Bureau of Labor Statistics

Phoenix Capital Research's picture

Mr. Geithner is either outright insane or a total liar. Neither of those are welcome realizations, though I doubt they are news to anyone with a working brain. However, for the sake of manners, I'll simply assume Mr Geithner is outright insane, in which case I am indeed, quite honored to be invited to his recovery... I only wish he'd mentioned the planet where it was taking place.

Phoenix Capital Research's picture

A little while back, a Fed Economist by the name of Kartik Athreya, wrote a piece urging the public to only listen to economists who have PhDs from top level universities when searching for economic insights. Obviously this paper was a lot of fun for me to read. So I thought I’d present some thoughts on Mr. Athreya and the group of “experts” he represents

US Economy Will Return To December 2007 Employment Levels... In 2021!

Even as Bernanke is receiving his last minute briefing on what to say (everything, EVERYTHING, is good) and what to play dumb on (explaining the price of gold for example), a new report by the Center for Economic and Policy Research concludes that digging ourselves out of the current unemployment hole which is 7.5 million less people having jobs than did in December 2007, will take at least 4 years, and not occur prior to March 2014. However, this assumes a flat working-age population, something the Fed would love to be the case. Alas, the country is growing: and if one incorporates the effects of labor force growth into the above analysis, as the CEPR authors have done using CBO projections, then we may have a much larger problem on our hands: the study concludes that taking into account the approximately 14 million new job seekers in the future, then the December 2007 unemployment rate will not be met until April 2021! Welcome to the new normal. Of course, both of these analyses assume that the economy will immediately commence growing and generating jobs at the recovery rate seen in the 2000s, when about 166,000 jobs per month were being added. With every month that this does not happen the 2021 date will continue being pushed out further into the future. Perhaps one of the Senators today can ask a question of Bernanke just how he plans on reconciling this glaringly simple explanation for why the US economy will be underwater for a period of over a decade.

BNY ConvergEx: "For Every $1 Of Proceeds From Taxpayers, The Federal Government Issues More Than $1 In New Debt"

In his Friday commentary piece "Tax and Spend. And Spend", Nicholas Colas of BNY ConvergEx read our mind and posted this concise summary on the comparison between 2009 and 2010 tax withholdings, and the unique dynamics thereof. Whereas we will present a detailed analysis of this comparison shortly as there have been numerous interesting themes to discuss, we present the following piece from Colas as a great backdrop to our soon to be posted results. And for all those claiming the tax picture in the US is improving (we are looking at you Daniel Gross), here is the simple reality of the situation: "Simply put, for every $1 of proceeds from taxpayers, the Federal government issues more than $1 in new debt." Must read for all "improvement-ists", especially since Colas references the holy grail of all financial reporting: our all time favorite necessary and sufficient DTS.

NFP Down 125,000, Unemployment Rate 9.5%, +83K Private Payrolls With +147K Birth Death, Workweek Down 0.1 Hours - Another Disappointment

Private payrolls were a disappointment at just +83k, versus consensus of 112k. Birth-death added 147k. Census removed 225k, in line with consensus. Temporary help was another terrific "green shoot" increasing by +21k. And the Unemployment rate dropped to 9.5% because 652k people walked out of the labor force, which dropped from 154.393 million to 153.741 million. Another big miss for the recovery story and another confirmation of the data point. The only improvement was the percentage of those unemployed 26 weeks and longer dropped from 46% to 45.5%, or from 6.763 million to 6.751 million. Yet the most troubling indicator was the downward inflection in the average workweek, which once again dropped by 0.1 hours to 34.1 hours, while in manufacturing the drop was a severe 0.5 hours, following a rise of 0.4 hours in May. The slack in the laborforce is once again building up. Also, average hourly earnings declined by 0.1%, after an increase of 0.2% in May.

