relevance...This won't matter in the end when they ask the last person out to turn off the lights.
jo6pac
The race to the bottom continues

I still dunno about that second graph. Is this recession really only half as bad as the one in the early 70s?

So the non-seasonally adjusted number (including those ineligible for UI) was close to a million.

CR,

Why don't you account for the fact that the 70s and 80s had higher levels of full-time insured employment, when compared to 2009?

second graph -

Could it be that covered employment comprises of a larger number of white collar workers. We are now seeing the elimination of mainly blue collar workers but the trickle up effect hasn't happened yet (except financial sector)?

or they changed the how the numbers are calculated... again.

I see two possibilities for health care in the US- neither involve a large role for private insurance.

One option is a peaceful change to single payer coverage and the other involves angry people lynching "reluctant" doctors and their families. Preferably both!

//You can quit getting your teeth cleaned, the oil changed, and hope you don't need health insurance for only so long. It is like defered maintenance. When the euipment is new, or well maintained you can coast for awhile.//

Icelanders have lost faith in all politicians! I see progress.. oh and they (BBC) are blaming the internet and blogosphere for the loss of faith in politicians.

....2X the reported figure...easy comp
\t Black Star Ranch | \t \t \t \t02.05.09 - 9:04 am | #

## The books are cooked. And as for filing for UI, fuhgedaboutit. Start your own gig, be fearless in the face of adversity. Never bet America short. Nobody ever made any money shorting America.

ac writes:
I still dunno about that second graph. Is this recession really only half as bad as the one in the early 70s?

ac - There have been huge structural changes in our workforce since the 70s and 80s, so the absolute comparison of that 2nd graph is a little misleading. Just some of the changes.
1) Alot more people are now working part-time because of economic reasons. The BLS counts them as employed.
2) Has been a surge of self-employment and freelancers. Typically they are not covered under the unemployment insured.
3) In the inflexible manufacturing environment of the 70s and early 80s, companies would shut down their production line for a week/month (or a couple of months) at a time. The furloughed workers were eligible for unemployment until they got called back to work. Today, the overwhelmingly majority of workers laid off have no hope of ever being recalled by the same company. Those jobs have been lost.

So, I believe the 2nd graph does not tell the how story of how unemployment has changed in this country.

Volker - Nobody ever made any money shorting America.

Have I ever got a currency play for you.

C

energy,

"My sense is that is has, but data...must have more data..."

Never mind that...use the Force Luke...

Nostrovia,

--
"Volker - Nobody ever made any money shorting America."

What a moron. I HAVE and I have records to prove it. I used to say:

Sell America short
Sell Americans short
Sell America's leaders short

But never said...

Sell US Treasuries short

And I did just what I told people and I have done extremely well with triple digits annual returns for the past 1.5 years.

Jas

Volker is going to see the drama and resign for 'personal reasons'

Volcker Chafes at Panel Delay, Clashes With Summers (Update1) - Bloomberg.com 

Obama tapped Volcker for a new Economic Recovery Advisory Board charged with injecting fresh, outside ideas into policy debates.

...."The Egos" don't want "fresh, outside ideas"

Eight Bank CEOs invited to accountability meeting and Tony Blair attends the Prayer Breakfast...mmm

"While Summers, a former Treasury secretary, oversees the official White House economic policy apparatus, Obama tapped Volcker for a new Economic Recovery Advisory Board charged with injecting fresh, outside ideas into policy debates.

“When you have two strong, highly accomplished, driven people, it’s not unusual that there is going to be a battle over turf,” said James Cox, a professor at Duke University Law School in Durham, North Carolina. “I would hope that Obama doesn’t lose Volcker’s counsel. They need someone to help them think outside the box.” "

It's all horse shite. The only thing Volker could do is bring in a team that exposed the blatant corruption that has riddled Wall Street for decades. Something which would at best, lead to shite getting spattered on the deche bag Summers. Too bad for the old man that Summers controls the gateway, no?

You don't suppose that it was setup this way? You know, give the media and the Rubes something to go "Gosh, Obumble's gonna change things...Volker's on the team!" whilst simultaneously marginalizing the old man to the extreme?

Nah! That could be it.

Nostrovia,

Superior Court Judge Patrick Marlette ruled the state's sprawling budget gap justifies Schwarzenegger's furlough plan, which roughly equals a 9 percent pay cut for the 235,000 workers affected.

Idle hands are the devils playground....lets start the rioting

Toyota's incoming president, Akio Toyoda, called the current economy "unprecedented, the likes of which haven't been seen in 100 years."

