The Great De-Leveraging continues. This is needed but it has consequences - less consumption. And since we are depended on debt instead of wage growth and consumer spending we will languish in this 'new normal'.
hit the up arrow on your own post for this should be on the front page. I take this to be yet another financial oligarchy takeover and Bair seemingly is trying to hold the fort.
It is human nature to complain that the sky will fall when any restrictions are placed on us. But what always happens is that we learn to adjust and move on.
If the deals are attractive enough I am sure private equity firms will figure out a way to get deal done. They already have.
let's say a particularly nasty piece of economic fiction was posted on EP. Then, let's say members of EP demoted that post to being off of the site, i.e. they censored it to oblivion.
What happens then is your comments attached to that post all go with it, they all get non-published.
So, if you're wondering what happened to your comments attached to a particularly funky blog post that EPers have deemed not worthy of being on the site and thus demoted it with the "down" arrow on the bottom left....
that's what happened.
So, a couple of things, when writing comments attached to a particularly funky post, don't spend a lot of time on them...
and if this is an issue for people, i.e. a bunch of your comments disappeared....let me know I might be able to work something out to reattached those comments to some other post...
say a "lost comments" open blog post or something.
Also, this is a reminder to be pretty damn prudent when using that down arrow.
It does literally unpublish and delete posts, which is a powerful control for keeping the content quality on EP high....
So don't use it just because you disagree with someone, as long as they wrote up something fairly well substantiated...
But do use it when you know something is just pure bunkola, conspiracy theory and so on....
I get the feeling people are so desperate for a "return to normalcy", some sort of emotional need for all of this nasty to simply disappear, that need is distorting what's the statistics really are saying.
So everyone, how about a "picture is worth a 1000 words".
Considering adding some graphs, statistics, charts, and format your posts please. (see the user guide for help on formatting posts).
Graphs, comparison to past recessions, comparison to the Great Depression...
precisely when does the unemployment rate really put the tip in GDP to get a double dip?
These are questions running around in my own brain, so I suspect other EP readers are wondering about the same thing.
and here's another question: ok, this is all bad. Myself, I must have put up 100 posts at this point trying to push for massive incentives to revitalize U.S. manufacturing, start up investments, infrastructure, innovation....
i.e. kick some fire under the production economy because frankly I just don't believe more retail sales clerks, Wal-mart workers or making more profits off of sick people (currently 1/6th of the economy) is going to kick in real GDP.
We need a jobs program and one that isn't "busy work" but one that will actual spawn real industries. In addition, one that will not spawn more bubbles.
The auto sector added 28,200 to the industry payroll in July, which was the highest tally in 11 years. To show you just how big that really is, it is a 69% annualized surge. Normally, the industry, which is in secular decline, posts job losses of between 20,000 and 30,000 consistently, so this alone represented roughly a 50,000 swing. We estimate that there was about a 30,000 swing in the rest of the manufacturing sector due to the spillover from the current inventory adjustment in the motor vehicle industry. The 0.3% MoM increase in the workweek was also skewed by the 4.1% MoM jump in the auto sector.
As we mentioned, there have been large fluctuations in the federal government payroll too. After hiring a slew of Census workers in the spring, there were 57,000 layoffs in May-June and then we saw in today’s report that 12,000 federal workers were “hired” in July. Again, mathematically, this contributed about 20,000 to today’s headline number. In other words, and we have no intent on raining on anyone’s parade, there was about 100,000 non-recurring payrolls in that top-line figure. It may be dangerous to extrapolate today’s report into a view that we are about to fully turn the corner on the job market front.
Yes, the income number was also firm; average weekly earnings popped 0.5%, but again, this reflected the bounce in the auto sector as well as the 10.7% increase in the minimum wage to $7.25 an hour. Again, this is a non-recurring item and does not at all reflect an improvement in underlying income fundamentals in the personal sector. We had a similar bounce in the summer of 2008 when the minimum wage was last boosted.
