CR, how high do you think unemployment will rise to, during the current (probable) recession. (I remember that you've mentioned that it will stay below 8%).
"Note: There is nothing magical about the 350K level. We don't need to adjust for population growth because this indicator is just suggestive and not precise."
We have pop increasing over time but an offsetting shift in employment to contract or 1099 work... and participation rate declines. It's my sense that to make comparisons to earlier periods it would be useful to see those factored in a thoughtful way.
Did anyone see my Wright Model B?I unplugged it and threw it in the bay. And while I was at it, I signed up its chief proponent for a course that teaches the difference between normative and non-normative analysis.
REBear,
I seem to remember that one of the reasons GDP came in positive was the increase in inventories. So a revision downward would have a negative effect on GDP. I wonder if it was enough of a revision to put GDP into negative territory.
A bank employee inspecting a foreclosed house in Fontana stumbled upon a thriving business: more than 2,000 mature marijuana plants, part of a drug bust valued at $4.5 million.
From The Sun of San Bernardino: "Angel Wayhang Kou, 30, of Rancho Cucamonga was booked into jail on suspicion of cultivating marijuana, maintaining a residence for drugs, theft of utilities and conspiracy. ... Police began investigating the case Thursday when the bank employee inspecting a foreclosed house in the 14500 block of Mammoth Place found pot plants inside."
if you have a couple million in buds growing, why can't you mail a simple 2g mortgage payment... and if your in jail, have a buddy do it.
hank ... "He said the bill as it is structured now would shift too much risk from financial institutions to taxpayers and it was unacceptable to make permanent an increase in loan limits for Fannie Mae and Freddie Mac"
if you have a couple million in buds growing, why can't you mail a simple 2g mortgage payment... and if your in jail, have a buddy do it.
confused
The same reason that if you've got a perfectly good business going writing mortgage loans, you can't restrain yourself from expanding it to include blatantly unfit borrowers: pure, good old, unadulterated American greed.
Much of the home building was done using undocumented Mexicans, and thus, largely unemployment in this field will go unreported. Have Mexicans started to move back to their mother country?
Anonymouse writes:
Anyone notice financial equities diving on big volume this morning? News related or just technical turn...?
Anonymouse | 05.08.08 - 11:03 am | #
European Central Bank and the Bank of England holding out on rate cuts?
There seems to be a lot of hand wringing over whether there will be a recession or not. Do we care? Has anything really changed from a few months ago? It seems that the Fed is just as terrified of banks blowing up as back then and the calm facade and talk, talk, talk of Bernanke, Paulson et al is just designed to keep the masses from panicking whilst they carry on trying to fix things. But the situation remains the same: only subprime has blown up so far and Alt A and Option ARM resets are still ahead of us. Credit cards borrowing has soared as HELOCs dried up, and is being used by stretched consumers to pay for food, petrol, and other essentials. All this bottom calling seems a bit optimistic to me but I'm no expert, just an observer. I suppose the Fed could try to inflate the hell out of everything in order to prop up the markets ("wheee, retail sales are up") but surely even the short bus riders are wise to that? Please argue with me, tell me what has changed, cause I don't see it.
I'm convinced the financials have turned downtown. XLF will have broken a swing point on big comp volume for 1st time since March lows; SKF has begun its ascent to $200.
nice link. thanks.
so judging from the graph, euro and oil diverge sometimes, but eventually do recouple. does it mean that short oil/buy euro may be a good trade now? although recent eco data from eurozone makes me want to short euro too...
Toyota, Honda Motor Co. and Mazda Motor Corp. all predict lower profit this year as the yen's 15 percent gain against the dollar in the past 12 months erodes the value of sales in North America. President Katsuaki Watanabe forecasts sales of Corollas, Avalons and other vehicles in the region, Toyota's biggest market, to decline 6.4 percent this fiscal year amid a ``severe business environment.''