Posted this earlier, but Toyota idled all lines except one and expects to do 10 more idle days over the next two months.
Tax revenues in Toyota City are cliff-diving, and suppiers are getting hurt now too.

our tax dollars at work -
FDIC Releases First National Survey of Banks' Efforts to Serve the Unbanked and Underbanked
Banks Offer Products and Services for the Unbanked and Underbanked; Opportunities for Improvement Remain

spending millions to state the obvious. no link available from press release.

"Among other key findings of the study are:

While most banks offer basic checking accounts to all customers, few offer deposit, payment, credit and electronically based products that address the unique needs of unbanked and underbanked customers.
Banks are concerned about the profitability of doing business with unbanked and underbanked individuals as well as perceived regulatory issues related to anti-money laundering laws and regulations.
Among the findings regarding banks' efforts to improve access through retail branch operations and strategies are:

Over half of banks offer limited extended hours and foreign language capabilities at their retail branches.
Almost two-thirds (64 percent) of banks report that they have modified their retail operations in the last five years to make the bank more appealing or convenient for unbanked and/or underbanked customers."

as an underbanked customer, i like my offshore vault and glod.

CNBC, "Look! We're off the lows."

and back home in May. Yoshikawa lives in a Toyota-owned dormitory.

Yes, they will let the plants in the US go before they let this continue.

Unemployment offices across the country are overwhelmed by a deluge of claims...as Fed funding cutbacks have reduced staffers able to process claims. And, of course, states are running out of funds.

Deluge Is Holding Up Benefits to Unemployed - washingtonpost.com

omg...BAC -18%

A joke so we don't cry:

Three rich Wall Street banksters and a Federal Reserve official are flying over New York City in a private jet bought with bailout money. The first banker says, “Why don’t we throw a thousand dollars out the window and help somebody?”

The second banker says, “Why don’t we throw a million dollars out the window and help even more people?”

The third banker says, “Why don’t we throw a trillion dollars out the window and help everybody?”

The Federal Reserve official pauses, looks at the bankers and says, “Again?”

And finally, the (Libertarian) co-pilot turns around and says, “Why don’t we throw you guys out the window and just help ourselves?”

--
"BAC is toast! how Ironic. Very. If you read the history of that bank, has its origins by one of the few honest bankers around whose goal was not to make a profit."

Arghhhh,

AP Giannini, the original founder of what was later renamed Bank of America, was the best banker in US history but rogue bankers of NYC, “raised in a culture of fraud,” exemplified by Made-off and his list of victims, couldn't tolerate that. An American dope does not know the evil nature of NYC bankers and financiers. They are parasites that suck the host dry and then move on.

Jas

The deflation camp seems to dismiss a dollar collapse. Kind of likw pissing into a hurricane and expecting not to get any piss on your shoes.

If the dollar's collapse is less than the rest of the basket's collapse, deflation may happen.

Ugh. Now the Europeans want to join the US, Britain, and Japan in the liquidity trap. In England, banks are now no longer able to collect interest on some mortgages. What's that going to do to bank stability? But still they cut, in the face of evidence that extremely low interest rates are actively harmful to economic stability.

"what's your ROI so far,"?

...[eg]...it's a big pile of dirt I move around some, is all I know....

Simian - Good perspective on inflation/deflation:

Brad Setser: Follow the Money » Blog Archive » Still plenty to worry about …

--
"No Jas. I guaratee I kicked your ass over the past 25 years. So will my investors."

Anonymous Liar! Only scumbags attack others, without evidence, anonymously.

For the record, my public advice to most, who are not professional speculators, since July 1998, has been:

1. Avoid the Scam Market.

And keep your savings in:

1. US T-Bills and USG bonds
2. Gold
3. Swiss franc

And I have NEVER changed my advice to others even though I do speculate in the Scam Market, mostly on the short side. Unlike the liars on these blogs and forums I don’t change my story.

Jas

I know in the last depression that Roosevelt was unable to stop deflation until he devalued currency.

That's only because he was on a gold standard. Bernanke faces no such constraint.

Assets aren't money, folks. The quadrillion dollars in derivates didn't push prices up by 100,000% when they were formed and they aren't going to have a significant effect when they go away either.

Random question:  When BAC acquired CFC, was the BAC stock that the former CFC shareholders received in the deal restricted in any way, or could the former CFC shareholders sell their new BAC shares on day 1?  TIA

[If the dollar's collapse is less than the rest of the basket's collapse, deflation may happen.
Simian ]

Its starting position as the reserve puts it in a particularly vulnerable spot. Any challenge means it has a lot more to lose, relatively speaking.

OK, I lied.  Timmy got another pull on the handle.

