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Please read my latest and post your comments here:
http://pensionpulse.blogspot.com/2010/06/from-hysteresis-to-hysteria.html
Thank you,
Leo Kolivakis
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I think Leo greatly exaggerates the underlying effects of the so-called "wage bill".
The bottom line is incomes. It doesn't matter that 2.x milion jobs are added, which again, have a very distorted effect due to temporary Census adds. Aggregate income growth is going NOWHERE. Period.
I respect Leo for taking the positions he does, because he takes a lot of flak... and just keeps on his merry ways. But he is taking a dangerous read on upcoming events, and I sure hope he doesn't lose his shirt in the process. Leo seems like a pretty good guy, after all.
What I'd advise he do is focus on the more forward looking indicators of economic activity. Employment is well known for being lagging, though sometimes temp employment is close to coincident. Look at ISM data; look at ECRI; geez, look at semiconductor relative performance; etc.; just DON'T rely on employment to give you an accurate view to the future.
What I see on the leading indicators side gives me reason for pensiveness, because the trends are heading south. The world is not "booming"-- it is trying to dig itself out of a huge hole that developed in 2008-09. Despite the Greeks apparently speding money in the streets, that doesn't mean it's "responsible" spending.
Leading indicators?? They just raised the rent starting July 2010 in a medical building where I have an office at Robertson and Wilshire in Beverly Hills. And no one is moving out in protest. Everyone is paying up. True story. What CRE crises? Well, I guess it depends on where you look. Perhaps that is what is going on with Leo?? (Of course, patient loads are down 30% in the same building because no one can afford to see the doctor these days.)
Well, if this is your version of "man up" I don't want to see your imitation of Robert McNamera. I will mark this quote right here right now:
This economy is a version of Dorian Grey. You don't want to see what is underneath. If the banksters were not allowed to extend and pretend and the FRB were not allowed to pursue ZIRP and liquidity measures that are rewarding moral hazard and diminishing any prospects for a better economic picture 5 years from now, there would be no visible improvement in fundamentals. As it is, the few signs of improvement are tepid at best.
Granted, census hiring will probably be high again next month, but I'll be back next month and the month after for you to finally "man up".
"Maybe next month." Thanks Leo, blood just squirted out of my eyes.
leo, the bottom line is exponentially increasing debt does not create growth. its that easy and if you cant see through that i dont know how else to explain it to you. and this is debt that is currently at negative real interest. what happens when rates move up? what happens to real estate commerical and residential which both have still yet to bottom? what happens when taxes move up? what happens when the US health insurance industry effectively ceases to exist because of govt meddling? there are 32 states in the US that are bankrupt? what happens when they start paying out 20% interest on junk bonds? as tyler or whoever it may be behind the zerohedge curtain continously points out, the treasury is at the edge of the debt roll ponzi all with negative real interest rates.. in all seriousness i am continously baffled at your inability to look outside the box..we are living in a fiat currency debt fest dream. it is not real....we didnt fix a god damn thing leo with the last crisis...to buoy the basis of your arguement, please explain how we got to where we were (in 08) and how we got "out"..? in both cases its debt..and now socialism.its ludicrous..and your solution in the ECB is money printing? it is not a solution, it is not capitalism, its kicking the can down the road and building a bigger more explosive debt bomb...the solution is allow market forces to take hold, those that have run their businesses and governments correctly will win, those who dont will lose. and we rebuild.
perhaps leo is gaming us all....hes doing the one thing that all websites attempt to do...he drives traffic..what creates as many or more posts from pissed off ZHer's than a sexy conspiratorial mind bending article that promotes the truth behind the curtain? a diametrically opposed view thats what...so keep writing your bs leo....this is the last time i will talk to the wall.
"hes doing the one thing that all websites attempt to do...he drives traffic.."
Such is what I think that the constant "news" about a certain shiny yellow metal is meant to do.
People don't actually BELIEVE that tripe? Do they? LOL.
If anyone can come up with Intelligent arguments as to why the following are full of hot air, I'd like to see them:
http://larouchepac.com/node/12066
http://larouchepac.com/node/11319
http://larouchepac.com/node/11319
+1 aurum, when the bond vigilante's come home to roost, even the all powerful FED will get bulldozed into higher interest rates! What's it going to look like when it requires 25% of GDP just to srevice the debt all ready in existence? How about 35%?45%? Remember the debt saturation phase chart? The most important chart of the century!
Precisely!