It's now time to readjust our structure after having years of constant growth,'' Watanabe said at a Tokyo press conference.It's a golden opportunity to eliminate waste'' in the company.
Hybrid Cars
The overall U.S. market dropped 8.1 percent in the three months ended March 31. The price of regular gasoline gained 8 percent to $3.29 a gallon in the period and cost $3.62 a gallon as of yesterday.
Even though they are gaining market share, the gains are into a shrinking market and profitability is decreasing. Watanabe-san's statement is a wise one...too bad Detroit auto leaders don't take that advice instead of fiddling and making excuses.
It seems that the Bank of Japan won't need to intervene in FX as the dollar is strengthening gradually again.
Based on the article, these are sensible guys...quit while you're ahead and don't get too greedy. Sort of the opposite of the standard Las Vegas mentality that has pervaded America these last few years.
"Note: There is nothing magical about the 350K level. We don't need to adjust for population growth because this indicator is just suggestive and not precise."
Isn't population growth alone not enough though? With an older population you need to know how many are entering and how many are leaving the workforce.
It's now time to readjust our structure after having years of constant growth,'' Watanabe said at a Tokyo press conference.It's a golden opportunity to eliminate waste'' in the company.
Economists need to understand why our Golden Opportunities occur at the same time. If senior executives, bank officials, and government officials are waiting for the same golden moment, then we are in for something big.
True. Population is only the most obvious factor. Others include:
illegals in workforce
growth of contractor labor
age and other demographics
relative accuracy of data due to collection and distribution methods
To say its all a wash without modeling, and to hang your hat on a number 5% above an arbitrary threshold at the same time is not rational.
Please don't feed the trolls.
CR, how high do you think unemployment will rise to, during the current (probable) recession. (I remember that you've mentioned that it will stay below 8%).
Regards.
Did anyone see my Wright Model B?
"Note: There is nothing magical about the 350K level. We don't need to adjust for population growth because this indicator is just suggestive and not precise."
We have pop increasing over time but an offsetting shift in employment to contract or 1099 work... and participation rate declines. It's my sense that to make comparisons to earlier periods it would be useful to see those factored in a thoughtful way.
Whole sale inventories for March and Feb came in lower than expected (Feb was revised lower.) Does this have an effect on revised Q1 GDP?
Briefing.com: Economic Calendar
Did anyone see my Wright Model B?I unplugged it and threw it in the bay. And while I was at it, I signed up its chief proponent for a course that teaches the difference between normative and non-normative analysis.
REBear,
I seem to remember that one of the reasons GDP came in positive was the increase in inventories. So a revision downward would have a negative effect on GDP. I wonder if it was enough of a revision to put GDP into negative territory.
ot
A bank employee inspecting a foreclosed house in Fontana stumbled upon a thriving business: more than 2,000 mature marijuana plants, part of a drug bust valued at $4.5 million.
From The Sun of San Bernardino: "Angel Wayhang Kou, 30, of Rancho Cucamonga was booked into jail on suspicion of cultivating marijuana, maintaining a residence for drugs, theft of utilities and conspiracy. ... Police began investigating the case Thursday when the bank employee inspecting a foreclosed house in the 14500 block of Mammoth Place found pot plants inside."
if you have a couple million in buds growing, why can't you mail a simple 2g mortgage payment... and if your in jail, have a buddy do it.
hank ... "He said the bill as it is structured now would shift too much risk from financial institutions to taxpayers and it was unacceptable to make permanent an increase in loan limits for Fannie Mae and Freddie Mac"
Employment is overrated.
JS,
Q1 GDP got a 0.8% boost because of inventories. I'm not sure what percent of 'total inventory' is 'wholesale inventory'
contributions to GDP here
if you have a couple million in buds growing, why can't you mail a simple 2g mortgage payment... and if your in jail, have a buddy do it.
confused
The same reason that if you've got a perfectly good business going writing mortgage loans, you can't restrain yourself from expanding it to include blatantly unfit borrowers: pure, good old, unadulterated American greed.
