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Visualizing The Dead-Weight On The Global Economic Recovery

Tyler Durden's picture




 

Youth unemployment has become a worrying phenomenon with 74.6 million young people unemployed globally in 2012. Rising youth unemployment has a detrimental effect on economic growth, political and social stability as well as on the ability to exploit the potential demographic dividend. Young people who are neither in employment nor in education or training (NEET) are a particular social concern. The economic and social impact of a growing number of NEET young people aged 15 - 24 has raised concerns as they represent a dead weight burden.

 

15% of US youth population is 'dead-weight'

 

Source: Credit Suisse

 

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Thu, 04/25/2013 - 18:50 | 3500132 sunstreaker
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The Financial Stability Board (FSB) develops the policy makers’ strategic response to the banking crisis and directs its legal and institutional implementation in its jurisdictions, including the US and EU:

http://www.financialstabilityboard.org/

 

The FSB Plenary is comprised of the most senior representatives from Central Banks, Finance Ministries as well as from the main international bodies governing finance (FSB’s current chairman is Mark Carney, his predecessor Mario Draghi): 

http://www.financialstabilityboard.org/about/plenary.pdf

 

The FSB developed the so-called Bail-In. The main working paper is “Key Attributes of Effective Resolution Regimes for Financial Institutions.” It is candid and succinct. Specifically check points 3.5 & 3.6 titled: Bail-in within resolution:

http://www.financialstabilityboard.org/publications/r_111104cc.pdf

 

Equally to the point is the progress report, “Resolution of Systemically Important Financial Institutions,” from November 1st, 2012; it leaves no doubt that the Bail-In is indeed a template for many jurisdictions, amongst others those of the US and the EU:

http://www.financialstabilityboard.org/publications/r_121031aa.pdf

 

This is a major piece of the puzzle.

 

Why is nobody reporting on this?

 

Thu, 04/25/2013 - 18:56 | 3500161 Doubleguns
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Sunstreaker, enough already!!

Thu, 04/25/2013 - 18:59 | 3500165 sunstreaker
sunstreaker's picture

Did you read it?

Thu, 04/25/2013 - 19:06 | 3500191 dick cheneys ghost
dick cheneys ghost's picture

why dont you summerize it

Thu, 04/25/2013 - 19:10 | 3500210 ebworthen
ebworthen's picture

"All your money is ours."

or

"And...it's gone!"

Thu, 04/25/2013 - 19:16 | 3500230 dick cheneys ghost
dick cheneys ghost's picture

Got it....Thanks

Buy Gold/Silver!!

Fri, 04/26/2013 - 03:02 | 3501413 Oracle of Kypseli
Oracle of Kypseli's picture

Well said. Meanwhile, most important concept here that the youth is the group that .gov's are afraid off, as they are the ones that lead the revolutions.

Fri, 04/26/2013 - 04:11 | 3501456 Seer
Seer's picture

Don't know what it's like in other countries, but in the US the primary influencer of govt are older people.  It will be "older people" that are going to be afraid of the youth.

If there's a revolution then one cannot rule out a Logan's Run kind of result. (bastard banksters were "old people," right?)

Fri, 04/26/2013 - 07:30 | 3501636 Mentaliusanything
Mentaliusanything's picture

In the end they become "Cannon food". Its been the same since Christ wore nappies.

This time around, however it is not affordable even in Krugmans wet dreams.

Thu, 04/25/2013 - 19:14 | 3500226 sunstreaker
sunstreaker's picture

The bail-in is meant for everybody beginning 2013.

What happened in Cyprus happened according to plan.

I am giving you proof positive.

Why was nobody informed of the bail-in template, why is it being denied?

Thu, 04/25/2013 - 19:23 | 3500259 mayhem_korner
mayhem_korner's picture

 

 

That's not "news"...it's "olds."

Thu, 04/25/2013 - 19:30 | 3500280 sunstreaker
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Then you also know their next step, right? I do. I read their reports.

Fri, 04/26/2013 - 04:14 | 3501461 Seer
Seer's picture

Sorry, I'm too busy creating a world that doesn't rely on Them.  They can write whatever they want; and as many people fear some sort of OWG I do not- it ain't going to happen.

Don't confuse death throws with some sort of rebirth...  contrary to all the sci-fi flicks, in the real world the beast ALWAYS dies.

Thu, 04/25/2013 - 19:30 | 3500284 negative rates
negative rates's picture

Not everybody! Everybody doesn't have money.

Thu, 04/25/2013 - 19:07 | 3500194 Richard III
Richard III's picture

Which is the greater "dead-weight" exerted upon any global recovery: unemployed teenagers, or overbearing, indebted central governments ?

Fri, 04/26/2013 - 04:17 | 3501466 Seer
Seer's picture

We ought to dismiss the notion of "global recovery," for these reasons:

1) It's akin to some OWG- a collective;

2) WTF are we going to recover to, which previous bubble period?

3) There's insufficient natural capital with which to continue to push growth (for growth's sake).

Here's a fix:

Which is the greater "dead-weight" exerted upon life: unemployed teenagers, or overbearing, indebted central governments ?