Don't get confused by the lipstick on this pig. When these rates go up the party is truly over... many investments (real estate to name just one) will once again be further devalued based on skyrocketing cap rates and the great unwind will begin in earnest.
You good sir are making entirely too much sense!
The 'economy' is on life support right now. Take away the $1.5 trillion 'stimulus' used to bridge the current budgetary deficit and you have a 10% hole in the GDP numbers excluding the knock-on effects in the GDP multiplier. It can't go on like this forever... anyone can see that.
Meanwhile the rate of new business formation (not unemployed people selling lemonade) has been declining due to entrepeneurs not wishing to take the risk of leaving their jobs. It's a classic catch 22... and since 40% of GDP growth in the past thirty years has come from this sector... well... I just don't see a rosy future on the horizon just yet.
Indeed. Piling new short term debt at astronomical rates on top of astronomical amounts of existing debt is just the last gasp injection of simple sugar and epinephrine. They might get their patient to the finish line before he collapses, the finish line being mid november, obviously.
A big segment of underlying market forces have donned "I am John Galt" hats: Holding off on new ventures. Shutting down or scaling back businesses. Hunkering down financially. Waiting for the "unchange" they can believe in.
Players, of course, are playing...shorting.
Leo discounts, or is in denial that there's a lot of economic data series to show what an FDR-like vindictive interventionist power mad know-nothing executive branch will do to markets.
"Maybe next month."
Right, next month everything will magically turn around as all those census takers spend their paychecks stimulating demand and creating hundreds of thousands of new jobs. Oh I wish you were right...
We could always keep them on the payroll to count rocks. It's very important that we know how many rocks there are, too.
How many holes it takes to fill the Albert Hall?
Or just give them new government jobs cleaning rocks, grass and beaches down on the Gulf shore.
The next big wave of bad news, commercial real estate defaults. Much bigger than the S&L crisis in the late 80's. I wonder if the FED can print another couple of trillion to save the banks when this crisis hits?
The fed will simply slip the bad assets off of the banks' balance sheets and use the bad assets to collateralize more debt. None of this will end well. The fed has our figurative head crammed way up our third point and paradoxicly shoved back out our own mouth and will summarily cram the head back up the figurative third point again. By the time they are done, we are gonna be so screwed, it will indeed be legendary.
Pay double if you can find out the rock's race, and sex.
triple for phone #, email address and SS#.
They could save a lot of time buy classifying all of them as "Americans"
Leo, Things could have been worse as you suggest. We might have had no increase from census. Well that is where you are going to be on 8/1/2010. Just two months from now. All of the census workers will be out of a job. We are going to lose 1mm jobs in two months. What is that going to do to the headline number for unemplyment? Answer: It is sure to rise above 10% again.
There was nothing positive to this report. The market got it right when it tanked. We are not in a V we are in a downward leg of a W.
There is a guy I want to introduce you to. His name is Scott Grannis. He is the "good news" economist. Everything that he sees he puts a positive spin on it. You should see the comments that he gets. He has lots of readers (including me) who read his stuf to get a laugh and to make fun of. You don't want to copy this guy. He has no credibility left.
The numbers stunk. There is no positive spin. Admit it.
The link to the "good news" guy:
http://scottgrannis.blogspot.com/
Bruce, you are very wrong on Scott Grannis. I think Scott's opinion and analysis is very good. He is not "about" short term trading. I see his analysis as being valuable if you have a longer time horizion, such as the owner/operator of a business that has to navigate the current trouble fiscal waters. If you own/operate a business, you can't simply liquidate your assets and go to gold or cash every couple of days.
In my opinion, Scott is one of the best navigators out there. He points out the shoals and reefs and helps chart a course through them.
Seeking Alpha is not a good website to use to form opinions of other bloggers.
"You should see the comments that he gets. He has lots of readers (including me) who read his stuf to get a laugh and to make fun of"
Like when I come to the "GOLED BITCHEZ" threads.
I never know what the new price target for gold will be. Will it be 3000, 30000, or 30000000000 million bajillion today?
Anyway, it's good for a laugh fo sho.
the numbers are not so bad as leo suggests. I run my an alternative set of employment numbers when I lost faith in the BLS numbers.
The most important number is national income derrived from average weekly wages times the number of people employed. This number is trending up.
Now I know that these are backward looking numbers. And I am aware of the crisis in europe. I am nervous about how the 20% drop in the euro is going to effect both our and china's trade into the euro-zone.
