Have you gotten around to calculating the Fundamental Demand for new housing from the Census data? I know that people here and you spend lot of time on various supply related data, but unless there is good measure of demand we dont know how far the supply must fall and for how long, no?
Since there are many economists with Ph.D. here, may be they can help in coming to an agreement on the Fundamental Demand, as opposed to the Speculative Demand, for house-dwellings.
FWC: what is good for bankers and financiers is good for America.
Comment by Ben Jones: So far, that isnt a penny from taxpayers. IMO, the real threat of a bailout would be for the GSE bondholders.
Comment by Jas Jain: Most of the Fed and USG intervention in recent years has been to bail out bankers and financiers. No?
Of course, the argument is that by bailing out the bankers and financiers they are saving the US economy and thus the Little Guy, that Louis Rukeyser often talked about when he talked about the stock market.
We have created conditions whereby what is good for bankers and financiers is good for America. 30-40 years ago it was said of General Motors. -- Jas
Comment by palmetto: Great point, Jas. The difference, of course, is that General Motors provided jobs, pensions and a halfway decent product, back in the day. The bankers and financiers provide offshoring, outsourcing and massive transfers of wealth. They provide very little in the way of employment and their product is debt.
Comment by GetStucco: "The bankers and financiers serve a similar purpose, for the top 0.5% of the wealth distribution the part that pays the bulk of political campaign contributions."
Comment by Jas Jain: I study my Adam Smith religiously. The master said that bankers and financiers (especially traders) have no allegiance to any nation or people. They will take their capital to any end of the globe.
I can guarantee you one thing -- bankers and financiers will take their capital and move it somewhere outside the USoA. But, first they will milk the American People for all they are worth and more. The two bubbles over the past dozen years were to milk American People for more than what they are worth. During 2008-10 jobs will be gone, capital will be gone and some of the bankers and financiers will move to their new capital in Shanghai. They will still be able to collect rent (also know as interest) on their capital from the American People remotely. Arent globalization and technology wonderful? -- Jas
Back on topic, this chart should have a steady positive slope cet par. It is encouraging to see that despite 30 years of job growth, the trend is more or less flat since 1980.
It might not be sustainable forever, but that aspect makes it a happy chart for America.
--
Back to Topic -- Jobless Claims look awfully similar to pre 1973-74 recession. It was a very nasty recession.
Of course, the coming recession (any month now) will make Americans forget all other recessions. Then, to top it off, the depression that follows will make the world forget the Great Depression.
The severity of a depression is proportional to the "bankers' mischief" that preceded! The world has never seen more mischievous bankers and financiers. And govt., including the Fed, as enablers. Or, has it?
The Department of Homeland Security is already working on a system that will help lenders determine which borrowers are truly "qualified." To see how the beta version works, click here.
--
"It is encouraging to see that despite 30 years of job growth, the trend is more or less flat since 1980."
Ah, Name, you forget the denominator of job growth to normalize the job losses. (Total employment is NOT a good denominator).
The 6-Year rate of job growth (I have used 6- years because this cycle to me is going to be a 6-year cycle) is the LOWEST SINCE THE GREAT DEPRESSION ENDED (1949-50).
Can anyone here guess the 6-Year annual rate of job growth (Non-farm Payroll)?
It is very important, if one is interested in cyclical turns, that cyclical job losses, including the Jobless Claims, during the expected downturn be measured against the Job Growth since the last cyclical peak.
Jobless claims have yet to reverse Easter's upward distortion. Claims fell 4,000 in the April 14 week to a 339,000 level that is far above median expectations for 320,000 and well above outside expectations of 330,000.
The high jobless claims are just a residual hangover from the drunken debauchery that was Easter, apparently. It couldn't be that claims were, instead, distorted downward. That might dissuade some people from buying stocks.
I don't see anything good or bad in jobless claims. It's not a good indicator to predict recessions, unless it goes out of range, like to 400k or 250k.
theroxylander said: "... I don't see anything good or bad in jobless claims. It's not a good indicator to predict recessions, unless it goes out of range, like to 400k or 250k..."
A lot of economic indicators are like that. For example, a lower level of GDP growth or earnings growth isn't bearish at all if it's within an "expansionary" range. Rising inflation is also benign unless it breaks above a "normal" range.
for every 2 people retiring, there is 1 person qualified to replace them.
Thus, jobless claims might not be an indicator of a recession this time around, since the claims will probably remain artificially low for the next decade or so.
--
Your reasoning supports an argument against something, but not the observation I made.
I fully understand your unwillingness to change your logic, but for the benefits of the open-minded I will give it a second, and hopefully better, try.
