If you look at the last two articles on initial claims, I show the relationship between initial claims and job creation. Initial claims are just what they sound like, the number of new unemployment claims for that week. It doesn't mean they will obtain benefits, just the number of filings.
Since Friday is the unemployment report, I won't be overviewing initial claims. Wall Street jumps on this number to trade on and it's really stupid in terms of long term employment trends but that's what they do.
To see an implication of job growth, you need initial claims to be about 365k or below, but the 4 week moving average needs to be this number.
The fact Wall street jumps on this is ridiculous as we've pointed out many, many times, but that's what they do.
Then, Wall street has priced in "forecasts" on various economic releases and when the number do not match their "forecasts" they also go nuts, because they have placed trades on those "forecasts".
Stock markets, futures, trades are simply not the real economy, so what can ya do, but that's why you see so much bullshit about the report, it's traders, Wall street, pushing that up.
I do initial claims overviews about once a month and try to hit about the mid-point between the BLS monthly unemployment report, which is the real thing that matters and that also has serious statistical issue when looking at the month to month figures.
Honestly, I expect this month's report to be a swing to the upside and all due to the CPS study variance, but we'll see.
The big report I'm going to analyze is manufacturing new orders, shipments, in a big, huge way because so many traders jumped on the durable goods advance release. That's my exercise for the reader overview tomorrow.
Friday of course I'll be all over the unemployment report with graph-o-ramas and custom number crunch.
Always amused every week when the 350,000-400,000 weekly claims are always puppeted by the talking points MSM as somehow "not as bad as expected" or "improvements from the previously modified and now dismal numbers from last week." As the labor participation rate is so bad and/or gets worse, wouldn't the initial claims have to keep dropping and dropping to not be as bad? I mean if 100 people are working, initial claims of 10 are bad (10% of people actually out there in labor force). If 90 people are now working, initial claims of 10 are not the same, but worse (11.1% of those working). And if 80 people are now working, then initial claims of 10 are obviously worse (12.5% of those in labor force). If the claims are steady or even close to the same numbers month after month after month with fewer people participating in labor force, how is that not seen as really bad by the media and pols? Or is it just a case of just don't analyze anything beyond the headlines' lies and spin?
I'm not even going to get into the quality of the new jobs regarding the lack of benefits, part-time, engineers and architects now stocking shelves at Home Depot if they can get past the "overqualified" barriers, etc. It's been done.
Cheating has become the rule, not the exception. Nobody is held accountable, not the banksters, not the hedge funds, not the politicians, not the regulators, not the lobbyists. They're all guilty of destroying this country for greed. We need to start somewhere and hold someone accountable.
One good thing indicated by graph #1: Expenses (I assume that even includes big screens and eye Pods, Phones & Pads) has only gone up 200% since 1984, while incomes have increased by 300%. There appears to be an underground "cardboard box" trade. Therefore, one possible solution: do not rent or buy cardboard boxes - they're generally available free if one knows where to look. Snead
I've been pounding the table about the destruction of savings as a result of the Fed's action since QE1 was launched. There has been hardly any discussion in the press at all about this problem, but it seems people are beginning to notice. Here is an article today that I think was published first in The Independent (UK).
The author talks about QE leading to the destruction of savings. He's right, but that is only one part of the picture. You have to add in ZIRP and NIRP (zero and negative interest rates) to get a complete view of the destructive aspect of Fed policies. Of course, in the broader sense, these policies are in response to deflation and reflect the dreaded liquidity trap that Keynes wrote about. The major global economies have joined or are joining Japan in the liquidity trap, where lowering interest rates has no stimulative effect on economic growth ("pushing on a string", as Keynes said). What this reporter has correct is the anti-stimulative aspect of quantitative easing: with no interest income available, investment grinds to a halt since people park their money where it is safe from credit risk. They need to be wary of credit risk because with no interest income, millions of actors in the economy - businesses and individuals - are exposed to bankruptcy when they start living off their savings and eventually liquidate all they own.
Here is another interesting aspect of deflation and the 1930's Depression that Bernanke ignores. The Great Depression was considered to be as bad as it was because so many banks collapsed from bad debts and bank runs (loss of confidence in the system). Bernanke seems determined to avoid that sort of destruction and loss of confidence in the financial system at all costs, very much as the Japanese avoided this pain too since the 1990s. The result, though, is that the banking sector never gets cleaned up. Big banks linger on, technically insolvent, as problems are kept hidden and the banks are forced to survive off the generosity of the government. Robert Oak has shown us many examples where the US government is funneling profits to the big banks, and even QE3 has now been shown to benefit their bottom line more than that of the consumer.
