January Employment Report: 598,000 Jobs Lost, Unemployment Rate 7.6%
Submitted by
CalculatedRisk on Fri, 02/06/2009 - 5:30am (267 comments)
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Priced in, move along.
first
blast, not sooner enough!
"The loss of jobs, at employers ranging from manufacturers like Caterpillar Inc. to retailers such as Macy's Inc., is shattering consumer confidence and crippling spending."
U.S. Jobless Rate Soared in January and Payrolls Kept Plunging - Bloomberg.com
The assumptions here are mind boggling.
Is consumer confidence and spending shattered and crippled by the lagging indicator of job loss? Or is it the converse? If it is the converse, what drives the drop in confidence? Spooky shadows? Boogey men? The realization that all the phony wealth is in fact phony?
Nostrovia,
The problem is being aggravated by the lack of hiring. Many hiring freezes out there.
Wall Street CEOs, investment bankers charged prostitutes on corporate cards, madam says
Friday February 6, 2009
Investment bankers racked up $100,000s in prostitution charges
Visa, Mastercard or American Express? Or maybe a credit card from JP Morgan Chase?
Wall Street CEOs, lawyers, bankers and media executives chalked up thousands of dollars in prostitution charges on their corporate credit cards -- swiping their cards for $2,000 an hour prostitutes, according to a New York madam who plead guilty last year.
Kristin Davis, the madam in question, went public to ABC News this week; ABC will be broadcasting her interview Friday at 10 pm. Davis says she has a list of 9,800 clients, many of whom she says New York prosecutors deliberately avoided when taking her case, even though she offered them her annotated client list.
In what's sure to create a media firestorm parallel to that of when a Washington, DC madam announced that she was publishing her client list (which included at least one senator), Davis' comments come at a time where incredible ire is already focused on Wall Street and banking executives. The pressure for her to release the list will certainly be immense.
But the pressure from New York's finest prosecuting team was nearly zero, Davis said. "They showed no interest," Davis quipped, alleging that they ignored that numerous corporate titans had used her services.
Among the names the network says it confirmed
Mish has an intereting article showing that the 1.5 million people on extended unemployment are not included in the 7.6% number. We are already north of 10%.
So much for the 'uptick' ...
Further, is the job loss driven by the "loss of confidence? At Cat?!? Or is it do to a reality...like sinking sales, sinking orders, and the realization that lots of newly purchased equipment is going to be moth balled?
But lets make sure our media template is simple-dimple. Wouldn't want to think too deeply. That would spoil the whole rationale for "stimulus". Wouldn't want to think too deeply about fake employments impact on the capital structure...we just need to reignite all that tug on the capital chain that the bubble created.
Nostrovia,
Seriously considering adding to my GS short stack.
Misean - stop tugging your capital chain.
Bad for the eyesight.
C
I am trying to sort this out. January (alone of months) normally has a huge negative net birth/death figure, which when subtracted from the real figure, makes unemployment look worse.
True to form, the January 2009 figure is -356 thousand. I was expecting this, and expecting it to drive the 600k figure to about 950k lost. Yet I see only 598k lost.
Were there only 242k real jobs lost, inflated to 598k by the model?
Or did they simply stop using the model to avoid the appearance of a catastrophe (or take your pick, incompetence)?
Class, anyone?
km4 writes:
Wall Street CEOs, investment bankers charged prostitutes on corporate cards, madam says
Friday February 6, 2009
Would you expect anything less from the titans of Wall Street?
More TARP please!
C,
"Bad for the eyesight."
Shhhh! My optometrist reads this sight, and I'm already in trouble there....
Nostrovia,
But the prostitutes are notorious spenders. This is good for main street.
my father lost his job yesterday.. not sure if he would be counted in the official #s though.. he is in his 70s.. can you collect unemployment in your 70s or would they make him go to social security? (He hopes to work again)
Plantagenet writes:
"I am trying to sort this out. "
Does this make it into 'seasonally adjusted'?
S&P500 closed at 845.85.
Now S&P 500 futures are up 2.3 to 842.8
Why do the futures not use the prior close?
Plantagenet,
"Or did they simply stop using the model to avoid the appearance of a catastrophe (or take your pick, incompetence)?"
Hmmm...given the fiddle f**king with the B-D model over the years, I have to dismiss incompetence. More likely an unsettle the rubes, but don't agitate them towards pitch forks and torches...too much.
Nostrovia,
1 currency sooner [yogi] writes:
But the prostitutes are notorious spenders. This is good for main street.
Only for the hoods selling meth ...
Market will zoom because birth/death model is skewing the number and actual number was better than expected. Heard it on CNBC. Funny how they ignore the months where the b/d model makes the number see better.
I smell a big rally in the next week. Wouldn't mind. I need a big move one way or another to set up the next counter move.
The problem is not confidence, its not fear of job loss, its not the banking system's failure to lend...THE PROBLEM IS the vast majority of american consumers have too much debt. They know it the banks know it the only people who do not seem to know it are the officials making policy.
Can anyone post the U-6 graft. Tnx in adavance.
I trust shadowstats.com more than I trust BLS (removing the L gives a more accurate name for them). Shadowstats shows an alternate measure of unemployment (including "discouraged workers") pushing darn near 18%:
Inflation, Money Supply, GDP, Unemployment and the Dollar - Alternate Data Series
I see mustard seeds.
"what drives the drop in confidence?"
Comrade, even the most simple among us realize our "leaders" are egotistical simpletons who have no idea how to upright the Ship of State, nor care to. Multiple corrections, one after another, week in, week out - Peter and the Wolfe combined with "The Sky Is Falling" every few days.
Our politicians are in effect senile old men lying in their own waste but incapable of realizing it. The stench, futility, and absurdity is unseen by them. Their shallow ego disallows objective thought.
The U6 graph is also at shadowstats.com
the B-D adjustment in January is merely data smoothing for seasonal adjustment, IIRC. Would love to see NSA number.
It's hard to read too much into B/D as January is the population adjustment month.
November and December figures also modestly revised down.
Or did they simply stop using the model to avoid the appearance of a catastrophe (or take your pick, incompetence)?
Class, anyone?
Plantagenet | 02.06.09 - 8:56 am | #
U6 probably gives you more clear picture. 15.4/13.9 is really bad. From 9.9 (Jan 2008) to 15.4 in one year. That is pretty close to what happened in 1931:
1930: The unemployment rate climbs from 3.2 to 8.7 percent.
1931: From 8.7 to 15.9 percent.
1932: to 23.6 percent.
1933: to 24.9 percent.
...
1939: Unemployment falls to 17.2 percent.
I was beaten by the CR-Bot on the last thread. This is a re-post, with apologies to any who were bored by it the first time. We all skip what we don't want to read, anyway:
joe shmoe writes:
A few responses to CR's post and this (last) thread.
1) We really don't know what Geithner and Obama might announce next week.
There have been reports in the media for the past couple of weeks, all attributed to "sources," never a named source, the stories are mutually contradictory, and many of the reported plans not only make no sense in general economic terms but also make no sense in immediate political terms.
2) That suggests that these stories are either made up crap by the media or trial balloons or leaks to move public opinion in opposite directions or stories put out by the banks to try to shape the issue.
I don't think these are trial balloons because several of the ideas are too eminently ridiculous. That leaves the other three possibilities or a mix of them.
Remember, Elizabeth Warren just released some really embarrassing information on TARP's purchase of crap at major excess prices...would you ever want to propose another purchase scheme after that???
3) I agree completely that nationalization/preprivatization is the right course of action. But I did not see anyone on this thread reflect on the enormous political mountain that plan would need to climb over to be implemented.
It is not just bankster opposition. It is more than two centuries of American political tradition that stands in the way.
The Republicans in the Senate possibly have the ability to stop the stimulus bill, about which there is far less controversy than there would be for a bank nationalization/preprivatization.
I don't know what Obama and Geithner will say next week, but I am 100% certain that no one could have succeeded in proposing bank nationalization between January 20 and now. No one, not FDR, not Conjure, not Krugman or Yves or Buiter or anyone else calling for it.
To the extent that Obama might see the necessity of some form of nationalization, then his steps so far - waiting for the bad news to come out and shaping opinion, perhaps, through some leaks - would make the most sense to get it done.
4) I think Obama may well have cornered the Republicans by baiting their leaders into making some absurd statements on the stimulus bill. As a matter of political analysis (as opposed to partisan ranting), if he can now paint the Republicans as unconcerned about the 500,000 Americans who are losing their jobs every month and unconcerned about the pleas from Republican governors despearate to keep their states going, then there will be cracks in the ranks of the Repubs in the House and Senate, and more of them will lose their seats in 2010.
