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Frontrunning: October 9
- Unemployment will supress U.S. consumer spending, survey shows (Bloomberg)
- California bond sale pushes munis down, lifts yields most since June (Bloomberg)
- Fed begins testing reverse repo trades (FT), also Fed said to consider clearing banks, facility to drain reserves (Bloomberg)
- Thomson CDS settlement snarls Europe restructurings (Bloomberg)
- The most hated rally in Wall Street history (Ritholtz)
- Death spiral capital relieves Bernanke's dilemma (Bloomberg)
- It's all just monopoly money (Minyanville)
- Must read for all lemmingly sheepish sell side analysts: "Sell" for research renegades becomes business off Wall Street (Bloomberg)
- Italian tax evaders repatriate funds at record pace amid slump (Bloomberg)
- The dollar adrift - a global vote of no confidence (WSJ)
- Consumers keep paying off credit cards, building up savings (WaPo)
- Is BlackRock going to rule the world? (Reuters)
- The pullout method: Bernanke claims he'll be first to tighten in the heat of the moment (Wall St. Cheat Sheet)
- Goldman gives loan to stoke commercial mortgage bonds (Bloomberg)
- 34 banks don't pay their quarterly TARP dividends (USA Today)
- Obama wins peace prize (Bloomberg)
»
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"Consumers keep paying off credit cards, building up savings"
At least there's one bit of good news :)
"The Nobel Committee lauded the change in global mood wrought by Obama's calls for peace and cooperation but recognized initiatives that have yet to bear fruit: reducing the world stock of nuclear arms, easing American conflicts with Muslim nations and strengthening the U.S. role in combating climate change."
Winning an award for (promise of) change and hope, the world has gone mad, mad I tell you!
I'm beginning to think that with so many people blindly obsessed with this guy that he may in fact be the antichrist.
Gore Vidal once said [of Kissinger's award of this during the Vietnam War I believe] one cannot underestimate Scandanavian wit.
The hits just keep on rolling.
trade deficit shrunk...on a weakening dollar no less, how does that correlate with a growing GDP?
and for something completely different, photos from yesterday's rush in Detroit to receive free money:
http://bit.ly/LcCmj
fun fact about Larry Fink:
"Before joining Blackstone, Fink was a managing director at First Boston, where he pioneered the mortgage-backed securities market in the United States."
http://en.wikipedia.org/wiki/BlackRock
from reuters link above:
"It’s also the risk and analytics manager in chief for the Fed’s MBS purchasing program."
disaster capitalism at its blackest.
Obama Inauguration: 20 Jan 2009.
Closing date for nominations for the 2009 Nobel Peace Prize: 1 Feb 2009.
Although, when they're giving the economics prize to Paul "Ellsworth Toohey" Krugman, what the hell do you expect?
Change you can believe in Rusty. Pre-engineered change you can believe in....
We'll see if the Nobel Peace prize winner will expand troop deployment in Afghanistan and invade Iran.
What a joke.
The only "change" I believe in is pre-1965 quarters, dimes, and half-dollars (and war nickels in a pinch).
http://www.nytimes.com/2009/10/09/business/09shop.html?ref=business
"Retailers’ Sales for September Only Reach 2005 Levels "
Question: What percentage of all the internet traffic today will touch on the goofy Nobel Peace Prize?
and dennis kneale should win the prize for economics.
given that he has done about as much for the field of economics as obama has done for world peace.
Compared to Bush/Cheney, Obama has done a lot for world peace - it seems like forever since the US attacked someone new.
THREE-PETE !!
First one, clearly, is for being Not Bush43. There Is A God.
Second one will be for letting McChrystal and McKiernan use Bill Corson's CAP system as the model to expand the Afghan Public Protection Program. AP3. That's to safeguard Afghans from poppy gangsters, regional mobsters such as Gulbuddin, national gangsters such as the Karzai brothers, and the media-beloved but unimportant Taliban.
Third will be for turning around and bashing the $80,000,000,000-a-year opium/heroin business. That's 90% dependent on the Afghan poppy crops. Better we just buy it up at source.
THREE-PETE, BABY !!
Must read for all lemmingly sheepish sell side analysts: "Sell" for research renegades becomes business off Wall Street (Bloomberg)
I read the article. As a ml client, I'm most confident that my guy d. bianco doesn't fit into this model. his overweight recommendation on the financial sector is a no brainer.
even though some other firms downgraded Marriott, my guys at ML upgraded.
they are bright enough to see through the fog and can see that people will soon be loading up in hotels.......obama, pelosi stimulus v 2.0 most likely will have hotel money to pay for out of work and homeless cdo traders.
I can't believe you missed this bah bay:
GEITHNER'S PHONE LINE TO POWER,
Lloyd Blankfein on speed dial
http://www.nypost.com/p/news/business/geithner_phone_line_to_power_BbZZ0p7WfoOEb7L7XPLuoN
actually, the good news is that lots of MSM covered it. HuffPo (which hammers the obama group on its wall st/banking policy contrary to some thinking) had it splashed all over their front page yesterday for a couple of hours.
amazingly I saw it on MSNBC and CNN...of course, not that it matters anymore.
