This page has been archived and commenting is disabled.

Are Another 1.3 Million Americans About To Drop Out Of Labor Force (And Send Unemployment Plunging)?

Tyler Durden's picture





 

With even the Fed somewhat challenging the credibility of the official unemployment rate - as labor force participation collapses structurally - the possibility that if Congress does not act by Dec 28th, a further 1.3 million people will lose emergency aid and may be deemed 'out' of the labor force merely exaggerates an already farcical situation. As JPM's Mike Feroli notes, the "official" unemployment rate may drop up to 0.8 percentage points, but it won't mean the economy is any better. Is this the 'excuse' the Fed needs to transition from QE to forward guidance (with the public seeing only a rapidly collapsing unemployment rate as evidence of their success) even as the data that they are so "dependent" on becomes worse than useless?

 

As we warned in November, the only two charts that matter ahead of Friday's likely distorted nonfarm payrolls report.

First, the labor force participation rate, which plunged from 63.2% to 62.8% - the lowest since 1978!

 

But more importantly, the number of people not in the labor force exploded by nearly 1 million, or 932,000 to be exact, in just the month of October, to a record 91.5 million Americans! This was the third highest monthly increase in people falling out of the labor force in US history.

At this pace the people out of the labor force will surpass the working Americans in about 4 years.

 

And if the Congress does not pass the bill to extend emergency aid - set to expire Dec 28th - then up to 1.3 million more people will be added to that list of 91.5 million already our of the labor force (and another 800,000 more to come in further months)...

This has profound implications for the oh-so-important unemployment rate that  the Fed is so dependent upon...

JPM's Feroli: One observation that could set an upper bound on thinking about a participation effect is to hypothesize that all 1.3 million EUC claimants exit the labor force after benefits expire in 1Q (again, should Congress allow that to happen). In that case, the unemployment rate would fall by 0.8%-pt, obviously an extreme example. Some of the Fed studies can help to narrow the range of outcomes.

 

One of the more recent works (Farber and Valletta from the San Francisco Fed) indicates that about a fifth of long-term unemployment is due to extended benefits. With just over 4 million long-term unemployed recently, this would imply that the absence of extended UI benefits could lower the unemployment rate by 0.5%-pt.

This will directly impact the Fed's credibility to manage the economt in a "data-dependent" manner:

JPM's Feroli: Setting aside the normative aspect of whether from a public policy perspective this is a desirable or undesirable outcome, such a fall in the unemployment and participation rates could create some tricky choices for Fed policymakers as they assess the health of the labor market.

Remember, while consensus is convinced Taper is a positive (the Fed wouldn't pull back unless everything is golden); we suspect, and today's Treasury Auction Failure supports that thesis, that the Fed is looking for excuses to Taper (or shift policy away from QE)...

As we have noted numerous times before; the "taper" is all about economic cover for a forced move the Fed has to make:

 

1. Deficits are shrinking and the Fed has less and less room for its buying

 

2. Under the surface, various non-mainstream technicalities are breaking in the markets due to the size of the Fed's position (repo markets, bond specialness, and fail-to-delivers among them).

 

3. Sentiment is critical; if the public starts to believe (as Kyle Bass warned) that the central bank is monetizing the government's debt (which it clearly is), then the game accelerates away from them very quickly - and we suspect they fear we are close to that tipping point

 

4. The rest of the world is not happy. As Canada just noted, the US monetary policy will be discussed at the G-20

Simply put, they are cornered and need to Taper; no matter how bad the macro data and we are sure 'trends' and longer-term horizons will come to their rescue in defending the prime dealers' clear agreement that it is time...

 


- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Mon, 12/02/2013 - 15:44 | Link to Comment Four chan
Four chan's picture

even santa deserves an obama phone and an ebt card,

Mon, 12/02/2013 - 16:34 | Link to Comment NotApplicable
NotApplicable's picture

I see that "Taper Tyler" made it in to work today.

Sure they "have to" taper. Problem is, that's an instantaneous endgame move, and thus is wholly moot in this version of reality.

Mon, 12/02/2013 - 16:56 | Link to Comment SamAdams
SamAdams's picture

The FED doesn't want to taper, even if the unemployment rate decreases, they will find weakness which justifies further easing (bank bailouts).  It's not yet time to completely destroy the strength of America, but soon.  Remember, the profane still have their guns (NYC and CA excepted).