Eric Sprott: A Busted Formula

There’s nothing wrong with throwing a little money at a problem to make it go away. There’s equally nothing wrong with throwing a little borrowed money at a problem to make it disappear, as long as you have the means to pay that borrowed money back. But what happens if you throw a lot of borrowed money at a problem, and the problem doesn’t go away? If you’ve ever experienced a situation like that you can probably understand how Europe feels right now. It just unleashed a magnificent $1 trillion euro bailout and the market responded with a selloff by the end of the week! So what happened? That money was supposed to make the problem go away, after all. And it was a lot of money. Why did the market respond to it with such disdain? We believe the market’s reaction is confirming what we have long suspected: that these bailouts provide next to no long-term value. They don’t produce real jobs. They don’t improve productivity. They just prolong the precarious leverage game played by the financial sector, and do so at tremendous cost to taxpayers. "Bailout and Stimulate" has been the rallying call for governments and central banks since the beginning of this financial crisis – and it has certainly had its impact over the last two years, but not the type of impact we need to propel real, sustainable growth. - Eric Sprott

smartknowledgeu's picture

Since college students are already likely to end up living back at home with their parents after they graduate as the job horizon will appear no better in four years than it is today, why not spend that time immersed in self-education of how the financial and monetary systems really work? In the process, students will save their parents hundreds of thousands of dollars in tuition and save themselves the ignoble fate of being a sheep led to the slaughter by banking shills like Joseph Stiglitz, Paul Krugman and Jeffrey Sachs.

David Rosenberg Part 1: "Why The Depression Is Ongoing"

"There are classic signs indeed that the recession in the U.S. ended last summer — output, sales, etc. But the depression is ongoing and the reason we say that is because real personal income, excluding handouts from the government, has barely budged. In fact, real organic personal income is nearly $500 billion lower now than it was at the peak 16 months ago and this has never occurred before coming out of any technical recession. It is a depression, as the chart below attests — that is the trendline for real household incomes, until the government comes in to top them off with handouts, subsidies and extended jobless benefits. The share of U.S. personal income being derived from Uncle Sam’s generosity has risen above 18% for the first time ever." - David Rosenberg

Fake +290K Payrolls "Added", Real Number Is 36K After Census And Birth-Death, Unemployment Goes Back To 9.9%, Underemployment At 17.1%

290K of which census was 66k and Birth Death was 188k. Hurray -the economy added a real 36k in jobs in April. Still, we are curious how the Chairman will not be forced to discuss tightening after this B/D adjustment inspired number (188K in April B/D, 81K in March). And in the meantime, headlines will read Unemployment back to 9.9%, and Underemployment back to 17.1%. Record jittery market bounces than calms down again.

madhedgefundtrader's picture

Improving California state finances make its municipal bonds a “buy.” With California in the heat of primary elections, this is good news no one seems to want to talk about. Inconvenient ties to the “vampire squid.” With taxes about to skyrocket everywhere, tax free municipal bonds are about to become more valuable. What’s this movie, "Fight Club", all about, anyway? (VCV), (NCP), (NVX).

Reggie Middleton's picture

Unemployment (real unemployment that is) is still rampant. The federal government is effectively funding and financing deficit state unemployment rolls (see below for more detail). With record bankruptcies, deleveraging consumers, and rampant unemployment combined with drastic drops in consumer expenditures, guess what retail stocks are doing??? Yep, you guessed it. Now, what happens when reality reasserts itself???

Morning Musings From Art Cashin

"Despite the contortions of the pundits, it looked (from the playing field) like the selloff was 75% Greece and, maybe, 25% Goldman. The selling was quite broad. Nearly 80% of the stocks that traded closed down. The added problem for the bulls was the increased volume brought on by the option expiration. That made Friday a clear distribution day in the key indices.
Traders headed for the ritual marination wondering what the next step in the Greece situation would be. Reports were that the ECB and IMF might be in Athens as early as Monday. It sparked the bulk of post close conversation." - Art Cashin