Assets aren't money, folks. The quadrillion dollars in derivates didn't push prices up by 100,000% when they were formed and they aren't going to have a significant effect when they go away either.
Fair Economist

along those lines, normal deflationary microeconomical effects will be distorted. the derivative deflation affects the LOC (line of credit) in banking international trade, reducing trade to barter (as we're starting to see in many countries), causing scarcity and hoarding and micro inflation in costs of certain goods.

the medium term result will likely be an increase in barter, grey and black market exchange.

What's going on with BAC, WFC? What's the news? Seems pretty sharp to chalk up to the ongoing drift to zero.
Dust Bowling for Dollars | 02.05.09 - 10:41 am | #
-----
Unsure.  There was quite a bit of talk here yesterday calling for the impending doom of C & BAC.  I couldn't tell if people were talking from a position of opinion or citing rumors or news they had heard.

BAC could be getting pummeled because it fell below the 5 USD/share mark that most/all mutual funds have (as in they cannot own shares that are lower than 5 USD), but if it is anything else beyond those kinds of technicals, I don't know.

Feb. 5 (Bloomberg) -- Orders placed with U.S. factories fell in December for a fifth month, reflecting a pullback in business spending that will extend the recession.
Bookings declined 3.9 percent, more than forecast, after a revised 6.5 percent drop in November.

More job losses dead ahead.

--
Only morons in America still believe in the power of the vote. Here are some exchanges:

Rich (few days ago): "Already Obama is becoming a stooge who reads the lines the powers-that-be feed him."

Jas: Before American dopes have the right to vote, power elite has the right to select those most likely to get elected. Even as shareholders dopes have no real power of vote. Vote is a useless exercise in most cases and is mostly for entertainment purposes. Elections are pageantry and entertainment! An American deludes himself with the power of his vote. Let us find out how many Americans will sell their vote for $1000! The sad part about America’s organized political gangs is that Democrats are bad and Republicans are worse. And what real choice do Americans have?! The system is fully gamed. An American voter is a sucker. A big time sucker. Not to forget the fact that he, or she, is politically impotent.”

Bud Conrad: "Sadly true. Even as I can't think where it is done better. The failuing is that most of us think we have the right to vote and that it might make a difference. We are not hypocrates, just dupes.”

Jas: Hello Bud, One of the many arguments by American revolutionary leaders, in 1775, to fight against the British was that the British Parliament was a very corrupt political institution controlled by moneyed interests. Guess what?! THE WHOLE ANGLO-AMERICAN DEMOCRACY HAS BEEN A FRAUD FOR SOME 350 YEARS WHEREBY MONEYED INTERESTS HAVE CONTROLLED THE GOVT, ESPECIALLY THE WAR MAKING PART OF THE GOVT, IN THE NAME OF DEMOCRACY, OR VOTE BY THE PUBLIC. Yeah, yeah, wisdom of the masses! The difference now, versus the past in the UK and the US, is that in the past the old warrior aristocracy and the priestly class kept the money power in some check. Now, there are no real checks on the power of money. There are no checks and balances. MONEY HAS ABSOLUTE POWER TODAY. What do they say about the absolute power?

A vote has turned into a means to CON the public! I mean born-and-bred dopes and morons.

Jas

Per Bloomberg, BAC is being hammered on concerns it doesn't have sufficient capital, despite the 138 billion dollar Fed injection.

Bank of America Slides on Concern for Nationalization (Update2) - Bloomberg.com

Sports Guy Lafleur - Trying to support or prop up over capacity is a waste of money. Buy it and plow it under.

Would you pull your funds out of BAC? I am nowhere near the FDIC cap.
Dust Bowling for Dollars | 02.05.09 - 10:54 am | #
-----
Personally speaking, I have. 

I pulled my savings from BAC and moved it to a local credit union.  I had planned on moving my checking over by the end of this month, but I may have to move earlier than I had expected if it keeps up the fall into Friday.

I've been informed the housing market is coming back and will be doing fine by years end. It really saddens me to see people out there that are still so sadly delusional. I'm growing weary with trying to explain to them how stupid they are...

Absurdly green on the Dow over the last 15 minutes. Just another day at the races folks.

anonymous coward writes:
Obama warns of need for stimulus bill right away

What he did not say is tha Amerika faces civil unrest and violence as the unemployed vent their anger towards pork-eating congress critters and greedy bankers

Oh thank you fried, I miss mp and Conjure. Do you remember what thread they posted to?