Thu, 04/25/2013 - 19:08 | 3500206 smlbizman
smlbizman's picture

yes i read it...and if we just make minimum wage like 25.00 an hour that should help the youth unemployment problem.....i think the author may need to look further to see were the real dead wieght is....but im sure we will be off loading that dead wieght within 2 yrs. max when they start drafting them to help spread democracy in the entire world battlefield...

Thu, 04/25/2013 - 22:27 | 3500959 Colonel Klink
Colonel Klink's picture

"This is a major piece of the puzzle.

Why is nobody reporting on this?"

 

That's precisely why.

Thu, 04/25/2013 - 18:56 | 3500154 ebworthen
ebworthen's picture

TPTB better keep those kids fed and with a smart phone and other distractions.

However, at some point, when they see their parents and grandparents suffering, there will be hell to pay.

Watching these fresh-faced silver spoon kids from Ivy League business schools on Cramer's tour is nauseating.

Thu, 04/25/2013 - 19:39 | 3500320 knukles
knukles's picture

The answer is in the New Improved Miracle Cure of Eugenics.

Thu, 04/25/2013 - 18:55 | 3500155 Doubleguns
Doubleguns's picture

The true dead weigh is in the house, senate and white house.

Thu, 04/25/2013 - 18:57 | 3500160 Dr. Engali
Dr. Engali's picture

Hmmm record high youth unemployment and record high poverty. I'm pretty sure this will end well.

Thu, 04/25/2013 - 19:31 | 3500287 FieldingMellish
FieldingMellish's picture

Now all we need is a way to tell them we have already spent all their future earnings.

Fri, 04/26/2013 - 04:18 | 3501469 Seer
Seer's picture

No problem, as long as we don't have to also tell them that they'll have to pay OUR debts as well (while supporting us in old age).

Thu, 04/25/2013 - 20:14 | 3500504 negative rates
negative rates's picture

How so?

Thu, 04/25/2013 - 19:00 | 3500163 eatthebanksters
eatthebanksters's picture

As long as you have an imbalance between paying people wages that the market will bear or paying people what the government or unions demand, you will create a situation that to bring balance back to the market, a fissure will split (like an earthquake) until the pressure is diminshed and some type of balance is restored.  Its a natural fucking law.  The bill is coming due for all this happy horseshit welfare crap and the guys that want to protect all the little people are about to fuck them in the ass.  When the shit goes down and the 32 hour a week union member longshoreman no longer collects his $175k a year and his bennies go to shit, he can thank his greedy union bosses and the dumbshits in government that rewarded sloth instead of hard work and risk taking.  Same goes for every other overpaid motherfucker (including the bazillionaires)...it will all be settled but in a very painful way.

 

Welfare for thetruly needy is great...welfare for lazy fucks is bribery.

Fri, 04/26/2013 - 04:34 | 3501477 Seer
Seer's picture

Yeah, it's ONLY govt and unions that are to blame...

Not that I'm defending anyone, just defending logic.  Knock everyone's salary down to $1 and let me know how the logic holds up then.

TOO MANY PEOPLE AND TOO FEW RESOURCES.  You're seeing symptoms and not the root.  The root of the problem lies in the entire premise of perpetual growth on a finite planet.  In general everyone just kind of went along when the good times are happening (though nothing different was done then), it's only now that we start looking around at hungry people (well, we don't see them because we're to busy looking at longshoremen etc.) and hold on to what we have tighter.

It's not clear what you expect for results.  If it's to cut wages then I suppose that you could accomplish that, even though it'll happen anyway all by itself*.  If it's to create "growth" then I'm sorry to say that that won't happen: we're out of natural capital sufficient enough to bump us up another growth notch.

* Economies of scale in reverse will pull things back and then stuff them into the ground. We've scaled to such a high volume that it's distorted the true costs of natural resources; once the volume drops the cost of natural resources is going to be MUCH greater (and wages, by comparison, will be much less significant).

Thu, 04/25/2013 - 18:57 | 3500166 Bam_Man
Bam_Man's picture

"Dead weight" is right.

Global pandemic and/or thermo-nuclear war is all but "baked in the cake" at this point.

Thu, 04/25/2013 - 18:59 | 3500171 ugmug
ugmug's picture

Dead weight settles nicely into a plush couch holding a game controller and a bag of chips.

Thu, 04/25/2013 - 21:02 | 3500665 Kprime
Kprime's picture

right on bro, pass the cheetos.

The thing that really pisses the governments off, about all the unemployeed and workforce drop outs, is the fact they can't rape the non-existent income stream.  Guess they'll have to order blow up dolls all around.

Thu, 04/25/2013 - 20:59 | 3500667 Accounting101
Accounting101's picture

Come on now! We have been bitching about these kids since the time of Ancient Greece. Somehow we manage to keep rolling on.

Thu, 04/25/2013 - 21:05 | 3500676 ugmug
ugmug's picture

The dead weight gaming bubble will soon evolve into the dead weight riot bubble.