5) Last, for all my respect for Conjure and MP, and my recognition that they are far better at forecasting than I will ever be, I think Conjure clock may not have been helpful in creating a short term time horizon. The depression was already baked in the cake. All kinds of actions should have been taken long ago, and several steps should be taken now. Sooner is much better in all kinds of ways . . . and, yet, there is every reason to think the depression will be L shaped. Long term strategy and planning is needed, because there is no short-term fix.
There's lots of public talk about immediate horizons, little about long term plans.
What gets set up for the next few years in terms of political viablility may well be much more important than any specific acts taken now.
Black Star Ranch,
hence the ongoing discussions regarding a good stable-cleaning down at the ranch? ...
From last thread:
The financial mass destruction is coming either way. If Congress declares them all void, it would be like canceling all life insurance, because some insurers are overextended.
BSR,
"Our politicians are in effect senile old men lying in their own waste but incapable of realizing it."
Agree. I was more interested in critiquing the media template...the assumed cause and effect etc. But as they are two sides of the same coin...
Nostrovia,
Birth/death really whacked the number. That hasn't happened in a long time - been going the other way for years. Didnt all you guys used to bitch about that? I guess now it doesnt matter since its helping pull down the number.
hey, its probably right, but its hilarious that there is no mention of it in the comments when its usually the first complaint registered in the comments when it goes the other way.
Classic and predictable. Can't trust the uber bulls or the uber bears - they can only see it the way they want to.....
(Credit default swaps)
Speaking of insurers, HIG getting crushed.
real U6 numbers
Table A-12. Alternative measures of labor underutilization
I think the woman in California that had 8 kids at once is skewing the BD model.
Birth/death really whacked the number. ... its hilarious that there is no mention of it in the comments
Anonymous | 02.06.09 - 9:08 am | #
We have been discussing it since 8:56. Sorry you missed it.
Question:
Hasn't the calculation of the headline unemployment number changed in the last 30 years?
If so, isn't the chart above stringing together apples and oranges such that no long term trending/comparison is possible?
Thanks.
Plantagent - I saw some of it but Haloscan gave me only a few comments before I posted. I read your post. The numbers were far better than I expected. This is by no menas a good report, but not nearly as bad as most of us thought. I just find it funny that everyone used to say the B/D adjustment was pumping the numbers - now few on this board are seeing it the other way.
Anonymous writes:
"Classic and predictable. Can't trust the uber bulls or the uber bears - they can only see it the way they want to....."
Seems like this applies to human behavior, in general. We force order onto random patterns to keep things coherent and sane.
1) U-6 at 15.4%. Wow. Remember, U-6 of today is the number they report from the Depression (which crested at 25% -- 10% away). I predict U-6 breaks 20% by Jan 10.
2) January is a B/D adjustment month (July is the other). In other words, they "reconcile" the differences between B/D and reality for the last 6 months.
Virtually ALL adjustments have been negative for the last 5 years. Which indicates the B/D is a bad model.
OK here is a big WTF for me that I will have to dig into later - check out the seasonally adjusted vs. non-adjusted for U-6...
NA changed from 13.5% to 15.4%
SA changed from 13.5% to 13.9%
again, WTF, over?
Comrade Misean: Confidence or job loss?
Well, it's obviously a negative feedback loop - lack of confidence leads to lack of hiring (I was unemployed in late 2007 and believe me that effect was in full swing) which leads to lack of confidence which leads to...
But what's preventing the negative loop from expiring (anytime in the next few years) is overleverage combined with a global synchronized recession, IMHO.
Emotion feeds the process but so does rational calculation.
Comrade Misean is Dope writes:
BSR,
"Our politicians are in effect senile old men lying in their own waste but incapable of realizing it."
Agree.
What?
No 'erectile dysfunction' thrown in to complete the imagery?
February 2, 2009
Roughly 25 million to 26 million rural migrant workers in China are now jobless and have returned to their hometowns, The Associated Press reported Feb. 2, citing Chen Xiwen, director of government advisory body the Central Rural Work Leading Group. The 26 million figure is separate from Chinas official unemployment figure, which only includes registered urban workers and was at 8.3 million in November 2008. Chen said that job creation and maintainance is needed to ensure stability in Chinas countryside. The migrant unemployment figure was announced one day after Chinas government said 2009 might be the toughest year since 2000, calling for development in agriculture and rural areas to counter the economic downturn.
Btw: There are about 120mn (+/- a few mn) migrant workers in China. Now how's that for an unemployment rate. (The official run that doesn't count the migrants is like 4.3%)
like 1929, this equity crash took place in october...and we have bounced a few times and not established new lows since...after the crashof 1929, the mkt bounced quite significantly, all the way into late march of 1930...and then, the great depression officially began overnite in the beginnning of april 1930...i suspect a similar situation now with equities and the economy..the fed and other central banks have obviously injected enormous liquidity...but by the end of march, i see the mkts and its traders growing weary and worn-out..and this is when the bottom shall be crossed thru...exhaustion is lurking and shall ultimately lead to that 6000 level in the djia...
Black Star Ranch | 02.06.09 - 9:04 am
Very nice writing.
There is a class of Americans out there who have never known what hard times are like. That is a great thing about this country. The problem is the price we purchased it at a very high price.
What is different is who is going to go down behind this change we are seeing. The middle class, over the past 20 years, is a body that has had limbs amputated. The industial workers were an arm. The farmers another arm. Outsourcing took a leg and three toes on the other leg.
Meanwhile the head kept telling itself, and being told, that it was necessary. We were propped up, given a Stephen hawkings remote control, and told to watch our HD TV.
Now the sepsis has reached the vital organs. The nurses are worried. The Doctors are consulting. The patient would like to make a run for it but that is no longer an option. Instead as the realization of what the future looks like finds him wailing "It was not my fault!"
Wall St cheers job mkt meltdown. Pretty disgusting how the skimmers operate.
Wall st to taxpayer, "Can I haz handout"
It didn't go to 10%. Rally time.
I think I remember this part. So long as everything is "priced in" and "not as worse as anticipated", it's all good news, right?!
joe shmoe | 02.06.09 - 9:06 am
Another good post!
"All kinds of actions should have been taken long ago, and several steps should be taken now. Sooner is much better in all kinds of ways ."
nova, except we individually CAN succeed! There are no steps left to be taken as a group but as individuals we can prepare ourselves and our families. I don't think it will be Mad Max, but economically it will be much worse than now. I prepare for the worst and hope for the best. This is the best we'll have in my lifetime.
We're all Okies now.
Obama Set to Name Economic Panel
By JEFF ZELENY
Published: February 6, 2009
WASHINGTON President Obama is set to appoint on Friday a new team of outside economic advisers, led by a former Federal Reserve chairman, Paul Volcker, to offer independent advice to help the White House craft a response to the nations growing recession. . .
I think it is important to make sure that the recovery package is of sufficient size to do whats needed to create jobs, Mr. Obama told reporters as he flew aboard Air Force One to speak to House Democrats meeting in Williamsburg, Va. We lost half a million jobs each month for two consecutive months and things could continue to decline.
He added, Every economist, even those who may quibble with the details in the makeup of the package will agree that if youve got a trillion dollars in lost demand this year and a trillion dollars in lost demand next year then youve got to have a big enough recovery package to actually make up for all those lost jobs and lost demand.
- NY Times
so it seems Obama does understand the problem is vanishing demand
Speaking of insurers, HIG getting crushed.
Yahoo Finance is Bullish on that stock!
They're never wrong!!!
/snark
The woman in California use to work for a Mental Institution. She actually should have been a patient.
I have seen the family on TV at times, your right from the looks of it they all could use a little institutional time....None the less, the Great State of California and its tax payers will pick up her tab for her brood.
I'll look at the bright side: I needed to go on a diet and watch more TV anyway.
Maybe he should have formed the panel BEFORE the stimulus plan and the bank "rescue" plans were created.
Meet the new boss same as the old boss...
Obama Set to Name Economic Panel
By JEFF ZELENY
Published: February 6, 2009
WASHINGTON â President Obama is set to appoint on Friday a new team of outside economic advisers, led by a former Federal Reserve chairman, Paul Volcker, to offer independent advice to help the White House craft a response to the nationâs growing recession. . .
