clue: mayhem]

US stocks were a toast last night. And it's been a bad start so far.

Well, it has not just been a bad start, but for the Dow Jones Industrials the worst since 1900!

As for oil, WTIC closed past $33 last night. But WTIC hit an intraday low of $32.1 which virtually breached the 2008 low of $32.4. Well, as for the OPEC oil equivalent, prices of the OPEC basket plunged to 2004 lows. 

Notes the ZH: Amid Saudi price cuts to Europe, the basket price was set at $29.71 today - the first print below $30 since April 2004.

And on commodity shipments, the Baltic index likewise hit fresh lows.

Again from the ZH: Another day, another fresh all-time record low in The Baltic Dry Index as Deutsche Bank's "perfect storm" appears ever closer on the horizon. Plunging 4.7% overnight to 445 points, this is 20% lower than the previous record low in 1986 and as one strategist warns, "It’s a brutal start of the year, there’s just nowhere to hide on the market."

Finally with oil and commodity trade on milestone lows, how about return on commodity investments?

Rate of returns on commodities have hit the Great Depression levels! Incredible!

The ZH: While the "sell in 1973, and go away" plan had worked out for some in the commodity space, the destruction of the last decade has only one historical comparison... the middle of The Great Depression. The 10-year rolling annualized return for commodities is -5.1% - the lowest since 1938...

For commodities, a buying opportunity should arise someday...

So a critical test on the SAR peg, the worst DJIA performance since 1900, OPEC Basket at 2004 lows, fresh lows for the Baltic index and annualized commodity returns at Great Depression levels, PLUS CHINA--do all these suggest bullishness for risk assets or of growing probability of a global financial economic crisis?

Graphics: 67 Countries which the US Government is Obliged to go to War for

The policeman of the world has defense treaties with 67 countries, which means US government is obliged to go to war to defend them during conflicts.

Writes the Mental Floss (hat tip Lew Rockwell )

The United States has entered a lot of treaties over the years, especially after the complicated network put in place after World War II. The Myth of Entangling Alliances by Michael Beckley sought to figure out a hard number for just how many countries the United States has agreed to defend in war. Thanks to NATO, ANZUS, OAS, and bilateral agreements, the U.S. has promised 67 countries protection. Here's a look at the list included in Beckley's paper:

Some insights from the above. First, there is a big probability for the US to be drawn into (needless) wars. Second, the US government military have been spread too thin. Third, this represents great business for the military industrial complex. Fourth, this also represents expanded US political influence on nations with which the US has defense treaties. Fifth, expanded political influence also translates to monetary and economic influence (US dollar standard)

Infographics: Keynesian Economics 101

If one should wonder why the scourge of boom busts cycles and its attendant crises (economic, financial, currency and debt), as well as accounts of hyperinflation, continually afflicts society, then look no further than to the economic dogma that has provided justification for their existence.

The Austrian Insider (hat tip Mises Blog and Zero Hedge) on the 4 Simple Lessons of Keynesian economics

Since Keynesian economics has reined supreme among mainstream economists for decades, you might want to know some of the basics. If this is confusing to you though, don’t worry about it! There are people in charge who have it all under control.

The great Austrian economist F.A. Hayek on Keynesian economics (from page 349 of Hayek’s The Trend of Economic Thinking, which is Vol. 3 in The Collected Works of F.A. Hayek hat tip Cafe Hayek) [bold added]

It is characteristic of much of recent economics that by ever new arguments it has tried to vindicate those very prejudices which are so attractive because the maxims that follow from them are so pleasant or convenient: spending is a good thing, and saving is bad; waste benefits and economy harms the mass of the people; money will do more good in the hands of the government than in those of the people; it is the duty of government to see that everybody gets what he deserves; and so on.)

