I was out shopping yesterday at a local mall where we have a Toys R Us and a Best Buy sitting right next to each other. Now, typically, on a Thursday night in December, the parking lot is impossible to navigate. Jammed. Almost not worth even trying to shop.
Yesterday, it was ... DEAD. When we pulled into the parking lot, my wife and I looked at each other like, WTF?
I expected it to be less busy, but it was TOTALLY. DEAD.
So, i assume this means that the congresscritters will be presenting one of those giant foam board checks to the automakers today on the steps of the Capitol.
This is part of the wake up call to reality for the market place and investors. The Great Recession is here and these announcements will help make sure we get pollyanna off the mic.
We'll see how the market absorbs this data today and the certain calamity news over the next month.
So, i assume this means that the congresscritters will be presenting one of those giant foam board checks to the automakers today on the steps of the Capitol.
This is the weird "so bad, it's good" thinking that makes me think +500 is not out of the question.
Assume Crash Positions! writes:
So, i assume this means that the congresscritters will be presenting one of those giant foam board checks to the automakers today on the steps of the Capitol.
Assume Crash Positions
Incorrect. They hired Ed McMahon for that job after these numbers came out. Paid him $4.7m out of the TARP money.
This doesn't make sense. There is a full page ad in my local paper today saying that the local car dealership mogul is hiring. Lots of opportunity in auto sales apparently. If they are hiring it must be because that industry is booming, right?
Is it considered employment if you work on a commission basis and you never make a commission?
Employment / Population ratio is now 61.4%. This is below the lows of the 2001-2003 downturn and close to the lows of the 1990-1992 downturn, despite the general influx of women into the workforce, two-career couples, etc.
Back in the early 80s the workforce participation rate was under 58%, but those were different times...
Don't you see? This is great news. The sooner and faster we get to 8% peak unemployment the sooner we emerge from recession. Since the markets look 6-12 months ahead it's buy buy buy time.
And how many of those people will have to liquidate those in the next year or two?
And how many other millions will be joining them? No more credit. No more equity. No job. No other choice. I believe someone on this board coined the term "demiddleclassification".
well I ws going to do my usual monthly pissing in the wind and point out the U6 figure but I see that C&C has already pointed that the U6 figure shows an unemployment rate of 12.5%. Table A-12. Alternative measures of labor underutilization
We still haven't seen the collapse in government employment and municipal bond defaults.
Is the Fed powerless here to stop the slide ? Seems like the economists that totally missed the decession/depression are convinced the Fed can fix this. I am not convinced...
Anonymous writes:
Lawrence Livermore Laboratories has discovered the heaviest element yet known to science. The new element, Governmentium (symbol=Gv), has one neutron, 25 assistant neutrons, 88 deputy neutrons, and 198 assistant deputy neutrons, giving it an atomic mass of 312. These 312 particles are held together by forces called morons, which are surrounded by vast quantities of lepton-like particles called peons. Since Governmentium has no electrons, it is inert. However, it can be detected, because it impedes every reaction with which it comes into contact. A tiny amount of Governmentium can cause a reaction that would normally take less than a second, to take from 4 days to 4 years to complete. Governmentium has a normal half-life of 2 to 6 years. It does not decay, but instead undergoes a reorganization in which a portion of the assistant neutrons and deputy neutrons exchange places.
And how many other millions will be joining them? No more credit. No more equity. No job. No other choice. I believe someone on this board coined the term "demiddleclassification".
So is that the definition of "middle class" now - you've got a 401K?
Spoke to a friend who went into Macy's in NE Ohio after dinner looking for a specific item in the kitchen appliance area. The clerk approached him and after he stated that the same item would be on sale at Kohl's this weekend, she proceeded to discount the item more and through in a package of highline coffee. She told him that she had been working for several hours and had not had a sale yet and just wanted something on her register to show she was there. He went back to his hotel, a Marriott, where the desk clerk told him that only 7 rooms out of nearly 70 were booked. That was the good part, her boyfiend runs another location and they only had 3 rooms booked for last night.
Empty hotels, malls and Macy's wheelin' and dealin'!
@CR...excellent graph, I did not realize that recessions were spaced so regularly. The boom/bust cycle seems to be a natural phenomena. If governments kept their mitts out of it, fluctuations on the plus and minus side would not be so drastic.
We're now down from a peak of nearly 65% in 2000 to today's 61.4%, clliff diving, undoing the entire 1990s and late 1980s.
The peak-to-trough swing in this number from 1980-82 was from 60% to 57%, a move of 3%. We're already down by more than that since the 2000 peak.
If you combine the 2000-2003 and current recessions (and there wasn't much of a recovery in the middle) things have worsened more than in any postwar recession. From a "chartist" perspective, we're starting to see "lower highs and lower lows", and you know what that means... trend reversal likely. Sigh.
The historical low since 1948 is about 55%; hopefully we won't get there...
So is that the definition of "middle class" now - you've got a 401K?
a job, a 401k, some ability to borrow, thoughts of retiring some day before death. Those definitely would be parts of a definition of middle class. And a lot of people are losing those options.
The worst is that there is nothing -NOTHING - to indicate that a bottom is near.
The Bernanke policies appear to have been utterly ineffective. More academic 'theory' bites the dust. Clearly he does not know a recession from a debt deflation... which is no surprise since he didn't know a bubble when he floated on it, either.
All the words about 'this is not like 1930' will soon float away in the wind.
I don't think you understand what the various plans/policies were intended to do. They were to make the bankers whole - not to help average people out.
Can someone plot this against the participation rate as well. My understanding is that these are not earth shattering numbers, but if you also count the lower participation rate from 10 or 20 years ago.... these numbers are much worse.
Does anyone have enough numbers to plot percentage of working age adults vs full employment?
I know, I know. But they won't have done even that when the whole shooting match is over. Books will be written, and in 80 years or so we'll try again. I won't be here to watch.
[CNBC is using the phrase "lagging indicator" a lot this morning
Nemo ]
It's true. The problem is it reinforces the downturn as fear grips those that expect to be the next pinkslip recipients and consumption takes another leg down.
Wouldn't be surprised if the correlation of employment status between spouses is pretty high.
I.e., you get the 60% average not by 60% of households having an employed person, but by (2A + 1B + 0*C)/(A+B+C). I bet a good portion of households are "A" or "C."
6.7% unemployment using the post Clinton formula,which leaves out those that have giving up looking for work.
Using the pre-Clinton formula the unemployment is 15%.
Consultants pontificate what they truly know nothing about, fly many miles on the company dime, buy tech gadgets, expensive clothes, and overall......loose their clients money. Have a great day.
Can someone explain, b/c I'm confused by something. If the expectation was for -350k and unemployment rate of 6.8%, how do we end up with losses of 533k and yet only 6.7 as the unemployment rate?
The only reason c&c got to fill in for me is I slept in. Yes, U6 is roughly comparable to headline unemployment prior to 1983.
But look on the bright side. No longer fettered by full time employment these people will being actively investing their savings and retirement accounts thus reviving the moribund financial services industry.
By excluding discouraged workers, the official unemployment rate of 6.7% is a complete sham. The u-6 rate of 12.2% is much more accurate, otherwise perhaps we can get every unemployed who is looking so discouraged they give up looking, therefore per the BLS they leave the labor force, and we can get the labor rate down to 1%. Boom times.
Can someone explain, b/c I'm confused by something. If the expectation was for -350k and unemployment rate of 6.8%, how do we end up with losses of 533k and yet only 6.7 as the unemployment rate?
Because lots of people have stopped looking. They count as "laid off" but not as "unemployed".
Can someone explain, b/c I'm confused by something. If the expectation was for -350k and unemployment rate of 6.8%, how do we end up with losses of 533k and yet only 6.7 as the unemployment rate?
Because a chunk of people fell off the rolls. I would hazard a guess that next month's number will spike above 7%.
mal writes:
While we're pondering the job market, can someone explain to me what consultants actually DO?
Consultants go in, talk to people, find out what everyone already knows, and then tell management the things that everyone knows but are too chicken to say themselves.
Lou Jiwei, the chairman and chief executive of the China Investment Corporation, a $200bn (£135bn) fund, said China had no intention of "saving" the West from the financial crisis.
Huge shopping center - except for Walmart, parking lots empty in front of most stores and restaurants. Several defunct or soon to be big boxes (you know the culprits). This center 'serves' the fairly newly minted housing projects built over the past 15 years east of I-5 in south OC, the ones that the bubble inflation encouraged. I think OCDan is out there somewhere.
Think that, after it empties out, it'll return to Nothing but flowers - "we caught a rattlesnake, now we got something for dinner".
I used to believe 2007 = 1929, but I do think the world's central banks have acted quickly and aggressively enough to avert a complete financial meltdown. Certainly the part of the fixed income derivatives world I trade is somewhat functional again, though a shadow of it's former self. The 1974/75 recession was very sharp, and given the way the world's central banks are running the printing presses full tilt, I'm now more of the mind 2008 = 1974. We better hope Volker lives into his 90's, because I have a feeling we'll be needing him again in a few years.
Assume Crash Positions! writes:
"So is that the definition of "middle class" now - you've got a 401K?"
That's probably not a bad identifier for what today passes as the ever dwindling American middle class.
Assume Crash Positions! | Homepage | 12.05.08 - 9:09 am |
Over 8.5 Trillion already committed, and they will be spending, if Treasuries hold up...FAILS, more. LOL! We have a shrinking GDP and a growing deficit. Everything should be just fine.
ZURICH (Reuters) - Alex Widmer, the chief executive of Bank Julius Baer (VTX:BAER.VX - News) and a well respected figure in Swiss private banking, has died unexpectedly at the age of 52, the bank said.
A source told Reuters he had been informed by close friends of Widmer's family that the banker had committed suicide.
Swiss news website 20Minuten cited two unnamed independent sources as saying it was a case of suicide.
Swiss police declined to comment on the death.
Julius Baer, Switzerland's biggest dedicated wealth manager which has roots dating back to the 19th century, is based in Zurich and manages more than 360 billion Swiss francs ($300.8 billion) in assets for rich individuals and institutions.
Can someone explain, b/c I'm confused by something. If the expectation was for -350k and unemployment rate of 6.8%, how do we end up with losses of 533k and yet only 6.7 as the unemployment rate?
They're different surveys and in particular the household survey (which gives the unemployment rate) seems very volatile.
On a monthly basis I wouldn't focus on it too much unless it helps you make an argument or justify a trading decision.
The 10-year yield was 2.53 percent today, after dropping to a record 2.50 percent. The security is also set for a fifth weekly gain, with the yield declining 40 basis points this past week.
And if you're a peak oil believer like I am (and I was a geophysicist before I sold my soul to the devil er wall street), you have to start liking the Chevrons and Conocos of the world, though that could be a wild ride given the downdraft in commodities shows no signs of abating yet.
The loss of jobs so far, given the recent home ownership rate and assuming 1/3 of homes are owned outright, means something like 400k mortgage have been put at risk due to job loss.
Consultants mostly provide cover for management. If an idea doesn't work, they can point to the consultants and say "They're the experts, and they thought it was a good idea".
Like right now, a company that needs to lay off a significant part of its work force can hire consultants to decide who and how many. If it turns out that the company is completely disfunctional as a result, the managers can then hire more consultants to figure out how to fix the problem.
In some cases, consultants may actually have some particular expertise that the company only needs on a temporary basis to be fair.
Oh, my, I'd better go shop at Dillard's; I like Dillards.
Those are huge drops.
The mall was moderately busy when I went to get an ice cream cone, but the number of packages being carried was low, and there were very few in Fudrucker's eating.
To be fair, Costco was seeing huge gains from retail gasoline sales all year so this number isn't so bad. That said, Kohl's -17.5% and Nordstrom's -15.9% are beyond recessionary.