Serf Allen Greenspend, I have been here awhile myself, and I won't coddle pure lunacy. Economists and weathermen are the only jobs where you never have to be right even once usually because you are an academic who is living in an Ivory Tower when it comes to the economists. There is no way that FI's comment is anything but an uneducated opinion. Anyone who understands Derivatives knows that it is one of the biggest drivers concerning where we are today.

Market likes the bad bank I guess.

That's when you should brace yourself.
anonymous coward | 02.05.09 - 11:08 am | #
-----
"The Obama administration has decided on a new package of aid measures for the financial services industry, including a bad bank component, and is expected to announce them next Monday, according to a source familiar with the planning."

The "Obama administration" needs to stop with the future announcements.  They have run a few too many trial balloons regarding stimulus packages and financial aid to (fill in here).  What is the over/under that the Obama people kick that can down the road on Monday too?  Better yet, that they will do it earlier than Monday?

Maybe that big Monday announcement by Barry O'Bildenberg will be a Bank Holiday instead...
DOW36000 | 02.05.09 - 11:11 am | #

Nah, you get one the Monday after that, for sure.

"Anyone see or hear from Hanky-poo lately??"

He has retired to his bird-watching sanctuary remote island soon to be fortress.

This just in from the AP:

"The Obama Administration is working on a plan to end the floating of trial balloons. This plan will be announced next week."

If they were marked to market and market prices increased, would have that increased the banks ability to lend? (I'm not very well-versed on the capitalization requirements of banks.) Or, were they just used to buoy the income statements of the banks in the last few years?

Yes, profits on derivatives (not the face value) increase bank capital and allow more loans. Net losses will reverse that - up to the point that the derivative-issuing banks have lost all their capital, which is getting pretty close.

I can't prove it, but by connnecting a few dots a strong argument can be made that the government ring fenced many of the one sided derivatives trades when they effectively seized control of FNM, FRE & AIG.

Basically, the tax payers were forced, without their knowledge, to save GS, JPM, MS & others from insolvency. The bankers got to keep their jobs, stock options, bonuses, houses in the Hamptons, etc. The tax payer got stuck with the fraud and the losses.

What a sham(e)

Fair Economist, do you realize that American Banks hold at least 175 Trillion in Derivatives, and a 1% loss on those products equals Doomsville my friend. It is more than the banks are worth, and 3% which is a minimum in my book, will blow them all sky high, but keep clicking your Ruby Slippers Dorothy.

"Anyone see or hear from Hanky-poo lately??"
hank took his tranche of the tarp money in unmarked c-notes. he threw them in his playroom up in the hamptons and is currently throwing the money in the air and watching it flutter dow

Drudge headline - Pres. O - "
THE FEAR: PASS IT NOW, OR WE MAY NEVER RECOVER "

Reminds me of BB andf Hank P on Tarp I .

The derivatives implosion will have an effect on the downside.

A derivatives implosion could potentially cause a depression by locking up the banking system. It can't cause much deflation though, and not even remotely on the scale of derivative face value. If derivative face value had much to do with price levels then we would have seen hyperinflation in the past decade. We didn't, so derivative face value has little effect on price levels. Those are the facts.

Another Cramdown for the American Taxpayer. We have been threatened with Martial Law, Per Rep. Sherman, during TARP so expect even more dire propaganda so the Govt. and Bankers can steal our own money from us.

I noticed in my county, a shortfall of 1.25 billion for such things as capital construction projects, to keep the spending levels up, is being funded from the endowment-like
comprehensive annual financial report surpluses from the fat years. My county is selling off US treasuries and equities to fund the projects.

Are many other counties in the nation doing the same thing? This could account for much of the downward pressure on equities. Could CR do a story on this subject?

"a 1% loss on those products equals Doomsville"

Optomist!

Seriously, the capital base REPORTED is only like 0.05% of derivative total.

However, an honest appraisal of capital base is that it is < 0. Meaning that mathematics can offer no guidance going forward.

Nostrovia,

RockyR said: "What is driving stocks higher this morning?"

There's a seasonal upside bias this time of year. Myself, I'm not reading anything else into it, we're just going sideways in an overall downtrend.

Sebastia

ping off 8000? maybe, down goes frazier?
there's so much good news, though

--
"Angry Saver, I think you are 100% correct."

Comrade Kristina,

We agree. Don’t you connect further dots that lead to the conclusion that we have an evil government, or a bad system that puts crooks’ agents into power?

Jas

Jas, that is nothing new to most of us here I would have to guess. Our government has been broken for a very long time. Apathy played a huge part in this demise, well that and greed.

Spectre, you're also forgetting derivatives, insofar as they are derivatives, are zero-sum. There are no net losses. Net losses come from changes in real assets.