Why Keynesian economics have popular with politicians and why it signifies as societal disease. From Austrian economist Peter Boettke (bold added)  

Keynesianism is not a panacea because Keynesianism has dominated public policy making for half a century and has left us in such a state of public debt. Keynesianism broke the old time fiscal religion of balanced budgets and fiscal responsibility, and changed not only attitudes of economists and policy makers, but also eroded whatever institutional constraints existed on public spending that had existed. Keynesianism cannot work to solve our current problems because Keynesianism is responsible for our current problems. Keynesianism provided an illusion of short term prosperity, but the reality of long term stagnation. Of course, the revealing of the illusion can be put off, as I have pointed out before, if there is the discovery of new opportunities for gains from trade, and/or gains from innovation.

But the governmental habit of spending is still there and the bill has to be paid as some point. Keynesianism is a disease on the body politic because it caters to the natural propensity of politicians to focus on short run, and to concentrate benefits and disperse costs.

Wow! As the Yuan Dives, Chinese Stocks Crash 7+% Prompts Second Trading Halt for 2016!

Following Monday’s trading halt due to  the 7% stock market crash, the Chinese government spent the next two days managing or propping up the stock market. Yesterday, the Shanghai index even surged 2.25%

The Chinese government have been desperately attempting to cosmetically embellish its economy from its imploding bubble by price fixing market signals: interest rates (SHIBOR), the stock market and the currency.

Apparently, the market has been complexly porous and more powerful than the authorities wished them to be. [As side comment: The Chinese government increasingly looks like the supercilious version of King Canute.]  

So as they bolstered stocks, the selling pressures manifested elsewhere, this time on the currency markets or the yuan...

Most of the currency losses can be seen via the offshore yuan or the surging USD CNH

The USD CNH quote as of this writing...

The downside revaluing offshore yuan has likewise been reflected on the onshore yuan (USD CNY)... 

but the rise of the USD CNY has been at a lesser scale relative to the USD-CNH

So the gap between the freer offshore yuan (CNH) has been widening relative to the tightly government controlled onshore yuan (CNY). This implies that the Chinese government appears to be losing control! 

Yesterday's pressure on the yuan has has prompted US and European stocks to close significantly down.

The spillover effects from the battered yuan eventually boomeranged back to the source!

Barely 30 minutes from the opening bell, Chinese stocks cratered to over 7%!

And this automatically triggered the circuit breakers…which suspended trading anew for the second this first week of 2016!

The Bloomberg reported (this time attributing today's action to the yuan which they omitted last Monday)

Chinese stock exchanges closed early for the second time this week after the CSI 300 Index plunged more than 7 percent.

Trading of shares and index futures was halted by automatic circuit breakers from about 9:59 a.m. local time. Stocks fell after China’s central bank weakened the currency’s daily reference rate by the most since August.

“The yuan’s depreciation has exceeded investors’ expectations,” said Wang Zheng, Shanghai-based chief investment officer at Jingxi Investment Management Co. “Investors are getting spooked by the declines, which will spur capital outflows.”

Under the mechanism which became effective Monday, a move of 5 percent in the CSI 300 triggers a 15-minute halt for stocks, options and index futures, while a move of 7 percent close the market for the rest of the day. The CSI 300 of companies listed in Shanghai and Shenzhen fell as much as 7.2 percent before trading was suspended.

Chinese stocks in Hong Kong, which doesn’t have circuit breakers, slumped 4.4 percent. The offshore yuan fell to a five-year low before erasing losses

As I warned during my closing year outlook

Defending the US dollar soft peg required access to US dollars. Unfortunately, such window has been closing for the Chinese economy. Moreover, outflows and or capital flight have been compounding on the supply conditions of an already scarce US dollar. Finally, domestic credit expansion to save the stock markets translates to relatively more money supply vis-a- vis the US dollar (whether the Fed tightens or keeps policies at current levels). This implies supply side influences on the yuan’s weakness.

