Continued claims are now at 4.087 million - the highest level in 26 years.

Note that the weekly unemployment claims tends to peak towards the end of a recession - just something to remember.

So we're at a 26 year peak. Recession must be over.

When are we going to hit 700K?

OT, a lack of property tax declines certainly isn't helpful, glad we sold in 05 -

Property-tax collections climb as home prices fall

Property taxes haven't fallen since 1934, the BEA says.

• Property tax limits. Most states cap how fast taxes rise in boom times. In bad times, the same laws keep taxes from falling and even permit modest increases on most homes.

Arizona, California, Florida and Nevada — the four states hit hardest when overheated real estate markets crashed and triggered waves of foreclosures — all have tax laws that work this way.

•Delayed appraisals. Most states are slow to change the assessed value of homes. Some Pennsylvania counties haven't done major reappraisals for decades. Elsewhere, homeowners must pay taxes on peak values for years before new assessments reflect plunging prices.

Property-tax collections climb as home prices fall - USATODAY.com

Maria Barrelbottom. LOL

Yes, I though it was funny they didn't mention a shortened week for claims.

in my neck of the woods we had the following this week

Momentive Performance Materials on Wednesday announced a restructuring that will cut the pay of 400 hourly workers by 25 percent beginning Jan. 1.
\t
It also temporarily laid off 225 workers for periods ranging from two days to two weeks. The layoffs began Nov. 24.

and this

Super Steel Schenectady Inc. will close early next year, eliminating up to 200 jobs.

“Without substantial new orders, we cannot sustain the employees at the plant,” the Dec. 1 statement said.

some good news for a change, quite hopeful, even potential job creation aspects. the SED joint china usa statement just released, here's one of many highlights -

The United States, through the Department of Energy, and the People's Republic of China, through the Ministry of Housing and Urban-Rural Construction, agreed to conduct an EcoCity policy study, strengthen capacity building, promote science and technology development, and design an EcoCity demonstration project under the Ten Year Framework;

HP-1311: U.S. — China Joint Fact Sheet: Ten Year Energy and Environment Cooperation

Year-over-year would be more informative than monthly or weekly because we are entering the Christmas rush of seasonal hires.

CR,

Did you perhaps mean "look back at"? It is sometimes difficult to see where the summit is when one is still going uphill.

The biggest swindle in the world is getting bigger. Way bigger.

The more they screw up the more you pay and the more power they get.

Predator state.

These bad numbers are coming at a time when employment should be seasonally strong. I fear the numbers coming in Jan and Feb.

Well I do think these numbers are seasonally adjusted.

Since there is an over abundance of working for the jobs, over capacity, lets cut work hours/week like in France.

just a thought...

it's a good idea, but won't work here due to benefits. It's cheaper to have less people work more hours in the US due to benefits.
in France, healthcare and most benefits are nationalized, so you don't have this problem

News is news. Just buy 'em.

Note that the weekly unemployment claims tends to peak towards the end of a recession - just something to remember.

this is of course true! obviously as we leave recession then we are in an expansionary mode and thus we need more workers and not less!

but the problem is that you don't know when you've peaked until the numbers are already falling!

so it's a hindsight sort-of thing, right?

Who the fcuk is buying equities now? Whoever is buying must obviously think that the recession will be over in 6-9 months. What do these guys know that we don't?

YTL - Wanted to catch you while you're here. Thanks so much for the info on the MD/Phd - brought up some great issues. And for the other medical industry insights you bring.

energy,
Are the credit markets still showing similar strains as last week?

Or worsening?

Agree that this rally in equities will be short lived. I'm starting to suspect manipulation by the treasury/fed. Maybe not direct equity purchases (possible). But interventions in the currency/ mortgage market.

This equity market rally makes no sense to me. Total pump job.

I'm long a bunch of jan srs calls.

I'm trying to figure out how to play the coming CRE crash.

SRS is one way.

What about shorting the shit out of insurance companies? Don't they have big CRE exposures?

I'm sure some of them are TBTF, but maybe they'll go out AIG/FNM/FRE style, with an equity wipeout.

Are you looking at MET and PRU? Or do you have other juicier targets in mind?

I'm just beginning to look around.

I know they're down from highs, but since the CREs just started crumbling, I don't think the huge markdowns have hit yet.

Plus, with the long term rates going into the shitter, how are annunities supposed to pay out?

Geithner Seeks to Push FDIC’s Bair Out After Clashes (Update1) - Bloomberg.com 
Geithner May Seek to Push Bair Out After Clashes During Crisis
(Bair left a bad pizza taste in Geithner's mouth or was it shampoo?)

Thanks for long term graph. On occasion we get into discussions about whether unemployment, inflation it is "much worse" now than in late 70s - early 80s. Granted the worse is yet to come, but we are not yet near the 1979-82 spikes, either on an absolute basis, or percentage terms. When arguing a certain social agenda, people forget that unemployment is cyclical. Maybe the causes change, but no one has invented a long term, stable full employment economy.