So if I were to notice that the anchoress on CNBC this morning is dressed like a Christmas present waiting to be opened, would that be sexist?
Nemo | Homepage | 12.05.08 - 9:48 am
Yes, U6 is roughly comparable to headline unemployment prior to 1983.
Could you give me a source on this? I have a bet running with a friend where I am owed $3000 if we hit 1/2 of the great depression's 25% unemployed. I showed him U-6 but he's demanding that I provide him with some proof that this was the metric they used back in 34.
How do undocumented workers figure into these offical stats? I have often heard (from the left) that the real rate is twice that of the official numbers.
We have already seen a deflationary tendency in the construction industry here in Florida for about two years now.
You can get ten hours from an undocumented worker for $50.00. They hang out at Home Depot and Lowes--at least eight or ten at any given point.
The US lumpen proles have a hard time against more hungry competition.
My company does it above the board--and that is why the profit margin is cutting it close.
I love the fatal dynamics of the US consumer economy: kick the workers in the face and let inflation eat away at the residual gains of last century's labor movement--and then wonder why credit and home equity based consumerism is a long-term loser.
Indeed, I won't be happy or hopeful until Red State crackers start storming WalMarts, cleaning out the ammo and food, trampling the wage-slave workers under foot.
Sad irony that McDonalds and WalMart actualize nice profit increases in these times.
Lucky and propitious that I am 'going back to the land', learning to hunt, grow food and dig roots at this stage in my life.
Be prepared, for the worst has yet to come.
Just got a notice from the foreclosure proceedings on my duplex. With luck I can squat here for another six months before the police demand that I leave.
I plan on covering myself with putrid alligator fat and the juice of a native berry--this is what the indigenous folks of Florida did to ward off attacks from swarms of mosquitos. Hey, it worked for them. They never worried about eviction or unemployement, right?
There are folks in South Florida helping poor people find suitable squats. I like that. I want to move up from my piddly duplex into a McMansion.
Nemo - I'm forced to endure bubblevison 10 hours a day since the monitor is right in front of me. I definitely think the necklines have gotten lower and the shirts tighter in the last couple months. They're supposed to be whacking 10% of staff at cnbc soon, so I guess the money honeys will do whatever it takes. I'm still waiting for Fox business news to fold so I can feel good about buying stocks again.
Consultants are overpaid note takers...they walk through some companies failed system and then just report back to management what their employees have been saying for years. Then they get a big bill for something they already knew...more wasted money and useless information from the "best and brightest"...
Maybe now when I call to buy something I won't get the salesperson who wants me to do all the work. As in make a copy, send it to me, then do this...blah, blah.
I just had one of those, again. No. You want the sale, you make the copies and send them to me etc... You are not doing me a favor.
Consultants are overpaid note takers...they walk through some companies failed system and then just report back to management what their employees have been saying for years. Then they get a big bill for something they already knew...more wasted money and useless information from the "best and brightest"...
I happen to disagree being in the IT Consulting business. But like every other field - there are good ones and bad ones.
I plan on covering myself with putrid alligator fat and the juice of a native berry--this is what the indigenous folks of Florida did to ward off attacks from swarms of mosquitos. Hey, it worked for them. They never worried about eviction or unemployement, right?
I'm concerned that in a catastrophic scenario, people who consider themselves very bright and capable won't be able to feed themselves and dependents. Hungry rocket scientists. Will work for fission.
"Consultants go in, talk to people, find out what everyone already knows, and then tell management the things that everyone knows but are too chicken to say themselves."
PapaSloth | 12.05.08 - 9:25 am | #
Papa: That is exactly right. Some years ago there was a consultancy that was hired by many bank holding company CEOs. The CEOs knew they had to downsize their employment rolls, especially after mergers, but were reluctant to do it themselves. So a weak CEO would hire the pricey consultant. In due course the consultant informed the CEO (and board) that it was necessary to downsize, and the CEO would announce at the end of the process that he had no choice but to begin layoffs. "The devil made me do it," or something like that. It happened dozens of times and some consultants got rich.
Of course, the hiring of the consultant was an early warning to bank employees to prepare for the worst.
sure is funny how people are buying builders and reits right now....Darn right interesting...Builder bailout might be stealth stock purchases..no other explanation.....divi's will be cut, so mfunds can't be big buyers or are they?
Sometimes I sits and wonder and somtimes I just sits..Satchel paige..
More anecdotes for everyone:
We are almost finished with our budgeting process. We came up with a very conservative "reserve" case. Any possible expense, short of major layoffs was cut. Now our January pipeline is looking even worse than our lower bound.
cd writes:
sure is funny how people are buying builders and reits right now....Darn right interesting...Builder bailout might be stealth stock purchases..no other explanation.....divi's will be cut, so mfunds can't be big buyers or are they?
Sometimes, I ask myself, "can people really be this stupid, or do they know something I don't?" That's a question that can only be answered in retrospect.
Sometimes, I ask myself, "can people really be this stupid, or do they know something I don't?" That's a question that can only be answered in retrospect.
Although Bayes Rule would tell you that if you go with "stupid", you're rarely wrong.
Sorry if I missed this, but did anyone post the Fed's weekly balance sheet update from yesterday? That's my favorite "credit crisis indicator" right now.
Time to create the "unthinkable case"
Gavshire Hathaway | 12.05.08 - 10:10 am | #
Man, I went thru this in the tech wreck while living in SV. The only plus side I found: It separates the men from the boys.
Real leaders will decide what part of the company lives and what part dies, and what the company will be when it grows up again. Fake leaders will declare a 10% across the board cut, and then will find themselves in the same predicament 6 months down the road.
JP writes:
Naturally, if a CEO doesn't have the cahones and needs to hire a "blame man" for the job, then he's a crappy captain of the ship anyway.
Well, yes and no. As a CEO, you still have to work with the remaining staff after the layoffs, and it's a lot easier if the resentment has been off-loaded. A good CEO plays the percentages, and hiring a scapegoat is a cheap hedge.
If not for the hope that Obama brings to the disaffected I believe we would be on the edge of revolt. The ease with which we handed out money to financial institutions is obscene. The expectation from taxpayers that they will get their own bailout is growing. While I hope we continue to argue the merits as well as we are now doing with the automakers, I think it matters little at this point. Obama is doing his best to calm the world with signs of transparency, but the clock is running out. Patience is wearing thin. The automaker bailout is a lose-lose situation. The economic news will get worse and in the next few months our resolve as a people will once again be tested. I believe Obama can see us through, but like Krugman I grow more and more worried.
JP - other people at my firm read CR, and I need to retain a little anonimity here, so I can't be too specific. I will say that my markets are quite sensitive to credit, and were in complete disarray in September and October. They functioning now, but at maybe 25% of their former capacity, and I honestly don't think they'll be back to more than 30-40% for the rest of my career (however long that might be these days).
"Naturally, if a CEO doesn't have the cahones and needs to hire a "blame man" for the job, then he's a crappy captain of the ship anyway."
JP | 12.05.08 - 10:10 am | #
JP: You may not believe this, but there are far fewer "crappy" CEOs of bank holding companies these days than there were say in 1990, before the wave of mergers and acquisitions got underway. Competition was limited and mediocre management, along with comfortable perks, were the order of the day for BHCs like Signet (VA) and others of that ilk. Their greatest fear (I kid you not) was receiving a call from Hugh McColl.
"a job, a 401k, some ability to borrow, thoughts of retiring some day before death."
"thoughts of retiring some day before death" is not a fair condition for those youngsters like me. the idea of 25/30 years of leisure for all might have been unrealistic.
remember that social security/medicare will have to go through a tremendous change, their rosy estimates don't include a shrinking economy. i wonder how those 2 million less jobs will affect SS surpluses.
Well, yes and no. As a CEO, you still have to work with the remaining staff after the layoffs, and it's a lot easier if the resentment has been off-loaded. A good CEO plays the percentages, and hiring a scapegoat is a cheap hedge.
No it is not, it is an expensive hedge because it tells your upper crust that you don't know how to do the layoff and manage expectations yourself.
It is the George Bush school of leadership: Have other people be responsible for bad news. People ultimately know that the CEO made the call regardless, so the CEO should man up and take visible accountability.
the idea of 25/30 years of leisure for all might have been unrealistic.
My old man keeps railing about how it's up to my generation to "save social security" for ourselves - and here he dropped out of the workforce and any involvement in politics at age 50 and is lecturing me.
And when I say it's too late, he lectures me some more for being pessimistic and a defeatist and not a "fighter."
And then when I talk about revolution, he lectures me some more about how wonderful the Constitution already is.
I used to be able to have great conversations with him about politics, but his mind is back in the sunlit '60s and I find very little common ground with him any more.
mal(Unrated) writes:
the idea of 25/30 years of leisure for all might have been unrealistic.
My old man keeps railing about how it's up to my generation to "save social security" for ourselves - and here he dropped out of the workforce and any involvement in politics at age 50 and is lecturing me.
MAL my old man has a pension benefit of over 70K, 24K in SSI, retired at 55 and recently called the tax department 4 times when he didn't get his $250 middle-class Star rebate.
If they want to save SSI they can look in the fkng mirror.
Sebastian - The numbers tell only part of the story when considering societal breakdown. It goes beyond approval ratings, consumer confidence, and misery index. They are indicators, but nobody knows where that tipping point is...where trust in government breaks down. It can be triggered by an event. I pray we don't find out.
JP writes:
It is the George Bush school of leadership: Have other people be responsible for bad news. People ultimately know that the CEO made the call regardless, so the CEO should man up and take visible accountability.
If companies were machines, then engineers would make the best CEOs, and it would all come down to measurements and optimizations.
But companies are made of people, and managing people's expectations and opinions is at least as important as actually implementing the change itself. Hiring an "expert" and seeking his advice before taking drastic action plays as thoughtful, mature leadership. Taking quick, unilateral action is viewed as impulsive and rash, rather than as strong and decisive. It's all on how expectations are managed.
And yes, Bush was a bad leader, but largely because he picked bad advisors, and then only heard what he wanted to hear.
I love when the shit fan hits the right people.. arrogant ass..
The project is the Trump International Hotel and Tower in Chicago, which is to be the second-tallest building in that city (after the Sears Tower). By Mr. Trumps account, sales were going great until the real estate market in Chicago suffered a severe downturn and the bankers made it worse by creating the current financial crisis.
Those assertions are made in a fascinating lawsuit filed by Mr. Trump, the real estate developer, television personality and best-selling author, in an effort to avoid paying $40 million that he personally guaranteed on a construction loan that Deutsche Bank says is due and payable.
Rather than have to pay the $40 million, Mr. Trump thinks the bank should pay him $3 billion for undermining the project and damaging his reputation
Forward indicators are still going through the floorboards, and there are going to be massive layoffs in the financial industry in December, so the fact that this wasn't the worst ever payrolls number isn't exactly reassuring - wait for it, the Dec.08 number may well be the worst ever, and then get topped by the Jan.09 number - January typically being the only month where the birth-death is actually negative. That being said, I do believe this is going to play out more like 74/75 than 29-33, though this is giving the appearance of morphing into something uglier than even a cave-dwelling perma-bear like myself was expecting.
Very interesting chart CR, thanks! I'm noticing something rather interesting with the red line (yoy% change in employment). If you go to the beginning of each recession on the X-axis and move up and find the spot where the red line intersects it and make a mark, you can find an interesting pattern (just eyeballing it):
1960: +3.0%
1970: +3.0%
1974: +4.0%
1980: +2.0%
1981: +2.0%
1990: +1.8%
2001: +1.0%
2007: +0.9%
Up to and until the 1974 recession the yoy% growth in employment was still at high levels when the economy entered recession, while after 1974 the %yoy growth in employment was at progressively lower positive rates. It looks like we we spent a lot of effort trying to cool things off beforehand,and now we are having more problems getting the furnace to light with time. Inflation / deflation / interest rates ??