Hence, inflationism PLUS the scarcity of US dollar supply reveals why the US CNY soft peg cannot be sustained. Acting like a relief valve, China’s central bank, the PBOC, simply relented on the building pressures on the peg. The PBoC responded by allowing the markets to partially revalue the yuan. Hence the devaluation! ...

And it may not just be about capital flight but likewise, imploding bubbles should translate to money supply destruction. And this can be seen through the slack in money supply (M2) growth, slumping growth of CPI and deepening deflation in manufacturing input prices or the PPI

Importantly, considering China’s immense US dollar debt exposure, borrowing to pay back debt will only reduce US dollar supply. How much more when highly leverage companies default?

And this compounds on the US dollar dilemma which has now become a global phenomenon.

So while the USD CNY’s advance may not have been as steep as last August, the USD-CNY broke out from its allotted bandwidth.

The last time the USD-CNY materially advanced (again last August), the USD Php spiked, and global financial markets tremored.

Déjà vu August 2015? Or was August an appetizer or the blueprint of the things to come (for 2016)?

Quote of the Day: The Saudi Arabian Government is the Ultimate Inspiration and Financial Benefactor of the Islamic State

A lengthy excerpt from analyst David Stockman from his latest article on the Middle East crisis:

The truth is, the long era of the so-called oil crisis never happened. It was only a convenient Washington invention that was used to justify statist regulation and subsidization of energy domestically and interventionist political and military policies abroad.

Back in the late 1970s as a member of the House Energy Committee I argued that the solution to high oil prices was the free market; and that if politicians really wanted to cushion the purely short-term economic blow of a Persian Gulf supply interruption the easy and efficient answer was not aircraft carriers, price controls and alternative energy subsidies, but the Texas and Louisiana salt domes that could be easily filled as a strategic petroleum reserve (called SPRO).

During the Reagan era we unleashed the energy pricing mechanisms from the bipartisan regime of price and allocation controls which had arisen in the 1970s and began a determined campaign to fill the SPRO. Thirty-five years later we have a full SPRO and a domestic and world economy that is chock-a-block with cheap energy because the pricing mechanism has done its job.

In fact, OPEC is dead as a doornail, and the real truth has now come out. Namely, there never was a real oil cartel. It was just the House of Saud playing rope-a-dope with Washington, and its national oil company trying to do exactly what every other global oil major does.

That is, invest and produce at rates which are calculated to maximize the present value of its underground reserves. And that includes producing upwards of 10 million barrels per day at present, even as the real price of oil has relapsed to 50 year ago levels.

What this also means is that Imperial Washington’s pro-Saudi foreign policy is a vestigial relic of the supreme economic ignorance that Henry Kissinger and his successors at the State Department and in the national security apparatus brought to the table decade after decade.

Had they understood the energy pricing mechanism and the logic of SPRO, the Fifth Fleet would never have been deployed to the Persian Gulf. There also never would have been any Washington intervention in the petty 1990 squabble between Saddam Hussein and the Emir of Kuwait over directional drilling in the Rumaila oilfield that straddled their historically artificial borders.

Nor would there have been any “crusader” boots trampling the allegedly sacred lands of Arabia or subsequent conversion of Bin-Laden’s fanatical Sunni mujahedeen, which the CIA had trained and armed in Afghanistan, to the al-Qaeda terrorists who perpetrated 9/11.

Needless to say, the massive US “shock and awe” invasion thereafter which destroyed the tenuous Sunni-Shiite-Kurd coexistence under the Baathist secularism of Saddam Hussein would not have happened, either. Nor would the neocon war mongers have ever become such a dominant force in Imperial Washington and led it to the supreme insanity of regime change in Libya, Syria, Yemen and beyond.

In short, the massive blowback and episodic eruptions of jihadist terrorism in Europe and even America that plague the world today would not have occurred save for the foolish policy of Fifth Fleet based energy policy.

Still, there is an even more deleterious consequence of the Kissinger Error. Namely, it has allowed the House of Saud, along with Bibi Netanyahu’s political machine, to egregiously mis-define the sectarian and tribal conflicts which rage in today’s middle-east.