Vast majority of jobs, especially in a service jobs dominated economy, are NOT CYCLICAL. Therefore, the jobs that are likely to be lost, and Initial Claims are just one indication of that, are going to be proportional to the growth in jobs during the cycle. This cycle has been the worst in job creation since the end of the Great Depression. Since, lot fewer CYCLICAL JOBS were created (mostly in the area of pure consumption) lot fewer people are let go in any given week or month. No?
THE BEST MEASURE WOULD BE: HOW MANY MONTHS WORTH OF JOB INCRFEASES WERE INITIAL JOBLESS CLAIMS.
Average job increases per month for the past 6 years are 85K. Therefore, we have 4 months worth of jobs filing for initial claims in a week. This is bad and it could be that the recovery is tired and will soon fall flat on the ground.
I sincerely hope that this clarifies the point I was trying to make earlier in shorthand.
Two more weeks like the last two and it will be exactly where it was right before the last two recessions started. Not saying that's going to happen, though.
The idea I had, which does not necessarily conflict with what you are saying, is that the labor force is larger than it was in the 1970s, but the number of poor souls separated from their jobs in an average week is not larger. I am discounting the cycles and looking at the trend line.
Your idea seems to be that it is more difficult for the disgourged workers to get reemployed when job growth is low.
It is possible for both ideas to be true.
I agree that fewer jobs correlate with lower prospects of reemployment. But because job creation is reported net of job elimination, it would take a diminishingly short time for reemployment without any job growth at all cet par.
The ease of reemployment idea is less straightforward, because you have to consider immigration, location, skillsets, etc. I understand that all else isn't really equal.
--
OT but Important
Hello CR,
Have you gotten around to calculating the Fundamental Demand for new housing from the Census data? I know that people here and you spend lot of time on various supply related data, but unless there is good measure of demand we dont know how far the supply must fall and for how long, no?
Since there are many economists with Ph.D. here, may be they can help in coming to an agreement on the Fundamental Demand, as opposed to the Speculative Demand, for house-dwellings.
Thanks.
Jas
--
Another OT, but, hopefully, of interest here:
April 19, 2007
FWC: what is good for bankers and financiers is good for America.
Comment by Ben Jones: So far, that isnt a penny from taxpayers. IMO, the real threat of a bailout would be for the GSE bondholders.
Comment by Jas Jain: Most of the Fed and USG intervention in recent years has been to bail out bankers and financiers. No?
Of course, the argument is that by bailing out the bankers and financiers they are saving the US economy and thus the Little Guy, that Louis Rukeyser often talked about when he talked about the stock market.
We have created conditions whereby what is good for bankers and financiers is good for America. 30-40 years ago it was said of General Motors. -- Jas
Comment by palmetto: Great point, Jas. The difference, of course, is that General Motors provided jobs, pensions and a halfway decent product, back in the day. The bankers and financiers provide offshoring, outsourcing and massive transfers of wealth. They provide very little in the way of employment and their product is debt.
Comment by GetStucco: "The bankers and financiers serve a similar purpose, for the top 0.5% of the wealth distribution the part that pays the bulk of political campaign contributions."
Comment by Jas Jain: I study my Adam Smith religiously. The master said that bankers and financiers (especially traders) have no allegiance to any nation or people. They will take their capital to any end of the globe.
I can guarantee you one thing -- bankers and financiers will take their capital and move it somewhere outside the USoA. But, first they will milk the American People for all they are worth and more. The two bubbles over the past dozen years were to milk American People for more than what they are worth. During 2008-10 jobs will be gone, capital will be gone and some of the bankers and financiers will move to their new capital in Shanghai. They will still be able to collect rent (also know as interest) on their capital from the American People remotely. Arent globalization and technology wonderful? -- Jas
The Housing Bubble Blog » Bits Bucket And Craigslist Finds For April 19, 2007
Back on topic, this chart should have a steady positive slope cet par. It is encouraging to see that despite 30 years of job growth, the trend is more or less flat since 1980.
It might not be sustainable forever, but that aspect makes it a happy chart for America.
--
Back to Topic -- Jobless Claims look awfully similar to pre 1973-74 recession. It was a very nasty recession.
Of course, the coming recession (any month now) will make Americans forget all other recessions. Then, to top it off, the depression that follows will make the world forget the Great Depression.
The severity of a depression is proportional to the "bankers' mischief" that preceded! The world has never seen more mischievous bankers and financiers. And govt., including the Fed, as enablers. Or, has it?
Jas
The Department of Homeland Security is already working on a system that will help lenders determine which borrowers are truly "qualified." To see how the beta version works, click here.
--
"It is encouraging to see that despite 30 years of job growth, the trend is more or less flat since 1980."