Labor participation rate is a classic head and shoulders pattern, but we all know technical charting means nothing when the invisible hand is at work.

 

Mon, 12/02/2013 - 17:46 | Link to Comment aVileRat
aVileRat's picture

Remember how Death of a Salesman was the siren call for that 'lost' generation crushed in the 1929 stock crash ? How they all wanted meaning to their lives and One More Deal ? How the flower children rallied and hated their 'arrogant' parents for their blind consumerism and clinging to the talking points of corrupt think tanks pre-war ?

Yeah. Good times.

Energy progressive taxation, healthcare expenses (drug & insurance) and non-core inflation will drive people into a desperate hunt for yield to offset their declining purchasing power. Their generational shame as pensions & retirement plans returning 3% (net trailer) are falling vs. a 50% ROI market will force them into higher risk assets. They will MOMO seeking The One More Deal to offset the gambler remorse of 2007 and validate their egos stoked by 40 years of direct-to-consumer marketing pushes. Their lacks of functional families, borne of their rabid support of progresive family structures have left them alone in old age. The only thing holding them together is the media message drilled into them since 1960 George Lois ads which told them they were 'unique' and a superior generation. They will cling to that superiority through ethical product purchasing no matter how bad it hurts their dwindling savings.

Like Willie Loman, they are going to be the elderly greeter at the door of your big box store or retail dealership. They will never retire. It will be worse than Japan because their remorse will become resentment at the next generation. They who never had ambition to build their own firm or speak their mind will suddenly feel that the world deserves their 'wisdom' and in turn, economic growth must become their charity.

On that note, who's up for some beer pong & Amazon cyber monday sales ?

 

Mon, 12/02/2013 - 18:58 | Link to Comment Son of Loki
Son of Loki's picture

I'm too busy watching Duck Dynasty re-runs to play beer pong with you today. Sorry.

Mon, 12/02/2013 - 16:39 | Link to Comment rubiconsolutions
rubiconsolutions's picture

But....but...but..CNBC tells me the economy is improving.

Mon, 12/02/2013 - 16:57 | Link to Comment SamAdams
SamAdams's picture

The economies of CEO's, Chairman's, Treasury Secretaries and Mammonite Politicians have increased, aren't you paying attention?

Tue, 12/10/2013 - 19:44 | Link to Comment Debeachesand Je...
Debeachesand Jerseyshores's picture

The title should read: "Another 1.3 Million Non-People will be dropped from the Public Conscious.

Mon, 12/02/2013 - 15:45 | Link to Comment Al Huxley
Al Huxley's picture

Those are the new bitcoin millionaires.  Also, I don't think the shrinking deficit will be a long-term problem for the FED.

Mon, 12/02/2013 - 15:50 | Link to Comment NoDebt
NoDebt's picture

"Also, I don't think the shrinking deficit will be a long-term problem for the FED."

Thank you for that, Al.  It's been my thesis all along.

Mon, 12/02/2013 - 15:45 | Link to Comment NoDebt
NoDebt's picture

Unemplyment rate, perhaps the only number even less relevant than GDP.

Mon, 12/02/2013 - 20:53 | Link to Comment BraveSirRobin
BraveSirRobin's picture

I had an economics professor who loved to say "Figures don't lie, but liers love to figure." He harped on the unreliability of government data. He had a theory that there was a strong inverse correlation between government lies in economic data and freedom.

Mon, 12/02/2013 - 15:45 | Link to Comment Bay of Pigs
Bay of Pigs's picture

Fascinating, bewildering and utterly tragic all at the same time.

Mon, 12/02/2013 - 15:57 | Link to Comment Grande Tetons
Grande Tetons's picture

Think of it this way...the Fed is on pace to own the Bond market and eliminate the labor market. Now that is fucked up. 

 

I guess we are all going to get paid to stay at home. 

Mon, 12/02/2013 - 16:04 | Link to Comment depression
depression's picture

Win / Win for the Progressives.

This is Price Fixing on a Grand Scale.

Once they own everything (capital, labor and production capacity), they can set the price of everything at what they deem to be a 'fair' value.