The fact is, there is no such thing as generic Islamic terrorism. The overwhelming share of the world’s 1.3 billion or so Sunni Muslims are not remotely interested in Jihaddism.

Likewise, the 200 million adherents of the Shiite Muslim confession are not terrorists in any religious or ideological sense. There are about 60 million Shiite in India and Pakistan and their quarrel, if any, is rooted in antagonisms with Hindu-India, not the West or the US.

Similarly, the 80 million Shiite domiciled in Iran, southern Iraq, southern Lebanon and the Alawite communities of Syria have been host to sporadic terrorist tactics. But these occurred overwhelmingly in response to efforts by outside powers to occupy Shiite communities and lands.

That is certainly the case with the 20-year Israeli occupation of southern Lebanon, which gave rise to Hezbollah defense forces. It is also true of the Shiite uprisings in Baghdad and southern Iraq, which gave rise to the various militias that opposed the US occupation.

Moreover, post-1979 Iran has never invaded anyone, nor have the Shiite communities of northern Yemen, who are now being bombarded by Saudi pilots driving US supplied war planes and drones.

In short, there has never been a Shiite-based ideological or religious attack on the West. The anti-Americanism of the Iranian theocracy is simply a form of crude patriotism that arose out of Washington’s support for the brutal and larcenous regime of the Shah—–and which was reinforced during Iraq’s US aided invasion of Iran during the 1980s.

By contrast, the real jihadi terrorism in the contemporary world arose almost exclusively from the barbaric fundamentalism of the Sunni-Wahhabi branch of Islam, which is home-based in Saudi Arabia.

Yet this benighted form of medieval religious fanaticism survives only because the Saudi regime enforces it by the sword of its legal system; showers its domestic clergy with the bounty of its oil earnings; and exports hundreds of millions to jihadists in Syria, Iraq, Libya, Turkey, Iran, Egypt and numerous other hot spots in the greater middle east.

At the end of the day, the House of Saud is also the ultimate inspiration and financial benefactor of the Islamic State, as well. Had it not provided billions in weapons and aid to the Syrian rebels over the last five years, there would be no civil war in Syria today, nor would ISIS have been able to occupy the dusty, impoverished towns and villages of the Upper Euphrates Valley where it has established its blood-thirsty caliphate.

So this weekend’s execution of a Saudi Shiite cleric who never owned a gun or incited anything other than peaceful protest among the downtrodden Shiite communities of eastern Arabia is truly the final straw. It was a deliberate provocation by a reprehensible regime that has so thoroughly corrupted the War Party that it even managed to have Washington shill for its preposterous appointment to head of the UN Commission on Human Rights!

Infographics: Bitcoin Was The Top Performing Currency in 2015

The Visual Capitalist writes:

The Money Project is an ongoing collaboration between Visual Capitalist and Texas Precious Metals that seeks to use intuitive visualizations to explore the origins, nature, and use of money.

For most investors, the major story of 2015 was the expectation and eventual fulfillment of a rate hike, signalling the start of tightening monetary policy in the United States. This policy is divergent to those of other major central banks, and this has translated into considerable strength and momentum for the U.S. dollar.

Using the benchmark of the U.S. Dollar Index, a comparison against a basket of major currencies, the dollar gained 8.3% throughout the year.

Despite this strength, the best performing currency in 2015 was not the dollar. In fact, the top currency of 2015 is likely to be considered the furthest thing from the greenback.

Bitcoin, a digital and decentralized cryptocurrency, staged a late comeback in 2015 to overtake the dollar by a whopping 35% by the end of the year.

Bitcoin is no stranger to extremes. During the year it came into the mainstream in 2013, Bitcoin gained 5,429% to easily surpass all other currencies in gains. However, the following year it would become a dog, losing -56% of its value to become the world’s worst performing currency in 2014.