U.S. factory orders down more than 5% in October

Angry Saver, sterilization concerns me too, but it seems that debt destruction acts to sterilize as well.

Until it doesn't anymore.

I'm probably from the other end of the political spectrum of Angry Saver & yourself but I share some of his concerns and am also suspicious of how well they can 'sterilize' these interventions. I just don't see how they won't ultimately result in monetary inflation which later results in 'price increases'. Possibly a lot of it.

@ Energy,
Thanks. I'll spend some more time digging into those metrics. I'm also wondering if the distress in the CMBX indexes is getting worse. With the rise in SRS I'd assume they've been improving.

@ Eric,
I think some of the REITs will be hit much harder than they have so far: SPG, VNO, BXP, and SKT all look like disasters waiting to happen.

So far the interventions have been sterilized. M1  is now up some over trend but I suspect that's intentional - it's certainly a tiny increase compared to the Fed balance sheet expansion. M2 is just returning to its long-term trend after falling below it over the past year.

The Fed clearly is not unsterilizing accidentally, and only to a limited extent deliberately.

New article on Baltic Dry downplays the credit crunch, suggest the lowering index is now mainly about lack of demand due to economic downturn.

404 - Error: 404

The more they screw up the more you pay and the more power they get.

Predator state. - AC

It's not at all surprising. We have a system that encourages and rewards stupidity and incompetence. Hence the rush for more stupidity.

The productive class will creamed before this nonsense is over. The entire bottom 90% of wealth holders may very well end up as wards of the state. All in the interest of saving our "free" market eCONomy.

It's a sham.

@ 12th Percentile | 12.04.08 - 9:34 am | #

Regarding Super Steel plant in NY - I'm not surprised. I call on their offices in Milwaukee and they have some issues. Steel fab can be very good business but you had better be BOTH low cost & productive... then be careful to not bid too low (buying business at a loss). I think they might have been guilty of the last one. I know some jobs they took away from other companies that raised some eyes - I just assumed they were lower cost... reading the article makes me think maybe just lower priced... the two aren't necessarily coincidental. Sometimes it's better to lose an order than win it at a cash eating loss.

Don't kid yourself about the coming global food shortages. They are real.

It doesn't take a lot to feed a hungry world.

Only credit, weather, oil, credit, unfettered shipping, credit and farmer's motivated by high prices.

Fair Economist,

Ignore the accepted theories for a minute.

Consider. Any time false wealth or fictitious assets prices are propped up with government guaranteed obligations, it is an inflationary event. Money above output destroys the medium of exchange function of money.

The fed is hoping the excess money will flow back into assets like real estate, stocks and corporate bonds. God help us if it flows into commodities. And remember, many of the world's $$$$ are held by foreigners.

I'm not a worrier by nature, but this worries me. Murphy's law is like gravity.

wish this car had a better dashboard.

You can have the best dashboard in the world and still know nothing about what is happening under the hood if the 'sensors' feeding the dashboard are poorly positioned or badly designed. I think that is the problem more than the dashboard. JMHO.

OOOOOOhhhhhhhh Nibbling SRS here. Glad I resisted yesterday.

But AS, the point is that the money supply is not increasing much. The charts are clear; M2 is in normal bounds and M1 is being increased in a limited, controlled way (probably to keep M2 stable). Buying assets with Treasuries doesn't change the money supply. It exposes the Fed to credit risk, which is a problem, but it has no effect on the money supply.

Or even worse, you have some clowns who think sending green lights to the dashboard will get the engine running in tune again...

What a perfect metaphor for the administration policy of trying to support the banks and expecting that to help the real economy.

SRS just fell off a cliff--don;t know why.

i am in flyover, and i am hearing lots of farmers not planting grains in the spring, as input costs are STILL too high relative to expected sale price
nullpointer | 12.04.08 - 10:41 am | #

It's early (up here in Minnie)... they won't have to commit to planting until at least March & maybe even later - some of this is a negotiating ploy w/ the seed co's & chem producers - they all try to lock in early commits from farmers & the prices aren't enticing that (unlike the last couple years where the reverse was true - farmers feared not having inputs but already having commitments to the next end of season futures market).

Its just the usual stalemate now - nothing to worry about - yet.

oh no, i just realized we're driving a Hugo designed and built by orwellian inspired engineers.

BARNEY: TIMMY SHOULD STOP HITTING ON BAIR.

dryfly-

not disagreeing, but the info i have is internal to the farms...they are in the yearly speadsheet mode now, trying to figure out what and how much to plant.

i am not a farmer, but i was really surprised when i heard this, as i ~assumed~ their input costs (seed, fuel, nitrogen, potash etc) had cratered far more than the output commodity prices.