It's really quite an ingenious plan.

Mon, 12/02/2013 - 19:17 | Link to Comment mvsjcl
mvsjcl's picture

They all ready own everything. They're tired of pretending that they don't, and would rather just have it out in the open.

Mon, 12/02/2013 - 15:46 | Link to Comment the not so migh...
the not so mighty maximiza's picture

They can never taper, even if they stop counting everyone and unemployment becomes 0.

Mon, 12/02/2013 - 16:10 | Link to Comment Lore
Lore's picture

Re: "the people out of the labor force will surpass the working Americans in about 4 years."

Anyone who doesn't believe we face absolute, imminent, wrath-of-God CRISIS is ignorant, a fool or a lying psychopath.

Mon, 12/02/2013 - 15:49 | Link to Comment Dr. Engali
Dr. Engali's picture

Lol...you used "fed' and 'credibility' in the same sentence .....twice. Could you keep a straight face while typing this?

Mon, 12/02/2013 - 15:54 | Link to Comment krispkritter
krispkritter's picture

That can be a new ZH word: 'Fedibility', lacking any and all credibility to the point of causing one to cackle hysterically.

Mon, 12/02/2013 - 15:47 | Link to Comment krispkritter
krispkritter's picture

And I'll give you three guesses as to who will take credit for the drop and the first two(like the 1.3 million), don't count.

Mon, 12/02/2013 - 16:02 | Link to Comment insanelysane
insanelysane's picture

You need to sell the sizzle to the sheeple.

Mon, 12/02/2013 - 16:38 | Link to Comment Vampyroteuthis ...
Vampyroteuthis infernalis's picture

And I'll give you three guesses as to who will take credit for the drop and the first two(like the 1.3 million), don't count.

I need just one and he is too busy playing basketball to perform his job.

Mon, 12/02/2013 - 17:02 | Link to Comment SamAdams
SamAdams's picture

Basketball?  Is that what the Larry Sinclair types are calling it these days?

Mon, 12/02/2013 - 15:47 | Link to Comment NoDebt
NoDebt's picture

"As we have noted numerous times before; the "taper" is all about economic cover for a forced move the Fed has to make"

Yes, I know, I keep hearing that being said.  Let's see it happen.  And let's see it stick for more than 6 months.

What QE is breaking probably isn't as bad as what's going to break if they stop.

Mon, 12/02/2013 - 18:44 | Link to Comment OneTinSoldier66
OneTinSoldier66's picture

She tapers me, she tapers me not

She tapers me, she tapers me not

.

.

.

 

Mon, 12/02/2013 - 15:49 | Link to Comment Dollar Bill Hiccup
Dollar Bill Hiccup's picture

A farcical feedback folly.

Mon, 12/02/2013 - 15:58 | Link to Comment Tsar Pointless
Tsar Pointless's picture

Fucking funny.

Mon, 12/02/2013 - 15:49 | Link to Comment RaceToTheBottom
RaceToTheBottom's picture

Any amounts the long term unemployed decrease, the disabilities and normal welfare ranks will increase.

Mon, 12/02/2013 - 15:50 | Link to Comment semperfi
semperfi's picture

when everyone is "out of the labor force" the unemployement rate will be 0%

Mon, 12/02/2013 - 15:53 | Link to Comment NoDebt
NoDebt's picture

They're only human, semperfi.  They're doing everything they can to get us there as quickly as possible.

You are young.  You will live to see that day.

Mon, 12/02/2013 - 15:51 | Link to Comment yogibear
yogibear's picture

Knew of another able bodied person approved for Social Security disability.

More voters for the FSA, Obama phones, free healthcare,  free housing and food stamps.

See, the unemployed really doesn't matter Bernanke/Yellen will just print more and buy up all the trillions in US debt.

Bernanke/Yell and the Fed will have to increase QE from $85 billion/month to $100 plus billion/month.

Mon, 12/02/2013 - 16:08 | Link to Comment insanelysane
insanelysane's picture

I've told this story a few times.  Wifey works in city in the northeast with mostly minority workers.  One person had early onset of alzheimer's and was making critical errors in their job and it was a person that worked for 35 years.  No one could figure out how to legitimately get the person SSI disability.  Seriously, it took almost a year to get the person any benefits because the SYSTEM isn't set up to handle legitimate cases.  In the interim, the company took it on the chin and gave the person menial tasks to do.