Firstly June 2009 BLS release and one can see two things. First the official unemployment rate was 9.5% and then in table A-11, here, we see that the unemployment rate was 9.7%.
Then, archived releases, which are not adjusted, simply the release at the time are here.
I'm thinking we might upload more data sheets, charts because this current release only compares to 1 year ago, not the month-to-month change.
I have to agree with you manfrommiddletown, in looking over all of these stats upon first glance, it doesn't look like anything has changed.
It also appears to have not gotten worse.
This is the new good if you notice, "not worse" is now taken as "good".
What would be interesting is to graph the people dropping off of the count.
The number of long-term unemployed (those jobless for 27 weeks or more) rose by 584,000 over the month to 5.0 million. In July, 1 in 3 unemployed persons were jobless for 27 weeks or more.
Among the marginally attached, there were 796,000 discouraged workers in July, up by 335,000 over the past 12 months. (The data are not seasonally adjusted.) Discouraged workers are persons not currentlylooking for work because they believe no jobs are available for them.
The other 1.5 million persons marginally attached to the labor force in July had not searched for work in the 4 weeks preceding the survey for reasons such as school attendance or family responsibilities
Here is the first paragraph from the BLS press release
Nonfarm payroll employment continued to decline in July (-247,000), and the unemployment rate was little changed at 9.4 percent, the U.S. Bureau of Labor Statistics reported today. The average monthly job loss for May through July (-331,000) was about half the average
decline for November through April (-645,000)
A lot of this underwater data is consistent with some commentary that Mark Hanson, of the Field Check Group, recently made. Mark is considered to be a leading expert on the housing market, and isn't afraid to speak out bearishly in the media, which I find refreshing and very important considering the biased news often coming from the MSM.
His full comments are below, but as a quick summary of some of his main points are that while the recent data suggests that the market has stabilized, this is due in part to government intervention and programs that are temporarily helping. However, once these temporary measures recede, the middle and upper ends of the market will succumb to many of the same pressures that hurt the subprime market. This will in turn cause the markets to suffer substantially again, essentially creating what he calls "Mortgage Implostion 2.0" And if this occurs alongside Deutsche Bank's predictions mentioned above, it is going to get very ugly indeed.
"After a year or so the real pain will occur when the mid to upper bands are down 40% from where they are now, and the price compression has made the low to low-mid bands much less attractive – the very same bands that are so hot right now. Rents are tumbling and those that bought these properties for investment will be at risk of default (investors have been buying all the way down). Investors have just started to get taken to the woodshed from all of the supply and this will get much worse. Mid-to- upper end rental supply is also flooding on the market making it much better to rent a beautiful million dollar house than putting $300,000 down and buying.
After investors are punished -- and with move-up buyers gone for years – it will leave first-time homeowners to fix the housing market on their own. Good luck and good night. Five years from now when things look to be stabilizing, all of these terrible kick-the-can-down-the-road modifications that leave borrowers in 5-year-teaser, ultra-high-leverage, 150% LTV, balloon loans will start adjusting upward and it will be Mortgage Implosion 2.0. These loan mods will turn millions of homeowners into over-levered, underwater, renters and ensure housing is a dead asset class for years to come.
Due to a confluence of events including a national foreclosure moratorium and near-zero sales in the mid to upper end during the off season, the broader housing data show signs of stabilization. Taken in context, it is a blip.
There are no silver linings or green shoots in housing whatsoever other than by these first-time homeowners – former renters – who now find it cheaper to own than rent. This is a very good thing, but it only applies to a small segment of the population and will not be able to support the market. In addition, the first-time buyers who come out of the rental market put continuous pressure on rents.
Our data shows that the mid-to-upper end housing market is on the precipice of the exact cliff that the market fell off of in 2007, led by new loan defaults. What happens to the economy when you hit the mid- to-upper end earners the same way the low-to-mid end was hit with the subprime implosion? We will find out soon enough. When we look back on housing at the end of 2009, anyone that made positive housing predictions this year will not believe how far off they were."