âI think it is important to make sure that the recovery package is of sufficient size to do whatâs needed to create jobs,â Mr. Obama told reporters as he flew aboard Air Force One to speak to House Democrats meeting in Williamsburg, Va. âWe lost half a million jobs each month for two consecutive months and things could continue to decline.â
He added, âEvery economist, even those who may quibble with the details in the makeup of the package will agree that if youâve got a trillion dollars in lost demand this year and a trillion dollars in lost demand next year then youâve got to have a big enough recovery package to actually make up for all those lost jobs and lost demand.â
http://www.nytimes.com/2009/02/0...eb-econ.html? hp
so it seems Obama does understand the problem is vanishing demand
joe shmoe | 02.06.09 - 9:28 am | #
Vanashing Demand IS NOT the problem. The problem is that the economy has exceeded 'Potential" for the last 20 or so years and we are now reverting to that potential with a vengance
What would happen if one of the oompa loompas, known for their orange skin, and a wrecking ball, known for its destructive ability, mated?
Of course, youd have Angelo Mozilo, former CEO of Countrywide.
Systemically Important
To see who or what has to mate to end up with an unemployed ex-CEO like Chuck Prince, see the linky above.
Samdog writes:
So much for the 'uptick' ...
Samdog | 02.06.09 - 8:54 am | #
Samdog, you don't get it. All news is good news. The DOW will rally on this. G_d forbid we get some good news then it might drop. Oh, forgot, about all news is good news.
Look for tasmanian devil feedback loop--these losses are the first of many suprising losses.
--bh
Not 800k... look out for a huge rally!
It's all priced in.
All the kiddies on Wall St are baking cookies for Santa Timmay when he opens his goodie bag on Monday. He was the NY Fed governor. That means he knows who his bosses are.
CNBC showed a graph of the "real unemployment" data series (goes back to 1992 they said) showing "real unemployment" at nearly 13%. It looked like it shot up from about 7% about a year ago. The data series is supposed to include "discouraged workers". I wonder if this series might understate because it may not include people in part-time work that would prefer full-time.
Sorry I can't give you more exact numbers, they flashed it on screen for only about 10 seconds.
Market will jam today and likely most of next week. Check volume at close.
Then of course the crap out on opex.
Actually, Friday 13th could be interesting too, depending on how the long bond comes in on Wednesday.
C
Kristina, I'm glad your rate didn't go up and I don't think it will do so next time either.
You don't have to suffer such angst.
You just have to add the index (on the note) to the margin (also on the note) and you get the next period's interest rate. You have to look up the value of your particular index on the interest rate blogs.
If it's libor, that's very low, added to the margin, say it's 6 points. That gets you 8ish, and since you said its 12% now (I remember these things), that's what it will be. Since you told me that it doesn't go lower than 12%. Maybe if you whine at them, they will modify to let it go lower than 12. Prolly not tho.
But I'm glad you are relieved. Frankly, if the note had it go down as well as up, I might be telling you not to bother to refi.
....ever notice how when some REALLY bad news comes down, Obama makes a Walt Disney appearance and "everything is OK" again?
"598,000 thousand" is redundant. Please remove "thousand" from the headline.
diogenes writes:
Samdog writes:
So much for the 'uptick' ...
Samdog | 02.06.09 - 8:54 am | #
Samdog, you don't get it. All news is good news.
Thanks for straightening me out. I actually was beginning to think that maybe the market was no longer a relevant indicator ...
Has CNBC become more realistic than Bloomberg? Yikes.
Actually liz it's 10.22 not 12. It can't go lower than 10.22 Hopefully it will be a moot point and I can get that refi done now, I have all my paper work together and have my fingers crossed hubby will hear about this job beginning of next week...
Vanashing Demand IS NOT the problem. The problem is that the economy has exceeded 'Potential" for the last 20 or so years and we are now reverting to that potential with a vengance
Fed? | 02.06.09 - 9:31 am |
Actually the fundamental problem ( increasingly for past 20 yrs ) is that without 'bubbles' the US economy is anemic.
Well, that's less awful.
Good luck with hubby's job.
Great video cartoon of banksters. Enjoy! Wall Street Executive Air | Mark Fiore's Animated Cartoon Site
headline on google finance...
Stock Futures Gain: job losses less horrible than expected
Less horrible...
welcome to the less horrible economy
"President Barack Obama is bringing in a team of outside advisers to help steer the economy out of a tailspin"
Now? Did he, like, just discover a problem????
Or does this indicate a breakdown and impasse in his current 'team'?
What caused the snappy recoveries in recent years?
"less horrible"? WTF? Madness has enveloped us...
This is the best we'll have in my lifetime.
Black Star Ranch | 02.06.09 - 9:26 am
This may be the best of times for a generation or more. Not just in the US, but in the world.
A couple months or more we were in Old Town Alexandria for dinner. We were walking back to the car, the streets were filled, the storefronts were lit up. White Christmas lights in the trees. It was beautiful.
I got a flash. Then I told everyone to stop. We did, and I told them "Look around you. Just look and remember." Of course they looked at me like I was crazy. I hoped they looked and remembered because that night I had a feeling what we were seeing was never going to come again in my lifetime.
BAC flying high, good grief, these people are unhinged from reality.
No the problem is we had to start saving. Apparently even a 1% decrease in spending is devastating.And a 2% decrease, oh, my!
The NYTs had a piece on how an expensive shopping street now had a lot of empty stores, day before yesterday.
NPR interviewed a compulsive, but now recovering shopaholic, who said she and her debtors Anonymous group were actually the lucky ones now, because they had amended their lifestyles and the whole rest of the country were the shopaholics now.
No riots yet in Cali?
Actually the fundamental problem ( increasingly for past 20 yrs ) is that without 'bubbles' the US economy is anemic.
\t km4 | \t \t \t \t02.06.09 - 9:37 am | #
Very true... We have an economy in which "growth" is really just an expension of credit (debt) rather than an increase in production. Therefore, to keep growing, we need more credit. The only problem is that people are finally realizing that they have used too much credit, that is pulled forward too much demand, and are now boltering their balance sheets. Government pulling forward demand, even on infastructure projects, cannot solve the problem.
Wow, just a vertical takeoff, CNBC hacks must be ecstatic...
He added, Every economist, even those who may quibble with the details in the makeup of the package will agree that if youve got a trillion dollars in lost demand this year and a trillion dollars in lost demand next year then youve got to have a big enough recovery package to actually make up for all those lost jobs and lost demand.
joe smoe, what an idiotic article. The problem has never been nor is lack of demand but misallocation of capital. How many doggie psychiatrists or aromatherapy and day spas do we need. The object of the hangover is to reorder things not to refill the puch bowl. Zero has it all wrong.
extra special yen fueled fun today...huge five minute candle right when the jobs data came out
nova,
Please stop it--you're bumming me out ...
No, the jobs report was worse than expected. The market believes Obama will throw more billions at the banks, but the tide may have turned.
Timmay!
The past 4 months look an awful lot like the 2002 bottom in the market - same levels too. There seems to be a ton of support at these levels. Could lead to a huge bear rally. Be very careful shorting this market - you could get buried. I wouldn't go long either. Technicals are going to rule the next 12 months and only nimble traders will be able to make money.
joe shmoe,
nice post.
--bh
diogenes writes:
"How many doggie psychiatrists or aromatherapy and day spas do we need."
True, perhaps ... I suppose we can always rely on Asian nail salons & dollar stores to fill the empty retail space.
They will get their bailout soon -
Comrade Kristina writes:
BAC flying high, good grief, these people are unhinged from reality.
Comrade Kristina | Homepage | 02.06.09 - 9:39 am | #
Too late, got mys gs july puts.
Very true... We have an economy in which "growth" is really just an expension of credit (debt) rather than an increase in production. Therefore, to keep growing, we need more credit. The only problem is that people are finally realizing that they have used too much credit, that is pulled forward too much demand, and are now boltering their balance sheets. Government pulling forward demand, even on infastructure projects, cannot solve the problem.
Fed?
That's why Denninger says it's a D not a R
The Market Ticker
"I got a flash. Then I told everyone to stop. We did, and I told them "Look around you. Just look and remember." Of course they looked at me like I was crazy. I hoped they looked and remembered because that night I had a feeling what we were seeing was never going to come again in my lifetime."
I rarely, rarely post, but as a historian, nova's was just too brilliant to pass up, especially since it sums up how I've been feeling for the last few months.
Compare it to this:
"The lamps are going out all over Europe; we shall not see them lit again in our lifetime"
Sir Edward Grey, August 1914
Summarizing a Bloomberg article from a few days ago: 1.1T in global toxic bank assets have been disclosed so far. The IMF is predicting $2.2T in global bank losses this year, while Roubini is predicting $3.6T.
Since we are at the $1.1T on the global depression map, and have to go to $2.2T-$3.6T, does this imply that unemployment will double (or triple using Roubini's numbers)?
Wow ... Vertical takeoff--no kidding.