Mon, 12/02/2013 - 16:29 | Link to Comment Nick Jihad
Nick Jihad's picture

Too bad they weren't a firefighter with a "back injury".

Mon, 12/02/2013 - 15:51 | Link to Comment Keyser
Keyser's picture

And the 30 year Treasury rate was 8.5% in 1978... Mortgage interest rates were at 9%. A far different picture from today with the derivatives market looming in the background should the rates go up. 

Mon, 12/02/2013 - 15:50 | Link to Comment NOTaREALmerican
NOTaREALmerican's picture

Have the newly unemployed explored the exciting new field of Delivery Drone repairman?  

My TBTF Zombie has student loan funds available now.    Operators are standing by.

Mon, 12/02/2013 - 15:52 | Link to Comment Keyser
Keyser's picture

Only if the drones are equiped with Hellfire missiles. 

Mon, 12/02/2013 - 15:50 | Link to Comment Al Huxley
Al Huxley's picture

1) Deficits won't be shrinking for any extended period

2) I don't think its technicalities that are breaking the market so much as rampant corruption and regulation intended to support rather than prevent that corruption

3) Ben or Janet or Barry just need to tell the public that the debt's not being monetized and then there's no problem

4) The rest of the world can go fuck themselves.

 

So Ben, Janet, carry on, everything's under control...

Mon, 12/02/2013 - 15:55 | Link to Comment NoDebt
NoDebt's picture

"4) The rest of the world can go fuck themselves."

You can't see it through the internet but I'm having a good belly laugh because that's exactly the phrase that popped in my head when I read it.

Man, if we're wrong about this, our cynical old asses are gonna get TORCHED on this one.

Mon, 12/02/2013 - 16:02 | Link to Comment Al Huxley
Al Huxley's picture

Yes, very true - maybe it really IS different this time...

Mon, 12/02/2013 - 17:00 | Link to Comment GreatUncle
GreatUncle's picture

In all previous cases the abilitiy to kick the can down the road was possible...

It will be different this time if the can no longer be kicked any further.

 

Mon, 12/02/2013 - 17:10 | Link to Comment SamAdams
SamAdams's picture

These guys know the ponzi is coming to an end.  That is why they ran up the derivatives, to cash out.  Their derivatives are senior to creditors (savings in a bank).  The ponzi started at $1.00, which is now worth maybe $.04.  This is known as the end.

It won't be the end of the corporation, just an end to your bill of rights explicitly.  A complete fascists socialist makeover from the land of the free to the land of the slave.

Mon, 12/02/2013 - 18:53 | Link to Comment OneTinSoldier66
OneTinSoldier66's picture

"Yes, very true - maybe it really IS different this time..."

 

Yep. And FDR didn't outlaw the money in use at the time of his reign by dictatorial executive order, AND, there was no Great Depression.

 

Those are just myths! ;-)

Mon, 12/02/2013 - 15:53 | Link to Comment I am Jobe
I am Jobe's picture

I thought the AMZN Drone delivery might create some futuristic jobs, So everyone can qualify to fly drones in the future 

Mon, 12/02/2013 - 15:57 | Link to Comment walküre
walküre's picture

What does it matter anymore? The Kremlin had fantastic business sense which is why there was no unemployment in the old Soviet Union. The news was always positive. The people that were asked for their opinion, had a gun held to their head to confirm just how happy everyone was.

Stick a fork in it. We're done.

Mon, 12/02/2013 - 15:57 | Link to Comment Uchtdorf
Uchtdorf's picture

Every day we get closer to seeing if some new .gov program or regulation is going to be that proverbial camel back-breaking straw. We producers will eventually just stop producing.

Mon, 12/02/2013 - 16:11 | Link to Comment I am Jobe
I am Jobe's picture

USSA is a Nation of Laws and Regulations. More power to Corp and Lobbysists.

Waiting for the Happy Pill truck to arrive 

 

Mon, 12/02/2013 - 16:11 | Link to Comment yogibear
yogibear's picture

Why produce when the government will take more of it and distribute it to the FSA?