I fear the restrictions on monetary policy actions now compared to then will make this worse overall, but I do like that stat."
I'm pretty sure it will get worse before it gets better, too. However, in the same way that people sometimes ask "where is the recovery going to come from?" I think it's reasonable to apply the same principle and ask "where are the additional job losses going to come from?".
If this has all been caused by a housing bubble and a lot of jobs in the housing/mortgage/mortgage derivatives/ancillary areas have been lost, what's left? "Everybody else", the doomsayers would say, but is that reasonable? I would respond that autoworkers at the Big Three would be next, but after that...
Wow, sharp revisions down for the preceding months. I remember the same thing happened for August, announced after the election. I wonder if September's could have been announced before the election? If I'm reading Bloomberg correctly the UR for September, announced October 3, was 159,000, now revised upwards to 403,000?? Yeah, yeah, it was the hurricanes. I remember making this same comment about August's sharp revision upwards, announced immediately after the election.
The participation rate has nowhere to go but down (demographics).
Also, as we become more and more socialist (at all levels) the marginal worker figures it out and gets in the wagon rather than pulling it, shouting for (and voting for) more and more "help" for himself at the expense of the remaining taxpayers.
Can't help but wonder what happens when those in the wagon outnumber those pulling it.
And if you file some pleadings in response, for your Fla foreclosure, you can camp out in your apt for far more than 6 months. In fact, depending on where you are, you could get 'way more than 6 months. A certain amount of luck is involved.
I think it's reasonable to apply the same principle and ask "where are the additional job losses going to come from?". - Sebastian
I don't think the next few months are that hard to see that retail and what little manufacturing will get slammed. Moving forward any high cost business will be ripe for layoffs as well.
"@John(VA): You're right, I don't believe you. :)"
JP | 12.05.08 - 10:22 am | #
Well, JP: compare BB&T with the old Signet. One CEO (Allison) learned how to survive, the other (now deceased) didn't. Don't just focus on the top tier BHCs.
I am concerned that the U-6 stat is essentially meaningless because it must contain in it many people who simply cannot navigate in the real world job market. Undereducated, underskilled and likely unmotivated. These peoplethere must be millionsconstitute a permanent unemployed underclass. It seems to me misguided to count them in any set of employment/unemployment stats.
What counts are actual live job prospects. That scenario is bad enough without including people who will never work full time. Those latter, IMHO, constitute the bedrock of Pres. Obama's voting base. So from that perspective he has a stake in increasing their numbers to guarantee reelection, not to mention a constitutional amendment allowing him to serve beyond 2016. Putin, anyone?
"If this has all been caused by a housing bubble "
Sebastian, the problem is, I don't think this mess was caused by the housing bubble, the housing bubble is merely a symptom of the broader credit bubble. That's why we're screwed. Every aspect of our economy is impacted by credit deflating.
I just wrote a couple of big checks to the federal and state ( total 21% of the gain) for long term capital gains on a piece of investment real estate I sold 6 months ago . The contract was at bubble prices in early 2007 but did close until June 2008 . I had some 1031 properties identified but buying them sure looked increasingly like that I might be catching the falling knife .
Mal wrote:
"I find very little common ground with him any more"
but please don't let that get in the way of having a great relationship with your dad. i lost my dad several years ago and boy do I wish i would have worried less about stuff like that and enjoyed him more when i had him here. very hard lesson to learn. i'm sure you're fine, but when my friends with living parents complain about minor stuff, i remind them they are blessed to have their parents here and focus on the important stuff of loving/enjoying family and forget the trivial stuff.
Sebastian writes:
matt said: "Nice numbers Sebastian!
I fear the restrictions on monetary policy actions now compared to then will make this worse overall, but I do like that stat."
I'm pretty sure it will get worse before it gets better, too. However, in the same way that people sometimes ask "where is the recovery going to come from?" I think it's reasonable to apply the same principle and ask "where are the additional job losses going to come from?".
If this has all been caused by a housing bubble and a lot of jobs in the housing/mortgage/mortgage derivatives/ancillary areas have been lost, what's left? "Everybody else", the doomsayers would say, but is that reasonable? I would respond that autoworkers at the Big Three would be next, but after that...
--
Fair enough, but were deleveraging on such a grand scale that I believe everything will be hit in some way.
When they raid the whorehouse, they take all the girls.
PapaSloth: I'm not saying to do it without advisors or an expert opinion. But for a CEO to think that somebody else will take the reputation hit for making tough decisions (a blame man), well, he's only fooling those who can be fooled. Either that, or the organization is so FUBAR that the rank-and-file actually believe that accountability is not with the CEO.
my dad jockingly sometimes tells me "do me the favor to agree with me on something." so i'll do.
gn: "Can't help but wonder what happens when those in the wagon outnumber those pulling it."
i'd expenct a growing cash economy and a come back to family/neighbor "bartering" if you want. they are extremely common in latin societies. grandma's doing the cooking and child care, and in exchange, they get a roof and help with their medical bills, for ex. neighbors providing flexible child care also and getting it back when they need it. it doesn't need to get ugly.
I object to these insults at consultants. They can make great power point presentations too. Have you watched a couple Monte Carlo simulations? Very impressive stuff.
RD
I can also visualize the PPT trying to wrap ropes around that carcass and attempting to drag it off the ledge. Might be they'll all go over together.
It seems to me misguided to count them in any set of employment/unemployment stats. -JohnR(VA)
I think we should keep track of it and measure it, because it is useful information, but I would agree somewhat with you in that it isn't as relevant. We need to be able to measure the level of self-employed persons since they compose a higher level of the workforce than ever before. How that's accounted for is more important IMO.
The historical perspective is useful, but the 1974 number is final. Today's number is the intial estimate and subject to revision. Two months from now, the November number will have been revised lower, I think, and we will be looking at an awful January number.
wawa - I suspect you are confusing fools who believe Obama will fix everything with reality-based individuals who feel better having him as president during this crucial time than Bush, McCain, or Palin. This is not to say both sides of the aisle haven't been responsible for getting us to where we are.
Assume Crash Positions! writes:
Thanks for the link Isabel. Interesting stuff.
Assume Crash Positions! | Homepage | 12.05.08 - 9:45 am | #
Isn't it? I've just now read the comments, and they made me wonder how the "poor are poor because they chose to" crowd (of which there were some examples there) will fare when the piranhas will start nibbling at them. Somehow, they don't seem very resourceful, or knowledgeable, to me.
like shiller says, in USA, specially those that are successful totally underestimate the amount of luck they have had. from their parents to the year they were born.
this is so true! it makes me laugh when an old baby boomer says "the young only need to work hard, look at me!"
if i fight for anything it'll be for kids in this country not to become debt-paying slaves, not for bigger entitlements.
julia | 12.05.08 - 10:40 am | #
You might want educate yourself on just how much SS pays... its barely three hots and a cot. The belief of most young people is it's a 3BR condo on the 18th it isn't. If you want that you better have other assets - lots of them.
Likewise if you want those who have already raised their kids to pony up for the next batch 'kids in this country'... then there better be something in it for them too. I hear a lot of elderly saying now - fine take my SS away - just don't expect me to support the schools anymore - NOTHING AT ALL - I did that back when I was paying my SS dues too. Let those wealthy young Xers pay for their own spawn themselves - all of it.
Just to understand the repercussions - in my town something like 80% of the property tax is paid for by people whose kids are grown or had no kids.
This kind of talk is a go-nowhere-I-got-mine-fuck-you solution. Somehow we as a society have to find a way for us all to do alright (young - middle aged - elderly) or it breaks down and gets real ugly real fast.
Personally, I find it very difficult to drop the trading mindset of the last 15 years.
I know the friggin bulldozer is coming to flatten the landscape, but I can't help diving in front of it for the occasional shiny quarter. Penny wise, pound foolish describes it well.
Most companies are debt based. Who will fund them?
"But companies are made of people, and managing people's expectations and opinions is at least as important as actually implementing the change itself. Hiring an "expert" and seeking his advice before taking drastic action plays as thoughtful, mature leadership."
I would say that executives who offload blame onto consultants are wiley rather than weak. But the idea that this plays as thoughtful and mature...
In the thick of massive layoffs, no one is thinking like this. Everyone is angry, depressed or scared. There is no good way to do it. After a layoff occurs, those left behind breathe a sigh of relief and then hope that they aren't next in line.
12th Percentile said: "Does anyone else enjoy that Sebastian has returned here and is once again the voice of optimism?"
Not so much a voice of optimism (since I'm not nearly as optimistic as I was before), but there are still two sides to every argument. A two-term Bush presidency and a "War to Nowhere" is what you get when all contrary views are shouted down.
Comment on the constant fudge of the payroll numbers?? Last month's briefing forecast was 200k; reported was 240k; revision was 320k. This month briefing was 300k reported was 533k. Any guess as to what the revision will be later this month?
When the young people leave, a town dies. If you don't support the schools, the young people will leave. Property values will go down (relative to other places. Of course they're going down anyway right now). The old people who remain will have no one to foot the bill for their civic services and be left with crumbling infrastructure. If the area is close to a city, urban decay will set in and the area will become crime infested.
Sebastian is right in so much as it's been this bad (or worse) before and in many of our lifetimes. 1974 comes to mind for me too - my sophomore/junior year of HS and my father lost his job. He was white collar and it was his third major job loss in a six year period - each time it took a year to land a new job... the last time it was only because he started his own business.
We went something like seven months without making a house payment - the bank didn't foreclose because (a) we knew him personally and (b) they were up to their eyeballs in foreclosures already.
Can it get worse than '74 - sure. It hasn't yet - it will have a way to go before we get there.
I'm not shouting anyone down (and I shouted pretty loud against the MBA President for 8 years so I'm aware of what it is like to be on the minority opinion side of an argument, but I was also on the fact based side).
The idea that we need to have both sides of an argument to make it "fair and balanced" is exactly what got us into this mess. There aren't two sides to many arguments when the one side is wrong and not based on facts.
BTW - Three manufacturing companies in my area have just shut their doors in the last few weeks. Not one had to do with housing. Another just cut salaries by 25% across the board. And our median sales price went up again last month continuing a 6 year bull market in housing here. Again, these are facts.
Bush: "I want to apologize to the American people for my performance as President of the United States. We need not wait for history any longer, my legacy will be as the worst President in our nation's history. I wish you well in your battle against poverty and extremism. I wish you strength in your fight for energy independence. Stand strong in your resolve to check the rising tide of health care costs and out-of-control debt. Oh, and sorry for trashing the consistitution...Cheney made me do it. Peace out!"
dryfly, you are saying nothing new, at least in CA and FL that type of measures have been implemented already. i'd expect more of them to come.
i'm not rooting for the old to die of starvation, nor anything like that. all i'm saying is realistically, there's a limit to "lets spend now, the next generation will pay". i am educated about ss/medicare 45% of spending now, heading towards 75%.
much of the rest of the spending is not discretionary either. tell me, you really don't see a problem here?
Tell that to Del Webb, he'd probably disagree. Especially for those elderly who already have theirs - screw the young, let them pay for their own schools, day care, kids college - we done that already.
Get the point? The same knife cutting against SS can also cut against the young - old & young alike can be so selfish as to be 'pennywise, pound foolish'.
Again - if we as a society can't find a way to support all of us from our bounty - then it breaks down for all of us. If folks aren't smart enough to realize that (and obviously many here aren't all that smart) then we deserve the return of the Middle Ages.
Losing a job isn't fun or easy but it's nature's way of telling you to go do something else. You may need years of schooling and a household relocation to another geographical region. But, that's life.