I guess it really was "priced in"?
Now? Did he, like, just discover a problem????
Or does this indicate a breakdown and impasse in his current 'team'?
wally
Look at the panel on this new team. Panel is for working thru the buy american positio
Vanashing Demand IS NOT the problem. The problem is that the economy has exceeded 'Potential" for the last 20 or so years and we are now reverting to that potential with a vengance
Fed? | 02.06.09 - 9:31 am | #
Hear, hear! Well put.
It baffles me that reversion to the mean as a scientific principle is glossed over by the so called "smart people" as a less valid hypothesis. You know, the 50% educated kind, that attain a cursory view of a situation, and proclaim proudly that they know whats wrong. A truly insightful person knows what they DON'T know, and act accordingly.
Not directed at you Joe Schmoe, but at society in general. This post just made me think of it.
".....that night I had a feeling what we were seeing was never going to come again in my lifetime."
Many people think I am a demented old fool - but I truly find these times exciting! This is history in the making. A dissolution of a country. A going back to discovering lost and thought unimportant traits, skills, and lifestyles. My kids, grandkids, and greats might find it tougher, but I know it will be much more fulfilling for them.
Employers Slash 598,000 Jobs; Unemployment Rate Jumps to 7.6 Percent- AP
And yet the market shoots up. The insanity continues...
This is history in the making. A dissolution of a country
Black Star Ranch | 02.06.09 - 9:56 am | #
You may be disappointed. Was the great depression the dissolution of a country? What shatters it this time? I would think TPTB would go to extremes to ensure that didn't happen. Dissolution of a currency, maybe.
CR - Question regarding seasonality.
This year, there were many stories floating around about how retailers never staffed up for the holiday shopping season.
Considering the seasonally adjusted numbers are constructed to take into account things like temp holiday hiring, does that make the seasonal number at this point any less valid?
Go long bond, go!! I love watching the debtors (the US) squirm!
10 Year UST @ 15%, coming soon to a theatre near you!!
"yen fueled take-off"
You got that right...honestly I really don't understand how they do it and still have value....(Yen).
Ciao
MS
so it seems Obama does understand the problem is vanishing demand
joe shmoe
oh crap! I thought he appointed a council of economic advisors almost a month ago...same shit different pile
I'll guess right now we open at S&P 900 on Monday.
Wall Street Executive Air | Mark Fiore's Animated Cartoon Site
and quietly...SLV and SLW continue upwards.
Ciao
MS
Time to go short again. I love making the same money over, and over, and over, and over. Thanks Erin, Becky, Carl, Joe, and (my personal fav) Cool Breeze!
Roubini and Gross are pissing me off.
Whats up with this mini or near depression crap? Roubini has joined Gross as a freaking sell out.
Gross=asset inflation
Roubini=15 minutes are over
Ciao
MS
I am very disappointed that Lassie was not selected a as member of the council of economic advisors. Timmay gets lost if Lassie's not around.
squeezed | 02.06.09 - 10:06 am
To be a prophet or rebel one has to have nothing to lose. Because to be a real one means you will lose it all, be stripped, lashed, and sent into the wasteland alone an unmourned.
\tOK here is a big WTF for me that I will have to dig into later - check out the seasonally adjusted vs. non-adjusted for U-6...
NA changed from 13.5% to 15.4%
SA changed from 13.5% to 13.9%
again, WTF, over?
| \t02.06.09 - 9:16 am | #
\t citizen energyecon | \t \t \tHomepage
Nov/Dec are big temp worker hiring months. January is when they normally lose the temp jobs. This leads to the seasonal adjustment.
Of course this year there was anecdotally very little seasonal hiring. Meaning that the seasonal adjustment will hit later.
and Moody's is just so ahead of the curve on HIG.....
About a year too late IMO.
Ciao
MS
kind of funny.... Calculate Risk mocked Feinstein for saying that there are 500 million new unemployed every month.
And now CR did the very same thing with his own headline!!!
No, that 598,000 thousand is correct.
Unfortunately, the internet doesn't work well where I am.
But I'm watching and laughing.
My descendants have learned the lessons well and have managed to keep your politicians leashed so far.
And I don't see how your congressmen and leaders match up to mine - people the stature of Jackson and Clay.
I hated Jackson, but couldn't get past a man who spent years with a dueling bullet embedded in his chest.
Good luck to you, you're going to need it.
As your Misean says, BWAHAHAHAHAH!
there are problems, and there are causes of problems.
there were bubbles that led to misallocation of capital.
there is vanishing demand that pumps up unemployment; as consumption sinks, so does production.
but the vanished demand and the unemployment get allocated, too, and they are being allocated to the people who played the least role in causing the bubbles and misallocations of capital, and the people who skimmed the most off of those misallocations are skating away the least severely effected.
Angelo Mozilo and John Thain, for example, are not going to be on any bread lines or homeless.
so the right response is to supply aid to the unemployed and create new jobs for them, esp in needed infrastructure and similar programs to improve future competeitiveness. borrow for it now, and progressively over time tax the bubble bastards into the future to recoup some of their ill-gotten gains to pay for it.
that means keep the inheritance tax and increase it at the high end. that means move closer to the income and capital gains tax levels of the Eisenhower years, adjusted for today's dollar equivalents. and, of course, claw backs whenever viable.
can be done.
Los Angeles Times - California, L.A., Entertainment and World news - latimes.com ca state workers get holiday.
CR - to add a little bit of meat to my earlier comment, I took the historic series from BLS for U3 NSA & SA and compared them.
The average difference between the January SA & NSA numbers has been about 0.5%. This year it is 0.9%. The last peak difference was in 2003 at 0.7%.
Considering the participation rate that has also fallen, I'm leaning towards the conclusion that the SA number is a bit "off" this time around.
Jeremiah, the great prophet of doom, foretold disaster for decades. When it happened, and the Jews were living miserably in exile, he continued to chastise their wandering from the righteous path.
According to tradition, they stoned the old man to death.
Government leaders will need to take a "shock-and-awe" approach towards the economy as indicators show a worsening recession, Mohamed El-Erian, co-CEO of the Pimco bond fund, said Friday.
'Shock and Awe' Needed to Combat Recession: El-Erian - CNBC
Joe Stalin writes:
"598,000 thousand" is redundant. Please remove "thousand" from the headline.
Nancy Pelosi said that America would lose 500 million jobs per month without the stimulus. Perhaps she was too optimistic.
And you really should check me on the internet.
I'm not just a name.
I was real and at one time, vilified by your leader.
Rightfully so.
And my descendants are thriving.
Timmay is THE ROCK STAR NOW !
Government leaders will need to take a "shock-and-awe" approach
That really worked out so well in Iraq....
15.4% U-6!
Yeah baby yeah. Lucifer is out there fretting like a little old lady right now folks.
If I were still in the market Id buy skf right now
Faber Says U.S. Stimulus May Lead to `Dire Consequences'
Bloomberg News
OT--Anyone out there with a good sense of market history? In the 70's, (if memory serves, but please correct me if I am wrong) the stock market went nowhere after the 1974 bear market (in general) until 1982 when we had the beginning of the 20 year (almost) bull market. It sure seems to me like we will have a replay of the 70's, high unemployment, rising interest rates, (gold going up too?), although I will concede that the current situation could make the 70's seem mild by comparison. And what kicked off the bull market in 1982 was when Volker cut interest rates (which, in some ways just now reached its final conclusion at 0% T-bills.) If one assumes that the massive deficits/borrowing causes a continually rising interest rate environment going forward, does anyone know how stocks have performed in such an environment? (The 60s might be an example, but werent corporate profits pretty robust and growing?) Thanks in advance for any thoughts.
Is Chairman Cox a member of the President's Working Group ?
That is no so bad. I thought we would be over 600K. With next month's adjustment it probably will go well past 600K. Still, no catastrophe, just a long slog down into a recession.
Not sure whether the Mayflower Madam is thriving, Nicky.
Crap. HIG is down. I knew I should have bought puts when treasuries dropped by 20% last month.
The official U6 is over 15.4%, it was about 9.5% in jan 2008
Ponyless in NJ(Excellent) writes:
Still, no catastrophe, just a long slog down into a recession.
Look at the NSA U-6.
Table A-12. Alternative measures of labor underutilization
Better than +50% growth in one month.
That'll leave a mark.