The paradox is, though, that the economy cannot grow out of a depression until the financial system is cleansed of corruption and bad debts. You also need - sad to say - for the economy to be placed on short rations until this cleansing is completed. That means consumers and businesses need to live with reduced standards, and consumers in particular have to stop spending while they build up their savings. Neither of these two things is happening in the US. Savings in particular are at a low rate, because the only debt liquidation that has occurred is with home mortgages. Corporations are still heavily laden with debt, most of it at high yields. And as we mentioned, savers are trapped because of QE, ZIRP, and NIRP - they have no place to go to earn a safe and fair (market-determined) yield.
Everythone thinks the Great Depression was eventually conquered by huge government spending in the US during WWII. That is only part of the picture, and it is the part Paul Krugman and other Keynsians insist should be happening now. But you need at least three more things. You need to clean up the financial sector (not happening in the least - it is being coddled at the expense of everyone else). You need the private sector to embrace austerity (WWII was successful in part because of the War Bond program, when consumers were urged to invest in government bonds rather than spend money on "luxuries". I remember my parents talking about living under food and gas rationing during the war, and scrounging around for tin foil to sell on the used market). Finally, you need social consensus as to the necessity of this austerity. Being in a war for survival is certainly one way to forge social consensus, but that is hardly an option in a nuclear age. When the US did go to war in the last decade, Bush urged Americans to shop - just the opposite of what is needed during a war. What is a required now is a politician who can build a national consensus on austerity and the need for saving as opposed to consumption, until balance sheets are restored. This same politician will have to put some banks into receivership, and will also have to turn the Fed around too - toward promoting saving and not consumption. Retail spending and global trade will obviously collapse for awhile, making the depression worse, and there are going to be a lot of shuttered stores in most major countries. Governments won't be able to help much here, because their resources are now quite limited having been wasted on propping up the banks and their bondholders/shareholders. Governments will instead have to concentrate on the necessities of life for individuals - access to food, shelter, medicine, school for individuals.
Again, I don't see any of these things happening. Washington seems to be lurching toward austerity, but of the wrong kind - hitting people badly, especially the most vulnerable, and letting certain sectors of the economy off the hook, like the financial and defense sectors. People need to see that government is arbitrating pain-sharing fairly, so that necessities are met, as consumption collapses. This is the failure we see in Europe. Greeks are allowed to watch their economy collapse and consumption fall, but no other European country is willing to help where it matters - a Marshall Plan for basic food supplies, medicines, and energy so that Greek citizens wouldn't have to eat out of dumpsters, or die for lack of basic medicines. Instead all the money is going to the banks.
It's pretty obvious that lessons simply will never be learned and taken to heart because every single bank and corporation that violates any rules can simply shift all the losses, civil penalties, etc. on to the public, customers, etc. The NY AG can sue whoever he wants, but the fact is nothing changes except the customers will simply pay more in ATM fees, or loan processing fees, or higher interest rates as a result. These actions don't even result in lower compensation for the guilty CEOs. An individual or small business that engaged in fraud, laundered money, or any number of other crimes would face stiff jail or prison time for crimes and huge fines it couldn't shift to taxpayers or shareholders. Civil and criminal forfeiture too. TBTF and other corporations don't face the same threat and that's Problem #1 - different rules because of different access and/or control of powerplayers. Now, if criminal cases were pursued, that would change the game. Because then the responsible individuals would feel the weight of the law, and could personally lose money, and would personally sit behind bars. A criminal can't shift his fines and term of incarceration on to a shareholder, or customer, or a taxpayer like TBTF does with their penalties all the time. At that point it might even be a little more difficult for felons to meet and control our democratic process (although Michael Milken seems to have bought his way into controlling powerplayers despite his felony record and history).
It really is that simple. Until those creating and approving criminal activity in these corporations (e.g., environmental crimes for other sectors, financial fraud and manipulation for banks) are held personally responsible for crimes, then business will continue as usual. If you are personally responsible enough for bonuses and mega-salaries, then you are also responsible for violating the law when that happens too - hiding behind incorporation will no longer do when criminal laws are violated. How just is it when people that had nothing to do with the malfeasance are punished with higher fees? And don't the banks and corporations always say, "Well, if what we were doing was wrong, why weren't we stopped?" We should take that as an open invitation to use the law to stop them, and those that have the US Code and state criminal laws/codes in front of them that get paid to investigate and stop such crimes should take up the invitation to hold them criminally responsible. Just think of how much smaller budget gaps would be in different jurisdictions if a few criminals' Hamptons estates, Lear jets, and bank accounts were seized. If those actions are good enough for one set of criminals, then they are good enough for all criminals, plus it would ensure those that broke the law were punished, deter others, while sparing customers and the general public from unfair burdens for things they didn't do.