Communism/socialism in the making. Eventually the government tells you to share housing.

Belong to the communist party and the union to get more.

Mon, 12/02/2013 - 15:57 | Link to Comment Nex
Nex's picture
GALLUP DAILY

Nov 29-Dec 1, 2013 –
Unemployed: 8.3%
Interesting thing is compared to Dec 1. 2011.(2012 is huge manipulation, presidential elections)-
Unemployed: 8.5%
For 2 years:0.2% improvement. Not bad for $1 trillion print and ZIRP.

 

Mon, 12/02/2013 - 15:58 | Link to Comment Kreditanstalt
Kreditanstalt's picture

There are TWO economies in this no-growth world.  

The one for people with paychecks looks quite healthy, at least to them.  They buy and sell from one another.  Some of them produce actual goods.  They buy the vacations, the i-gadgets, the campers and RVs and eat in restaurants.  These people buy the $19 take-out pizzas and $3.50 coffees and they don't think twice before doing so.  They keep NFLX and TSN in business... 

The problem is that that economy is SHRINKING, while the bigger one composed of us peasants is growing rapidly...

Mon, 12/02/2013 - 16:07 | Link to Comment NOTaREALmerican
NOTaREALmerican's picture

Re:  There are TWO economies in this no-growth world.  

There's also another way to look at it:

There's the "most fit" (aka top 10%) who own most of the corporations and politicians (so,  indirectly own the government).   And there are the unfit (the losers in the bottom 90%) who are just food for the "most fit".  

Survival of the fittest, bitches!!!

Mon, 12/02/2013 - 16:36 | Link to Comment Nick Jihad
Nick Jihad's picture

I don't see that. It seems to me that a lot of people who work for a living, perhaps most, are worse off than if they joined the FSA. Not me, thank goodness, but I still wonder what keeps those working poor on the job - we'd all be in a hell of a fix if they decided to bail.

Mon, 12/02/2013 - 17:51 | Link to Comment Exponere Mendaces
Exponere Mendaces's picture

Reminds of a story from a sci-fi series.

They land at this outpost, and everything seems normal, homes and families, green grass, etc..

After a few disappearances, the team starts to question their surroundings, and finds out the outer shield that protects the town used to be much larger - the atmosphere is toxic - and over the years, as the energy cells started to give out, the shield was reduced, dooming those outside the perimeter.

Apparently everyone was wired with some kind of Google Glass bluetooth-from-hell device, so it would just retroactively edit their memories so nobody would question the neighbors disappearing.

Just like the participation rate going "down". Its just contracting until there's nothing left, like the doomed townspeople.

I guess the news media are the memory redacting part of the story, since it never gets mentioned.

Mon, 12/02/2013 - 16:01 | Link to Comment ebworthen
ebworthen's picture

They stopped counting me over a year ago.

Pretty soon I'll have to apply for Medicare, S.S. Disability, EBT/Food Stamps.

Tick-tock, tick-tock, goes the clock.

Mon, 12/02/2013 - 16:13 | Link to Comment yogibear
yogibear's picture

"Pretty soon I'll have to apply for Medicare, S.S. Disability, EBT/Food Stamps."

Go for it! Join the FSA. It's becoming a very strong and self-enforcing base.

Eventually the FSA demands to split up all those huge houses in the Hamptons in this transition to communism.

Mon, 12/02/2013 - 16:08 | Link to Comment I am Jobe
I am Jobe's picture

REPORT: Chinese Officials Barged Into Bloomberg News For An 'Inspectio

Read more: http://www.businessinsider.com/chinese-officials-inspect-bloomberg-news-2013-12#ixzz2mLlcTMRw

Mon, 12/02/2013 - 16:52 | Link to Comment insanelysane
insanelysane's picture

Chinese were just looking at better ways to put out propaganda.  Bloomberg is doing just fine for O.

Mon, 12/02/2013 - 16:09 | Link to Comment squid427
squid427's picture

The fed has already tapered twice, at the end of QE1 & QE2, and what did it get us? More QE.