The second best performing major currency, relative to the USD, was the Israeli shekel. It gained 0.3% throughout the year, and the Japanese yen (0%) and Swiss franc (0%) were close behind, finishing on par with how they started the year.

The world’s worst performing currencies are from countries that were battered by commodities or geopolitical strife.

Ukraine’s hryvnia fell -33.8% in the aftermath of Crimea. Brazil’s real (-30.5%), the Canadian dollar (-15.9%), Russian ruble (-20.8%), and South African rand (-26.7%) all lost significant value in the purging of global commodities. Gold finished the year down -10%, and silver at -11%.

Courtesy of: The Money Project

Chinese Stocks Greets 2016 with a Bang: 7% Crash that Triggered Trading Halts! Japan's Nikkei Dives 3%!

Baptism of fire it has been for the opening sessions of several key stock markets in 2016.

Unfortunately, instead of fireworks to celebrate 2016, Chinese stock markets greeted the New Year with a shocking 7% crash that prompted for a trading halt!

The Bloomberg reports:

China halted trading in stocks, futures and options after a selloff triggered circuit breakers designed to limit swings in one of the world’s most volatile equity markets.

Trading was halted at about 1:34 p.m. local time on Monday after the CSI 300 Index dropped 7 percent, according to data compiled by Bloomberg. An earlier 15-minute halt at the 5 percent level failed to stop the retreat, with shares extending losses as soon as the market re-opened. The selloff, the worst-ever start to a year for Chinese shares, came on the first day the circuit breakers took effect.

The $7.1 trillion stock market is starting the year on a down note after data showed manufacturing contracted for a fifth straight month and investors anticipated the end of a ban on share sales by major stakeholders. Chinese policy makers, who went to unprecedented lengths to prop up stock prices during a summer rout, are trying to prevent financial-market volatility from weighing on economy set to grow at its weakest annual pace since 1990.

Perhaps policymakers were still in vacation. So when the cat is away the mouse will play.

More...

Under the circuit breaker rules finalized last month, a move of 5 percent in the CSI 300 triggers a 15-minute halt for stocks, options and index futures, while a move of 7 percent closes the market for the rest of the day. The CSI 300, comprised of large-capitalization companies listed in Shanghai and Shenzhen, fell as much as 7.02 percent before trading was suspended.

Chinese shares listed in Hong Kong, where there is no circuit breaker, extended losses after the halt on mainland exchanges. The Hang Seng China Enterprises Index retreated 4.1 percent at 2:12 p.m. local time.

The above table exhibits the broad based bloodbath in Chinese equities that was halted today due to new circuit breaker.

Absent in the above report has been the developments in today's offshore yuan (USD-CNH).  The CNH which has apparently fallen by a substantial amount...(or the USD has risen significantly)

This in contrast to the more tightly government controlled onshore Yuan (USD CNY) which likewise surged at the pm session

With the CNH falling more than the CNY, this has brought about a wider gap between the two. It really signs of strains being ventilated on the currency markets, which partly emanates from outflows (capital flight) and mostly from deflationary pressures within China. And strains in the currency market seem to have spilled over to stocks.

This also shows that no matter how the Chinese government tries to facelift its financial markets, pressures from imbalances will emerge elsewhere

Woes in China's stocks appears to have spread to Japan's Nikkei 225 which tanked by 3% today. 

And as of this writing US futures based on CNN data have likewise been significantly down.

Have these been writing on the wall for 2016 (not limited to financial markets but to real economies as well)?

2016: A Year of Sovereign Debt Defaults?

Ms. Carmen Reinhart, Harvard professor and co-author of the book that chronicled financial crises during the last eight centuries entitled "This Time is Different", sees 2016 with a grim outlook. She has sounded the sirens on the increased likelihood of government debt defaults this year. And such string of  government debt defaults may start with, or be triggered by emerging markets.

An excerpt extracted from Project Syndicate (bold added)

As 2016 begins, there are clear signs of serious debt/default squalls on the horizon. We can already see the first white-capped waves.