Everyone with a printing press is engaged in this madness, so if Japan can try failed central policies, then the ECB will continue to follow them, as well as the Fed. None of them have worked. Seriously, the Japanese worker can't get a break for years now and still pays outrageous sums to live in a tiny shoebox in Tokyo to hopefully find a job (or live like the students and people in their 30s that will never know the employment of the famed "salarymen"), and still the same failed policies go on and on. Same as the Fed. And the ECB continues to insist that the Euro can never be broken, never, despite how much the headlines replay every single day (e.g., Spanish unemployment 25%+, Greek unemployment not getting fixed, austerity, Troika comes up witn nth "deal" that last for a day or two, then a national leader comes out and says he won't go along with austerity as soon as he meets the angry faces in his own national capital). Those headlines have lasted how long now and keep getting replayed. It's endless. There simply can't be this much money being printed without completely devaluing currencies. And metals keep going up.
The dollar hasn't devalued though, although I think they should count all of inflation, not just core, gee wiz, food and energy as just a tad important to regular people here.
A sane, normal man or woman in a Nation founded on democratic principles would ask hourly how is it an unelected group of individuals composed of former and/or future highly-paid banksters could approve printing trillions of dollars and inflating the dollar into oblivion. A citizen would also ask how such a group could make secret loans in the tens or hundreds of billions of dollars to US and foreign banks without any say-so by the American public. An American that cared about democracy would also ask why people implicated in receiving commingled and stolen funds (greetings Jamie "White Whale enabler among other winning strategies" Dimon) could still remain, one year later, on the NY Fed's Board of Directors. Jamie and Jon "MotherF'ing Global" Corzine, come on, you're so guilty of stealing and receiving billions of looted funds from farmers and so much more, just admit it, your buddies won't prosecute you, but we know you belong in Florence ADX for your crimes that destroyed millions of lives and national economies.
In a sane world, one might ask why the NY Fed Board of Directors actually thinks the CEO of Macy's, the President of Columbia University, and the President of the Metropolitan Museum of Art would actually "represent the public" as they were apparently elected by the Fed and banks to do according to the NY Fed's website. Really, the President of Columbia, Lee Bollinger, is struggling with student debts, or working a minimum wage job, or is injured and 70 and relying on Social Security payments to pay heating bills? How about the CEO of Macy's? And the President of the Metropolitan Museum of Art? Really? The wealthy have a lot in common with the long-term unemployed struggling to survive? Something tells me the CEO of a retail chain loves credit, free money, and printing more and more cash. But hey, what do the 99% know? I'm sure the Fed is looking out for us and people like Dimon (and other banksters), Fed official banksters like Bernanke, and university presidents and other six-figure head honchos really care about Americans suffering whenever they examine, discuss, and analyze how the Fed is helping TBTF and bankster allies at the expense of America.
But hey, it's only democracy, and if Ben and TBTF and the Fed tell us they are better than disclosing anything that directly affects us, despite the FOIA, and the very idea that democracy is built on being well-informed and no secrets, than who are we to argue? Ben, print away! Banksters, party on like it's 1929 X 10. Because what's going to happen soon globally because of your madness will make Zimbabwe look like a booming economy and the chaos over unemployment and unaffordable food globally would make Genghis Khan's approach look like a giant Macy's Thanksgiving Day Parade in comparison. Ah, Macy's, expertise on Fed matters and parades does come in handy, so now I do see the connection, impressive!
Boy oh howdy. Anyone notice when a statistic comes out that doesn't match the "expected number" put up on so many press sites' economic calenders all hell breaks loose?
Right now we have all sorts of "analysis" popping up trying to imply this report is wrong. It's not wrong and hey, 51.5% isn't that great in the first place folks. New orders is NOT prices, it's volume, there's one mistake out there in analysis. Second, this is all of manufacturing, hello, oil & gas refining are part of manufacturing by this report. Regionals will NOT match since some regions are more durable goods, others nondurable and so on.
The key statistics to validate the ISM are the October 4th manufacturing report, released by the Census and the Federal Reserve industrial production report. We'll try to turn to this article on October 4th and update the corresponding graph.
We also edited this overview to include a graph of the Fed G.17 manufacturing industrial production against the ISM manufacturing production index.
We sure as hell hope so, else MSM should hire us to write up overviews. ;)
We are part of Google news and we have a nice little feature from Google news to help push up stories, which I use when the press gets something oh so wrong and everyone is busy reading their oh so wrong analysis.
Google in this regard is cool, they hand review sites but going off of Journalistic standards, not squeezing out the little people, unlike Bing or Yahoo do. (and they do, only the news that's fit to match their lobbyist agendas!)
One of the reasons I started going into so much detail on statistical releases (with the help of awesome, mega fast graphing St. Louis Reserve FRED system), is because the press as well as the blogs gets this stuff oh so wrong. Even now, all weekend long we saw the MSM claim "consumer spending soared", when it's simply not so. More inflation soared folks, that's the difference between the 0.5% and 0.1% monthly increase. Additionally gasoline soared is more the truth of it.
Of course the MSM put income in their press reports almost as a footnote.
Someone actually passed a positive law in the 1990's to make government data publicly available, so anyone can do this. Of course they have to understand how to read those releases. Beyond graphing, we are addicted to eye candy and we hope that gives others the visuals to digest the trends....