Bank Funds Terror, Hires Killers in Berlin Film Festival Opener
Bank Funds Terror, Hires Killers in Berlin Film Festival Opener - Bloomberg.com
The villain of “The International,” the opening movie at this year’s Berlin Film Festival, is the IBBC, a bank which funds terrorism, engages in arms trafficking and hires contract killers to murder its opponents
Guys, if you are going to look at a single print from the birth/death model and draw conclusions from it, you are going to draw very odd conclusion. January is always a down month for the B/D plug, so the fact that it was down in today's report is not evidence of a problem. January is always the biggest birth plug, so the fact that it was big isn't a problem. The reason the plug is big and negative in January is that BLS assumes lots of businesses fold up on a seasonal basis in January. The plug is consistent in direction and magnitude with the non-seasonally adjusted count, which runs from -2.5 mln to -3.6 mln (today's data).
That is not evidence the plug is right. The plug could be completely wrong.. buit the complaints about the plug posted here are mostly misdirected.
Same as Russia in 2002.
Yours In Socialism,
КильГор Форель
"the dissolution of a country"
Maybe the dissolution of a way of life...globally.
From the bbc...
"German industrial output has seen a record fall after a sharp contraction in manufacturing activity.
Output plunged by 4.6% in December from the previous month, figures from the Economy Ministry showed.
It was the steepest decline since May 1989 and was much worse than the 2.5% fall expected by analysts."
Add drought, now raised to the hightest alert levels to the troubles in China
along with migrant job losses.
And in Japan, lodestar Toyota announced even higher losses while their ratings were downgraded.
And Liz, it was Madison Avenue, according to the NYTimes, the highest retail per sq. ft. in the world, now pock marked with vacancies.
Thread music: Timmy and the Lords of the Underworld
squeezed writes:
Roubini and Gross are pissing me off.
Whats up with this mini or near depression crap? Roubini has joined Gross as a freaking sell out.
squeezed | 02.06.09 - 10:06 am | #
MS writes:
Gross=asset inflation
Roubini=15 minutes are over
Ciao
MS
MS
Why is Roubini a sellout whose 15 mins. are up?
As politicians are still debating the stimulus package, the head of the Congressional Oversight Panel for the TARP bailout funds is admitting that we, the taxpayers, appear to have already paid $254 billion for assets that appear to be worth $176 billion. That's a shortfall of $78 billion that may have just gone up in smoke, effectively. Now, it may eventually happen that the assets we now own appreciate in value, and that money is made back, but this is the key problem with just having the gov't jump into "buying" bad assets. It's almost guaranteed that they're going to overspend. If that doesn't make you uncomfortable about what sort of mess we're going to get with the stimulus package, I don't know what will. The government isn't just throwing money at a problem that might not need money -- it's doing it badly. On a historic level.
The villain of The International, the opening movie at this years Berlin Film Festival, is the IBBC, a bank which funds terrorism, engages in arms trafficking and hires contract killers to murder its opponents
When I saw the preview for this in the theater, and discovered that the villain is a bank, I laughed out loud, and then wondered whether I was seeing the product of a sea change in attitudes about the bank.
Excellent! Remaining shorts will be out by the end of the day. Bailout-stimulus announcement on Monday may be the trigger. Dow 7k is now in sight.
Perhaps Wall St crooks use TARP $$$ to pay for their prostitutes
The Raw Story | Wall Street CEOs, investment bankers charged prostitutes on corporate cards, madam says
I think the 'real' u6 in california is already over 20% (if you count the illegals)
joe schmoe @ 9:06 am
+1
Don't know - can't say - whether or not you're right, but it's enormously gratifying to see a post not addressed to an imaginary D.C. brimming with ignorance and worse.
"1) U-6 at 15.4%. Wow. Remember, U-6 of today is the number they report from the Depression (which crested at 25% -- 10% away)."
Anyone have a link or cite supporting this? Trying not to go around so half cocked on internet arguments thesedays.
Byz, yes. A lot of people went from being full-time to part-time. We are still below the U6 numbers from the recession in 73-74 and the Volcker recession. I would agree that the trend is looking mighty scary.
This unemployment increase is not credible. Look at how it increases at a 45 degree angle, month after month. Who would believe numbers like that?
Why is Roubini sellout?
Because Mr. Stagdeflation has been dancing around the D word for months. And when he finally utters the dread word he adds a near to it. Wanker.
And if there are any here who have any doubt -- enjoy this economic snuff porn:
http://blogs.cfr.org/setser/files/2009/02/200922simpleip.png
On a Moody's Economy.com conference call yesterday, chief economist and former McCain campaign advisor Mark Zandi provided a chart that illustrated the impact of the stimulus package on employment. With a package about the size of the one being discussed, the unemployment rate would peak at 9% later this year and then gradually drop over the next couple of years to about 7%.
Without a stimulus, unemployment would rise into double-digits for several years, which Zandi said would represent "a depression." He also said he would prefer a larger stimulus.
The punch line, of course, is that McCain opposes the stimulus, based on what I've read. The GOP would rather plunge the country into a depression than allow the Democrats to get credit for doing something right.
It's sick.
Well, this globalism experiment failed. Back to Americanism !
"The government isn't just throwing money at a problem [again] that might not need money -- it's doing it badly."
Show me a program the FedGov has undertaken long-term successfully (the military does not count).
This is quite intriguing......sure beats deciphering 900-pages of gobbly-gook:
The Fair Tax.....
Americans For Fair Taxation: Great New Batch of FairTax Videos
Black Star Ranch
The National Park Service.
UpsideTrader is talking about commercial real estate, IYR and SRS:
"An interesting factoid is that much of the existing retail space has NOT been cancelled yet and probably won't be until the second half of 2010, so good news for all you SRS longs or IYR shorts. It's coming, it's just been delayed. The commercial real estate bulls will get their faces raked, it's just a matter of time."
[ The Financial Ninja ]
Long term guv program that worked : sequencing the human genome ?
The Fair Tax.....
Black Star Ranch | 02.06.09 - 10:37 am | #
I'm a big fan of the Fair Tax idea.
Has anyone noticed that the NSA unemployed number has gone from 10.999 (almost 11 million) in Dec 2008 to 13.009 (13 million) in Jan 2009.
We lost almost 2 million jobs in from the end of dec 08 to jan 09?
Most government agencies were created out of "free" market disaster. The alternative is worse, as with the current insolvent banking system.
....besides the National Park Service.....LOL
Oh boy, here we go trashing Roubini again.... Yeah, what does he know and what analysis does he do....
Not nearly as much as the CR commetn posters I'm sure...
I guess Roubini is just an irrelevant dumbing who is now a bull by CR commenter status.
The Uber-Bears will be toasted in this market just like the Uber-Bulls. Its the same narrowminded thinking on both sides and exactly what has gotten the country into this mess.
GPS is a govt run program.
How about the moon landing? NASA used to kick ass when it was funded properly
The military is by far the worst run and most wasteful government agency... by a LARGE margin..... any honest DoD contractor will tell you that
".......than allow the Democrats to get credit for doing something right."
Puhleese....ever wonder why we never heard of Obama before his Presidential run? Because throughout his entire life he has been an appeaser. Always trying to bring people together. Constantly compromising - continually changing opinions. No flack, no opinions, no opposing views means no negative feedback. Those are GREAT traits in some jobs - but NOT President. I would love for it to be something more, but because of his upbringing, he will be another Carter without the stubbornness or independence.
Exaactly. We need a DECIDER
DEICIDER
BSR... to play devil's advocate
I'd say it's not the government itself that is the problem.. it's the people RUNNING the government
Obama is the first president we've had in 30 years that is even remotely interested in running the government properly (although clinton did a half=decent job for a neo-liberal)
I merely said Roubini's 15 minutes are over...infer what you like from that.
many of you already have.
Ciao
MS
Puhleese....ever wonder why we never heard of Obama before his Presidential run? Because throughout his entire life he has been an appeaser. Always trying to bring people together. Constantly compromising - continually changing opinions. No flack, no opinions, no opposing views means no negative feedback. Those are GREAT traits in some jobs - but NOT President. I would love for it to be something more, but because of his upbringing, he will be another Carter without the stubbornness or independence.
you might be right.. but give the guy more than 2 weeks
And remember.. bush was the exact opposite.. and he was the worst president in US history
USA=CCCP,
Has anyone noticed that the NSA unemployed number has gone from 10.999 (almost 11 million) in Dec 2008 to 13.009 (13 million) in Jan 2009.
Yes, Mr. Bond, it is sick. And it is also the biggest political trap that McCain and the Repubs have walked into since they chose Sarah Palin as their VP nominee.
Obama did it so smoothly by being so nice to them and listening to them. Go back and read some of the Repub accounts of their meetings with Obama a week ago. They said they were never consulted so much when bush was President!