Unless of course you are a favored species - then you take the easy way out and beg for some government teat to suck.
I think that is right about the time my dad, who was a few years out of school with a pHD in biochem, was digging ditches for a living.
Sebastian wonders where other job losses might come from after the housing related ones.
I noted what is happening where I am with companies shutting down. I also was talking to a CFO friend of mine this week and they said they didn't have the money for payroll and couldn't borrow it.
Our local mall owner (they own 9) has been delisted, can't make their debt payments and is trying to sell some of their other malls to survive.
And as Rich has pointed out many of the biotech and other start ups rely on borrowing since they don't have positive cash flow. They will be in trouble. People like Gavshire's company who rely on online ad money are in trouble. Even Google is in trouble. Newspapers are dying. The traditional music industry is getting destroyed. My brother works at a large biotech firm, marketing just got cut in half. And most governments on all levels are facing huge budget shortfalls. In Mass. they are cutting government jobs. I imagine many states and counties and city's will have to do the same.
I don't think the question is where will the additional job losses come from beyond housing and finance. The question is, will many of these jobs ever come back.
The ones in my area that just got shipped to mexico, probably not.
first?
Furst?
third
Inconceivable Fezzik!
Fantastic news!!!!! There must be a 1000 point ralley in store for today......
Or not....
Inconceivable Fezzik!
Definitely the Pit of Despair....
-533,000
That alone is a serious social problem.
u6 12.5%
There must be a 1000 point ralley in store for today......
Sure is.... after all "This Is The Bottom"(tm)
anyone know if we net gained or lost jobs over the last 8 years?
Gonna be tough to bail our way back to prosperity. Kinda like drinking your way to sobriety.
Ho-ly Cow.
Nice combo graph, too.
One more month like this and Chimpy had 8 years of no job growth...throw in 2 failed wars, doubling the national debt, etc...
OK US, please stop delivering grim data an hour or two before EU markets close. It's not fair.
In the words of the esteemed Reverend Wright, "The chickens have come home to roost."
link for c&c's u-6 fig.:
Table A-12. Alternative measures of labor underutilization
Clearly, we haven't given the Bankers enough money as these numbers dictate.
[ac writes:
-533,000
That alone is a serious social problem]
I agree. I have 2 close friends out of work. 1 is losing hope.
Disastrous. The goldilocks crowd are now all socialists. The automakers will get a pass today...
Hello. My name is Inigo Montoya. You killed our economy. Prepare to die.
Horrific!
The participation rate dropped 0.3%, average hours fell, U3 up, U6 up 0.7% to 12.5%.
Ouch.
crispy:
Am I correct in my understanding that U-6 is akin to the definition held during the GD?
Thanks
Looks like just in time inventory practices now encompass personell.
We are all inventory now!
CR - can you pls comment on the impact of the death/birth adjustments? In your opinion, are they still undershooting or already overshooting?
Employment is a lagging indicator. And the forward looking indicators are falling off a cliff. This is getting really scary!!
Eric writes:
There must be a 1000 point ralley in store for today......
Sure is.... after all "This Is The Bottom"(tm)
Eric
I would not be surprised by a rally. I'm in Ultra S&P today.
....Curious....Didn't we use the U6 number during 1984 highs in unemployment?
Gonna be tough to bail our way back to prosperity. Kinda like drinking your way to sobriety.
4shzl | 12.05.08 - 8:52 am
That's no excuse not to try at least on the drinking thing.
BTW: What does Shadowstats have to say?
homedad43 - I dont know the answer to that...Mish seems to think so. He did a story on that yesterday
We have been told we are either getting layoffs or there may be a vote for wage cuts.
Tell ya what.
I was out shopping yesterday at a local mall where we have a Toys R Us and a Best Buy sitting right next to each other. Now, typically, on a Thursday night in December, the parking lot is impossible to navigate. Jammed. Almost not worth even trying to shop.
Yesterday, it was ... DEAD. When we pulled into the parking lot, my wife and I looked at each other like, WTF?
I expected it to be less busy, but it was TOTALLY. DEAD.
Here comes the rally.................
So, i assume this means that the congresscritters will be presenting one of those giant foam board checks to the automakers today on the steps of the Capitol.
Are we there yet?
My containment is full.
92 bottles of Yen on the wall
92 bottles of Yen...
homedad43 -
Mish's Global Economic Trend Analysis: Prepare For Depression Level Unemployment
Assume crash positions
It will take one that big to put all the zeros on it.
This is part of the wake up call to reality for the market place and investors. The Great Recession is here and these announcements will help make sure we get pollyanna off the mic.
We'll see how the market absorbs this data today and the certain calamity news over the next month.
Time to Re-Leverage
Yen 91.82
So, i assume this means that the congresscritters will be presenting one of those giant foam board checks to the automakers today on the steps of the Capitol.
This is the weird "so bad, it's good" thinking that makes me think +500 is not out of the question.
Keeping some powder dry just in case.
SOMALI PIRATES: THERE IS PENT-UP DEMAND FOR WARS.
Assume Crash Positions! writes:
So, i assume this means that the congresscritters will be presenting one of those giant foam board checks to the automakers today on the steps of the Capitol.
Assume Crash Positions
Incorrect. They hired Ed McMahon for that job after these numbers came out. Paid him $4.7m out of the TARP money.
Baltic Dry still falling, but rate of fall seems to have slowed.
-3 663
This doesn't make sense. There is a full page ad in my local paper today saying that the local car dealership mogul is hiring. Lots of opportunity in auto sales apparently. If they are hiring it must be because that industry is booming, right?
Is it considered employment if you work on a commission basis and you never make a commission?
Expired
Swiss banker commits suicide.
Employment / Population ratio is now 61.4%. This is below the lows of the 2001-2003 downturn and close to the lows of the 1990-1992 downturn, despite the general influx of women into the workforce, two-career couples, etc.
Back in the early 80s the workforce participation rate was under 58%, but those were different times...
Data for the current E/P is in the BLS report cited above. Data for the historical values I'm pulling from St. Louis Fed National Economic Trends.
Wisdom Seeker,
A chart with U3, U6, and participation rate since 1976.
http://4.bp.blogspot.com/_elFdQk0Twr4/STSrJZhU_JI/AAAAAAAAAAc/wYGChIde7xI/s1600-h/U3U6part-rate.PNG
"This is the weird "so bad, it's good" thinking that makes me think +500 is not out of the question."
Yep. A screaming rally would make no sense whatsoever under these conditions.
I therefore give it only a 43.94% chance of happening.
Gold off a cliff.
Crispy - absolute employment has grown but the ratios suck. St. Louis Fed: Household Survey Data
Don't you see? This is great news. The sooner and faster we get to 8% peak unemployment the sooner we emerge from recession. Since the markets look 6-12 months ahead it's buy buy buy time.
"Alex Widmer was the very epitome of a Swiss private banker," Julius Baer said in a statement.
"It is a great shame," added a Zurich-based trader. "It is very sad. He embodied Julius Baer. He was the most important person in private banking."
Not a good omen for Swiss bankers
How many of those 1.25 million people had 401ks?
And how many of those people will have to liquidate those in the next year or two?
And how many other millions will be joining them? No more credit. No more equity. No job. No other choice. I believe someone on this board coined the term "demiddleclassification".
That is what is happening and it is ugly.
well I ws going to do my usual monthly pissing in the wind and point out the U6 figure but I see that C&C has already pointed that the U6 figure shows an unemployment rate of 12.5%.
Table A-12. Alternative measures of labor underutilization
-K
We still haven't seen the collapse in government employment and municipal bond defaults.
Is the Fed powerless here to stop the slide ? Seems like the economists that totally missed the decession/depression are convinced the Fed can fix this. I am not convinced...
Anonymous writes:
Lawrence Livermore Laboratories has discovered the heaviest element yet known to science. The new element, Governmentium (symbol=Gv), has one neutron, 25 assistant neutrons, 88 deputy neutrons, and 198 assistant deputy neutrons, giving it an atomic mass of 312. These 312 particles are held together by forces called morons, which are surrounded by vast quantities of lepton-like particles called peons. Since Governmentium has no electrons, it is inert. However, it can be detected, because it impedes every reaction with which it comes into contact. A tiny amount of Governmentium can cause a reaction that would normally take less than a second, to take from 4 days to 4 years to complete. Governmentium has a normal half-life of 2 to 6 years. It does not decay, but instead undergoes a reorganization in which a portion of the assistant neutrons and deputy neutrons exchange places.
Anonymous | 12.05.08 - 4:56 am | #
From last thread, late night.
Classic. Just...classic.
Congratulations, anonymous.
Thankyou Wallstreet!
And how many other millions will be joining them? No more credit. No more equity. No job. No other choice. I believe someone on this board coined the term "demiddleclassification".
So is that the definition of "middle class" now - you've got a 401K?
Rob Dawg, a hint of sarcasm maybe? At least 6 more months of net layoffs. Double digits are all but locked at this point.
Spoke to a friend who went into Macy's in NE Ohio after dinner looking for a specific item in the kitchen appliance area. The clerk approached him and after he stated that the same item would be on sale at Kohl's this weekend, she proceeded to discount the item more and through in a package of highline coffee. She told him that she had been working for several hours and had not had a sale yet and just wanted something on her register to show she was there. He went back to his hotel, a Marriott, where the desk clerk told him that only 7 rooms out of nearly 70 were booked. That was the good part, her boyfiend runs another location and they only had 3 rooms booked for last night.
Empty hotels, malls and Macy's wheelin' and dealin'!
@CR...excellent graph, I did not realize that recessions were spaced so regularly. The boom/bust cycle seems to be a natural phenomena. If governments kept their mitts out of it, fluctuations on the plus and minus side would not be so drastic.
The market today will end wherever Ben wants it to end. It will fluctuate. But in the last hour, it will get there.
"So is that the definition of "middle class" now - you've got a 401K?"
That's probably not a bad identifier for what today passes as the ever dwindling American middle class.
So is that the definition of "middle class" now - you've got a 401K?
Correction: had a 401k.
Here's a link to historical plot of the employment/population ratio.
We're now down from a peak of nearly 65% in 2000 to today's 61.4%, clliff diving, undoing the entire 1990s and late 1980s.
The peak-to-trough swing in this number from 1980-82 was from 60% to 57%, a move of 3%. We're already down by more than that since the 2000 peak.
If you combine the 2000-2003 and current recessions (and there wasn't much of a recovery in the middle) things have worsened more than in any postwar recession. From a "chartist" perspective, we're starting to see "lower highs and lower lows", and you know what that means... trend reversal likely. Sigh.
The historical low since 1948 is about 55%; hopefully we won't get there...
....both previous months were revised downward BIGTIME.....wonder what the REAL number will be for THIS month?
30-year Treasury now yields 3.052%.
S&P futures rebounding; 1-2% off the lows 45 mins ago
Panamax and Supramax indices keep falling:
851
So is that the definition of "middle class" now - you've got a 401K?
a job, a 401k, some ability to borrow, thoughts of retiring some day before death. Those definitely would be parts of a definition of middle class. And a lot of people are losing those options.
The worst is that there is nothing -NOTHING - to indicate that a bottom is near.
The Bernanke policies appear to have been utterly ineffective. More academic 'theory' bites the dust. Clearly he does not know a recession from a debt deflation... which is no surprise since he didn't know a bubble when he floated on it, either.
All the words about 'this is not like 1930' will soon float away in the wind.
"S&P futures rebounding; 1-2% off the lows 45 mins ago"
It's all priced in. Buy! Buy! Buy!
In our group of 27, 9 senior engineers we're given notice.
2 of us (me included) will lateral to different contracts, but the other 7, not so much.
I'd say depression is coming.
I'm seeing this on federal contracts, you know, that big tit we suck off of...