Let the "market" take care of it. This people just need to know where to go for help. FU*k that.
WE NEED A NEW ECONOMIC GROWTH MODEL - NOW!
People are rioting in the streets of France and even fu*king China for jobs and what are we doing - talking about some bullshit fake Kenyan birth certificate or better we have "protestors" siding with big insurance companies who don't want to provide health care coverage to over 43 million Americans. WTF!
It is absolutely amazing how we have been brainwashed and critical thinking skill dulled. We have financial conglomerates spending billions of dollars in bonuses right after receiving a huge tax subsidy and all we do $133 a month for people.
Sometimes I wonder if our demise is not just around the corner.
You can integrate in reverse, from -inf to inf, so I thought that's how you wanted it.
That's very, very cool you have that level of math geek....
Then, you can parse actual formula for CDOs, which I looked at and said WTF, because the assumptions were not valid, from a mathematical view.
I've seen a lot of advanced mathematics used in some of the Academia economic tourism I've engaged in.
Very very cool but we can also just put the more advanced GDP equations, productivity equations etc. in posts...
but I have assumed no one would know what we were talking about and those who would...hopefully would be polite if we made a mistake! So, in other words, at least for myself to translate all mathematics into English in posts...
It seems MimeTex is a little fussier than LaTex (which is fussier than raw TeX), just enough to catch the inattentive user. But they did a nice job just getting more than just the most basic of symbols to work.
BTW, you got the equations right, except for reversing the limits on the integration. I'd be a little surprised if those are used in economics -- they're from chemical physics (not all of us are formally trained in economics, after all). The first is the quantum mechanical density operator in matrix form; the second is just the integral over a Lorentzian (factoring the denominator makes the poles really obvious). If you have to write a LOT of equations, everything else is much more painful.
Thanks for doing this. I'll have to play with graphing next -- but I'll read the instructions first for that.
And not so sure it's so much trade openness but a fetishization of the stock market and quarterly bottom lines as the only criteria of economic health.
Because with the way *most* places do business today, they need that short term credit float to pay for work already done but not yet paid for- so most commercial paper is really salaries.
-------------------------------------
Maximum jobs, not maximum profits.
The Great De-Leveraging continues. This is needed but it has consequences - less consumption. And since we are depended on debt instead of wage growth and consumer spending we will languish in this 'new normal'.
We need a new economic growth model!
RebelCapitalist.com - Financial Information for the Rest of Us.
hit the up arrow on your own post for this should be on the front page. I take this to be yet another financial oligarchy takeover and Bair seemingly is trying to hold the fort.
Blackstone Calls FDIC’s Buyout Rule a Deal-Breaker
It is human nature to complain that the sky will fall when any restrictions are placed on us. But what always happens is that we learn to adjust and move on.
If the deals are attractive enough I am sure private equity firms will figure out a way to get deal done. They already have.
RebelCapitalist.com - Financial Information for the Rest of Us.
let's say a particularly nasty piece of economic fiction was posted on EP. Then, let's say members of EP demoted that post to being off of the site, i.e. they censored it to oblivion.
What happens then is your comments attached to that post all go with it, they all get non-published.
So, if you're wondering what happened to your comments attached to a particularly funky blog post that EPers have deemed not worthy of being on the site and thus demoted it with the "down" arrow on the bottom left....
that's what happened.
So, a couple of things, when writing comments attached to a particularly funky post, don't spend a lot of time on them...
and if this is an issue for people, i.e. a bunch of your comments disappeared....let me know I might be able to work something out to reattached those comments to some other post...
say a "lost comments" open blog post or something.
Also, this is a reminder to be pretty damn prudent when using that down arrow.
It does literally unpublish and delete posts, which is a powerful control for keeping the content quality on EP high....