But bottom line, we hope we're providing a bridge from the actual government statistical release, data, to what it means in real life for real people and not Wall Street, on this site.
Also, to correct the bumbling mistakes we see every day and certain press outlets are WAY more guilty on this than others.
==============
Getting our content lifted without permission isn't cool. We LOVE links, attributions, blog rolls and "did you see this" generally among the economic community, including OWS. Even summaries reposted are ok, along with links, because that brings more people to our site, but just brazen taking our content and reposting it is not cool. Gez, we can barely cover our server costs as it is.
I came to this story from my Google news page, left my comment, and didn't realize what you're about until I'd clicked on some of the links. This is great site and in fact I recognize a couple articles already that I've seen reproduced or linked to elsewhere.
I seem to detect the mainstream media looking into the statistics a little more closely along the lines you do and it has to be because of people like you putting the information out there. They have to, because it's already out there.
The Occupy movement raising the nation's consciousness helped a lot (as has President Obama's desperate election year conversion to economic populism) but the Occupy people were awakened by people like you. Thanks. I'm going to link to this site on my web log and write a post about it.
There are not quintiles available in this statistical release. But you are right and why we do the per capita graph at least. We have many other articles overviewing income by quintiles and wage brackets and all show the 1% getting the pie. In this article we show a pie graph.
These charts would look different if you did them for the 1 percent and 99 percent separately. The 1 percent is enjoying record profits, and since their taxes are so low (thanks to Reagan) they take a lot of that profit as income. Our incomes aren't going anywhere and in fact I've seen statistics that show them flat since Reagan, and then starting to decline in the past few years. The Census Bureau released a set of such figures a few weeks ago. By lumping everyone together here, it conceals that. It makes it look better than it is.
Folks, System D is a term for the underground economy and we know there are two realms, illegal labor and illegal drugs, oh, I guess 3 illegal sex trade.
Has to be, for we all know making $10k a year, there is no way to rent even a roach motel in many areas of the country.
Economists and analysts are aghast at the plunge in durable goods for August. I just wanted to give a heads up that is the advance report number and the next release will be October 4th. We will make a point to really cover durable goods new orders and shipments in great detail, along with graphs against other economic indicators (GDP, payrolls, PCE). Look for it, we don't like covering the advance report because durable goods manufacturing is so often revised in the space of 7 days between the two economic statistical releases.
Just a little advance heads up for those wondering why the overview is missing with such a dramatic plunge.
They are using foreigners on contracts, including many with security clearance requirements. We see in the news almost routinely of foreigners busted for industrial espionage, so U.S. corporations and business generally not thinking citizenship matters or loyalty matters is common.
Well, beyond the recent now realized terror attacks on embassies the thing that worries me is Iran and nuclear weapons. That guy is clearly bat shit crazy, evil and Israel's warning was frightening.
But this isn't my topic area, I'm just another new digester cog in the wheel on foreign policy, events.
Try as I might, I just can't see it. US election doesn't bring job growth either way (there simply is no viable plan or even talk of a real jobs plan for American citizens and we all know the benefactors of status quo behind the scenes keep blaming "uncertainty" for this or that, but the common man and woman continues to suffer without end), debt ratios in Europe are astounding, and I'm talking about UK, Spain, Italy, with Germany in recession or headed into one, not even discussing Greece, Portugal, and central banks and politicians demand more and more austerity and fewer safety nets while doing nothing to actually employ their own people. China's economy and political scene as tumultuous as ever as evidenced by shakeups, criminal prosecutions against those the Party no longer endorses, etc. as new leadership takes over. Chinese economy headed south assuming that current stats are even reliable as to how well China was doing to begin with. Australia's mining industry (i.e., Australia's economy) relies heavily on Chinese growth, so that's not goood. Japan, still suffering after decades, plus the tsunami + nuclear issue. China (PRC, and Taiwan) and Japan, Vietnam, Philippines, S. Korea, India fighting over islands and waters that contain oil and fisheries and those areas become increasinly important as the price of Middle Eastern oil is likely to skyrocket due to Iran situation and any threats to production and/or transport near Iran and Strait of Hormuz. Iran nuclear issue, plus its support of Syria. Syria + Turkey + Iran + Jordan + Iraq + Russia issues over full-blown Syrian civil war. The workers of the world face explosive food + fuel + housing prices (renters will suffer more as banks take over rentals and keep houses out of reach), and central banks flood TBTF with free cash that inflates prices but never brings any jobs, so more inflation, less employment, more money kept at the top of bank administrations, and more geopolitical issues. But Bloomberg covered Spanish austerity for a few minutes yesterday before switching over to a married couple of awesome elites, the husband was a former corporate lawyer/Morgan Stanley employee and the wife ran a homeshopping network and they looked rich and happy, so I feel better and I guess we all should because they represent .00001% of the world, but hey, they were smiling and living the good life.