They've just been Hillary Clintoned and they don't even know it.
bond writes:
On a Moody's Economy.com conference call yesterday, chief economist and former McCain campaign advisor Mark Zandi provided a chart that illustrated the impact of the stimulus package on employment. With a package about the size of the one being discussed, the unemployment rate would peak at 9% later this year and then gradually drop over the next couple of years to about 7%.
Without a stimulus, unemployment would rise into double-digits for several years, which Zandi said would represent "a depression." He also said he would prefer a larger stimulus.
The punch line, of course, is that McCain opposes the stimulus, based on what I've read. The GOP would rather plunge the country into a depression than allow the Democrats to get credit for doing something right.
It's sick.
bond | 02.06.09 - 10:36 am | #
"The GOP would rather plunge the country into a depression than allow the Democrats to get credit for doing something right."
You lost me at 'Moody's Conference'.
Anyone who thinks "stimulus" can put the genie back in the bottle is smoking a Phelps-caliber bong.
The NSA U3 is already 8.5%
Bush II was a joke. Bush I was the "Read my lips - no new taxes" BS
I agree that anyone who thinks stimulus is some sort of panacea is deluded... I do think it could help make Awful into just really bad
Of course to be honest.. the stimulus really doesnt matter... what matters is what is done with our insolvent banking sector
If Obama can ever smash the fed he will be my hero regardless of what else he does.. unfortunately hell need to figure out that his advisors are on crack first
The downward-cycle effects of this magnitude of unemployment will cripple the country. The country can't recover without demand that is backed by income/savings from earnings, since debt is no longer an option for personal or biz comsumption financing. This means jobs created by spending/stimulus is critical unless redo of Hoover is acceptable.
So, what does the GOP suggest? Here's what they propose:
This amendment ... submitted by conservative icon-in-the-making Sen. Jim DeMint (R-S.C.), was breathtakingly bold. The gist, from Sen. DeMints Website:
o Permanently repeal the alternative minimum tax once and for all;
o Permanently keep the capital gains and dividends taxes at 15 percent;
o Permanently kill the Death Tax for estates under $5 million, and cut the tax rate to 15 percent for those above;
o Permanently extend the $1,000-per-child tax credit;
o Permanently repeal the marriage tax penalty;
o Permanently simplify itemized deductions to include only home mortgage interest and charitable contributions.
o Lower top marginal income rates from 35 percent to 25 percent.
o Simplify the tax code to include only two other brackets, 15 and 10 percent.
o Lower corporate tax rate as well, from 35 percent to 25 percent.
This got the support of all but five Senate Republicans.
The GOP: lower taxes is the cure for anything economic. That's what they really believe in for change.
BSR
Yes, an appeaser. That's why Obama appeased the Clinton machine by accepting the VP ticket under Hillary as Pres, and that is why when Obama went to Iraq with Chuck Hagel and Jack Reed he let Gen Petreus tell him how it was going to be in Iraq.....
Except Obama blew past Clinton and when he went to Iraq he told Petreus that he listened to the General but that the General should understand that the President was setting a new strategy and a new mission for him to implement.
Jujutsu is the martial art of appeasement.
their skying them now boss!
I think a lot of you are missing the big picture. I mean at IBM we now have the opportunity to go and broaden our horizons by working in Indian coding sweatshops for a quarter of the salary. It's a global village baby, and they're hiring in the poor part of town.
A bank of Credit & Commerce anecdote:
My developer buddy bought some lots very cheap in a development, which had financing by this back in the late 70s/early 80s. He bought at a tax sale, so we had to quiet title so he could develop them. The chain of title was the weirdest hardest analysis I have ever done. BCC had issued a loan for nearly a million bucks, which sort of just went away.
This never happens. Rumor had it that the developer was a numbers runner from Joisey. Could have made a lot of money, but because of cheap, sharp practices, was engaged in a war with the buyers and hoa (after they wrested it away from the developer) for nearly 2 decades.
The BCC loan expired and passed the Statute of Limitations, after an assignment. All these strange 2nd and 3rd mtges to corporations with Greekish reference names, like Diana. Many strange deeds. Succeeded in quieting title. He developed 2 of the 3 lots, but now can't sell them because of the lousy mkt.
I never had a big mtg like that just have the lender apparently lose interest and abandon it. I suppose the lender was somehow in cahoots with the developer, otherwise if the funds were never advanced, the developer would have demanded a Satisfaction of Mtg. Since they did complete most infrastructure and did build some houses, I can only think that the funds were advanced and then simply abandoned, since the bank went belly up.
their skying them now boss!
anon
Buy then, buy alot, buy often, it's over, recovery is here, Kudlow says so, buy, buy, buy, buy!
Sorry. My face is being ripped off...for now.
it is all about a choice now between bad and worse.
the depression can't be stopped. it will either be nasty or terrible or horrific.
I want the policy choices to make it nasty.
There is no fix, quick or otherwise. But it can be a hell of a lot worse, or a littlle bit not so bad.
Bro Manziere writes:
I think a lot of you are missing the big picture. I mean at IBM we now have the opportunity to go and broaden our horizons by working in Indian
eat a rat for me, bro
why do people spell Shmoe with a "c" (Schmoe)?
lawyerliz writes:
A bank of Credit & Commerce anecdote:
Read the book "False Profits" written 15 years ago. Lays out BCCI's criminal enterprise and includes many of the past and current world leaders who were in bed with them.
Agreed, Joe S.
joe shmoe
because they all work for citi and all know there stock symbol
New Rosenberg note on Job losses:
The only thing we see at the end of the tunnel is a trai
why do people spell Shmoe with a "c" (Schmoe)?
\t
joe shmoe | 02.06.09 - 11:00 am | #
Why do you spell it with an 'e'?
Ed,
family heritage.
Anon,
Yes, the buggers at C have no shame.
There is no fix, quick or otherwise. But it can be a hell of a lot worse, or a littlle bit not so bad.
Granted, it's when people post preposterous things such as, "The GOP would rather plunge the country into a depression than allow the Democrats to get credit for doing something right," that I start to wonder how anyone can display any partisan loyalties in the midst of this debacle without a requisite IQ test.
They're all in the same boat. They're all clueless. They're all working against the average American. Dems and Republicans. Both sides.
Incredible. This rally based solely on the sentiment that Congress will keep bailing out banks. There is no positive economic news.
I merely said Roubini's 15 minutes are over...infer what you like from that.
many of you already have.
Ciao
MS
MS | 02.06.09 - 10:48 am | #
I interpret it to mean his voice will be lost beneath the din (sp?) of others in the mainstream crying the same thing. Not being a fashion-conscious kind of guy, I'm still guess it's the new black.
This amendment ... submitted by conservative icon-in-the-making Sen. Jim DeMint (R-S.C.), was breathtakingly bold.
Let me guess--cut taxes for the rich again. Breathtakingly bold!
I think I'm going to try this at home. I'm going to ask my boss for a 25% pay cut (since lower revenue leads to higher revenue--something about the Laffer Curve, right?) and then start paying for everything on credit cards. Within a few years, I should be debt-free, GOP style.
1 currency sooner yogi writes:
Incredible. This rally based solely on the sentiment that Congress will keep bailing out banks. There is no positive economic news.
And I believe
These are the days of lasers in the jungle,
Lasers in the jungle somewhere,
Staccato signals of constant information,
A loose affiliation of millionaires
And billionaires and baby,
These are the days of miracle and wonder,
This is the long distance call,
The way the camera follows us in slo-mo
The way we look to us all o-yeah,
The way we look to a distant constellation
That's dying in a corner of the sky,
These are the days of miracle and wonder
And don't cry baby don't cry
Don't cry don't cry
All the kiddies on Wall St are baking cookies for Santa Timmay when he opens his goodie bag on Monday. He was the NY Fed governor. That means he knows who his bosses are.
bearly | 02.06.09 - 9:32 am | #
Just remember what happened the day they passed TARP: the Dow began its October meltdown. If this rally continues throughout the day, I am loading up on shorts in anticipation of what's coming. Buy the rumor, sell the news.
I interpret it to mean his voice will be lost beneath the din (sp?) of others in the mainstream crying the same thing. Not being a fashion-conscious kind of guy, I'm still guess it's the new black.
\t son of zinger | \t \t \t \t02.06.09 - 11:08 am | #
Exactly right. Roubini call on mortgage securitization and its impact on the financial market was outstanding. His points on broader unemployment and GDP are pedestrian.
Don't worry the rally won't last, lest it destroys treasuries with it.
Jim in Portland,
Granted this is an odd moment to undertake tax reform or simplification, I can't help seeing those proposals in two entirely believable ways.
They are speaking to an older, fiscally conservative base which hasn't had much attention through this last administration. And they're attaching much-beloved riders to critical legislation saying, in effect, it's the cost of doing business.
