Congressional Budget Office
Few laws cause as much high blood pressure as the Affordable Care Act (ACA). Supporters of the law consider it the signature legislation of the Obama administration. Yet, in 2011 the House of Representatives passed the “Repealing the Job-Killing Health Care Law,” one of more than 40 attempts to scuttle the legislation. Public opinion polls are ambiguous: most Americans are against the law as a whole and yet most support many of its provisions. BofAML tries to slice through the partisan debate and show what serious research says about how the ACA will impact the labor market.
From budget projections released by the Congressional Budget Office (CBO) last week:
CBO now expects that output will fall slightly short of its potential, on average, even after the economy has largely recovered from the recent economic downturn.
We’ve thrown in the towel on our long-time assumption that the economy never again falls into recession.
Shocker: the business cycle lives!
Today, more than 10,000 Baby Boomers will retire. This is going to happen day after day, month after month, year after year until 2030. It is the greatest demographic tsunami in the history of the United States, and we are woefully unprepared for it. We have made financial promises to the Baby Boomers worth tens of trillions of dollars that we simply are not going to be able to keep. Even if we didn't have all of the other massive economic problems that we are currently dealing with, this retirement crisis would be enough to destroy our economy all by itself. During the first half of this century, the number of senior citizens in the United States is being projected to more than double. As a nation, we are already drowning in debt. So where in the world are we going to get the money to take care of all of these elderly people?
Low-wage workers clocked the shortest workweek on record in December - even shorter than at the depth of the recession, new Labor Department data showed Friday. The figures underscore concerns about the Obamacare employer insurance mandate's impact on the work hours and incomes of low-wage earners. Still, as Krugman told Colbert recently, he's "ok with a little bit of wealth redstribution from people who have been lucky to people who are unlucky."
WaPo Praises The Joy Of Being "Untethered" And "Unleashed" From A Job, The "Freedom" Of UnemploymentSubmitted by Tyler Durden on 02/09/2014 18:37 -0400
Now that the full court press to refute the findings of the CBO report which, as we reported, confirmed what was largely known - that as a result of Obamacare, the strapped US economy will have even fewer workers as millions will fall back on welfare state entitlements which make hard work obsolete - has failed, it is time for the propaganda to take a different track: one where not having a job, and in fact losing it due to Obamacare, is hailed as an act of nobility. Sure enough, here comes one of the administration's favorites, the Bezos Times, with "They quit their jobs, thanks to health-care law" which does largely as its name suggests: highlights just how "enabling" and "liberating" Obamacare is for one's life, once a person is no longer burdened by something as trivial as a job.
Today, the pundits are a-buzz making sense of the latest jobs report. But most of us care more about the state of one particular job: our own. How relevant is this latest bit of data to that? Not very. So, to better understand the trends in the work environment most likely impact our own paychecks, it will help to look at another bellwether similar to our fuzzy groundhog friend: AOL. AOL, a once-important pioneer in the transition to the 'digital economy', is once again showing us where the future of work is headed. Unfortunately, like the health of AOL's business over the past decade, it's not a pretty picture. As we've transitioned to an economy in which corporate profitability -- and thereby, stock prices -- is THE metric for success, the employer-employee relationship has become much more superficial than in past generations; and the encroachment of automation remove income options for those temporarily out of work, but it's increasingly limiting the options for the large pool of unskilled labor with few other alternatives
The taper program distances the bankers from responsibility for crisis in our financial framework, at least in the eyes of the general public. If a market calamity takes place while stimulus measures are still at full speed, this makes the banks look rather guilty, or at least incompetent. People would begin to question the validity of central bank methods, and they might even question the validity of the central bank’s existence. The Fed is creating space between itself and the economy because they know that a trigger event is coming. They want to ensure that they are not blamed and that stimulus itself is not seen as ineffective, or seen as the cause. We all know that the claims of recovery are utter nonsense. The taper is not in response to an improving economic environment. Rather, the taper is a signal for the next stage of collapse. The real reason stocks and other indicators are stumbling is because the effectiveness of stimulus manipulation has a shelf life, and that shelf life is over for the Federal Reserve.
The death of the middle class in America has become so painfully obvious that now even the New York Times is doing stories about it. Millions of middle class jobs have disappeared, incomes are steadily decreasing, the rate of homeownership has declined for eight years in a row and U.S. consumers have accumulated record-setting levels of debt. Being independent is at the heart of what it means to be "middle class", and unfortunately the percentage of Americans that are able to take care of themselves without government assistance continues to decline. In fact, the percentage of Americans that are receiving government assistance is now at an all-time record high. This is not a good thing. Anyone that tries to tell you that the middle class is going to be "okay" simply has no idea what they are talking about. The following are 28 signs that the middle class is heading toward extinction...