If you look at the last two articles on initial claims, I show the relationship between initial claims and job creation. Initial claims are just what they sound like, the number of new unemployment claims for that week. It doesn't mean they will obtain benefits, just the number of filings.
Since Friday is the unemployment report, I won't be overviewing initial claims. Wall Street jumps on this number to trade on and it's really stupid in terms of long term employment trends but that's what they do.
To see an implication of job growth, you need initial claims to be about 365k or below, but the 4 week moving average needs to be this number.
The fact Wall street jumps on this is ridiculous as we've pointed out many, many times, but that's what they do.
Then, Wall street has priced in "forecasts" on various economic releases and when the number do not match their "forecasts" they also go nuts, because they have placed trades on those "forecasts".
Stock markets, futures, trades are simply not the real economy, so what can ya do, but that's why you see so much bullshit about the report, it's traders, Wall street, pushing that up.
I do initial claims overviews about once a month and try to hit about the mid-point between the BLS monthly unemployment report, which is the real thing that matters and that also has serious statistical issue when looking at the month to month figures.
Honestly, I expect this month's report to be a swing to the upside and all due to the CPS study variance, but we'll see.
The big report I'm going to analyze is manufacturing new orders, shipments, in a big, huge way because so many traders jumped on the durable goods advance release. That's my exercise for the reader overview tomorrow.
Friday of course I'll be all over the unemployment report with graph-o-ramas and custom number crunch.
Always amused every week when the 350,000-400,000 weekly claims are always puppeted by the talking points MSM as somehow "not as bad as expected" or "improvements from the previously modified and now dismal numbers from last week." As the labor participation rate is so bad and/or gets worse, wouldn't the initial claims have to keep dropping and dropping to not be as bad? I mean if 100 people are working, initial claims of 10 are bad (10% of people actually out there in labor force). If 90 people are now working, initial claims of 10 are not the same, but worse (11.1% of those working). And if 80 people are now working, then initial claims of 10 are obviously worse (12.5% of those in labor force). If the claims are steady or even close to the same numbers month after month after month with fewer people participating in labor force, how is that not seen as really bad by the media and pols? Or is it just a case of just don't analyze anything beyond the headlines' lies and spin?
I'm not even going to get into the quality of the new jobs regarding the lack of benefits, part-time, engineers and architects now stocking shelves at Home Depot if they can get past the "overqualified" barriers, etc. It's been done.
Cheating has become the rule, not the exception. Nobody is held accountable, not the banksters, not the hedge funds, not the politicians, not the regulators, not the lobbyists. They're all guilty of destroying this country for greed. We need to start somewhere and hold someone accountable.
One good thing indicated by graph #1: Expenses (I assume that even includes big screens and eye Pods, Phones & Pads) has only gone up 200% since 1984, while incomes have increased by 300%. There appears to be an underground "cardboard box" trade. Therefore, one possible solution: do not rent or buy cardboard boxes - they're generally available free if one knows where to look. Snead
I've been pounding the table about the destruction of savings as a result of the Fed's action since QE1 was launched. There has been hardly any discussion in the press at all about this problem, but it seems people are beginning to notice. Here is an article today that I think was published first in The Independent (UK).
http://research.tdameritrade.com/public/markets/news/story.asp?docKey=40...
The author talks about QE leading to the destruction of savings. He's right, but that is only one part of the picture. You have to add in ZIRP and NIRP (zero and negative interest rates) to get a complete view of the destructive aspect of Fed policies. Of course, in the broader sense, these policies are in response to deflation and reflect the dreaded liquidity trap that Keynes wrote about. The major global economies have joined or are joining Japan in the liquidity trap, where lowering interest rates has no stimulative effect on economic growth ("pushing on a string", as Keynes said). What this reporter has correct is the anti-stimulative aspect of quantitative easing: with no interest income available, investment grinds to a halt since people park their money where it is safe from credit risk. They need to be wary of credit risk because with no interest income, millions of actors in the economy - businesses and individuals - are exposed to bankruptcy when they start living off their savings and eventually liquidate all they own.
Here is another interesting aspect of deflation and the 1930's Depression that Bernanke ignores. The Great Depression was considered to be as bad as it was because so many banks collapsed from bad debts and bank runs (loss of confidence in the system). Bernanke seems determined to avoid that sort of destruction and loss of confidence in the financial system at all costs, very much as the Japanese avoided this pain too since the 1990s. The result, though, is that the banking sector never gets cleaned up. Big banks linger on, technically insolvent, as problems are kept hidden and the banks are forced to survive off the generosity of the government. Robert Oak has shown us many examples where the US government is funneling profits to the big banks, and even QE3 has now been shown to benefit their bottom line more than that of the consumer.