I don't for a moment believe they think these proposals are a fix for the economy.
My take, soon to be posted on Zacks.com. The graph refered to is the one in CR's post:
In January, the economy shed 598,000 jobs, worse than the drop of 540,000 that was the consensus expectation of economists. The unemployment rate rose to 7.6% from 7.2% in December and is up from 4.9% a year ago. The revisions to prior months data were equally horrific, December was revised to a loss of 577,000 jobs from a previously reported 524,000 and November was revised to a loss of 597,000 from 584,000. January is the normal month for benchmark revisions, and they go back and look at the numbers for the whole preceding year. Nine of 12 months were revised down for total additional job losses of 385,000. In all the economy has shed 3.6 million jobs since the recession started in December of 2007, and 2.5 million of those have been lost in the last five months. Throw in the growth of the labor force and the number of unemployed is up by 4.1 million. The weekly unemployment claims data that came out yesterday makes it clear that there will not be much of an improvement, if any in the February report. As the graph below (larger version available at Blogger: Page not found shows that the year over year rate of decline is already approaching the worst levels seen in the early 1980s downturn. The unemployment rate is approaching the worst of the 1990 recession. Note that in both of the last two cycles the employment situation continued to deteriorate for more than a year after the recession officially ended. These numbers are going to get far worse before they get better.
Job losses were wide spread throughout the economy, with the goods producing sector losing a total of 319,000 in the month, of which 207,000 were lost in manufacturing and 111,000 were lost in construction. The service sector of the economy lost a total of 279,000 in January. The only areas gaining jobs were the usual suspects, Education and Health Care gained 54,000 jobs while the government had 6,000 net hires in January.
Even the 7.6% unemployment rate masks how bad things are. If one throws in the marginally attached to the labor force people and those that are working part time for economic reasons, the unemployment rate is now 15.4%, up from 13.5% in December and 9.9% a year ago. On a seasonally adjusted basis this number is not quite as bad, up only to 13.9% from 13.5% last month. These are numbers that are starting to look more like a depression than a recession, although we are not quite there yet. The employment to population ratio fell by 0.5 in January to 60.5% and is down 2.4 points over the last year. This is the lowest level since May of 1986, and far of its peak reached in April 2000 of 64.7% and well below the high for this cycle of 63.3% reached in January of 2007. I would remind you that in 1986, women were still in the process of entering the labor force.
For those looking for a silver lining, the average workweek remained steady at 33.3 hours and average hourly wages rose 0.3%. However, that seems like pretty thin gruel to me in evaluating this report. More people unemployed means more people with lower incomes. They will be forced to cut back even more on any discretionary spending. Those that still have jobs, but are afraid that situation will be temporary will also cut back. This means the retailers such as Kohls (KSS) and J.C Penny (JCP) are going to face continued difficulties. Less income also makes it harder to pay your mortgage leading to still more foreclosures and jingle mail, which will inflict even more damage on big mortgage lenders like Bank of America (BAC) and Wells Fargo (WFC). They, along with credit card specialists like Capital One (COF) will also be hurt by rising delinquencies in that book of business.
It is clear that we need swift action from the government to stop the downward momentum of the economy. That means that the stimulus bill has to pass, and quite frankly the bigger it is, and the more geared to spending rather than tax cuts it is the better. Air Bag spending like increased unemployment benefits and food stamps gets money into the hands of those who are most likely to spend it immediately, and thus creates and maintains jobs. Aid to the states will help them avoid having to lay off hundreds of thousands of their employees. Infrastructure programs, while slower to kick in, are desperately needed even without the current economic emergency. It will provide jobs and leave lasting value that will improve the long term health of the economy. The obstructionism that is going on in Washington right now is extremely dangerous. Those that are fighting it, quite frankly, could not pass the first midterm exam of Econ 101. They decry it as a spending bill not a stimulus bill. The fact is that all government spending is stimulus, just that some is more effective than others. Transfer payments to the poor are far more effective than transfer payments to Wall St. multimillionaires in the form of big bonuses indirectly funded by the Treasury. We are facing a huge shortage of aggregate demand, and only government spending can provide that right now. We need action now, but instead we are faced with a 40 piece Nero Philharmonic. The more that such spending can help those who are hurting the most from this downturn and/or leave lasting long term benefits the better.
Dr. Wu
+10000
The GOP: lower taxes is the cure for anything economic. That's what they really believe in for change.
JimPortlandOR | 02.06.09 - 10:54 am
As opposed to democrats, who believe that raising taxes is the cure for everything.
Now, why can't we all understand that both parties are a screw up...
One middle class American Family is not much different from another middle class American Family except for diversity of where they might live. You would have to be blind not to see who carries the water for the US Goverment, yet not one manufacturing job has been mentioned.
Oil's telling the real story...
joe shmoe:
Sorry, guy. Caffeine deficit, maybe?
Don't worry the rally won't last, lest it destroys treasuries with it.
Anonymous | 02.06.09 - 11:13 am | #
Interesting thought, as there are what, two huge T auctions next week? Run up equities, then throw them under the bus next week to flush that money into T's when the big sale is on...
quick note:
do not refer to today's market as a rally, please.
This is background noise. This is dying of cold exposure, where the victim gets up, runs, and takes off all there cloths.
It's still cold out there.
Plenty of dying still to come.
--bh
They're all in the same boat. They're all clueless. They're all working against the average American. Dems and Republicans. Both sides.
TM | 02.06.09 - 11:07 am
+1
Aww man, looking at Dirk I realize I completely misread YoY as MoM. Apologies above. U-6 unemployment only up 50% on the year. Doh. Apologies, my mind is elsewhere.
Black Star,
USA=CCCP was too nice. That thing you wrote about Obama being an appeaser who doesn't get feedback? You know that's utter nonsense, right? Logical impossibility and all that? In order to appease, he needs to know what the other side is saying. So he has to listen. If he didn't listen, he'd be unable to appeases. It may turn out he isn't either of the things you accuse him of being, but it's pretty clear he isn't both.
Maybe you should collect more data.
Lucifer/USA=CCCP,
The NSA rise in unemployment is pretty consistent with the NSA drop in employment. January is the biggest month for seasonal job losses through the year. By a huge margin.
Stock market - to the moon!
Too bad we can't lose 600,000 jobs every day!
cenergy-
no doubt the timing geithner and stimulous announcement was planned at same time
next week will be interesting
TCA,
It's okay to have a directional opinion, but from my view almost anything can happen. The markets have been de-stabilized and volatility can and will wreak havoc on the tape.
I posted the pdf of Christopher Warren's "resume" the other day. Well, an arrest warrant [pdf] was issued based on his online confession. (From Denninger's Market Ticker)
USA=CCCP(Unrated) writes:
FAZ is more fun to play with
Couldn't resist getting into a small a position there.
energy-
That's exactly how I read it too....
I think MS is about ready to puke out some "products" next week as well.
Ciao
MS
40 piece Nero Philharmonic---yeah!!!!
The NSA job loss is a bit over 2 milllion.
MS,
Any WAG on GS scuttle - I think it was GH? speculating yesterday that they may issue stock?
Also, the VIX appears to be creeping up from its low of the morning even as the market is rising...
\tand quietly...SLV and SLW continue upwards.
MS | 02.06.09 - 10:05 am | #
What are you talking about? SLW has been flat for the past six weeks. It was a great play from $3 and it will be again after the next leg down, but PMs are due to come down with the rest of the market in the next wave down. I'll load back up on the miners later, but there's still plenty of deflationary pressure ahead.
Eliminate mark-2-market so the Treasury can buy shit assets worth ZERO, at par.
Transfer of future tax receipts forward to Wall St, today. Good deal!
Way things are going.. Japan actually looks good..
the whole argument on lower/higher taxes is always amusing since it misses the god damn point
We need to pay for our govt services and if we dont want to pay that much then shit has to get cut
Neither party has really shown they are willing to do this..... unfortunately ronnie raygun convinced an entire generation that government was "bad" and that we could simply cut taxes and increase spending and the tax cuts would magically pay for all of it
Where are the real liberals and conservatives? Most of what we have let are neo-cons and neo-libs
Anonymous writes:
Faber Says U.S. Stimulus May Lead to `Dire Consequences'
Money Quote:
"Basically, what he government is doing because don't forget they are closely related to the financial sector through all kinds of nice little relationships... the economic crisis is a direct consequence of direct intervention of fiscal policy by the USG... not allowing a recession, a period of time for recovery for the market... I think with the present stimulus package, the depression will be longer..." - Marc Faber
energy-
Don't have any info. however they need to do it....wouldn't surprise me if they are doing it (mechanically speaking) today) and announce later or early next week.