So now that we have had this sell off, stocks are now moving into a fairly valued range, (however fair in the sense that they have been over valued for decades) It might be time to consider some really solid dividend payers. I'm not thinking that these are moon shots, just an alternative to gold and zirp savings accounts. Also I would only nibble, and not plunk down half your cash. This also only applies if you were out of the market by april.
The big issue here is a u.s. treasury problem. failed auction, spiking rates, etc. That happens and its lights out.
There is always "Mr. Sunshine", Brian Wesbury. Everything is happy. He loved housing just before it crashed.
Don't forget Brian Wesbury. How he still has a job, I don't know....
Way back, once upon a September morn, I was one of a small handful of Leo skeptics, enraged with his insane "take" on world events. But I tired, he did not, and he was for whatever reason allowed the bully pulpit here at ZH ( why? does Tyler have a crazed Aunt Gladys in the attic, and a natural sort of empathy? )but after a fortnight or three away I'm glad to see the mantle taken up by so many new faces.
It's like Mitch Hedberg, RIP , said" The thing that's depressing about tennis is, no matter how good I get, I'll never be as good as a wall. I played a wall once... they're fucking relentless!"
Yeah, that Leo, he's like a wall.
lol classic
I agree with you Bruce. I'm not a finance guy. I do nurture an obsession for news and trends though and seems quite clear that we live on thin ice. I tend to believe that Leo may be falling for the costumes and the set rather than considering empty dialoge and empty seats? So many positive indicators are built on unsustainable foundations. Leo must be Kenyesian? At any rate, I can't image that this play won't be cancelled soon.
Don't worry about the markets, they are just in a correction.
The Great Depression was a correction, too.
You are, without a doubt, the single greatest snake on the ZH forum.
In fact, the world must finally know the true identity of Leo.
He is Jon Nadler.
End of report.
Please stop junking Leo. What's the point of looking at just one view point? Don't junk him just because you disagree with him. It's not right.
mojo
dumpster does not junk .. but the number of junks represent the majority of readers .. and is a okay place to show disapproval, leo has the floor to respond to the many post that show where he is wrong ,
and also he has the stage to throw up any thing his heart desires ,
it is right and a blood less way to show objection to the Keynesian views.
how many point of fact has he junked by not responding to in any meaningful way
he still will not acknowledge williams shadow statistic .. shown to be a in depth look at real numbers ,, he refuses to look at more than one view point ,, his ,, and a smattering of status Que wonder kids .
he closes his eyes to a slowly quickening pace of debt destruction,, gold backed currencies , 33 American states on the Verge of bankruptcy ,, plus cities , and the commercial area in free fall
the studied analysis of a large group of very savy austrian economist that he gives a short shift to.
he believe his almost 30 ish views are consistent with the last 40 years .. of economic life and will not change .
his view are a danger to those who are looking for answers ,,
what can you say for a Keynesian outlook that is the cause of wars, poverty, unemployment , social upheaval and some how they just cant see the Forrest Gump from a large twig ,
i have no use intellectully for such noxious views and treat it with the same workings as an open sore.. a bleeding cut , a broken arm these are niot fixed by hiting the arm with a hammer , poking the cut to see more blood, ..or letting the puss and oz keep festering the whole body
leo may be a nice little guy, but he is a danger to himself and others .. by playing the Candide story in the best of all possible worlds . Voltaire's satire of the unquestioning of evil .. and he fights this evil with the very economic underpinnings that has caused this evil , and the fiat world of the lust for power ,
leo has not a clue
"his view are a danger to those who are looking for answers"
Listen to you!
You sound like a fucking cunt, with a little fucking cunty mouth telling people they can't be allowed to hear other views.
You fucking cunt
no beavis merkin .
i said his view s could be dangerous .. but you go ahead and censor my views while listening to horse shit
the Keynesian model has caused the wars the poverty the unemployment ,, so you would love to hear a person explain how to murder . see it done , and then express outrage if some one pointed out that murder is dangerous .
what a self absorbed lonely piece of american low life
its you call
i stated a fact,, leo is free to post what ever crap he wants you can pony up to pavlov's bowl of gruel
but touche listen to you ,, a pot calling a pan black
while i agree with you in principle, personally i'd rather be a cunt than a prick. but that's me.
If your comment, along with most the others on this thread, was a sword fight... Leo would be flat on his back, his weapon dislodged, and yours at his throat.
That is a profoundly idiotic statement.
Disingenuous and blinkered half-truths, dissembling and vapid mainstream, pro-status quo talking points, endlessly rehashed and repeated, do NOT constitute a meaningful or constructive "viewpoint". By your rationale, every egregious liar or insulting troll deserves a hearing too.