@Nemo
91 Bottles of Yen on the wall 91 bottles of yen....
with it officially a recession, to what extent are the b/d numbers revised retroactively? Could make for some truly fugly numbers.
I now know what a deer in the headlights is thinking....
Wally,
I don't think you understand what the various plans/policies were intended to do. They were to make the bankers whole - not to help average people out.
Seems like the economists that totally missed the recession/depression are convinced the Fed can fix this. I am not convinced...
--bearly
I was just thinking the same thing. People might be buying stocks today but I have no clue why they are doing it.
CNBC is using the phrase "lagging indicator" a lot this morning
I'm sure Ben will make a big rate cut announcement today to avert a market crash.
Oh.
Wait.
Nevermind.
academic theories? like the business theories and practice have been working so well?
Is it likely that this number will be revised up in Jan?
Sept went from 159 to 403
a job, a 401k, some ability to borrow, thoughts of retiring some day before death. Those definitely would be parts of a definition of middle class.
Sounds good. Guess that means I'm not middle class!
Gold off a cliff... rebounding some now: 24-hour Spot Chart - Gold
Can someone plot this against the participation rate as well. My understanding is that these are not earth shattering numbers, but if you also count the lower participation rate from 10 or 20 years ago.... these numbers are much worse.
Does anyone have enough numbers to plot percentage of working age adults vs full employment?
The worst is that there is nothing -NOTHING - to indicate that a bottom is near.
Futures have rallied huge off their lows.
Joe the Plumber sez "THAT'S A BOTTOM".
I have a 200.5k right now....
Mr. Sparkle,
I know, I know. But they won't have done even that when the whole shooting match is over. Books will be written, and in 80 years or so we'll try again. I won't be here to watch.
Brontide,
See my link above for a chart of that.
Is Trump in Trouble Again? - The Wealth Report - WSJ
When this guy gets fired and starts flipping burgers we are at the bottom...
-533, yesterday's leak?
Time for the gov't to put away the paddles and call time-of-death.
Tin Foil Hats and CONIZ for EVERYONE!
[CNBC is using the phrase "lagging indicator" a lot this morning
Nemo ]
It's true. The problem is it reinforces the downturn as fear grips those that expect to be the next pinkslip recipients and consumption takes another leg down.
While we're pondering the job market, can someone explain to me what consultants actually DO?
Time for the gov't to put away the paddles and call time-of-death.
That was done a while ago.....
Now there's just zombies.... everywhere.
SOMALI PIRATES: THERE IS PENT-UP DEMAND FOR WARS.
The period of 2009-2019 will come to be known as the "Pony Wars".
Any graph of participation by HOUSEHOLD?
Wouldn't be surprised if the correlation of employment status between spouses is pretty high.
I.e., you get the 60% average not by 60% of households having an employed person, but by (2A + 1B + 0*C)/(A+B+C). I bet a good portion of households are "A" or "C."
6.7% unemployment using the post Clinton formula,which leaves out those that have giving up looking for work.
Using the pre-Clinton formula the unemployment is 15%.
Consultants pontificate what they truly know nothing about, fly many miles on the company dime, buy tech gadgets, expensive clothes, and overall......loose their clients money. Have a great day.
Can someone explain, b/c I'm confused by something. If the expectation was for -350k and unemployment rate of 6.8%, how do we end up with losses of 533k and yet only 6.7 as the unemployment rate?
While we're pondering the job market, can someone explain to me what consultants actually DO?
Consulting
The only reason c&c got to fill in for me is I slept in. Yes, U6 is roughly comparable to headline unemployment prior to 1983.
But look on the bright side. No longer fettered by full time employment these people will being actively investing their savings and retirement accounts thus reviving the moribund financial services industry.
Xenophobes, you've got your solution. Now "our people" NEED those strawberry picking jobs, so it's adios illegals.
"CNBC is using the phrase "lagging indicator" a lot this morning"
... though a lagging indicator was somehow a leading indicator of recovery - which it is not.
By excluding discouraged workers, the official unemployment rate of 6.7% is a complete sham. The u-6 rate of 12.2% is much more accurate, otherwise perhaps we can get every unemployed who is looking so discouraged they give up looking, therefore per the BLS they leave the labor force, and we can get the labor rate down to 1%. Boom times.
Hey at this point , some people were expecting even worse . I would not be surprise if the DOW is up today .
There's also this despair.com great one:
Government
Darwindows --
Can someone explain, b/c I'm confused by something. If the expectation was for -350k and unemployment rate of 6.8%, how do we end up with losses of 533k and yet only 6.7 as the unemployment rate?
Because lots of people have stopped looking. They count as "laid off" but not as "unemployed".
Can someone explain, b/c I'm confused by something. If the expectation was for -350k and unemployment rate of 6.8%, how do we end up with losses of 533k and yet only 6.7 as the unemployment rate?
Because a chunk of people fell off the rolls. I would hazard a guess that next month's number will spike above 7%.
Darwindows: the magic of modern obfuscation.
mal writes:
While we're pondering the job market, can someone explain to me what consultants actually DO?
Consultants go in, talk to people, find out what everyone already knows, and then tell management the things that everyone knows but are too chicken to say themselves.
OnTheRun writes:
-533, yesterday's leak?
OnTheRun | 12.05.08 - 9:19 am | #
-350?
[Wisdom Seeker writes:
Here's a link to....]
Link busted.
@Mr. Sparkle: Thanks, missed it in the deluge.
Where can I get some of the raw data... I was think of a few other plots
I think we see 9% in the ca number next Friday...book it!
FREE PONY BEN: FED WILL OFFER FREE PONIES FOR EVERYONE TODAY.
Game over..
2008-12-05 telegraph.co.uk
Lou Jiwei, the chairman and chief executive of the China Investment Corporation, a $200bn (£135bn) fund, said China had no intention of "saving" the West from the financial crisis.
mal writes:
While we're pondering the job market, can someone explain to me what consultants actually DO?
Consulting
Q: What's it called when two pirates disagree?
A: It's an ARRGGGGument
Sorry... heard it at a bar last night.
Also, Foothill Ranch Town Center (the OC).
Huge shopping center - except for Walmart, parking lots empty in front of most stores and restaurants. Several defunct or soon to be big boxes (you know the culprits). This center 'serves' the fairly newly minted housing projects built over the past 15 years east of I-5 in south OC, the ones that the bubble inflation encouraged. I think OCDan is out there somewhere.
Think that, after it empties out, it'll return to Nothing but flowers
- "we caught a rattlesnake, now we got something for dinner".
I used to believe 2007 = 1929, but I do think the world's central banks have acted quickly and aggressively enough to avert a complete financial meltdown. Certainly the part of the fixed income derivatives world I trade is somewhat functional again, though a shadow of it's former self. The 1974/75 recession was very sharp, and given the way the world's central banks are running the printing presses full tilt, I'm now more of the mind 2008 = 1974. We better hope Volker lives into his 90's, because I have a feeling we'll be needing him again in a few years.
Let the American Intifada begin.
According to the BLS, 42 percent of households have two or more earners (or did), 39 percent have one earner (or did), and 19 percent have no earners.
--from the 2007 Consumer Expenditure Survey, table 6
That was me posting fresh updates from Somali pirates and PONY BEN.
Assume Crash Positions! writes:
"So is that the definition of "middle class" now - you've got a 401K?"
That's probably not a bad identifier for what today passes as the ever dwindling American middle class.
Assume Crash Positions! | Homepage | 12.05.08 - 9:09 am |
Premium content | Economist.com
"I was surprised by how many of the homeless women have 401(k)s and IRAs."
Thanks Nemo! Gives me a better understanding of why U6 is more relevant in discussing true unemployment. U3 seems essentially worthless...
Turbo --
I would guess you are right. These sorts of employment numbers will inspire a massive government response.
Brontide - BLS site has all of it.
Employment Situation
Over 8.5 Trillion already committed, and they will be spending, if Treasuries hold up...FAILS, more. LOL! We have a shrinking GDP and a growing deficit. Everything should be just fine.
Let me be the first person of the day to ask: can we nationalize the banks now?
There are too many holes to plug.
Yield on 3-month Treasury has doubled to 0.01%
Expired
ZURICH (Reuters) - Alex Widmer, the chief executive of Bank Julius Baer (VTX:BAER.VX - News) and a well respected figure in Swiss private banking, has died unexpectedly at the age of 52, the bank said.
A source told Reuters he had been informed by close friends of Widmer's family that the banker had committed suicide.
Swiss news website 20Minuten cited two unnamed independent sources as saying it was a case of suicide.
Swiss police declined to comment on the death.
Julius Baer, Switzerland's biggest dedicated wealth manager which has roots dating back to the 19th century, is based in Zurich and manages more than 360 billion Swiss francs ($300.8 billion) in assets for rich individuals and institutions.
Can someone explain, b/c I'm confused by something. If the expectation was for -350k and unemployment rate of 6.8%, how do we end up with losses of 533k and yet only 6.7 as the unemployment rate?
They're different surveys and in particular the household survey (which gives the unemployment rate) seems very volatile.
On a monthly basis I wouldn't focus on it too much unless it helps you make an argument or justify a trading decision.
PeakVT,
I see your point, but can we sell Texas back to Mexico first, and then Nationalize the Banks?
Humbly,
--bh
The 10-year yield was 2.53 percent today, after dropping to a record 2.50 percent. The security is also set for a fifth weekly gain, with the yield declining 40 basis points this past week.
that's it, for now
Just buy AOT (any old thing!).
Although at the moment it appears that I am not first, I remain confident that the BLS later will quietly revise my number.
And if you're a peak oil believer like I am (and I was a geophysicist before I sold my soul to the devil er wall street), you have to start liking the Chevrons and Conocos of the world, though that could be a wild ride given the downdraft in commodities shows no signs of abating yet.
Market fading bad news again.
This info just crossed my desk:
November 2008 Retail Comp Sales -
Walmart 3.4%
Ross (2.0%)
Costco (5.0%)
Saks (5.2%)
Dillards (9.0%)
American Eagle (11.0%)
Gap (10.0%)
Target (10.4%)
JC Penney (11.9%)
TJ Max (12.0%)
Gottshalks (13.0%)
Macy's (13.3%)
Chico's (15.4%)
Nordstrom (15.9%)
Bon-Ton (16.0%)
Kohl's (17.5%)
Barney Frank is so dreamy, the way he slobbers on the mic.
The loss of jobs so far, given the recent home ownership rate and assuming 1/3 of homes are owned outright, means something like 400k mortgage have been put at risk due to job loss.
Consultants mostly provide cover for management. If an idea doesn't work, they can point to the consultants and say "They're the experts, and they thought it was a good idea".
Like right now, a company that needs to lay off a significant part of its work force can hire consultants to decide who and how many. If it turns out that the company is completely disfunctional as a result, the managers can then hire more consultants to figure out how to fix the problem.
In some cases, consultants may actually have some particular expertise that the company only needs on a temporary basis to be fair.
Thanks for the link Isabel. Interesting stuff.
Would-be sellers of sperm, eggs, plasma and hair are swamping agencies with inquiries.
Short on cash, some sell own body products - Health care- msnbc.com
Made me kind of gag this morning. Who wants poor people sperm and eggs?
Yuck!
Oh, my, I'd better go shop at Dillard's; I like Dillards.
Those are huge drops.
The mall was moderately busy when I went to get an ice cream cone, but the number of packages being carried was low, and there were very few in Fudrucker's eating.
Would-be sellers of sperm, eggs, plasma and hair are swamping agencies with inquiries.
Yeah, I heard a radio spot about this a couple of weeks ago.
Now, when people start selling the non-renewable stuff, like kidneys and lungs, we may be close to declaring a bottom.
So if I were to notice that the anchoress on CNBC this morning is dressed like a Christmas present waiting to be opened, would that be sexist?