FE, how do we globally jetison 700 trillion bucks worth of derivatives with 60 trillion world wide GDP without repercussions in the money supply? not saying it can't be done, but beyond my grasp.

"That would be the end of the banks - but it would have little effect on the price level."

In much the same way that having a bullet through your heart would have little effect on your blood pressure.

Sorry for going all physiologist on ya, but that's the best analogy I have, whilst I go looking for my eyeballs, which popped out after reading that.

Nostrovia,

@Fair Econ - I think the line that people are trying to draw is that if banks fail, credit vanishes, and on a larger scale that affects prices in a somewhat trickle-down fashion.

Sure, that's happening now. But the effect has little to do with the face value of derivatives, and the effect on prices could be countered by the Fed if it so chose.

Fair Economist writes:
Spectre, you're also forgetting derivatives, insofar as they are derivatives, are zero-sum. There are no net losses. Net losses come from changes in real assets.

No they are not a zero sum game although the authorities would love for the sheeple to believe that falsehood. Notional only works when everyone can pay on the bet, and once you start getting defaults, it's like a room full of mousetraps that start going off when you lob a ping-pong ball into the room.

That you can believe in the zero sum BS is astounding, but your are an Economist, and they clearly didn't see any of this coming while many of us here and on other blogs knew exactly where we were headed. Nothing like using the mind that God gave you.

As the various Tranches are marked down, you can be damn sure that those who bought protection through derivatives of various kinds will try and collect. How exactly does one draw blood from a turnip/counterparty who is flat ass broke? That is not notional, and it's certainly not a zero sum game.

MS,

;P

Nostrovia,

SPECTRE of Deflation said: "...That you can believe in the zero sum BS is astounding..."

Is it? What if we frame it another way.

In 2006 near the top of the California housing market, Rob Dawg sells me his house for $750,000. Today, it's only worth $500,000. I have a loss of $250,000 on the property.

But where did that $250,000 go? Did it disappear completely? Or did the money just change hands, and now Rob Dawg has it instead of me?

Simplifying for the sake of easy understanding, let's say an investment bank took my mortgage on that house, created a bond out of it, and sold it at par to PIMCO which now has a loss on that mortgage-backed bond because the value of the property has fallen by $250,000.

PIMCO's loss on the bond didn't disappear, but now belongs to the investment bank.

If, instead, another truly ruthless investment bank took that mortgage-backed bond and turned it into a CDO and sold it to a truly clueless investor and the truly clueless investor is looking at a 75% loss on that CDO, where is that money? In the pocket of the truly ruthless investment bank.

Minus whatever the transaction costs are, why isn't all this a zero-sum situation, where the money simply changed hands but didn't evaporate?

Sebastia

Anonymous said: "Let's go along with your analogy, but instead of the bank trading or writing the MBS or CDO, they tried to mimic what that product would look like by writing CDSs and bundling them, a Synthetic CDO. The originator bank only collected the 1-2% fee/premium for originating the CDSs. Further, they wrote more in CDS coverage that the normal bond was worth. Now there are more obligations than people who can pay."

Let's make your analogy simpler for my addled mind.

My house has fire insurance on it and I pay the premium. However, all 10 of my nearby neighbors also buy fire insurance on my house. So when my house burns down the insurance company is on the hook to pay out 11 times on a single loss.

Although the insurance company imprudently sold too much insurance (like synthetic securities), in reality my neighbors' only real loss is the premium they paid, since they didn't actually own the house.

So the neighbors lose their premium, but the insurance company has it.

Not trying to be obtuse, I just don't see how supposedly new and additional losses aren't simply transfers.

Sebastia

Fair Economist, I think some reading on your part concerning Derivatives is required. Here's a dandy:

What Cooked the World's Economy?

t r u t h o u t | What Cooked the World's Economy?

It's all priced in. Nothing to see here.

Sebastian, one problem with your scenario and it's called synthetics which are backed by nothing. In effect it's a bet that must be paid or defaulted on just like the other dervatives.

Oh, and how exactly do you take a bunch of subprime shit tranches, with default rates in the high 60% range, and repackage and sell them as AAA with additional derivatives and synthetics written against the new securitized package? Still notional right? Not a chance.

ova,

Tent cities are becoming pretty common across the U.S. A quick Google news search shows that existing tent cities have been the subject of debate in Olympia, WA, Nashville, TN and in Sacramento, CA. In my neck of the woods (Santa Cruz, CA) there are a lot more campers living in the woods around here. A fairly common arrangement is to pay a property owner a few bucks per month for the right to camp (or park a decrepit RV) on a piece of land with access to an extension cord and a hose or access to a bathroom.