Vikram, I'm not really sure how high unemployment will increase. I think 6% is very likely, and 7% is possible. Right now I think 8% is unlikely.
Best Wishes.
soros on NPR,
From TF:
Todd Harrison over at Minyanville ponders this for the past week and a half due to the massive amount of OTM puts that traded ahead of the collapse.
Today he throws out the following questions:
What if the March 17th Federal Reserve Bailout wasnt aimed at BSC
What if it was actually a bailout of JPM
What if Billionaire Joe Lewis had "knock out" Provisions on his BSC exposure
And JP Morgan was the counterparty to that transaction?
Could it be that JPM was responsible for listing and trading the 'out of the money' puts in BSC
Is that why we never saw an investigation on that outsized activity
Yal, I have also seen similar comments that the bailout was actually a bailout of JPM. I'll see if I can find it and post it.
CR,
What did you think of the report out today saying we are not in a recession? What happens if we just have zero growth?
With zero growth, doesn't debt implode?
Much of the home building was done using undocumented Mexicans, and thus, largely unemployment in this field will go unreported. Have Mexicans started to move back to their mother country?
Ouch! That does not look good. With unemployment going up, house prices falling and the national dept hitting ATH.
Bailout of JPM (and not Bear...)
Rescue for Bear or Bailout for JP Morgan? | Robert Salomon's Blog
RGE - The Fed is Getting Desperate in Dealing with a Liquidity Crunch that Shows Little Signs of Relenting
I like this guy, from Financial Times.
FT.com / Short View
I said from the day it happened that the BSC bailout was really a JPM bailout. JPM was probably BSC's largest counterparty.
We have pop increasing over time but an offsetting shift in employment to contract or 1099 work... and participation rate declines.
Do you have links on that barely? I'd be interested to know how much the shift is (officially) and what the numbers look like in time series.
Anyone notice financial equities diving on big volume this morning? News related or just technical turn...?
Hmm makes me think twice about my new loan approval for my new Harley...we shall see
Anonymouse writes:
Anyone notice financial equities diving on big volume this morning? News related or just technical turn...?
Anonymouse | 05.08.08 - 11:03 am | #
European Central Bank and the Bank of England holding out on rate cuts?
ECB, BOE Keep Main Rates Unchanged to Fight Inflation (Update1) - Bloomberg.com
Bottom - for my SRS that is.
I jusst finished reading Soros new book.
Let me sum it up.
- We are in a super bubble
- Housing bubble collapse is affecting the potential collapse of the super bubble.
- Reflexivity ^3
Soros made some bad bets very recently. He bought Bear Stears right before the price went $2.
He was shorting the $US at the bottom and lost a significant amount on the recent bounce.
Poor guy. There is a price to pay for being too smart and too early.
BTW: Did anyone else double up on gold when I told them to? I thought so
There seems to be a lot of hand wringing over whether there will be a recession or not. Do we care? Has anything really changed from a few months ago? It seems that the Fed is just as terrified of banks blowing up as back then and the calm facade and talk, talk, talk of Bernanke, Paulson et al is just designed to keep the masses from panicking whilst they carry on trying to fix things. But the situation remains the same: only subprime has blown up so far and Alt A and Option ARM resets are still ahead of us. Credit cards borrowing has soared as HELOCs dried up, and is being used by stretched consumers to pay for food, petrol, and other essentials. All this bottom calling seems a bit optimistic to me but I'm no expert, just an observer. I suppose the Fed could try to inflate the hell out of everything in order to prop up the markets ("wheee, retail sales are up") but surely even the short bus riders are wise to that? Please argue with me, tell me what has changed, cause I don't see it.
re gold....
the ECB's dump it to offset it's printing presses. It has had it's run for the time being. When they stop dumping it it will resume it's rise.
until then...sideways.
Ciao
MS
I'm convinced the financials have turned downtown. XLF will have broken a swing point on big comp volume for 1st time since March lows; SKF has begun its ascent to $200.