November 2008 Retail Comp Sales -
Walmart 3.4%
Ross (2.0%)
Costco (5.0%)
To be fair, Costco was seeing huge gains from retail gasoline sales all year so this number isn't so bad. That said, Kohl's -17.5% and Nordstrom's -15.9% are beyond recessionary.
Nemo,
I don't think so.
Blackhat - I think we can keep Texas if they to deport everyone named "Bush" to Mexico. Tom Ricks, too.
Did you notice who is not retiring to the Stage Prop Ranch? Surprise!
So if I were to notice that the anchoress on CNBC this morning is dressed like a Christmas present waiting to be opened, would that be sexist?
Nemo | Homepage | 12.05.08 - 9:48 am
Melissa Lee? No, not at all. She be fine.
A nation of "but" traders.....
"I'm a free market type of guy, but......"
ButButButbbbbbbbbrrrrrrrrrhahahahaha
More HIG puts? Up 50%
Yes, U6 is roughly comparable to headline unemployment prior to 1983.
Could you give me a source on this? I have a bet running with a friend where I am owed $3000 if we hit 1/2 of the great depression's 25% unemployed. I showed him U-6 but he's demanding that I provide him with some proof that this was the metric they used back in 34.
Isabel | Homepage | 12.05.08 - 9:34 am | #
Isabel, that was one great article.
Bushco spinning on CNBC...Hennessey has said numerous times things were great. That fat ass has no credibility, I hope he is homeless in January!
We need to tax all the people that just lost their jobs so we can pay them so they can pay us for the debt they owe.
Fed has spent 3 trillion dollars!
Fed has spent 3 trillion dollars!
Brontide | 12.05.08 - 9:53 am | #
is that taxpayer money given or to be gotten?
If we get a close below 800 on the sp, the wheels will probably really come off. All the "bottom feeders" of the last 2 weeks will get creamed.
ITG's Barbera says ISM and Unemployment dictates 4th quarter -8.5% contraction. Double consensus.
How do undocumented workers figure into these offical stats? I have often heard (from the left) that the real rate is twice that of the official numbers.
We have already seen a deflationary tendency in the construction industry here in Florida for about two years now.
You can get ten hours from an undocumented worker for $50.00. They hang out at Home Depot and Lowes--at least eight or ten at any given point.
The US lumpen proles have a hard time against more hungry competition.
My company does it above the board--and that is why the profit margin is cutting it close.
I love the fatal dynamics of the US consumer economy: kick the workers in the face and let inflation eat away at the residual gains of last century's labor movement--and then wonder why credit and home equity based consumerism is a long-term loser.
Indeed, I won't be happy or hopeful until Red State crackers start storming WalMarts, cleaning out the ammo and food, trampling the wage-slave workers under foot.
Sad irony that McDonalds and WalMart actualize nice profit increases in these times.
Lucky and propitious that I am 'going back to the land', learning to hunt, grow food and dig roots at this stage in my life.
Be prepared, for the worst has yet to come.
Just got a notice from the foreclosure proceedings on my duplex. With luck I can squat here for another six months before the police demand that I leave.
I plan on covering myself with putrid alligator fat and the juice of a native berry--this is what the indigenous folks of Florida did to ward off attacks from swarms of mosquitos. Hey, it worked for them. They never worried about eviction or unemployement, right?
There are folks in South Florida helping poor people find suitable squats. I like that. I want to move up from my piddly duplex into a McMansion.
Nemo - I'm forced to endure bubblevison 10 hours a day since the monitor is right in front of me. I definitely think the necklines have gotten lower and the shirts tighter in the last couple months. They're supposed to be whacking 10% of staff at cnbc soon, so I guess the money honeys will do whatever it takes. I'm still waiting for Fox business news to fold so I can feel good about buying stocks again.
Mal-
The consultants that I know are just full-time workers paid as "consultants" thus no benefits.
is that taxpayer money given or to be gotten?
Tiberius | 12.05.08 - 9:54 am
At some point interest or inflation on the dollar will pay it off.
consultants = outsourcing of blame
A way for execs to manage risk.
Took me a couple years of consulting to figure this out. Ugh, I'm so glad to be done with that crap.
At some point interest or inflation on the dollar will pay it off.
Brontide | 12.05.08 - 9:56 am | #
right now interest is declining and we have deflation?
Certainly the part of the fixed income derivatives world I trade is somewhat functional again,
Turbo: What do you trade?
+400 on the dow at the end of the day.
Consultants are overpaid note takers...they walk through some companies failed system and then just report back to management what their employees have been saying for years. Then they get a big bill for something they already knew...more wasted money and useless information from the "best and brightest"...
Maybe now when I call to buy something I won't get the salesperson who wants me to do all the work. As in make a copy, send it to me, then do this...blah, blah.
I just had one of those, again. No. You want the sale, you make the copies and send them to me etc... You are not doing me a favor.
Oh by the way...I did some consulting in my public accounting days...
Joe
Not today.
Consultants are overpaid note takers...they walk through some companies failed system and then just report back to management what their employees have been saying for years. Then they get a big bill for something they already knew...more wasted money and useless information from the "best and brightest"...
I happen to disagree being in the IT Consulting business. But like every other field - there are good ones and bad ones.
@bearly: sorry about broken link, it claimed it was good..
Type this into your browser, no spaces. The key part is EMRATIO:
http://research.stlouisfed.org/fred2/fredgraph?&chart_type=line&graph_id=0&category_id=&recession_bars=On&width=630&height=378&bgcolor=%23B3CDE7&txtcolor=%23000000&preserve_ratio=true&&s_1=1&s[1][id]=EMRATIO
"+400"
No way Jose.
I plan on covering myself with putrid alligator fat and the juice of a native berry--this is what the indigenous folks of Florida did to ward off attacks from swarms of mosquitos. Hey, it worked for them. They never worried about eviction or unemployement, right?
Don't plan on doing any mating I guess..
" scav writes:
academic theories? like the business theories and practice have been working so well?
scav | 12.05.08 - 9:15 am | # "
The problem is that recent "business" theory has been ivory-tower Harvard MBA reveries.
I'm concerned that in a catastrophic scenario, people who consider themselves very bright and capable won't be able to feed themselves and dependents. Hungry rocket scientists. Will work for fission.
"Consultants go in, talk to people, find out what everyone already knows, and then tell management the things that everyone knows but are too chicken to say themselves."
PapaSloth | 12.05.08 - 9:25 am | #
Papa: That is exactly right. Some years ago there was a consultancy that was hired by many bank holding company CEOs. The CEOs knew they had to downsize their employment rolls, especially after mergers, but were reluctant to do it themselves. So a weak CEO would hire the pricey consultant. In due course the consultant informed the CEO (and board) that it was necessary to downsize, and the CEO would announce at the end of the process that he had no choice but to begin layoffs. "The devil made me do it," or something like that. It happened dozens of times and some consultants got rich.
Of course, the hiring of the consultant was an early warning to bank employees to prepare for the worst.
sure is funny how people are buying builders and reits right now....Darn right interesting...Builder bailout might be stealth stock purchases..no other explanation.....divi's will be cut, so mfunds can't be big buyers or are they?
Sometimes I sits and wonder and somtimes I just sits..Satchel paige..
RE: Governmentium
Very good, my only suggestion is "klepton" (as in kleptocracy).
Hungry rocket scientists. Will work for fission.
Ben Frank'll Tank Bernanke | 12.05.08 - 10:06 am | #
time to crank up the underground economy
10% of all loans now in f/c or deliq
C&C
Link please
Report says record 1-in-10 households with mortgages delinquent or in foreclosure. That's crazy to how many people on my street are in this shape.
I'm still right side up on my home. For now.
More anecdotes for everyone:
We are almost finished with our budgeting process. We came up with a very conservative "reserve" case. Any possible expense, short of major layoffs was cut. Now our January pipeline is looking even worse than our lower bound.
Time to create the "unthinkable case"
headline only on msnbc.com
BREAKING NEWS: Report says record 1-in-10 households with mortgages delinquent or in foreclosure
Of course, the hiring of the consultant was an early warning to bank employees to prepare for the worst.
JohnR(VA) | 12.05.08 - 10:06 am | #
Naturally, if a CEO doesn't have the cahones and needs to hire a "blame man" for the job, then he's a crappy captain of the ship anyway.
cd writes:
sure is funny how people are buying builders and reits right now....Darn right interesting...Builder bailout might be stealth stock purchases..no other explanation.....divi's will be cut, so mfunds can't be big buyers or are they?
Sometimes, I ask myself, "can people really be this stupid, or do they know something I don't?" That's a question that can only be answered in retrospect.
Sometimes, I ask myself, "can people really be this stupid, or do they know something I don't?" That's a question that can only be answered in retrospect.
Although Bayes Rule would tell you that if you go with "stupid", you're rarely wrong.
Hopefully CR will report on the 10% of all loans now bad...this does not include the millions of homes already taken back the last couple of years
Hey,
Jack Daniels just raised guidance and announced better than expected sales.
Ya'll need to lay off the sauce.
Sorry if I missed this, but did anyone post the Fed's weekly balance sheet update from yesterday? That's my favorite "credit crisis indicator" right now.
Time to create the "unthinkable case"
Gavshire Hathaway | 12.05.08 - 10:10 am | #
Man, I went thru this in the tech wreck while living in SV. The only plus side I found: It separates the men from the boys.
Real leaders will decide what part of the company lives and what part dies, and what the company will be when it grows up again. Fake leaders will declare a 10% across the board cut, and then will find themselves in the same predicament 6 months down the road.
I am so depressed! Think our " middle class" 401ks in secure funds are really secure ?
JP writes:
Naturally, if a CEO doesn't have the cahones and needs to hire a "blame man" for the job, then he's a crappy captain of the ship anyway.
Well, yes and no. As a CEO, you still have to work with the remaining staff after the layoffs, and it's a lot easier if the resentment has been off-loaded. A good CEO plays the percentages, and hiring a scapegoat is a cheap hedge.
A little Monty Python lampoon of gov't structure, make yer own allegory:
YouTube - Monty Python and the Holy Grail
...."the underground economy"....has always been alive and well in Nevada....
Okay, perspective now.
December, 1974. Non-farm payrolls lost -602,000 jobs, off of a base of 77.66 million or -.78%.
November, 2008. Non-farm payrolls lost -533,000 off of a base of 136.17 million or -.39%.
Been there before and a lot worse without anything near a depression and/or total societal breakdown.
Sebastia
If not for the hope that Obama brings to the disaffected I believe we would be on the edge of revolt. The ease with which we handed out money to financial institutions is obscene. The expectation from taxpayers that they will get their own bailout is growing. While I hope we continue to argue the merits as well as we are now doing with the automakers, I think it matters little at this point. Obama is doing his best to calm the world with signs of transparency, but the clock is running out. Patience is wearing thin. The automaker bailout is a lose-lose situation. The economic news will get worse and in the next few months our resolve as a people will once again be tested. I believe Obama can see us through, but like Krugman I grow more and more worried.
When the next tax revolt is scheduled?
JP - other people at my firm read CR, and I need to retain a little anonimity here, so I can't be too specific. I will say that my markets are quite sensitive to credit, and were in complete disarray in September and October. They functioning now, but at maybe 25% of their former capacity, and I honestly don't think they'll be back to more than 30-40% for the rest of my career (however long that might be these days).
Sebastian,
True -- but have we seen this before?
St. Louis Fed: Series: BOGNONBR, Non-Borrowed Reserves of Depository Institutions
Cheers,
GH
My rally hat is still hanging on the wall.
"Naturally, if a CEO doesn't have the cahones and needs to hire a "blame man" for the job, then he's a crappy captain of the ship anyway."