So don't use it just because you disagree with someone, as long as they wrote up something fairly well substantiated...
But do use it when you know something is just pure bunkola, conspiracy theory and so on....
is that manufacturing jobs or is that just the return of workers from the summer shut down or ?
I get the feeling people are so desperate for a "return to normalcy", some sort of emotional need for all of this nasty to simply disappear, that need is distorting what's the statistics really are saying.
manfrommiddletown just put up a post on this...
So everyone, how about a "picture is worth a 1000 words".
Considering adding some graphs, statistics, charts, and format your posts please. (see the user guide for help on formatting posts).
Graphs, comparison to past recessions, comparison to the Great Depression...
precisely when does the unemployment rate really put the tip in GDP to get a double dip?
These are questions running around in my own brain, so I suspect other EP readers are wondering about the same thing.
and here's another question: ok, this is all bad. Myself, I must have put up 100 posts at this point trying to push for massive incentives to revitalize U.S. manufacturing, start up investments, infrastructure, innovation....
i.e. kick some fire under the production economy because frankly I just don't believe more retail sales clerks, Wal-mart workers or making more profits off of sick people (currently 1/6th of the economy) is going to kick in real GDP.
We need a jobs program and one that isn't "busy work" but one that will actual spawn real industries. In addition, one that will not spawn more bubbles.
Found this, which should add to the discussion.
Frankly this is a blog post for you're citing so many facts and it's in depth....
Other folks...do not be afraid of the blog....when you're writing up really detailed posts....it's aok..
This took me forever to find.
Firstly June 2009 BLS release and one can see two things. First the official unemployment rate was 9.5% and then in table A-11, here, we see that the unemployment rate was 9.7%.
Then, archived releases, which are not adjusted, simply the release at the time are here.
I'm thinking we might upload more data sheets, charts because this current release only compares to 1 year ago, not the month-to-month change.
I have to agree with you manfrommiddletown, in looking over all of these stats upon first glance, it doesn't look like anything has changed.
It also appears to have not gotten worse.
This is the new good if you notice, "not worse" is now taken as "good".
What would be interesting is to graph the people dropping off of the count.
total numbers of unemployed, 14.5 million.
Here is the first paragraph from the BLS press release
Here is the link to table A-11.
A lot of this underwater data is consistent with some commentary that Mark Hanson, of the Field Check Group, recently made. Mark is considered to be a leading expert on the housing market, and isn't afraid to speak out bearishly in the media, which I find refreshing and very important considering the biased news often coming from the MSM.
His full comments are below, but as a quick summary of some of his main points are that while the recent data suggests that the market has stabilized, this is due in part to government intervention and programs that are temporarily helping. However, once these temporary measures recede, the middle and upper ends of the market will succumb to many of the same pressures that hurt the subprime market. This will in turn cause the markets to suffer substantially again, essentially creating what he calls "Mortgage Implostion 2.0" And if this occurs alongside Deutsche Bank's predictions mentioned above, it is going to get very ugly indeed.
"After a year or so the real pain will occur when the mid to upper bands are down 40% from where they are now, and the price compression has made the low to low-mid bands much less attractive – the very same bands that are so hot right now. Rents are tumbling and those that bought these properties for investment will be at risk of default (investors have been buying all the way down). Investors have just started to get taken to the woodshed from all of the supply and this will get much worse. Mid-to- upper end rental supply is also flooding on the market making it much better to rent a beautiful million dollar house than putting $300,000 down and buying.
After investors are punished -- and with move-up buyers gone for years – it will leave first-time homeowners to fix the housing market on their own. Good luck and good night. Five years from now when things look to be stabilizing, all of these terrible kick-the-can-down-the-road modifications that leave borrowers in 5-year-teaser, ultra-high-leverage, 150% LTV, balloon loans will start adjusting upward and it will be Mortgage Implosion 2.0. These loan mods will turn millions of homeowners into over-levered, underwater, renters and ensure housing is a dead asset class for years to come.