"Markets were over-priced coming into 2014," warns Sam Zell (noting that he does not believe in the Fed's wealth effect perspective on market-growth helping buying and selling decisions in the real economy), but while he sees a benign outlook for residential real estate, among his biggest concerns are "half-assed" Obamacare's "deleterious effect on the USA" and its "need to be radically changed." Supportive of Carl Icahn and his 'capitalist activism', Zell adds rather frankly that he believes Tom Perkins was correct about the "the 1%... for political convenience," and reminds Bloomberg TV's Betty Liu that "the politics of envy, the politics of class warfare are what has separated America from many parts of the rest of the world," until now.
- Goldman to Fidelity Call for Calm After Global Stock Wipeout (BBG)
- Turnabout on Global Outlook Darkens Investor Mood (Hilsenrath)
- EU Said to Weigh Extending Greek Loans to 50 Years (BBG)
- Second Storm Hitting Northeast Halts Planes, Schools (BBG)
- Small Banks Face TARP Hit (WSJ)
- As Sony prepares PCs exit, pressure mounts for reboot on TVs (Reuters)
- IBM Uses Dutch Tax Haven to Boost Profits as Sales Slide (BBG)
- ECB faces dilemma with inflation drop (FT)
- London Subway Strike Snarls Traffic as Union Opposes Cuts (BBG)
Earlier we reported how, in the CBO's own words, Obamacare would result in (at least) 2.5 million (soon to be revised much higher) workers departing the labor force over the next decade, that would stay there were it not for the skewed incentives provided by this latest welfare Ponzi scheme. Sure enough, it took the White House mere moments to share its canned retort seeking to control the major fallout this report generated as it goes, once again, against all of Obama's promises. From Reuters: "The White House on Tuesday refuted arguments that Obamacare reforms will hurt jobs, and said a new report from the Congressional Budget Office finds the reforms will spur hiring during the 2014-2016 period. "Claims that the Affordable Care Act hurts jobs are simply belied by the facts in the CBO report," the White House said in a statement about the report, contradicting assessments that said the CBO showed reforms will result in a cut to hours." So job losses after 2016, but before then the surge in hiring - of part-time workers - offset by mass layoffs of full-time workers as employers seek to game Obamacare. Just say that then.
When the "impartial" Congressional Budget Office first attempted to predict the impact on the US labor force as a result of the administration healthcare ponzi scheme, also known affectionately as Obamacare and less affectionately by other names, it estimated that 800,000 Americans would drop out of the labor force by 2021. Moments ago it just revised that projection, admitting that it was off by the usual 100% or so: the hit to the US labor force due to Obamacare is now estimated to so0ar to 2.3 million through 2021, and furthermore the CBO just admitted that the enrollment rate will be dramatically below the White House's baseline estimates, with 2 million fewer people signing up this year than previously estimated.
It is still all about the Yen carry which overnight tumbled to the lowest level since November, dragging the Nikkei down by 4.8% which halted its plunge at just overf 14,000, only to stage a modest rebound and carry US equity futures with it, even if it hasn't helped the Dax much which moments ago dropped to session lows and broke its 100 DMA, where carmakers are being especially punished following a downgrade by HSBC of the entire sector. Also overnight the Hang Seng entered an official correction phase (following on from the Nikkei 225 doing the same yesterday) amid global growth concerns and has filtered through to European trade with equities mostly red across the board. Markets have shrugged off news that ECB's Draghi is seeking German support in the bond sterilization debate, something which we forecast would happen a few weeks ago when we pointed out the relentless pace of SMP sterilization failures, with analysts playing down the news as the move would only add a nominal amount of almost EUR 180bln to the Euro-Area financial system. Elsewhere, disappointing earnings from KPN (-4.3%) and ARM holdings (-2.5%) are assisting the downward momentum for their respective sectors.
Alarms are going off in assorted plunge protecting offices, now that the USDJPY has breached the 102.000 "fundamental" support level, below which the Yen can comfortably soar to sub 100.000 in perfectly even 100 pip increments. The first trading day of February has brought another weaker session across Asia though some equity indices such as the KOSPI (-1.1%) are in catch-up mode given they were shut towards the back-end of last week. Over the weekend, the Chinese government published its latest official manufacturing PMI which showed a 0.5pt drop to 50.5, a six-month low, and consistent with consensus estimates. DB’s Jun Ma believes there was some element of seasonality affecting this month’s result including the fact that Chinese New Year started at the end of January (vs February last year), anti-pollution measures in the lead up to CNY and efforts to control government consumption around the holiday period. The official service PMI was released overnight (53.4) which printed at the lowest level since at least 2011. The uninspiring Chinese data has not helped market sentiment this morning, with the Nikkei plunging -2% and ASX200 once again under pressure. S&P500 futures have fluctuated around the unchanged line this morning although if support below the USDJPY fail solidly, then watch out below. Markets in Mainland China and Hong Kong remain closed for Lunar New Year.