Treasury subservient to Goldman is now customary.
Goldman is doing a rope-a-dope don't fall for it.
World economy: Jobless recovery beckons
October 9th 2009
FROM THE ECONOMIST INTELLIGENCE UNIT
Although the world economy is now recovering, the effects of the sharp recession in late 2008 and the first part of 2009 will be felt for some time—especially in labour markets. Unemployment will continue to rise in many countries, dampening the recovery in the short term. There is also a concern that higher unemployment will become entrenched, with negative implications for growth in the medium term.
The extent to which unemployment has already risen as a result of the global downturn varies across regions and countries. In the US, where labour markets are more flexible and companies therefore generally quicker to shed jobs, the rate reached 9.8% in September, a 26-year high and up by around four percentage points since mid-2008. In the euro zone the rate has risen by just two percentage points, to 9.6% in August. Some euro zone countries have seen much sharper increases, for example Spain and Ireland, where construction booms have come to an end. In Germany, however, the rate is up by less than a percentage point, to 7.7% (on a harmonised EU basis) in August.
Rises in unemployment have been restrained partly by government action. Slightly over half of the OECD's member countries have introduced wage subsidies or hiring bonuses, or taken on extra public-sector workers. In addition, in countries with less flexible labour markets, as in much of western Europe, firms tend to be reluctant to shed labour, preferring to keep workforces in place for an upturn. Companies have instead coped through arrangements such as reduced working time and temporary factory and office closures.
However, fiscal pressures will make it difficult for governments to sustain employment-support strategies. Moreover, if (as the Economist Intelligence Unit expects) final demand does not recover to pre-crisis levels in the near term, firms that have not yet adjusted will have to shed surplus labour as excess capacity is cut. This suggests that many countries still face considerable rises in unemployment. We expect the rate in Germany, for example, to pick up to an average of over 10% in 2010.
A key issue is whether higher unemployment will become entrenched as a result of the crisis. Following past recessions, employment has tended to remain lower for some time, owing to a combination of higher structural unemployment and lower labour-force participation—US employment took almost a decade to return to its level from before the 1979 oil-price shock, for example. That was partly because loose rules on disability benefits and early retirement encouraged people to leave the labour force, something governments in many countries have since corrected. In contrast, the recent crisis may discourage people from leaving the labour force, by reducing the value of pensions and other assets, notably property.
At the same time, weak demand will discourage job creation—jobless recoveries seem likely in developed economies. Employment is usually considered a lagging indicator, so even if demand picks up more quickly than expected, labour markets will remain weak for a considerable time. We forecast that employment in the US will average 141.7m in 2011, well below the level of 146m in 2007 before the recession hit, and will not recover to 2007 levels until around 2013 or 2014.
This suggests a high chance of "hysteresis", or a rise in the underlying, natural rate of unemployment, in many countries. The strength and even the validity of the concept are debated, but there is an argument that workers' skills become impaired the longer they remain unemployed. The OECD assumes that two out of every three workers in continental Europe who remain jobless for more than a year will not resume work thereafter.
Another factor is that economic recoveries tend to demand re-allocation of labour between sectors—away, in this case, from sectors that boomed before the crisis, such as construction and financial services, both of which are likely to shrink as a proportion of GDP in many countries in the coming years. There is some evidence that rigid labour-market structures, such as strict employment protection laws and generous unemployment benefits, hinder the re-allocation of labour and hence job creation. The US, with weaker employment protection than in Europe, has therefore tended to see unemployment fall more rapidly after economic downturns. However, widespread negative equity following that country's house-price crash may hinder labour mobility and prevent a similar revival this time around.
Unemployment is therefore likely to remain high into the medium term, in developed economies in particular. We forecast that the average rate in the US will peak at 9.7% in 2010 and decline only gradually thereafter to 7.4% in 2014, still well above the level of 4.6% in 2007.
These labour-market trends have serious implications. In the short term, the prospect of further lay-offs implies continued pressure on countries' financial sectors from rising defaults on mortgages and consumer debt. In the longer term, the IMF argues that long-lasting reductions in the employment rate are a key reason why output tends not to recover to its pre-downturn trend after banking crises.
Persistent high unemployment will pose major policy challenges. Unemployment hysteresis will, in conjunction with the burden already implied by ageing populations, put considerable strain on welfare models. Against a background of weak demand, labour-market policy will have to focus, rather than on the supply-side reforms that have predominated in recent decades, on actively promoting employment demand—although such measures have a mixed track record and will be constrained by poor fiscal positions in many cases.
The Economist Intelligence Unit
FROM THE ECONOMIST INTELLIGENCE UNIT
Although the world economy is now recovering, the effects of the sharp recession in late 2008 and the first part of 2009 will be felt for some time—especially in labour markets. Unemployment will continue to rise in many countries, dampening the recovery in the short term. There is also a concern that higher unemployment will become entrenched, with negative implications for growth in the medium term.
