Employment: Comparing Recessions and Diffusion Index
Submitted by
CalculatedRisk on Fri, 04/03/2009 - 5:36am (85 comments)
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This comment thread has been CRC-IZED by yagij (CRbot helped a little).
CRCizer: Employment: Comparing Recessions and Dif... <br/><br/><br/> And for the stubborn old-timers... it's also been HALO-IZED by CRbot.
http://realize.org/cr/halokit.php?halourl=http://www.haloscan.com/comments/calculatedrisk/542307103862128731
Ok, back to gloomitis
CR I love that first graph. It's as informative as the 4 bad bears.
Although, weren't the definitions of employment different in 1948 and 1958?
Wow, Byz was on a real tear prev thread.
It would appear job losses are accelerating. Where does that end up?
C
A garph of the spagetti monster god guy!!!
We worship his noodley self!!!
AWESOME context from that graph, esp for a canadian who doesn't get much local usa news coverage (well, i don't watch local news in Toronto for that matter)
Hmmm how about all the people that U6 doesn't count, like my wife. Company has reduced pay 10% and require 10% more hours worked ( so same take-home, but more hours worked ).
I know a lot of people in the same boat who don't even qualify for U6 recognition.
Well, she's got a job, doesn't she?
What happens if they do this again. And again?
That graph is damn scary. It looks like we're on a highway to hell and the brakes just gave out.
I think CR is trying to deflect criticism by posting so making so many posts that we don't have time to keep up, much less comment.
I predict one of CR's future graphs will look like this:
----------- Level of Subsistence
x Where you are
That first chart is a scary one. You look at the current line and due to UE and lag, the RED LINE is going to be a rip snorter! It hasn't started bending horizontal yet. It'll be the biggest and deepest hole on that chart!
Area under the curve FTL.
It's raining monkeys!
I predict one of CR's future graphs will look like this:
----------- Level of Subsistence
x Where you are
======
LMAO
My garden groweth nicely.
Are the monkeys bouncing?
This diffusion thingy is a bit like a CDO - overly complicated. I'm just a simple BBAD. That said, I don't need a weather man to know which way the wind is blowing.
The short term trends are ugly. So are the long term trends.
So, what is the range used to determine that an industry has no change? Is 1% gain or loss no change?
Yes, looks like we're hitting every branch on the way down, Liz.
The first graph is very interesting. A couple of observations: 1) The '81, '90, '01 lines all take considerably longer to turn positive, and 2) The slope of the current recession is most similar to the post-war recessions-especially 1958. This is very ominous indeed, if the rapidity of the job loss would be similar to 1958 and the time to recover as long as the 2001 recession.... that would be catastrophic.
Wow, how ironic is this -- Ban gay marriage, end up with gay marriage: Iowa Same-Sex Marriage Ban Struck Down by High Court (Update4) - Bloomberg.com
Wow, how ironic is this -- Ban gay marriage, end up with gay marriage:
I seem to recall some old saying about being careful with what you wish for. Yes, yes, I know it's probably so incredibly obscure that only a few people have heard of it.
Perhaps some fundamental change is emerging. This is the first real jobs recession of the computer era.
But did you guys catch the season finale of ER last night? NPR's Marketplace certainly did, and felt it was important enough to blab about it.
Pump, I'll be honest, I didn't know that ER was even still on television.
Yea me either until Ms. Jablonski did a segment on it just after the jobs report.
I remember when the market used to rally when we were adding 150k a month.
Now it rallies if we LOSE only 500k a month.
yep. makes perfect sense.
::whistles on::
How many bank failures for the day?
agree wally. Been a long time too since we've seen losses as steep as the massive job losses associated with manufactoring back in the 40s and 50s. Pretty wild swings. I do think the 2001 unrecovery recovery will nicely match the steep drop and that post-analysis, if we're that luck to have post-analysis, will not that this condition was obvious, except to anyone who's opinion mattered.
--bh
We need a publication of the FDIC index of number of employees. When the unemployment of FDIC turns up, then we can say the meltdown & recession is ended.
The Latest from Denninger:
Asshat Award: John Dugan
What is ER? That is supposed to be entertainment or educational.
Another CROCUS ?
[A sobering ISM non-manufacturing report marks a step back for the economic outlook. The ISM's composite index fell back nearly 1 point to 40.8 with a nearly 2 point loss in new orders to a 38.8 reading that points to slowing business conditions ahead. The employment index also fell, down 5 points to 32.3 in a reminder of this morning's 663,000 drop in March payrolls. Prices also point to deepening contraction, at 39.1 for a 9 point swing downward. Stocks moved lower in immediate reaction to today's report which cuts short those who had been hoping for quick improvement in the economy]
Ok, heads the market goes up; tails it goes down. Alright ..... that's enough time wasted on research.
Lawyerliz,
Just look for RIFs. They'll probably do the same thing they did the last time. Read Government Executive and I'm sure they'll run a story about some successful GS-15 getting ready to wind-down FDIC staff how it's challenging but rewarding...