The paradox is, though, that the economy cannot grow out of a depression until the financial system is cleansed of corruption and bad debts. You also need - sad to say - for the economy to be placed on short rations until this cleansing is completed. That means consumers and businesses need to live with reduced standards, and consumers in particular have to stop spending while they build up their savings. Neither of these two things is happening in the US. Savings in particular are at a low rate, because the only debt liquidation that has occurred is with home mortgages. Corporations are still heavily laden with debt, most of it at high yields. And as we mentioned, savers are trapped because of QE, ZIRP, and NIRP - they have no place to go to earn a safe and fair (market-determined) yield.
Everythone thinks the Great Depression was eventually conquered by huge government spending in the US during WWII. That is only part of the picture, and it is the part Paul Krugman and other Keynsians insist should be happening now. But you need at least three more things. You need to clean up the financial sector (not happening in the least - it is being coddled at the expense of everyone else). You need the private sector to embrace austerity (WWII was successful in part because of the War Bond program, when consumers were urged to invest in government bonds rather than spend money on "luxuries". I remember my parents talking about living under food and gas rationing during the war, and scrounging around for tin foil to sell on the used market). Finally, you need social consensus as to the necessity of this austerity. Being in a war for survival is certainly one way to forge social consensus, but that is hardly an option in a nuclear age. When the US did go to war in the last decade, Bush urged Americans to shop - just the opposite of what is needed during a war. What is a required now is a politician who can build a national consensus on austerity and the need for saving as opposed to consumption, until balance sheets are restored. This same politician will have to put some banks into receivership, and will also have to turn the Fed around too - toward promoting saving and not consumption. Retail spending and global trade will obviously collapse for awhile, making the depression worse, and there are going to be a lot of shuttered stores in most major countries. Governments won't be able to help much here, because their resources are now quite limited having been wasted on propping up the banks and their bondholders/shareholders. Governments will instead have to concentrate on the necessities of life for individuals - access to food, shelter, medicine, school for individuals.
Again, I don't see any of these things happening. Washington seems to be lurching toward austerity, but of the wrong kind - hitting people badly, especially the most vulnerable, and letting certain sectors of the economy off the hook, like the financial and defense sectors. People need to see that government is arbitrating pain-sharing fairly, so that necessities are met, as consumption collapses. This is the failure we see in Europe. Greeks are allowed to watch their economy collapse and consumption fall, but no other European country is willing to help where it matters - a Marshall Plan for basic food supplies, medicines, and energy so that Greek citizens wouldn't have to eat out of dumpsters, or die for lack of basic medicines. Instead all the money is going to the banks.
Great post and follow up! +10
My first time here, keep up the good work!
It's pretty obvious that lessons simply will never be learned and taken to heart because every single bank and corporation that violates any rules can simply shift all the losses, civil penalties, etc. on to the public, customers, etc. The NY AG can sue whoever he wants, but the fact is nothing changes except the customers will simply pay more in ATM fees, or loan processing fees, or higher interest rates as a result. These actions don't even result in lower compensation for the guilty CEOs. An individual or small business that engaged in fraud, laundered money, or any number of other crimes would face stiff jail or prison time for crimes and huge fines it couldn't shift to taxpayers or shareholders. Civil and criminal forfeiture too. TBTF and other corporations don't face the same threat and that's Problem #1 - different rules because of different access and/or control of powerplayers. Now, if criminal cases were pursued, that would change the game. Because then the responsible individuals would feel the weight of the law, and could personally lose money, and would personally sit behind bars. A criminal can't shift his fines and term of incarceration on to a shareholder, or customer, or a taxpayer like TBTF does with their penalties all the time. At that point it might even be a little more difficult for felons to meet and control our democratic process (although Michael Milken seems to have bought his way into controlling powerplayers despite his felony record and history).
It really is that simple. Until those creating and approving criminal activity in these corporations (e.g., environmental crimes for other sectors, financial fraud and manipulation for banks) are held personally responsible for crimes, then business will continue as usual. If you are personally responsible enough for bonuses and mega-salaries, then you are also responsible for violating the law when that happens too - hiding behind incorporation will no longer do when criminal laws are violated. How just is it when people that had nothing to do with the malfeasance are punished with higher fees? And don't the banks and corporations always say, "Well, if what we were doing was wrong, why weren't we stopped?" We should take that as an open invitation to use the law to stop them, and those that have the US Code and state criminal laws/codes in front of them that get paid to investigate and stop such crimes should take up the invitation to hold them criminally responsible. Just think of how much smaller budget gaps would be in different jurisdictions if a few criminals' Hamptons estates, Lear jets, and bank accounts were seized. If those actions are good enough for one set of criminals, then they are good enough for all criminals, plus it would ensure those that broke the law were punished, deter others, while sparing customers and the general public from unfair burdens for things they didn't do.