Thu, 04/25/2013 - 19:07 | 3500196 optionsman
optionsman's picture

parents and grandparents etc. will support their life style well into their late 30's. they will keep saying that "you cant take it with you anyway"......they hope that by supporting them this way they somehow are helping. which obviously cant be further from the reality.....

just saying

 

Thu, 04/25/2013 - 19:19 | 3500239 InconvenientCou...
InconvenientCounterParty's picture

dead weight can store a large amount of kinetic energy if it's perched. In this case it is.

Thu, 04/25/2013 - 22:19 | 3500934 Kprime
Kprime's picture

Stored energy is Potential.  Kinetic is the energy of motion.

Still, I like your point and agree with it. 

Thu, 04/25/2013 - 19:21 | 3500248 Dr. Engali
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If these kids had parents who taught them how to dress, talk, act, and work maybe somebody would want to hire them. I know this isn't the case with all the youth, but it certainly is with a big part of them.

Thu, 04/25/2013 - 19:53 | 3500399 Manipuflation
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Childrens.  Want any for "free"?

 

Fri, 04/26/2013 - 01:39 | 3501370 Lord Koos
Lord Koos's picture

If there aren't any jobs it doesn't matter if you apply in a Tuxedo speaking queen's english.

Fri, 04/26/2013 - 05:17 | 3501495 Seer
Seer's picture

Somehow I doubt that, in this economic downard spiral, much is going to make any difference.  We can pretend to dress them up for the pretend jobs I suppose...  But the reality is that they're probably becoming more versed in a future that WILL exist: ghetto.

Too many youth chasing too few jobs...

Thu, 04/25/2013 - 19:29 | 3500281 Manipuflation
Manipuflation's picture

WOW!  Thanks Canada.  You grow some fine **** up there.  Thanks for the cool silver coins too.

Thu, 04/25/2013 - 19:41 | 3500326 masaccio
masaccio's picture

What's the dead weight cost of the Koch Brothers and the creepy Walton heirs?

Thu, 04/25/2013 - 19:42 | 3500336 NoWayJose
NoWayJose's picture

This batch of dead weight is going to be paying your retirement... If they can find a job!

Thu, 04/25/2013 - 19:49 | 3500376 The Carbonator
The Carbonator's picture

The lazy are the modern day masters.

The true slaves are the taxpayers. If your cage is gilded it is still a cage after all.

If you work but half your labor is given to someone else you are a tax slave, no matter how nice your financed house is or how fancy your leased car is.

And what makes it sicker is that the half you get to keep is worthless fiat paper.

Thu, 04/25/2013 - 22:27 | 3500951 Kprime
Kprime's picture

Bravo.  Your point is even more powerful than most seem to realize.

The tax rape is so bad it now provides a strong motivation to stay off any "system" payroll.  We may find the best way to rid ourselves of the leeches that now call themselves government is to starve them.  There is more than one way to skin a cat.  Notice all these "unemployeed" are not dying of hunger or homelessness, but the gov can't suck them dry either.

Thu, 04/25/2013 - 20:04 | 3500451 PubliusTacitus
PubliusTacitus's picture

This is a recipe for mass Marxist revolution. 

 

That is the leftist goal - destroy the system, build it back up in their image, with them in power.

 

Molon labe

Thu, 04/25/2013 - 20:54 | 3500646 Accounting101
Accounting101's picture

You can't fix stupid!

Thu, 04/25/2013 - 22:58 | 3501047 Son of Loki
Son of Loki's picture

War is the remedy for all those Yutes. Remember, "the idle mind is the devil's workshop."

 

Better put an AR in their hands and send them off.

Fri, 04/26/2013 - 01:37 | 3501366 Lord Koos
Lord Koos's picture

Ship those youngsters off to fight in a couple of good sized wars, and problem solved...

Fri, 04/26/2013 - 01:43 | 3501375 DaveA
DaveA's picture

This is why it's so important for young people to stay in school until their late 20's.  It keeps them off the street.  Give 'em all A's if they show up for class; it's cheaper than giving them money.

Fri, 04/26/2013 - 03:41 | 3501434 dunce
dunce's picture

Most workers become more productive with more work experience. This has long term effects on the future because they are stagnant without a job. Retirees depend on current workers to provide goods and services. The pool of workers is shrinking because of birth control and if they are less productive it is even more negative. There is trouble from sea to shining sea,not just river city.

Fri, 04/26/2013 - 03:52 | 3501445 bunnyswanson
bunnyswanson's picture

lol

Fri, 04/26/2013 - 06:13 | 3501529 goldenbuddha454
goldenbuddha454's picture

Get rid of Minimum Wage and you'll see teens employed.  Again, its government's hand in business that creates unemployment.  If the freemarket were allowed to work, there would be alot more people employed than there are now.

Fri, 04/26/2013 - 09:23 | 3501991 andyupnorth
andyupnorth's picture

But that would lead to a [further] real estate collapse...

Fri, 04/26/2013 - 07:03 | 3501595 AnAnonymous
AnAnonymous's picture

Youth unemployment has become a worrying phenomenon with 74.6 million young people unemployed globally in 2012.
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