--bh
March ISM Nonmsnufacturing in at 40.8, below expectations at 42...
Well, popeye, how did the coin land? Are we up or down?
No reductions in force at FDIC for quite a while!!
Doc,
Count on it.
Liz,
Yes.
Or did it land on the side and is rolling around?
hahahahah, popeye.
popeye does COINZ! Hoocoodanode!?
Dow's looking a bit parabolic. Futures elmo. Hmm. Guess it's not looking good?
C
I don't think it's time to short yet. I still think it'll go to 9k before really cliff diving again. Not everyone is back in yet
http://www.bloomberg.com/apps/news?pid=20601087&sid=a2t62x0yDW84&refer=home
April 3 (Bloomberg) -- Mortgages modified in the third quarter failed at a faster pace than those revised in the first, and the delinquency rate on the least risky loans doubled, signs of deteriorating credit quality, U.S. regulators said
/end snip
Why are 1980 and 1981 shown separately?
2 different recessions-
But but...Obama exported HOPE to G20 and they all had jolly good time there! They are also going to NAME and SHAME ("you naughty China!") and write an angry letter or even two to those tax havens!
Let me repeat that to myself: and the delinquency rate on the least risky loans doubled.
o.k., i made it 10:30, time for bourbon.
--bh
cnbc says orders in february rose so its ok
Time for a much needed laugh!
http://patdollard.com/2008/10/it-is-here-the-banned-snl-skit-cannot-hide-from-louie/
Best I can do is daytrade this market when there's clear direction - like yesterday - and to just stay out when the market is wallowing around - like today.
Wow, how ironic is this -- Ban gay marriage, end up with gay marriage.
Luckily, they're Americans. Rather than learning a lesson, they'll just be crybabies and change the charter.
Can't let a little something like a charter mandating equality to all ruin the simple prejudices that drive countless queers into the life of self-destructive behavior that people want to condemn. Imagine, if they were normal members of society, and not self-loathing psychic wrecks, who would Ted Haggard have to rail against? What's self-righteous American moralism without hideous life-destroying vices to go hand in hand with it?
You can't have the stock narrative of immorality and redemption if you just, like, treat your fellow man like your equal.
blackhat, yes that is disturbing and must, logically, end in raising of prime mortgage rates ( which will quell any benefits from driving down the 30 year bond ).
Market meet calvinball, calvinball meet market.
blackhat,
Let's see, rising equities with deteriorating credit fundamentals...it seems like we have seen this movie before, how did it end again?
Jr Deputy Accountant: CBO: Shhh... TARP is a Little More Expensive than we Thought
I wonder whether job stimulus efforts might be more effective if they were targeted at the diffusion index's components, except for the FIRE jobs, which Obama had grown unsustainably in recent years.
I hate js-kit.
now I can't even log-in.
No, Liz, that Anon post this AM was me and not Misean. He just wears off on me after awhile.
I'm officially into CRCize now.
Later folks, actually have work to do...
- homedad43
Are you still logged in on another computer?
Since my forecst was 925 for job losses, and the num is much less, I think we are on the road to recovery. WoHo
I wrote: " ... which Obama had grown unsustainably in recent years."
Haha. Meant to write: which Obaba said had grown unsustainable in recent years.
Big difference.
If nonfarm payroll job losses average 276000 for the next 9 months, there will have been no net jobs created this decade. That's a scary stat.
Yeah, well, if you owe $230k and nearby houses are going for 130k, you don't have a whole lot of motivation.
A heavy equipment operator, my newest foreclosure, kept making his payments until his hours got cut to half time and he couldn't any more. We're hoping for cram down legislation to pass. I was thinking suppose he won even a smallish lottery prize--would I advise him to come current or not? I think the answer is, actually no. He is very sentimental about the house.
is there any recourse in fl for home equity and or mortgage.
Mortgages modified in the third quarter failed at a faster pace than those revised in the first, and the delinquency rate on the least risky loans doubled, signs of deteriorating credit quality, U.S. regulators said.
http://www.bloomberg.com/apps/news?pid=20601087&sid=a2t62x0yDW84&refer=home
You are a master of chartology. Excellent representation of job losses relative to prior recessions.
test?
Recourse--here we go again.
Yes, deficiency judgments are allowed, even mandatory under Florida law.
They are asked for and granted routinely in car loan litigation. They are virtually never asked for in the case of house foreclosures. Never. Never.
Either recently or in the last 30 years. To the point that even conservative worry wart me wouldn't worry about that if I were in such a situation. I can't imagine a judge nowadays granting one either. I mean the debtor comes in and says, you appraised it sucker, you granted me the loan. You granted a 100% loan and yow were supposed to know what you were doing. Judges are elected here you know. Whether this reasoning is good or bad I just don't see it happening. And then if it were granted, the debtor would merely file bankruptcy and get rid of it anyway.