For some sovereigns, the main problem stems from internal debt dynamics. Ukraine’s situation is certainly precarious, though, given its unique drivers, it is probably best not to draw broader conclusions from its trajectory.

Greece’s situation, by contrast, is all too familiar. The government continued to accumulate debt until the burden was no longer sustainable. When the evidence of these excesses became overwhelming, new credit stopped flowing, making it impossible to service existing debts. Last July, in highly charged negotiations with its official creditors – the European Commission, the European Central Bank, and the International Monetary Fund – Greece defaulted on its obligations to the IMF. That makes Greece the first – and, so far, the only – advanced economy ever to do so.

But, as is so often the case, what happened was not a complete default so much as a step toward a new deal. Greece’s European partners eventually agreed to provide additional financial support, in exchange for a pledge from Greek Prime Minister Alexis Tsipras’s government to implement difficult structural reforms and deep budget cuts. Unfortunately, it seems that these measures did not so much resolve the Greek debt crisis as delay it.

Another economy in serious danger is the Commonwealth of Puerto Rico, which urgently needs a comprehensive restructuring of its $73 billion in sovereign debt. Recent agreements to restructure some debt are just the beginning; in fact, they are not even adequate to rule out an outright default.

It should be noted, however, that while such a “credit event” would obviously be a big problem, creditors may be overstating its potential external impacts. They like to warn that although Puerto Rico is a commonwealth, not a state, its failure to service its debts would set a bad precedent for US states and municipalities.

But that precedent was set a long time ago. In the 1840s, nine US states stopped servicing their debts. Some eventually settled at full value; others did so at a discount; and several more repudiated a portion of their debt altogether. In the 1870s, another round of defaults engulfed 11 states. West Virginia’s bout of default and restructuring lasted until 1919.

Some of the biggest risks lie in the emerging economies, which are suffering primarily from a sea change in the global economic environment. During China’s infrastructure boom, it was importing huge volumes of commodities, pushing up their prices and, in turn, growth in the world’s commodity exporters, including large emerging economies like Brazil. Add to that increased lending from China and huge capital inflows propelled by low US interest rates, and the emerging economies were thriving. The global economic crisis of 2008-2009 disrupted, but did not derail, this rapid growth, and emerging economies enjoyed an unusually crisis-free decade until early 2013.

But the US Federal Reserve’s move to increase interest rates, together with slowing growth (and, in turn, investment) in China and collapsing oil and commodity prices, has brought the capital inflow bonanza to a halt. Lately, many emerging-market currencies have slid sharply, increasing the cost of servicing external dollar debts. Export and public-sector revenues have declined, giving way to widening current-account and fiscal deficits. Growth and investment have slowed almost across the board.

From a historical perspective, the emerging economies seem to be headed toward a major crisis. Of course, they may prove more resilient than their predecessors. But we shouldn’t count on it.

Parallel Universe: Philippine Online Job Openings Collapse as Government Declares Record High Employment Rates!

The Philippine government tell us that for 2015, employment rate has surged to 93.7% or that unemployment rate has dropped to 6.3%.

The government tell us too that in 4Q 2015 employment rate was at 94.4% an all-time high! Unemployment rate as of October 2015 dropped to 5.7% which also represents a record low milestone!

These survey numbers contradict real events.

Why?  

 

Because online job postings have been crashing in 2015 relative to 2014!

According to online job agency, Monster.com, "The Monster Employment Index Philippines registered a -46% year-on-year decline in online recruitment activities between November 2014 and November 2015." (bold added)

It’s not just November though, with the exception of December which has yet to be posted, the entire 2015 have shown jobs growth numbers and levels significantly well below the 2014!

And it is NOT just Monster, two other employment indices which I monitor have been exhibiting Monster’s dilemma.