Poor guy Soros? Bad bets recently?
AR
Only made $2.9 billion last year.
wawawa | 05.08.08 - 10:49 am | #
nice link. thanks.
so judging from the graph, euro and oil diverge sometimes, but eventually do recouple. does it mean that short oil/buy euro may be a good trade now? although recent eco data from eurozone makes me want to short euro too...
Toyota, Honda Motor Co. and Mazda Motor Corp. all predict lower profit this year as the yen's 15 percent gain against the dollar in the past 12 months erodes the value of sales in North America. President Katsuaki Watanabe forecasts sales of Corollas, Avalons and other vehicles in the region, Toyota's biggest market, to decline 6.4 percent this fiscal year amid a ``severe business environment.''
It's now time to readjust our structure after having years of constant growth,'' Watanabe said at a Tokyo press conference.It's a golden opportunity to eliminate waste'' in the company.
Hybrid Cars
The overall U.S. market dropped 8.1 percent in the three months ended March 31. The price of regular gasoline gained 8 percent to $3.29 a gallon in the period and cost $3.62 a gallon as of yesterday.
A Las Vegas bank (Fifth Street Bank) has voluntarily shut itself down.
(hat tip: patrick.net)
RE: Toyota, Honda and Mazda...
Even though they are gaining market share, the gains are into a shrinking market and profitability is decreasing. Watanabe-san's statement is a wise one...too bad Detroit auto leaders don't take that advice instead of fiddling and making excuses.
It seems that the Bank of Japan won't need to intervene in FX as the dollar is strengthening gradually again.
El Cliffo:
Based on the article, these are sensible guys...quit while you're ahead and don't get too greedy. Sort of the opposite of the standard Las Vegas mentality that has pervaded America these last few years.
El Cliffo, how Bartelby the scrivener of them.
Will you make new loans?
I prefer not to.
sterlingerl writes: "There seems to be a lot of hand wringing over whether there will be a recession or not. Do we care?..."
I do. It's the difference between an -18% correction in the SP500 (which we've already had) and something much larger, along the lines of -28%.
Also unemployment of +6% and the next major downleg in housing price drops. Housing in my neck of the woods won't be spared, either.
If.
Sebastia
US Population:
1989: 246,819,230
2007: 301,139,947
Change: 22%
Correction for misuse of an absolute reference for selection from an expanding population:
350,000 * 1.22 = 427,029
"Note: There is nothing magical about the 350K level. We don't need to adjust for population growth because this indicator is just suggestive and not precise."
Only suggestive of a bias.
Isn't population growth alone not enough though? With an older population you need to know how many are entering and how many are leaving the workforce.
It's now time to readjust our structure after having years of constant growth,'' Watanabe said at a Tokyo press conference.It's a golden opportunity to eliminate waste'' in the company.
Economists need to understand why our Golden Opportunities occur at the same time. If senior executives, bank officials, and government officials are waiting for the same golden moment, then we are in for something big.
Sanity,
True. Population is only the most obvious factor. Others include:
illegals in workforce
growth of contractor labor
age and other demographics
relative accuracy of data due to collection and distribution methods
To say its all a wash without modeling, and to hang your hat on a number 5% above an arbitrary threshold at the same time is not rational.
Sebastian must made the most bearish statement of his life... time to go lllllllong eqqqqquities. (kidding of course, but noted).
SeaBass, I can't believe you acknoledge the existence of risk. Congratuatlions on opening an eye to take a peak at reality.
I said from the day it happened that the BSC bailout was really a JPM bailout. JPM was probably BSC's largest counterparty.
Anonymous
Wow, way to go out on that ledge.
Much like Chevy Chase in Memoirs of an Invisible Man, even if you can't see the person you still know when they're full of shit.
I should add, "to take a peak at opportunity". Risk = opportunity. They are the same coin after all.
Things are getting better all the time. Good thing Greenspan says it's all over!