[oh no, i just realized we're driving a Hugo designed and built by orwellian inspired engineers]

Command Economy. Should work out neatly, No ?

Fair Economist --

The $100 billion in GSE debt purchases will be unsterilized.

So will the $500 billion in MBS purchases (I believe).

I also think Angry Saver has a point about the contingent liabilities of all the gov't guarantees (e.g. the Money Market facility), which do not show up in M1 or M2 but definitely represent some sort of monetary expansion.

[Sebastian writes:
Brontide (wisely) remarked: "Would be nice if the graph/stats were adjusted for population growth since I'm sure the US is quite a bit larger now than in the 80's."]

Many undocumented workers that will never be able to collect benefits. Nevertheless, the numbers will easily eclipse the '80s levels...

which do not show up in M1 or M2 but definitely represent some sort of monetary expansion.

Nemo,

I look at it this way. Bank credit created money is based on a promise of output/work. If the promise is not met the associated money vanishes. However, a government promise will never vanish even in the absence of output. Hence we end up with more dollars but not necessarily more output. More dollars against the same output dilutes real savings (real saving = savings backed by output). That is a blatant attempt at inflation.

Also, over the short term these shenanigans get hidden. Over the long term (10 + years), inflation and money supply are extremely well correlated.

The majority will suffer. Mark my words.

It's 1x long benchmark went up by 40%, which makes me think SRS should be down more.

Except that

a) You can't compare daily returns to period returns like that and

b) There's tracking error, even if you could (which you can't).

i am not a farmer, but i was really surprised when i heard this, as i ~assumed~ their input costs (seed, fuel, nitrogen, potash etc) had cratered far more than the output commodity prices.
nullpointer | 12.04.08 - 10:55 am | #

Nope - input costs are way stickier. Monsanto et al set price targets & direct their field sales to try and hold the line - meanwhile 'the pit' in Chicago does what it does.

The farmers are putting it on their spreadsheets but that isn't the same thing as 'not planting'... it's similar to a 'vote to strike' in a union negotiation - they are serious if the prices don't get better or costs come down to CONSIDER not planting.

Remember most have debt payments so can't not plant forever.

It's all posturing right now. Deals will get done. Maybe not all but most acres will get planted.

OMG I miss Tanta and the word police!
Folks:
Less = smaller amount
Smaller number = fewer
As in "There is less money in this account than that one."
And "I have fewer dollars this week than I did last week."
Come on, you can't blame that on Halo Scan.
When you WRITE imprecisely I assume you THINK imprecisely.
One of the best posters on this blog was "Banker" whom we drove back into the Banker Dome with our loose language and sharp jabs.
Shape up, please. And cut out the chit chat for God's sake. 98% of us here are trying to learn -- either background or current events -- we can talk to our spouses or drinking buddies if we want to chit chat.

Anonymous asked: "SRS: What happened between Nov. 20th and today to cause a 60% loss?"

Unwinding of heavy leverage around a minor (major?) turning point. Even if this is just a shallow, multi-week consolidation (which I think even the bears would concede as a genuine possibility) it could get "worse."

Sebastia

Pavel C, hee hee, yes yugo from yugoslavia, hugo chavez is funnier, but i was giggling while typing.

Ethan said: "...Shape up, please. And cut out the chit chat for God's sake. 98% of us here are trying to learn -- either background or current events -- we can talk to our spouses or drinking buddies if we want to chit chat."

I don't have any friends, but I take your point. What better way to memorialize Tanta every single day than by clear, civil, and purposeful posts?

Sebastia

If you have been commenting on SRS and you didn't realize one of the top holdings in IYR was Public Storage, perhaps you should rethink giving people advice on the topic.

Just a Lurker writes:
Greenspend,

Are you aware of this Fed chart showing velocity?

St. Louis Fed: Error page12.pdf
Just a Lurker | 12.04.08 - 11:27 am | #

no, and thanks! i'll do some research on the timeline for the data, but is very handy.

found this really fun hunk of data when back tracing the link. yay. ethan, here's some fun for you-

http://research.stlouisfed.org/publications/mt/20081101/mt_20081113.pdf

Ancient Chinese Secret writes:
I have no problem with getting rid of Bair, regardless of Geithner's motives. I think the FDIC's policy of taking down these tiny banks has been ludicrous. They should have been taking down mid-size/regionals at least.

Ancient Chinese Secret | 12.04.08 - 11:33 am

If she is running the risk of being canned for expressing publicly what we are writing here, then how do you expect her to put the "C" in FDIC?

I'm being completely honest when I ask because it seems that even if there were people wanting to do it, they are marking too many enemies than allies...

I'm wondering what a good function is for representing the "output drag due to people being angry because they've been fucked over".

Probably lambda. ;0)