Mon, 12/02/2013 - 16:10 | Link to Comment Van Halen
Van Halen's picture

1. More people drop out of the labor force.

2. The numbers of people working versus those who are looking for work increase.

3. Unemployment plummets.

4. Success!

5. Because... Obama!

Mon, 12/02/2013 - 16:11 | Link to Comment Meat Hammer
Meat Hammer's picture

Cloward-Piven 2016

Mon, 12/02/2013 - 16:17 | Link to Comment SheepDog-One
SheepDog-One's picture

Soon america will have 1 full time employee, and that will represent a 100% employment number.

Mon, 12/02/2013 - 16:23 | Link to Comment starman
starman's picture

they dont call us the richest nation for nothing!!

Mon, 12/02/2013 - 16:37 | Link to Comment yogibear
yogibear's picture

More people living off the government tit the more liberal and democratic voters there are.

Self-enforcing socialism.

Just submit more bills and pass them to take more from those that have assets. A revolutionary party like 

in Cuba in the late 1950's, The  old Soviet Union to seize assets and distribute will become the new US.

Mon, 12/02/2013 - 17:14 | Link to Comment walküre
walküre's picture

When the 1.2 million unemployed drop off the assistance, where do they go? Is there another program to assist them further? I don't think it's that simple or is it?

Labor participation rate is more telling. The truest indicator of all is the underground economy where nothing gets reported and all transactions are cash or barter. I guarantee that there is a boom in non reported economic activity which is creating a subculture, a sub economy and a sub currency. Eventually it will morph into a sub state or sub civilisation. At what point does it have critical mass to outnumber the apologists for the status quo who still think they're in charge?

Mon, 12/02/2013 - 16:39 | Link to Comment NEOSERF
NEOSERF's picture

Viva l'America...we too can have 53% of our citizens on the dole

Mon, 12/02/2013 - 16:41 | Link to Comment Nick Jihad
Nick Jihad's picture

For your shadenfreude delectation:

I am absolutely certain that generations from now, we will be able to look back and tell our children that this was the moment when we began to provide care for the sick and good jobs to the jobless; this was the moment when the rise of the oceans began to slow and our planet began to heal;

Mon, 12/02/2013 - 16:50 | Link to Comment starman
starman's picture

did I mention there were 7Million less shopers this black Friday? They must of took their holiday vacations early.

Mon, 12/02/2013 - 17:11 | Link to Comment Dre4dwolf
Dre4dwolf's picture

There is nothing to buy, i didn't buy a damned thing this black friday.

O wait not true, i got some 7$ game because I was bored, but that less than I find in the folds of my sofa.

Kinda regretting my purchase.

Mon, 12/02/2013 - 16:52 | Link to Comment adr
adr's picture

I ain't need no job. I's had jobs befere, buts kept losin em causef my drug probem.

I founds outs bout dis program where's some guy gits you on disbility for hundred dollas. Nows I don't have to work at alls. Gets me like twennyfive hundred a month. Free cell phone, medicaid, some food stamps too. 

Then the guy was like, you don'ts see so good do you. I was like, no I'z barely see past what's five inches front my face. Guy said I must be gettin cataracts. So then he gets me a medicinual marijuana card. Now i'z even gets my drugs fo free.

Damn, this nots workin thin better than sex. With the cash I gots, prolly gets me sum of thats too.

This class is soon to outnumber the working class in America, and we have a future?

Written in hilbilly enrages people do do something about it. If I wrote it in ebonics then I'm just a racist who doesn't care about poor black people.

Mon, 12/02/2013 - 17:10 | Link to Comment Dre4dwolf
Dre4dwolf's picture

Thats the real zombie apocalypse.

It has a 68% chance of happening.

 

Mon, 12/02/2013 - 17:24 | Link to Comment lakecity55
lakecity55's picture

I'd say a 100% chance of happening.

stack and pack, amigos.

Mon, 12/02/2013 - 17:24 | Link to Comment walküre
walküre's picture

sounds almost like someone made an industry out of this and hired "a guy" to tell the people where to get what they need

where's some guy gits you on disbility

sorta like a recruiter for FSA

The commies ruled the streets in Germany before the brownshirts came in and cleaned up. It wasn't a fun time for either side of the game. Both were played like a fiddle. The Cossacks paid for the show.