Firm A, one of the top online job sites, which used to owned by one of the largest publicly listed holding company, has exhibited a 35% collapse in online job postings from a week ago since May, when I began tabulating their numbers!

Firm A’s September bounce, echoes with Monster’s data. And so with the November thud!

Firm B hasn’t been as lucky as Firm A. 

Firm B’s job opening numbers has virtually evaporated! Since April, Firm B’s online jobs have crumbled by a shocking 80% as of a week ago! Competition and the overall low job postings, perhaps led to the erosion of its market share.

While employment data is nuanced than job openings, job openings give us an insight on the conditions of job markets. Job openings provide a clue of the hiring process and employment conditions.

I have previously wrote about such divergence:

Perhaps employers have resorted to the traditional medium of newspaper based advertisement, which should be more costly, and more inefficient in drawing audiences or candidate employees.

Or perhaps employers have resorted to direct hiring via viral networking, without media advertisements.

Or perhaps job openings have really been dwindling.

Nonetheless based on online job openings the government’s statistical numbers have been unsubstantiated.

This simply tells us that the government’s numbers may be about statistical Sadakos. Or that their numbers that just popped out of the computer screens to generate a showbiz statistical talisman impact.

Yet Monster’s November job opening collapse was broad based! The decline included the top growth industries…yes, mainstream's favorite BPOs too (down by double digit)!

As in June’s data where Monster.com tries to spin the bad developments, as noted here:

Online jobs continue to nosedive. Monster.com’s June data reveals that online hiring plunged 32% year on year. Yet they call this “a significant improvement in growth from -43% in May 2015”. Huh? 

Officers from monster.com must have been scathingly pilloried by the throng of believers who think that the Philippines have reached a developed economy status to force the latter to utter such balderdash.

Monster officials say that current job collapse has “Partly due to the halting investments ahead of the elections and the dry spells of the El Nino, hiring has also begin to slow down”.

But they remain optimistic. They noted that job openings “will likely see a rebound in 2016, given the country’s strong private consumption as well as higher government spending in order to drive growth in the country”

If there has indeed been “strong private consumption” then why would election or political uncertainty serve as a roadblock for investments?

Have the business community become so fearful of the change in administration for them not to take advantage of opportunities from the meme of “strong private consumption”? Or why has the business community become (in aggregate) suddenly blind or dense to profit opportunities?

Yet the BSP tells us of a starkly different story: the business community have supposedly been more upbeat in Q3 and Q4. If so, why the lack of investments? Who has been telling the truth or who has been lying?

Second, how has the dry spells of the El Nino affected investments or job openings? Agriculture accounted for just 8.57% share of 3Q constant based GDP, whereas the Service sector had the largest share at 59.01%. Has there not been a consumer boom to offset dislocations from the weather? 

And if Monster’s numbers accurately reflect on economic activities, then why the slump in ALL sectors?

As for government spending, hasn’t there been a boom in government spending? 

Growth in government spending numbers has reportedly accelerated 19.3% in 3Q relative to 12.4% in 2Q and 4.5% in 1H. Yet where are the jobs? Why has the surge in government spending coincided with a collapse in the job opening markets? Even if we see things in terms of a time lag, the 2Q government spending activities should have at least buoyed job opening numbers. So why the vacuum? 

Could it be because job growth has emerged only in firms of crony enterprises benefiting from government spending projects in the exclusion of the rest?

Yes the government's record low unemployment and all time high employment rates paradoxically comes in the face of slowing statistical GDP, manufacturing and export recession, “halting of investments” and collapsing online job postings. That's government's economic logic for you: Low is high, down is up, few is many.

And you see, where (the phony) boom has been seen by the public or impressed upon the public as a politically correct theme, any negatives has to be denied, censored or rationalized by the mainstream's spin doctors.

At the end of the day, panics are created by reality overwhelming embedded or entrenched misimpressions, misperceptions and deceptions.

Personal Message: Wishing You the Best of 2016!

Thanks to my daughter for the graphic