Due to a confluence of events including a national foreclosure moratorium and near-zero sales in the mid to upper end during the off season, the broader housing data show signs of stabilization. Taken in context, it is a blip.
There are no silver linings or green shoots in housing whatsoever other than by these first-time homeowners – former renters – who now find it cheaper to own than rent. This is a very good thing, but it only applies to a small segment of the population and will not be able to support the market. In addition, the first-time buyers who come out of the rental market put continuous pressure on rents.
Our data shows that the mid-to-upper end housing market is on the precipice of the exact cliff that the market fell off of in 2007, led by new loan defaults. What happens to the economy when you hit the mid- to-upper end earners the same way the low-to-mid end was hit with the subprime implosion? We will find out soon enough. When we look back on housing at the end of 2009, anyone that made positive housing predictions this year will not believe how far off they were."
but here's the thing. There is no specific bill or proposal one can even point to.
Health care being 1/6th of the U.S. economy is obscene.
One needs to point to specifics. It's beyond bizarre how American politics are "fuzzy" on specifics.
You can watch TV all day long and not extract one specific..
it's like participation requires vagueness and "fuzziness".
Let the "market" take care of it. This people just need to know where to go for help. FU*k that.
WE NEED A NEW ECONOMIC GROWTH MODEL - NOW!
People are rioting in the streets of France and even fu*king China for jobs and what are we doing - talking about some bullshit fake Kenyan birth certificate or better we have "protestors" siding with big insurance companies who don't want to provide health care coverage to over 43 million Americans. WTF!
It is absolutely amazing how we have been brainwashed and critical thinking skill dulled. We have financial conglomerates spending billions of dollars in bonuses right after receiving a huge tax subsidy and all we do $133 a month for people.
Sometimes I wonder if our demise is not just around the corner.
RebelCapitalist.com - Financial Information for the Rest of Us.
You can integrate in reverse, from -inf to inf, so I thought that's how you wanted it.
That's very, very cool you have that level of math geek....
Then, you can parse actual formula for CDOs, which I looked at and said WTF, because the assumptions were not valid, from a mathematical view.
I've seen a lot of advanced mathematics used in some of the Academia economic tourism I've engaged in.
Very very cool but we can also just put the more advanced GDP equations, productivity equations etc. in posts...
but I have assumed no one would know what we were talking about and those who would...hopefully would be polite if we made a mistake! So, in other words, at least for myself to translate all mathematics into English in posts...
But I feel your pain -- my wife had to get in line with the little people.
Boyd Llankfein
It seems MimeTex is a little fussier than LaTex (which is fussier than raw TeX), just enough to catch the inattentive user. But they did a nice job just getting more than just the most basic of symbols to work.
BTW, you got the equations right, except for reversing the limits on the integration. I'd be a little surprised if those are used in economics -- they're from chemical physics (not all of us are formally trained in economics, after all). The first is the quantum mechanical density operator in matrix form; the second is just the integral over a Lorentzian (factoring the denominator makes the poles really obvious). If you have to write a LOT of equations, everything else is much more painful.
Thanks for doing this. I'll have to play with graphing next -- but I'll read the instructions first for that.
And not so sure it's so much trade openness but a fetishization of the stock market and quarterly bottom lines as the only criteria of economic health.
Or to be exact, 3 cheeseburgers and a small fries at McDonalds.
And we wonder why our poor are fat.
I dare you to try to find 2000 calories of anything more healthy for $4.32/day
-------------------------------------
Maximum jobs, not maximum profits.
I've got a paper I'm working on. Have to get it ready. I'm taking it to an academic conference in Massachusetts this fall.
CP=salary
Because with the way *most* places do business today, they need that short term credit float to pay for work already done but not yet paid for- so most commercial paper is really salaries.
-------------------------------------
Maximum jobs, not maximum profits.
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