And nobody has any money to suck in anyway. Well, hardly anybody.
Last man standing with job, Shelia, counting how many banks she and dufus can control.
Great... but disturbing article in Atlantic Magazine on the power of America's Banking Oligarchs and the control they have in Washington. This power and money and the access and control that it has bought makes it difficult if not impossible for this Financial crisis to be truely solved in a timely and forcefull manner.
Written by Simon Johnson former Cheif Economist at the IMF.
http://www.theatlantic.com/doc/200905/imf-advice
Simon Johnson was interviewed on NPR and he was great.
Interesting historical perspective and clearly it is not quite clear when this bottoms out. We may very well only be at a clearing in the woods and not entirely out of the woods, only time will tell. One positive to the painful human reality of rising unemployment is that it allows an economy to more rapidly deal with inefficiencies. In short, any boom will drive too much labor towards some end of the economy (in this case housing/finance) and this is something that needs to be corrected in the subsequent bust; And the faster the better.
One interesting and not often mentioned issue related to the Japan comparison is that in the early 1990s unemployment was kept articifially low during many years, which only served to prolong their road to recovery.
So when are GS and MS going to have another secondary offering to utilize the latest share price runup to recapitalize? That's gotta be in the works....
We set up about an acre here for a "community garden project" (built greenhouse for winter, buried water lines, put up short fencing, etc.). I think it might actually also turn out to be a grampa & grandma day-care. You'd be surprised how knowledgeable some of them old gals are. Now all I gotta do is talk them into a little housework.
Wow, Byz was on a real tear prev thread.
It would appear job losses are accelerating. Where does that end up?
As blackhat said:
http://www.bloomberg.com/apps/news?pid=20601087&sid=a2t62x0yDW84&refer=home
Prime mortgages that were delinquent after 60 days more than doubled in the fourth quarter, to 2.4 percent from 1.1 percent in the first, and rose significantly from the third quarter to the fourth, the report showed. Prime mortgages, considered the least likely to fail, account for two-thirds of all mortgages.
Thread prolly dead, but isn't this like 5 times what it was in good times?
I have a client in default who put 30% down at peak. He's underwater. They won't bargain with him. If this wasn't prime, I don't know what is.
[The government plan does not allow banks to buy their own assets]
Now that's difficult to game. Just buy each others asset. Or are banker just ethically bound to do the right thing in the eyes of the naive treasury and administration.
The banks will work against the interests of the country until it's bankrupt. JUST CLOSE THE FUCKERS DOWN NOW!
"disturbing article in Atlantic Magazine on the power of America's Banking Oligarchs and the control they have in Washington. "
United Banks of America?
This is very ominous indeed, if the rapidity of the job loss would be similar to 1958 and the time to recover as long as the 2001 recession.... that would be catastrophic.
Once Congress manages to force through carbon "cap and trade," my guess is we're looking at a big "L". We take out the 1948 drop and employment never regains 2007 levels.
The odd and striking "slow" start to what is a very powerful recession was due to the summer 2008 tax rebate, as is immediately evident from comparing this recession to typical recessions. The tax rebates were anticipated and then hit about 6 months in.
It's a "balance sheet recession", all about consumers being over-indebted. Tax cuts help reduce consumer debt faster, so tax cuts, like spending, won't cause a recovery, but tax cuts will bring the recovery timeframe closer by improving consumer balance sheets.
This could be done in a more clever and effective way.
Finding the Dream: How Obama's Middle Class Tax Cut Will Save Jobs
Finding the Dream: The Tax Rebate & TARP Worked Better Than Advertised Against The "Greater Depression"
It is possible after all to do something effective about the economy.
I'd rather balance the budget with a carbon tax than to balance it by taxing unemployment benefits and student stipends, like Reagan did. My $700/mo at U of IL got hammered in the 80's while the wealthiest walked away smiling. At least the free market could decide the best fuel alternative. Even if you think its a misallocation of capital, it beats building McMansions in the exurbs.
The first graph is great, but as someone said, the way unemployment is calculated was changed in 1993ish. To see the actual numbers, go to www.shadowstats.com/alternate_data
.
It looks to me like peak employment was around the beginning of 2008. Since then, it has dropped from 12% to about 20%. If you want a real scare, try this. Print up the first chart and plot the following...
Month 6=2% drop
Month 12=6% drop
Month 15=8% drop
Really scary stuff we are facing.
NewCreature
<><
Maybe this thread is dead by now--but if it's not- what are the odds that the US will start exporting skilled workers, in say, another year or two? Because there are greater numbers of better jobs elsewhere? I remember reading some resesarch scientists left the US during the Bush II years because of the stem cell research restrictions. They went to the UK & elsewhere. That's a small number of people, but could it increase because the US can't generate enough jobs at decent pay (I'm not talking about the Wall St. people, I'd like to see them go).
Azurite, I don't know the answer to your question, but you've given me a mental image of a revolving door whirling in a blizzard of visas.