The extent to which unemployment has already risen as a result of the global downturn varies across regions and countries. In the US, where labour markets are more flexible and companies therefore generally quicker to shed jobs, the rate reached 9.8% in September, a 26-year high and up by around four percentage points since mid-2008. In the euro zone the rate has risen by just two percentage points, to 9.6% in August. Some euro zone countries have seen much sharper increases, for example Spain and Ireland, where construction booms have come to an end. In Germany, however, the rate is up by less than a percentage point, to 7.7% (on a harmonised EU basis) in August.
Rises in unemployment have been restrained partly by government action. Slightly over half of the OECD's member countries have introduced wage subsidies or hiring bonuses, or taken on extra public-sector workers. In addition, in countries with less flexible labour markets, as in much of western Europe, firms tend to be reluctant to shed labour, preferring to keep workforces in place for an upturn. Companies have instead coped through arrangements such as reduced working time and temporary factory and office closures.
However, fiscal pressures will make it difficult for governments to sustain employment-support strategies. Moreover, if (as the Economist Intelligence Unit expects) final demand does not recover to pre-crisis levels in the near term, firms that have not yet adjusted will have to shed surplus labour as excess capacity is cut. This suggests that many countries still face considerable rises in unemployment. We expect the rate in Germany, for example, to pick up to an average of over 10% in 2010.
A key issue is whether higher unemployment will become entrenched as a result of the crisis. Following past recessions, employment has tended to remain lower for some time, owing to a combination of higher structural unemployment and lower labour-force participation—US employment took almost a decade to return to its level from before the 1979 oil-price shock, for example. That was partly because loose rules on disability benefits and early retirement encouraged people to leave the labour force, something governments in many countries have since corrected. In contrast, the recent crisis may discourage people from leaving the labour force, by reducing the value of pensions and other assets, notably property.
At the same time, weak demand will discourage job creation—jobless recoveries seem likely in developed economies. Employment is usually considered a lagging indicator, so even if demand picks up more quickly than expected, labour markets will remain weak for a considerable time. We forecast that employment in the US will average 141.7m in 2011, well below the level of 146m in 2007 before the recession hit, and will not recover to 2007 levels until around 2013 or 2014.
This suggests a high chance of "hysteresis", or a rise in the underlying, natural rate of unemployment, in many countries. The strength and even the validity of the concept are debated, but there is an argument that workers' skills become impaired the longer they remain unemployed. The OECD assumes that two out of every three workers in continental Europe who remain jobless for more than a year will not resume work thereafter.
Another factor is that economic recoveries tend to demand re-allocation of labour between sectors—away, in this case, from sectors that boomed before the crisis, such as construction and financial services, both of which are likely to shrink as a proportion of GDP in many countries in the coming years. There is some evidence that rigid labour-market structures, such as strict employment protection laws and generous unemployment benefits, hinder the re-allocation of labour and hence job creation. The US, with weaker employment protection than in Europe, has therefore tended to see unemployment fall more rapidly after economic downturns. However, widespread negative equity following that country's house-price crash may hinder labour mobility and prevent a similar revival this time around.
Unemployment is therefore likely to remain high into the medium term, in developed economies in particular. We forecast that the average rate in the US will peak at 9.7% in 2010 and decline only gradually thereafter to 7.4% in 2014, still well above the level of 4.6% in 2007.
These labour-market trends have serious implications. In the short term, the prospect of further lay-offs implies continued pressure on countries' financial sectors from rising defaults on mortgages and consumer debt. In the longer term, the IMF argues that long-lasting reductions in the employment rate are a key reason why output tends not to recover to its pre-downturn trend after banking crises.
Persistent high unemployment will pose major policy challenges. Unemployment hysteresis will, in conjunction with the burden already implied by ageing populations, put considerable strain on welfare models. Against a background of weak demand, labour-market policy will have to focus, rather than on the supply-side reforms that have predominated in recent decades, on actively promoting employment demand—although such measures have a mixed track record and will be constrained by poor fiscal positions in many cases.
The Economist Intelligence UnitWho cares whom gets the Noble Peace Prize, an award process created out of guilt of the mass murder of people for profit. Just the title is an oxymoron. But I'm sure the award will serve it's purpose while the body count continues.
Ill care for today just to let out my frustration over this absurdity. As you said, they gave a peace prize to someone who is waging two occupational wars.
DONT UNDERSTAND.
+100
The more people one can manage to kill in the name of national interest, the more likely one will win the No-bel peace price. Just look at the change you can believe in. Yeah, the ultimate Sun-tze strategy of letting other people die for your country while collecting the peace price peacefully.
In the same token, the more bad loans one can create, the more bonus one deserves. Kudos to all banksters and gold-sacks.
For all of you, yes you, so referred as middle class of america, you are all doomed and deserve to be homeless for concession to be robbed.