Ah, Name, you forget the denominator of job growth to normalize the job losses. (Total employment is NOT a good denominator).
The 6-Year rate of job growth (I have used 6- years because this cycle to me is going to be a 6-year cycle) is the LOWEST SINCE THE GREAT DEPRESSION ENDED (1949-50).
Can anyone here guess the 6-Year annual rate of job growth (Non-farm Payroll)?
Jas
--
Cyclical Job Growth and Cyclical Job Losses
It is very important, if one is interested in cyclical turns, that cyclical job losses, including the Jobless Claims, during the expected downturn be measured against the Job Growth since the last cyclical peak.
Any arguments, pro or con?
Jas
Og
Jobless claims have yet to reverse Easter's upward distortion. Claims fell 4,000 in the April 14 week to a 339,000 level that is far above median expectations for 320,000 and well above outside expectations of 330,000.
The high jobless claims are just a residual hangover from the drunken debauchery that was Easter, apparently. It couldn't be that claims were, instead, distorted downward. That might dissuade some people from buying stocks.
Barron's Econoday - Barrons.com
Jas,
Your reasoning supports an argument against something, but not the observation I made.
I have a feeling a lot of your conversations might work that way.
Name
Also, I'm sure this has been linked here previously, but I think it's worth re-linking because it adds some (negative) context to the jobless claims:
Are Immigrant Workers Skewing the Statistics
Jas,
I don't understand at all what you are trying to say.
maybe put it somewhere ina condensed fashion and provide us with a link ?
I don't see anything good or bad in jobless claims. It's not a good indicator to predict recessions, unless it goes out of range, like to 400k or 250k.
the drunken debauchery that was Easter [ac]
This is clearly the key factor in making sense of recent data...
theroxylander said: "... I don't see anything good or bad in jobless claims. It's not a good indicator to predict recessions, unless it goes out of range, like to 400k or 250k..."
A lot of economic indicators are like that. For example, a lower level of GDP growth or earnings growth isn't bearish at all if it's within an "expansionary" range. Rising inflation is also benign unless it breaks above a "normal" range.
S.
The baby-boomer factor!
for every 2 people retiring, there is 1 person qualified to replace them.
Thus, jobless claims might not be an indicator of a recession this time around, since the claims will probably remain artificially low for the next decade or so.
--
Your reasoning supports an argument against something, but not the observation I made.
I fully understand your unwillingness to change your logic, but for the benefits of the open-minded I will give it a second, and hopefully better, try.
Vast majority of jobs, especially in a service jobs dominated economy, are NOT CYCLICAL. Therefore, the jobs that are likely to be lost, and Initial Claims are just one indication of that, are going to be proportional to the growth in jobs during the cycle. This cycle has been the worst in job creation since the end of the Great Depression. Since, lot fewer CYCLICAL JOBS were created (mostly in the area of pure consumption) lot fewer people are let go in any given week or month. No?
THE BEST MEASURE WOULD BE: HOW MANY MONTHS WORTH OF JOB INCRFEASES WERE INITIAL JOBLESS CLAIMS.
Average job increases per month for the past 6 years are 85K. Therefore, we have 4 months worth of jobs filing for initial claims in a week. This is bad and it could be that the recovery is tired and will soon fall flat on the ground.
I sincerely hope that this clarifies the point I was trying to make earlier in shorthand.
Jas
--
Correction:
"Average job increases per month for the past 6 years are 85K. Therefore, we have 4 months worth of jobs filing for initial claims in a week."
Should read:
Average job increases per month for the past 6 years are 71K. Therefore, we have 5 months worth of jobs filing for initial claims in a week.
I divided by 60 rather than 72 months by mistake.
Jas
Two more weeks like the last two and it will be exactly where it was right before the last two recessions started. Not saying that's going to happen, though.
"Average job increases per month for the past 6 years are 71K. Therefore, we have 5 months worth of jobs filing for initial claims in a week."
Job creation is measured net.
--
"Job creation is measured net."
I didn't know that. Tells you how ignorant I am. I don't blame you for ignoring my logic.
Jas
I owe you more words Jas.
The idea I had, which does not necessarily conflict with what you are saying, is that the labor force is larger than it was in the 1970s, but the number of poor souls separated from their jobs in an average week is not larger. I am discounting the cycles and looking at the trend line.
Your idea seems to be that it is more difficult for the disgourged workers to get reemployed when job growth is low.
It is possible for both ideas to be true.
I agree that fewer jobs correlate with lower prospects of reemployment. But because job creation is reported net of job elimination, it would take a diminishingly short time for reemployment without any job growth at all cet par.
The ease of reemployment idea is less straightforward, because you have to consider immigration, location, skillsets, etc. I understand that all else isn't really equal.