Everyone with a printing press is engaged in this madness, so if Japan can try failed central policies, then the ECB will continue to follow them, as well as the Fed. None of them have worked. Seriously, the Japanese worker can't get a break for years now and still pays outrageous sums to live in a tiny shoebox in Tokyo to hopefully find a job (or live like the students and people in their 30s that will never know the employment of the famed "salarymen"), and still the same failed policies go on and on. Same as the Fed. And the ECB continues to insist that the Euro can never be broken, never, despite how much the headlines replay every single day (e.g., Spanish unemployment 25%+, Greek unemployment not getting fixed, austerity, Troika comes up witn nth "deal" that last for a day or two, then a national leader comes out and says he won't go along with austerity as soon as he meets the angry faces in his own national capital). Those headlines have lasted how long now and keep getting replayed. It's endless. There simply can't be this much money being printed without completely devaluing currencies. And metals keep going up.
The dollar hasn't devalued though, although I think they should count all of inflation, not just core, gee wiz, food and energy as just a tad important to regular people here.
A sane, normal man or woman in a Nation founded on democratic principles would ask hourly how is it an unelected group of individuals composed of former and/or future highly-paid banksters could approve printing trillions of dollars and inflating the dollar into oblivion. A citizen would also ask how such a group could make secret loans in the tens or hundreds of billions of dollars to US and foreign banks without any say-so by the American public. An American that cared about democracy would also ask why people implicated in receiving commingled and stolen funds (greetings Jamie "White Whale enabler among other winning strategies" Dimon) could still remain, one year later, on the NY Fed's Board of Directors. Jamie and Jon "MotherF'ing Global" Corzine, come on, you're so guilty of stealing and receiving billions of looted funds from farmers and so much more, just admit it, your buddies won't prosecute you, but we know you belong in Florence ADX for your crimes that destroyed millions of lives and national economies.
In a sane world, one might ask why the NY Fed Board of Directors actually thinks the CEO of Macy's, the President of Columbia University, and the President of the Metropolitan Museum of Art would actually "represent the public" as they were apparently elected by the Fed and banks to do according to the NY Fed's website. Really, the President of Columbia, Lee Bollinger, is struggling with student debts, or working a minimum wage job, or is injured and 70 and relying on Social Security payments to pay heating bills? How about the CEO of Macy's? And the President of the Metropolitan Museum of Art? Really? The wealthy have a lot in common with the long-term unemployed struggling to survive? Something tells me the CEO of a retail chain loves credit, free money, and printing more and more cash. But hey, what do the 99% know? I'm sure the Fed is looking out for us and people like Dimon (and other banksters), Fed official banksters like Bernanke, and university presidents and other six-figure head honchos really care about Americans suffering whenever they examine, discuss, and analyze how the Fed is helping TBTF and bankster allies at the expense of America.
But hey, it's only democracy, and if Ben and TBTF and the Fed tell us they are better than disclosing anything that directly affects us, despite the FOIA, and the very idea that democracy is built on being well-informed and no secrets, than who are we to argue? Ben, print away! Banksters, party on like it's 1929 X 10. Because what's going to happen soon globally because of your madness will make Zimbabwe look like a booming economy and the chaos over unemployment and unaffordable food globally would make Genghis Khan's approach look like a giant Macy's Thanksgiving Day Parade in comparison. Ah, Macy's, expertise on Fed matters and parades does come in handy, so now I do see the connection, impressive!
Boy oh howdy. Anyone notice when a statistic comes out that doesn't match the "expected number" put up on so many press sites' economic calenders all hell breaks loose?
Right now we have all sorts of "analysis" popping up trying to imply this report is wrong. It's not wrong and hey, 51.5% isn't that great in the first place folks. New orders is NOT prices, it's volume, there's one mistake out there in analysis. Second, this is all of manufacturing, hello, oil & gas refining are part of manufacturing by this report. Regionals will NOT match since some regions are more durable goods, others nondurable and so on.
The key statistics to validate the ISM are the October 4th manufacturing report, released by the Census and the Federal Reserve industrial production report. We'll try to turn to this article on October 4th and update the corresponding graph.
We also edited this overview to include a graph of the Fed G.17 manufacturing industrial production against the ISM manufacturing production index.
We sure as hell hope so, else MSM should hire us to write up overviews. ;)
We are part of Google news and we have a nice little feature from Google news to help push up stories, which I use when the press gets something oh so wrong and everyone is busy reading their oh so wrong analysis.
Google in this regard is cool, they hand review sites but going off of Journalistic standards, not squeezing out the little people, unlike Bing or Yahoo do. (and they do, only the news that's fit to match their lobbyist agendas!)
One of the reasons I started going into so much detail on statistical releases (with the help of awesome, mega fast graphing St. Louis Reserve FRED system), is because the press as well as the blogs gets this stuff oh so wrong. Even now, all weekend long we saw the MSM claim "consumer spending soared", when it's simply not so. More inflation soared folks, that's the difference between the 0.5% and 0.1% monthly increase. Additionally gasoline soared is more the truth of it.
Of course the MSM put income in their press reports almost as a footnote.
Someone actually passed a positive law in the 1990's to make government data publicly available, so anyone can do this. Of course they have to understand how to read those releases. Beyond graphing, we are addicted to eye candy and we hope that gives others the visuals to digest the trends....