JP | 12.05.08 - 10:10 am | #
JP: You may not believe this, but there are far fewer "crappy" CEOs of bank holding companies these days than there were say in 1990, before the wave of mergers and acquisitions got underway. Competition was limited and mediocre management, along with comfortable perks, were the order of the day for BHCs like Signet (VA) and others of that ilk. Their greatest fear (I kid you not) was receiving a call from Hugh McColl.
"a job, a 401k, some ability to borrow, thoughts of retiring some day before death."
"thoughts of retiring some day before death" is not a fair condition for those youngsters like me. the idea of 25/30 years of leisure for all might have been unrealistic.
remember that social security/medicare will have to go through a tremendous change, their rosy estimates don't include a shrinking economy. i wonder how those 2 million less jobs will affect SS surpluses.
WOW GH that is horrible!
Well, yes and no. As a CEO, you still have to work with the remaining staff after the layoffs, and it's a lot easier if the resentment has been off-loaded. A good CEO plays the percentages, and hiring a scapegoat is a cheap hedge.
No it is not, it is an expensive hedge because it tells your upper crust that you don't know how to do the layoff and manage expectations yourself.
It is the George Bush school of leadership: Have other people be responsible for bad news. People ultimately know that the CEO made the call regardless, so the CEO should man up and take visible accountability.
Reminder:
The fundamentals of our economy are strong.
Our financial institutions are well capitalized.
Carry on...
Nice numbers Sebastian!
I fear the restrictions on monetary policy actions now compared to then will make this worse overall, but I do like that stat.
Kashkari Says TARP Working, Banks Obligated to Lend:
Kashkari Defends TARP Against Congressional Criticism (Update2) - Bloomberg.com
I don't know what that St Louis Fed chart means but it looks ominous! Someone spell it out for me-
Kashkari Says TARP Working, Banks Obligated to Lend:
YouTube -
1134 writes:
Kashkari Says TARP Working, Banks Obligated to Lend:
To whom? The 1 in 10 households already behind or in foreclosure?
Serf Mike writes: WOW GH that is horrible!
Which data point are you referring to? Bwahahahaha
@turbo: Thanks. Good luck in the tough times...
@John(VA): You're right, I don't believe you.
the idea of 25/30 years of leisure for all might have been unrealistic.
My old man keeps railing about how it's up to my generation to "save social security" for ourselves - and here he dropped out of the workforce and any involvement in politics at age 50 and is lecturing me.
And when I say it's too late, he lectures me some more for being pessimistic and a defeatist and not a "fighter."
And then when I talk about revolution, he lectures me some more about how wonderful the Constitution already is.
I used to be able to have great conversations with him about politics, but his mind is back in the sunlit '60s and I find very little common ground with him any more.
Well Catholic girl,
As I've been saying since about May: "They're all insolvement".
This is uncharted territory. Can't tell you how the story ends, sadly.
Which data point are you referring to? Bwahahahaha
The cliff it fell plunged over with out even stopping. I notice the ression is factored to end before 2010.
Anybody out there brave enough to call a bottom here?
mal(Unrated) writes:
the idea of 25/30 years of leisure for all might have been unrealistic.
My old man keeps railing about how it's up to my generation to "save social security" for ourselves - and here he dropped out of the workforce and any involvement in politics at age 50 and is lecturing me.
MAL my old man has a pension benefit of over 70K, 24K in SSI, retired at 55 and recently called the tax department 4 times when he didn't get his $250 middle-class Star rebate.
If they want to save SSI they can look in the fkng mirror.
Sebastian - The numbers tell only part of the story when considering societal breakdown. It goes beyond approval ratings, consumer confidence, and misery index. They are indicators, but nobody knows where that tipping point is...where trust in government breaks down. It can be triggered by an event. I pray we don't find out.
OnTheRun --
Anybody out there brave enough to call a bottom here?
Guest on CNBC just did. He is "very optimistic about the next 6-12 months".
JP writes:
It is the George Bush school of leadership: Have other people be responsible for bad news. People ultimately know that the CEO made the call regardless, so the CEO should man up and take visible accountability.
If companies were machines, then engineers would make the best CEOs, and it would all come down to measurements and optimizations.
But companies are made of people, and managing people's expectations and opinions is at least as important as actually implementing the change itself. Hiring an "expert" and seeking his advice before taking drastic action plays as thoughtful, mature leadership. Taking quick, unilateral action is viewed as impulsive and rash, rather than as strong and decisive. It's all on how expectations are managed.
And yes, Bush was a bad leader, but largely because he picked bad advisors, and then only heard what he wanted to hear.
I love when the shit fan hits the right people.. arrogant ass..
The project is the Trump International Hotel and Tower in Chicago, which is to be the second-tallest building in that city (after the Sears Tower). By Mr. Trumps account, sales were going great until the real estate market in Chicago suffered a severe downturn and the bankers made it worse by creating the current financial crisis.
Those assertions are made in a fascinating lawsuit filed by Mr. Trump, the real estate developer, television personality and best-selling author, in an effort to avoid paying $40 million that he personally guaranteed on a construction loan that Deutsche Bank says is due and payable.
Rather than have to pay the $40 million, Mr. Trump thinks the bank should pay him $3 billion for undermining the project and damaging his reputation
Forward indicators are still going through the floorboards, and there are going to be massive layoffs in the financial industry in December, so the fact that this wasn't the worst ever payrolls number isn't exactly reassuring - wait for it, the Dec.08 number may well be the worst ever, and then get topped by the Jan.09 number - January typically being the only month where the birth-death is actually negative. That being said, I do believe this is going to play out more like 74/75 than 29-33, though this is giving the appearance of morphing into something uglier than even a cave-dwelling perma-bear like myself was expecting.
A Swedish pension fund that abides by Sharia laws has outperformed the Stockholm stock exchange since its launch in October:
Sweden's Sharia pension fund outperforms market - The Local
OnTheRun writes:
Anybody out there brave enough to call a bottom here?
OnTheRun | 12.05.08 - 10:27 am | #
CNBC reporting "it's a great buying opportunity:
Me: "Nope!"
...Tracking where individual dollars flow through an organization is also difficult, Kashkari said....
So what happened to "tranparency" and "plan supervision"???
I thought we were living in an autonomous collective...
So I was so wrong, for now. I'm going to stick to my num of -627!
But spot on for the Canadian numbers - which were worse than the US's.
FWIW, dude on CNBC this a.m. said to watch out for 8140 on Dow and 815 on S&P.
Very interesting chart CR, thanks! I'm noticing something rather interesting with the red line (yoy% change in employment). If you go to the beginning of each recession on the X-axis and move up and find the spot where the red line intersects it and make a mark, you can find an interesting pattern (just eyeballing it):
1960: +3.0%
1970: +3.0%
1974: +4.0%
1980: +2.0%
1981: +2.0%
1990: +1.8%
2001: +1.0%
2007: +0.9%
Up to and until the 1974 recession the yoy% growth in employment was still at high levels when the economy entered recession, while after 1974 the %yoy growth in employment was at progressively lower positive rates. It looks like we we spent a lot of effort trying to cool things off beforehand,and now we are having more problems getting the furnace to light with time. Inflation / deflation / interest rates ??
matt said: "Nice numbers Sebastian!
I fear the restrictions on monetary policy actions now compared to then will make this worse overall, but I do like that stat."
I'm pretty sure it will get worse before it gets better, too. However, in the same way that people sometimes ask "where is the recovery going to come from?" I think it's reasonable to apply the same principle and ask "where are the additional job losses going to come from?".
If this has all been caused by a housing bubble and a lot of jobs in the housing/mortgage/mortgage derivatives/ancillary areas have been lost, what's left? "Everybody else", the doomsayers would say, but is that reasonable? I would respond that autoworkers at the Big Three would be next, but after that...
Sebastia
Wow, sharp revisions down for the preceding months. I remember the same thing happened for August, announced after the election. I wonder if September's could have been announced before the election? If I'm reading Bloomberg correctly the UR for September, announced October 3, was 159,000, now revised upwards to 403,000?? Yeah, yeah, it was the hurricanes. I remember making this same comment about August's sharp revision upwards, announced immediately after the election.
PIMCO - Masanao- Quantitative Easing
florida is dead in it's own landscaped cardboard mcboxez.
huge irony is florida is swimming in free energy and water.
FL dopes will drive around in circles until their credit cards are declined.
Lived there for 25 years.
anonymous hate and despair everywhere.
the swamps are dead or covered in fill dirt.
The participation rate has nowhere to go but down (demographics).
Also, as we become more and more socialist (at all levels) the marginal worker figures it out and gets in the wagon rather than pulling it, shouting for (and voting for) more and more "help" for himself at the expense of the remaining taxpayers.
Can't help but wonder what happens when those in the wagon outnumber those pulling it.
The solution is for everyone to print their own money, as they're about to do in Milwaukee, according to the Chicago Tribune.
....good eyes Doc.......
OnTheRun writes:
Anybody out there brave enough to call a bottom here?
How about we call a cliff ledge and wait to see if the carcass hangs up here or rolls off again?
ew thread
gn - I think they already do, but we have momentum helping us on our ride down the mountain.
Well otis not quite.
And if you file some pleadings in response, for your Fla foreclosure, you can camp out in your apt for far more than 6 months. In fact, depending on where you are, you could get 'way more than 6 months. A certain amount of luck is involved.
I think it's reasonable to apply the same principle and ask "where are the additional job losses going to come from?". - Sebastian
I don't think the next few months are that hard to see that retail and what little manufacturing will get slammed. Moving forward any high cost business will be ripe for layoffs as well.
"@John(VA): You're right, I don't believe you. :)"
JP | 12.05.08 - 10:22 am | #
Well, JP: compare BB&T with the old Signet. One CEO (Allison) learned how to survive, the other (now deceased) didn't. Don't just focus on the top tier BHCs.
I am concerned that the U-6 stat is essentially meaningless because it must contain in it many people who simply cannot navigate in the real world job market. Undereducated, underskilled and likely unmotivated. These peoplethere must be millionsconstitute a permanent unemployed underclass. It seems to me misguided to count them in any set of employment/unemployment stats.
What counts are actual live job prospects. That scenario is bad enough without including people who will never work full time. Those latter, IMHO, constitute the bedrock of Pres. Obama's voting base. So from that perspective he has a stake in increasing their numbers to guarantee reelection, not to mention a constitutional amendment allowing him to serve beyond 2016. Putin, anyone?
Gavshire Hathaway -- what industry are you in? Thanks!
RD LOL carcass on a cliff
"If this has all been caused by a housing bubble "
Sebastian, the problem is, I don't think this mess was caused by the housing bubble, the housing bubble is merely a symptom of the broader credit bubble. That's why we're screwed. Every aspect of our economy is impacted by credit deflating.
mal, tell your old man not to count me on.
i'm not going to fight to "save" social security/medicare. it's ok with me if the gov only keeps welfare and medicaid (those i would fight to keep).
if i fight for anything it'll be for kids in this country not to become debt-paying slaves, not for bigger entitlements.
I just wrote a couple of big checks to the federal and state ( total 21% of the gain) for long term capital gains on a piece of investment real estate I sold 6 months ago . The contract was at bubble prices in early 2007 but did close until June 2008 . I had some 1031 properties identified but buying them sure looked increasingly like that I might be catching the falling knife .
Mal wrote:
"I find very little common ground with him any more"
but please don't let that get in the way of having a great relationship with your dad. i lost my dad several years ago and boy do I wish i would have worried less about stuff like that and enjoyed him more when i had him here. very hard lesson to learn. i'm sure you're fine, but when my friends with living parents complain about minor stuff, i remind them they are blessed to have their parents here and focus on the important stuff of loving/enjoying family and forget the trivial stuff.
Sebastian writes:
matt said: "Nice numbers Sebastian!