TCA ok you got me on SLW.......but not SLV. Incidentally...I can't disagree with the deflation argument as it's very strong and has major fundamental factors. My take with inflation is simply because it can be caused (with comms.) to produce a return. Look at SLV in the last three weeks....tell me something is not going on with that...
Ciao
MS
Bah! The stock market is rigged. US employment is necessary to keep the consumer economy going. Without it, one of the pillars that holds up the global economy collapses.
This jobs report shows the collapse . . . and the market goes up?
Rigged.
Fraudulent.
Manipulated.
The US is a lot more like Pakistan than Americans would dare to admit.
Now, why can't we all understand that both parties are a screw up...
Smartass |
Because the Republicans were in charge of Congress from '94 until 2006, and Bush, well, there's not enough electrons to type out his mistakes here - how about 3 SEC chairmen as the blind mice for starters?
"Interesting thought, as there are what, two huge T auctions next week? Run up equities, then throw them under the bus next week to flush that money into T's when the big sale is on..."
....Hmmm.....this is exactly what the Mrs. thought night before last.
They're all in the same boat. They're all clueless. They're all working against the average American. Dems and Republicans. Both sides.
TM | 02.06.09 - 11:07 am
I used to believe that and held out for the day when the Revolutionary Workers' Party would seize power. It was all just Tweedle Dee and Tweedle Dum.
Then George W Bush convinced me I was very wrong.
"Because the Republicans were in charge of Congress from...."
Today's Republican is like yesterday's Democrat - without the long hair...
Another take on some N-F numbers :
Jesse's Café Américain: A Closer Look at the Revisions to the Non-Farm Payrolls Numbers
"Then George W Bush convinced me I was very wrong."
+10
I can't stand pelosi and reid.. but at least they don't support torture, rape and murder and national policies.
However, they are idiots... of course the alternative (boehner, mcconnell) is way worse
"Granted, it's when people post preposterous things such as, "The GOP would rather plunge the country into a depression than allow the Democrats to get credit for doing something right," that I start to wonder how anyone can display any partisan loyalties in the midst of this debacle without a requisite IQ test."
I'm reminded of a Simpsons episode from probably 12-15 years ago where Bart (aboard some runaway creature) crashes first through a tent holding a Republican convention where the people are holding up signs saying "We want what's worst for everyone" then crashes through the Democratic tent where they hold signs saying "We want what's best for everyone but don't know how to govern".
Of course the Republican leaders want failure because if there is anything resembling a noticeable turnaround in fortune by the next congressional election the party will likely be toast. Also, the only issue that they seem to be able to win with is tax cuts. At some point in time, all this spending will render that approach impossible...to the same effect as a turnaround. At this point all they can do is stand staunchly opposed and hope for the worst.
Not that I give too much credit to the Dems. The stimulus package as drafted deserves the criticism it's receiving. I agree with the need for stimulus. However, the form chosen leaves a lot to be desired. More business as usual when the world is falling apart.
CNBC Worshipping at the altar of Goldman Sachs. Shameless shilling for the biggest wealth skimming operation in existence.
New Thread: Employment Diffusion Index ( 3 comments )
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can't argue with The Simpsons. Like the Bible, you can only interpret it.
bearly-
that ties in very neatly to more dilution with it's stock.
Ciao
MS
Unblvbl
+100
excellent post
Third administration of no financial clue. Tune in for your Daily sermon from Obama. No clue? sweet talk and chase the poll numbers.
I see that Steve Forbes was in Davos last week. Not happy with just predatory spending, he is crying for more tax cuts and a return to predatory lending: home loans to the serfs at 4% with banks marking them to model, ie, fairyland. Since wages adjusted for inflation over the last 30 years are negative, the rate of interest should be zero and the loan should be non-recourse. And Billygoat Gates was also lurking in Davos. This is the same predator who screamed at Congress 10 months ago that there was a shortage of workers for Microsoft to cherry pick over and demanded an increase in the influx of H-1B Visa workers. A couple of weeks ago, he coldly, quickly, and quietly laid off 5,000 in Seattle. What a country!
Look at SLV in the last three weeks....tell me something is not going on with that...
MS | 02.06.09 - 11:35 am | #
I haven't followed SLV. Call me a conspiracy theorist, but I don't trust the there actually is enough (any?) silver backing the fund. Has SLV been independently audited by someone that can be trusted?
SLW is a much safer play, IMO. They make money selling real silver. I'm just very nervous that they will be taken down with everything else in the next leg down. There's huge money to be made in PMs and oil, but I think it's too soon. But don't listen to me; I am seldom right about these things.
Lets approve the Stimulus Package on Monday...
Milwaukee Public Schools would reap $88.6 million over two years for new construction under the economic stimulus package just passed by the U.S. House of Representatives - even though the district has 15 vacant school buildings, a large surplus of property and no plans for new construction.
The amounts for MPS are particularly eye-catching, and not only because they are the largest in the state. Enrollment is declining every year, and the last major wave of construction in MPS - the $102 million Neighborhood School Initiative launched in 2000 - resulted in projects that are underused, have not met enrollment projections or have closed.
"And Liz, it was Madison Avenue, according to the NYTimes, the highest retail per sq. ft. in the world, now pock marked with vacancies.
fried | 02.06.09 - 10:23 am | #
Someone told me the Carnegie Deli closed a few days ago. Is there a corned beef index to track economic activity in Manhattan?
TCA-
Don't really know if there is actual backing.....don't care either.
Ciao
MS
And the market is of course up hugely on the news.
We don't need jobs - we just need credit! Don't worry about paying off those debts - that's "Unamerikan!"
No doubt the Secretary of Tax Cheating and the Bailout Bill II (or whatever number we're up to) will keep driving this market up into next week. Gotta keep the game going - there are still more sheeple to be sheared!
how about 3 SEC chairmen as the blind mice for starters?
Comrade NSA | 02.06.09 - 11:35 am | #
Bill Donaldson was not all bad, but then again he got canned because he wanted to actually regulate the markets.
tca-
sorry I didn't mean that as a snipe at ya!
I think that if we spend time actually worrying about what is kosher (audits, backing, etc) we'd never buy anything..
Market is just an extension of vegas in any case.
Ciao
MS
ShadowStats:
January Jobs Loss Was 716,000 Net of Concurrent Seasonal Factor Bias (Instead of Official 598,000 Loss)
Downside Benchmark Growth-Pattern Revisions Were Mostly Pre-Election
Alternate-Unemployment Rate Hits 18%
Einstein's definition of insanity comes into play with the Republicans.
Insanity is doing the same thing over and over again and expecting different results. Cut taxes, cause more debt and wonder why things blow up, and oh by the way while you are cutting taxes start an optional political war, increase all spending and expecting something good to happen.
This country is in deep trouble.
A new smart ass comment for the prostitute ring situation...
"Finally, an decent explaination of Trickle Down Economics."
Harndog
You may be disappointed. Was the great depression the dissolution of a country? What shatters it this time? I would think TPTB would go to extremes to ensure that didn't happen. Dissolution of a currency, maybe.
Dust Bowling for Dollars | 02.06.09 - 10:02 am | #
LATE REPLY: The country that existed after GD1 was over wasn't the same as the country that existed before GD1 happened. The continent of Europe was forever changed as well. Let's not forget Japan...
they are breaking out the party hats and favors at Pelosi's office.....at -598,000 job loss, she thinks this is a 4,402,000 improvement over the 50 million monthly loss she spoke of.
or ...was it 500 million?
Tax and Spend.
Borrow and Spend.
Take your pick.
TM hyperventilates: "They're all in the same boat. They're all clueless. They're all working against the average American. Dems and Republicans. Both sides."
This nutbar Con-blab is why our nation is stuck on stupid.
I've got a shovel-ready project to help America: dig a hole and bury this CONservative anti-American freakshow.
Spam:
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Why dont we release an employment rate.... 92.4% of americans have a job.. See that looks not too bad
Anybody else notice that CR's current recession band ends about May, '09?
So, does that mean back to prosperity or the recession becomes a depression?
If the latter, what color would you recommend for a depression band?
The U6 unemployment rate is 13.9% and is more representative of reality. It is available at the bls.gov website. We're already well past the 1981-1982 recession.
The number of persons who worked part time for economic reasons (sometimes
referred to as involuntary part-time workers) was essentially unchanged in
January at 7.8 million; however, this measure was up by 3.1 million over the
past 12 months. Included in this category are persons who would like to work
full time but were working part time because their hours had been cut back or
because they were unable to find full-time jobs.
rayna
employment agencies jobs