I will never understand this position taken by people such as yourself, who seem to lack any ability or willingness to discriminate between misinformation and lies, and intelligent and honest argument.
Akak, I agree with you. I searched your handle and have cruised through many of you comments. I could not find anything that wasn't a re-hash of other's thoughts. Could you point me to some of your best work?
Much appreciated...
Thank you for your disingenuous and flippant insult, Knucklehead. Your significant and profound contribution to the dialogue here has been duly noted with the deepest appreciation.
Leo has gone from wearing rose-colored glasses to plain old blinders. Tunnel vision straight to a Chinese solar-powered hell.
Leo I commented below - your 2.4m full time jobs includes the census workers. The sleight of hand is in the semantics. A full time worker can be a temporary worker since the BLS defines a worker's full time status by hours worked per week and not the permanence of their job.
Currency of your choice, $50 that the ECB does not lower rates. They already did something beyond their worst nightmare, QE, basically. They are howkish, unlike our Fed, and do not want to risk more devaluation. You miss the big picture, if the Euro sinks, China sinks, China sinks the world is screwed. China's biggest importer is the EU and China is paniced over the Euro, if the Euro does not strengthen or China does not devalue, ASAP, there are major freaking problems.
FYI, government jobs pay very well, nuff said. Consumption is up because of strat defaults because foreclosures are through the roof and bankruptcies are through the roof, no pun intended. I hate being a dick, but Jesus leo. This was a hitty report and not much postive can be made of it. One little data point is nothing.
You get your information from the Bank of Canada. Ha-ha.....that's hilarious...you really are a troll
National Bank of Canada is one of the major big six banks in Canada. Here is a link to their economic research site:
http://www.nbc.ca/bnc/cda/content/0,2662,divId-2_langId-1_navCode-9012,00.html
Not to be confused with the central bank, the Bank of Canada:
http://www.bankofcanada.ca/
In all their mightly knowledge, they still could not predict the meltdown in September 2008. Canadian banks got caught too. Despite their "safety", the government of Canada still had buy billions of dollars of crappy mortgage back securities away from many Canadian banks. Your reliance of the National Bank of Canada to see the next crisis will be your folly. The National Bank of Canada is going to tell the consumer "what they want to hear". That how these fools in government get elected, and that's what your reading into. You just drank from their Kool-aid - not knowing it was viral.
On a final note, yah the economic numbers "in Canada" look pretty damn good. They will continue to be.....IF....an economic timebomb in another part of the world doesn't go off. That's a pretty damn big IF don't ya think? All it took in 08 was for Lehman to blow. This shitstorm in Europe has endless potential derivative disasters. You also seem to forget that the Canadian consumer is utterly tapped out and debt levels on a personal level have never been this historically high. Mark Carney I think has shit his drawers already on this topic. He knows the 8000 dollar home renovation was a huge mistake (people borrowed vast sums and make per capita debt only much more worse). So Leo, in all your infinite national bank of wisdom, tell us all how fundamentally good things are.
GeminiRX, a fundamental question for you. Are all the "weak" hands out of the market?
After 18+ months of doom & gloom, job losses are starting to abate and there is some job creation going on. There is not as much job creation at this point in time as estimated, but you aren't seeing the 400,000+ of job losses you were a number of months back.
If you think all the "weak" hands are out of the market, should you expect it to crash?
You forget easily that all this "job creation" came straight from multi-billion dollar government stimulus. Once the stimulus ends, watch what happens....
Ask yourself if this economy is creating the "right jobs"....or is just temporary construction jobs, census jobs, low paying Walmart and KFC jobs. People are not going to be buying houses on a KFC salary.
I am very surprised the world lasted 18months. I guess that is what a few trillion buys. They bought time....that's all. They didn't buy a recovery. When are people going to realize that government manipulation in markets ends badly. Ask your grandparents or great grandparents how they remember things from 1930.
Leo-
I disagree with you but give you credit for throwing your opinion into the ring. You may want to take a look at a recent piece by John Mauldin "There's a Slow Train Coming" (www.frontlinethoughts.com) that references an economic forecasting firm that has developed a very accurate measure of Leading Indicators -- forecasts changes in BEA GDP measures a full two quarters in advance. They are looking for -2% GDP growth for 3Q'10. Take a read you might find some other data/points of view. I can't help but laugh when you cite economists who spend their time looking at "economic data series." Data series by definition is historical and anyone gazing into the rear view mirror is going to miss upcoming trend changes.