I fear the restrictions on monetary policy actions now compared to then will make this worse overall, but I do like that stat."
I'm pretty sure it will get worse before it gets better, too. However, in the same way that people sometimes ask "where is the recovery going to come from?" I think it's reasonable to apply the same principle and ask "where are the additional job losses going to come from?".
If this has all been caused by a housing bubble and a lot of jobs in the housing/mortgage/mortgage derivatives/ancillary areas have been lost, what's left? "Everybody else", the doomsayers would say, but is that reasonable? I would respond that autoworkers at the Big Three would be next, but after that...
--
Fair enough, but were deleveraging on such a grand scale that I believe everything will be hit in some way.
When they raid the whorehouse, they take all the girls.
My ex-grilfrind in college who is 50 years old, lost her job 2 month ago.
I talked to her on the phone (she lives in other state) she was very depressed. I am going to send her $2K as a gift to help her a little bit.
May people are suffering now.
JohnR - Have you contributed to the Palin/Plumber 2012 campaign yet?
PapaSloth: I'm not saying to do it without advisors or an expert opinion. But for a CEO to think that somebody else will take the reputation hit for making tough decisions (a blame man), well, he's only fooling those who can be fooled. Either that, or the organization is so FUBAR that the rank-and-file actually believe that accountability is not with the CEO.
wawa-
can I be your ex-girlfriend too?
We are all wawa's girlfriend now?
" the man from nantucket" i totally agree!
my dad jockingly sometimes tells me "do me the favor to agree with me on something." so i'll do.
gn: "Can't help but wonder what happens when those in the wagon outnumber those pulling it."
i'd expenct a growing cash economy and a come back to family/neighbor "bartering" if you want. they are extremely common in latin societies. grandma's doing the cooking and child care, and in exchange, they get a roof and help with their medical bills, for ex. neighbors providing flexible child care also and getting it back when they need it. it doesn't need to get ugly.
We are all wawa's girlfriend now?
I just look like hell in a skirt with my Italian unshaved legs.
Random excel question: How do you shade in parts of the graph to indicate a recession?
"In the words of the esteemed Reverend Wright, "The chickens have come home to roost."
Those words belong to Malcolm X, spoken decades ago.
Our wonderfull president is going to speak in 45 minutes, according to the CNBC.
What a fuc...ing joke. Mo....ther fuk....ker. The saddest part is that some fools belive Obama is going to fix everything !
I'm in online advertising, media, and to a lesser extent tech.
Startup, so private. But lots of public companies in the same space.
I object to these insults at consultants. They can make great power point presentations too. Have you watched a couple Monte Carlo simulations? Very impressive stuff.
RD
I can also visualize the PPT trying to wrap ropes around that carcass and attempting to drag it off the ledge. Might be they'll all go over together.
matt said: "...When they raid the whorehouse, they take all the girls."
I'm proceeding from the Pollyana-ish assumption that the number of girls in the whorehouse was a very small minority of total girls in the population.
S.
It seems to me misguided to count them in any set of employment/unemployment stats. -JohnR(VA)
I think we should keep track of it and measure it, because it is useful information, but I would agree somewhat with you in that it isn't as relevant. We need to be able to measure the level of self-employed persons since they compose a higher level of the workforce than ever before. How that's accounted for is more important IMO.
Bush to speak
when? 11am?
I'm proceeding from the Pollyana-ish assumption that the number of girls in the whorehouse was a very small minority of total girls in the population.
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i think this credit cycle has made whores of most of them. fortunately we don't need to wait long to find out.
Sebastian,
The historical perspective is useful, but the 1974 number is final. Today's number is the intial estimate and subject to revision. Two months from now, the November number will have been revised lower, I think, and we will be looking at an awful January number.
Does anyone else enjoy that Sebastian has returned here and is once again the voice of optimism?
Bush to speak....11:30AM
wawa - I suspect you are confusing fools who believe Obama will fix everything with reality-based individuals who feel better having him as president during this crucial time than Bush, McCain, or Palin. This is not to say both sides of the aisle haven't been responsible for getting us to where we are.
thanks PTDBD!
Assume Crash Positions! writes:
Thanks for the link Isabel. Interesting stuff.
Assume Crash Positions! | Homepage | 12.05.08 - 9:45 am | #
Isn't it? I've just now read the comments, and they made me wonder how the "poor are poor because they chose to" crowd (of which there were some examples there) will fare when the piranhas will start nibbling at them. Somehow, they don't seem very resourceful, or knowledgeable, to me.
"poor are poor because they chose to"
like shiller says, in USA, specially those that are successful totally underestimate the amount of luck they have had. from their parents to the year they were born.
this is so true! it makes me laugh when an old baby boomer says "the young only need to work hard, look at me!"
LOL
Buy and hold fellas... buy and hold... it's down now but it'll bounce back up. You can't time the market...
When/where is the dubya speaking?
if i fight for anything it'll be for kids in this country not to become debt-paying slaves, not for bigger entitlements.
julia | 12.05.08 - 10:40 am | #
You might want educate yourself on just how much SS pays... its barely three hots and a cot. The belief of most young people is it's a 3BR condo on the 18th it isn't. If you want that you better have other assets - lots of them.
Likewise if you want those who have already raised their kids to pony up for the next batch 'kids in this country'... then there better be something in it for them too. I hear a lot of elderly saying now - fine take my SS away - just don't expect me to support the schools anymore - NOTHING AT ALL - I did that back when I was paying my SS dues too. Let those wealthy young Xers pay for their own spawn themselves - all of it.
Just to understand the repercussions - in my town something like 80% of the property tax is paid for by people whose kids are grown or had no kids.
This kind of talk is a go-nowhere-I-got-mine-fuck-you solution. Somehow we as a society have to find a way for us all to do alright (young - middle aged - elderly) or it breaks down and gets real ugly real fast.
You all might want to engage brain before typing.
Just sayin'...
Personally, I find it very difficult to drop the trading mindset of the last 15 years.
I know the friggin bulldozer is coming to flatten the landscape, but I can't help diving in front of it for the occasional shiny quarter. Penny wise, pound foolish describes it well.
Most companies are debt based. Who will fund them?
Bush to speak....11:30AM
PTDBD | 12.05.08 - 10:55 am | #
Watch him pull a rabbit out of his hat.
Barley | 12.05.08 - 10:30 am | #
Barley, wait for the revisions - didn't September go from -159 to -420 or similar?
"But companies are made of people, and managing people's expectations and opinions is at least as important as actually implementing the change itself. Hiring an "expert" and seeking his advice before taking drastic action plays as thoughtful, mature leadership."
I would say that executives who offload blame onto consultants are wiley rather than weak. But the idea that this plays as thoughtful and mature...
In the thick of massive layoffs, no one is thinking like this. Everyone is angry, depressed or scared. There is no good way to do it. After a layoff occurs, those left behind breathe a sigh of relief and then hope that they aren't next in line.
12th Percentile said: "Does anyone else enjoy that Sebastian has returned here and is once again the voice of optimism?"
Not so much a voice of optimism (since I'm not nearly as optimistic as I was before), but there are still two sides to every argument. A two-term Bush presidency and a "War to Nowhere" is what you get when all contrary views are shouted down.
S.
Comment on the constant fudge of the payroll numbers?? Last month's briefing forecast was 200k; reported was 240k; revision was 320k. This month briefing was 300k reported was 533k. Any guess as to what the revision will be later this month?
California May Pay With IOUs for Second Time Since Depression
Bloomberg.com:
News
When the young people leave, a town dies. If you don't support the schools, the young people will leave. Property values will go down (relative to other places. Of course they're going down anyway right now). The old people who remain will have no one to foot the bill for their civic services and be left with crumbling infrastructure. If the area is close to a city, urban decay will set in and the area will become crime infested.
Penny wise, pound foolish.
Sebastian is right in so much as it's been this bad (or worse) before and in many of our lifetimes. 1974 comes to mind for me too - my sophomore/junior year of HS and my father lost his job. He was white collar and it was his third major job loss in a six year period - each time it took a year to land a new job... the last time it was only because he started his own business.
We went something like seven months without making a house payment - the bank didn't foreclose because (a) we knew him personally and (b) they were up to their eyeballs in foreclosures already.
Can it get worse than '74 - sure. It hasn't yet - it will have a way to go before we get there.
Again, just sayin'...
I'm not shouting anyone down (and I shouted pretty loud against the MBA President for 8 years so I'm aware of what it is like to be on the minority opinion side of an argument, but I was also on the fact based side).
The idea that we need to have both sides of an argument to make it "fair and balanced" is exactly what got us into this mess. There aren't two sides to many arguments when the one side is wrong and not based on facts.
BTW - Three manufacturing companies in my area have just shut their doors in the last few weeks. Not one had to do with housing. Another just cut salaries by 25% across the board. And our median sales price went up again last month continuing a 6 year bull market in housing here. Again, these are facts.
Huh, that -1 million I'm looking for over the next year seems more plausible now. Deflation is one ugly mother.
Bush: "I want to apologize to the American people for my performance as President of the United States. We need not wait for history any longer, my legacy will be as the worst President in our nation's history. I wish you well in your battle against poverty and extremism. I wish you strength in your fight for energy independence. Stand strong in your resolve to check the rising tide of health care costs and out-of-control debt. Oh, and sorry for trashing the consistitution...Cheney made me do it. Peace out!"
dryfly, you are saying nothing new, at least in CA and FL that type of measures have been implemented already. i'd expect more of them to come.
i'm not rooting for the old to die of starvation, nor anything like that. all i'm saying is realistically, there's a limit to "lets spend now, the next generation will pay". i am educated about ss/medicare 45% of spending now, heading towards 75%.
much of the rest of the spending is not discretionary either. tell me, you really don't see a problem here?
@ Whatthe | 12.05.08 - 11:10 am | #
Tell that to Del Webb, he'd probably disagree. Especially for those elderly who already have theirs - screw the young, let them pay for their own schools, day care, kids college - we done that already.
Get the point? The same knife cutting against SS can also cut against the young - old & young alike can be so selfish as to be 'pennywise, pound foolish'.
Again - if we as a society can't find a way to support all of us from our bounty - then it breaks down for all of us. If folks aren't smart enough to realize that (and obviously many here aren't all that smart) then we deserve the return of the Middle Ages.
We need a PPT for employment numbers!
Losing a job isn't fun or easy but it's nature's way of telling you to go do something else. You may need years of schooling and a household relocation to another geographical region. But, that's life.
Unless of course you are a favored species - then you take the easy way out and beg for some government teat to suck.
What's a republic?
Divide to conquer, dryfly... I suspect that the U S of A will take a while to get over that myopic old political trick...
Or maybe not. Time does seem to accelerate these days.
"1974 comes to mind for me"
I think that is right about the time my dad, who was a few years out of school with a pHD in biochem, was digging ditches for a living.
Sebastian wonders where other job losses might come from after the housing related ones.
I noted what is happening where I am with companies shutting down. I also was talking to a CFO friend of mine this week and they said they didn't have the money for payroll and couldn't borrow it.
Our local mall owner (they own 9) has been delisted, can't make their debt payments and is trying to sell some of their other malls to survive.
And as Rich has pointed out many of the biotech and other start ups rely on borrowing since they don't have positive cash flow. They will be in trouble. People like Gavshire's company who rely on online ad money are in trouble. Even Google is in trouble. Newspapers are dying. The traditional music industry is getting destroyed. My brother works at a large biotech firm, marketing just got cut in half. And most governments on all levels are facing huge budget shortfalls. In Mass. they are cutting government jobs. I imagine many states and counties and city's will have to do the same.
I don't think the question is where will the additional job losses come from beyond housing and finance. The question is, will many of these jobs ever come back.
The ones in my area that just got shipped to mexico, probably not.
mission accomplished