But bottom line, we hope we're providing a bridge from the actual government statistical release, data, to what it means in real life for real people and not Wall Street, on this site.
Also, to correct the bumbling mistakes we see every day and certain press outlets are WAY more guilty on this than others.
==============
Getting our content lifted without permission isn't cool. We LOVE links, attributions, blog rolls and "did you see this" generally among the economic community, including OWS. Even summaries reposted are ok, along with links, because that brings more people to our site, but just brazen taking our content and reposting it is not cool. Gez, we can barely cover our server costs as it is.
I came to this story from my Google news page, left my comment, and didn't realize what you're about until I'd clicked on some of the links. This is great site and in fact I recognize a couple articles already that I've seen reproduced or linked to elsewhere.
I seem to detect the mainstream media looking into the statistics a little more closely along the lines you do and it has to be because of people like you putting the information out there. They have to, because it's already out there.
The Occupy movement raising the nation's consciousness helped a lot (as has President Obama's desperate election year conversion to economic populism) but the Occupy people were awakened by people like you. Thanks. I'm going to link to this site on my web log and write a post about it.
There are not quintiles available in this statistical release. But you are right and why we do the per capita graph at least. We have many other articles overviewing income by quintiles and wage brackets and all show the 1% getting the pie. In this article we show a pie graph.
These charts would look different if you did them for the 1 percent and 99 percent separately. The 1 percent is enjoying record profits, and since their taxes are so low (thanks to Reagan) they take a lot of that profit as income. Our incomes aren't going anywhere and in fact I've seen statistics that show them flat since Reagan, and then starting to decline in the past few years. The Census Bureau released a set of such figures a few weeks ago. By lumping everyone together here, it conceals that. It makes it look better than it is.
Folks, System D is a term for the underground economy and we know there are two realms, illegal labor and illegal drugs, oh, I guess 3 illegal sex trade.
Has to be, for we all know making $10k a year, there is no way to rent even a roach motel in many areas of the country.
What about System D?
Economists and analysts are aghast at the plunge in durable goods for August. I just wanted to give a heads up that is the advance report number and the next release will be October 4th. We will make a point to really cover durable goods new orders and shipments in great detail, along with graphs against other economic indicators (GDP, payrolls, PCE). Look for it, we don't like covering the advance report because durable goods manufacturing is so often revised in the space of 7 days between the two economic statistical releases.
Just a little advance heads up for those wondering why the overview is missing with such a dramatic plunge.
They are using foreigners on contracts, including many with security clearance requirements. We see in the news almost routinely of foreigners busted for industrial espionage, so U.S. corporations and business generally not thinking citizenship matters or loyalty matters is common.
Well, beyond the recent now realized terror attacks on embassies the thing that worries me is Iran and nuclear weapons. That guy is clearly bat shit crazy, evil and Israel's warning was frightening.
But this isn't my topic area, I'm just another new digester cog in the wheel on foreign policy, events.
Try as I might, I just can't see it. US election doesn't bring job growth either way (there simply is no viable plan or even talk of a real jobs plan for American citizens and we all know the benefactors of status quo behind the scenes keep blaming "uncertainty" for this or that, but the common man and woman continues to suffer without end), debt ratios in Europe are astounding, and I'm talking about UK, Spain, Italy, with Germany in recession or headed into one, not even discussing Greece, Portugal, and central banks and politicians demand more and more austerity and fewer safety nets while doing nothing to actually employ their own people. China's economy and political scene as tumultuous as ever as evidenced by shakeups, criminal prosecutions against those the Party no longer endorses, etc. as new leadership takes over. Chinese economy headed south assuming that current stats are even reliable as to how well China was doing to begin with. Australia's mining industry (i.e., Australia's economy) relies heavily on Chinese growth, so that's not goood. Japan, still suffering after decades, plus the tsunami + nuclear issue. China (PRC, and Taiwan) and Japan, Vietnam, Philippines, S. Korea, India fighting over islands and waters that contain oil and fisheries and those areas become increasinly important as the price of Middle Eastern oil is likely to skyrocket due to Iran situation and any threats to production and/or transport near Iran and Strait of Hormuz. Iran nuclear issue, plus its support of Syria. Syria + Turkey + Iran + Jordan + Iraq + Russia issues over full-blown Syrian civil war. The workers of the world face explosive food + fuel + housing prices (renters will suffer more as banks take over rentals and keep houses out of reach), and central banks flood TBTF with free cash that inflates prices but never brings any jobs, so more inflation, less employment, more money kept at the top of bank administrations, and more geopolitical issues. But Bloomberg covered Spanish austerity for a few minutes yesterday before switching over to a married couple of awesome elites, the husband was a former corporate lawyer/Morgan Stanley employee and the wife ran a homeshopping network and they looked rich and happy, so I feel better and I guess we all should because they represent .00001% of the world, but hey, they were smiling and living the good life.
Pages