Tue, 12/03/2013 - 06:41 | Link to Comment kurt
kurt's picture

I say old chap, I needn't avail myself of gainful employ either. I bought stock in the private companies that now run your jails. When your "guy" friend and you are in jail for disability fraud you'll be working plenty hard... for me as you labor in our sweat shops in the daytime and nurse your torn anal sphincter while crying yourself to sleep at night. Talley Ho!

Mon, 12/02/2013 - 16:53 | Link to Comment Doom and Dust
Doom and Dust's picture

Can't you see? Central Cosa Nostra used the dual mandate to pin the unemployment rate treshold for tightening to I think it's 7,9% or sth even more arbitrary.

Even if reached, bankers will claim numbers are fudged because of labor market exits. Ergo, no taper or tightening until some combination of unemployment treshold and participation. Ergo, QE a.i.

 

Mon, 12/02/2013 - 17:08 | Link to Comment Dre4dwolf
Dre4dwolf's picture

Lol if bitcoin takes off and people start getting paid in bitcoins.

The entire financial sector will endup unemployed.

Bitcoin is probably the worst thing that could happen to the economy right now, it would cause unemployement to skyrocket.

Not that it would bother me in the least.

 

Mon, 12/02/2013 - 17:22 | Link to Comment lakecity55
lakecity55's picture

They may be off the labor force, but they are still Out Of Work.

Backdoor Barry's handlers are doing a superb job of utterly destroying America; they have already destroyed health care and energy.

Tell me again, why is this "man" of unknown identity still "in office?"

America deserves every single shit sandwich coming down the pike; this fuckhole and his crew should already be in prison.

Mon, 12/02/2013 - 17:39 | Link to Comment novictim
novictim's picture

This extended unemployment crisis, the collapse of consumer spending as well as the decline in home ownership rates are directly the result of the US Government -NOT- following a FDR style Keynesian economic policy.

This Obama administration's allegiance to:
1) low taxation of the rich,
2) zero-Tariffs policy and continued subsidization of job exporters,
3) agreement to extend MASSIVE Bailouts of the banking, insurance and financial markets,
4) shrinking Federal, State, and Local government (regulators, teachers, outsourcing infrastructure spending, etc),
5) and a continued reliance on the OIl/GAS sector
have all made this Presidency worse even then Bill Clinton's.

If you want this Right Wing Democratic Crony Capitalism out of office then you had better start organizing under Socialist and Green candidates. The Earth and our environment have started a count down to mass famine and violent weather shifts...time is running out.

Mon, 12/02/2013 - 17:39 | Link to Comment GreatUncle
GreatUncle's picture

The unemployment rate doesn't matter that is a misdirection, justification for an action.

For me what matters is the FED currently owns 33% and with no taper what happens if it reaches 100%?

Now lets play with this a bit ... as a model start sampling and it assumes the system is RIGGED AND GAMED.

So the FED is at 0%, the rest of the market at 100% and fleecing to say 10% a guess, FED exposure 0%.

Now try FED at 10%, the rest of the market at 90%, fed gets a little burned at say 1% on the previous guess.

Now ramp it up the FED's % with a larger market share and finding itself more and more fleeced :-)

*** With the FED at 100%, in a gamed market it fleeces itself by the 10%, not possible. ***

Think this *** is the doozy and they are trying to justify slowing the rate they are using money creation and hazard a guess at 66%+ of the market they will start to have serious issues. It will never make it to 100%, create a trillion, find you burned say 10% where this was intended to be on another not yourself. The deeper in they go with no taper the quicker it approaches the unanswerable question and a bit like Japan approaching a technical default. At a 1/3 it is already in way to deep that the % fleecing of itself becomes noticeable. A company year on year continually making losses on its books will start to have viability issue and a private business would be closed.

NOW APPROACH THE SAME ARGUMENT FROM SAY AN ACCOUNTANTS POINT OF VIEW WHILST CHECKING THE BOOKS. You create all this money to spend in your own shop by yourself yet you still show a loss in the shop, even a small one will raise many awkward questions that will need to be answered.

I reckon forced to taper, has to pretend the economy has a low enough unemployment level because pandoras box opens the closer it approaches 100% and probably a far lower level like > 50%. That leaves half as much again to achieve the lover level and in timescales you don't have 2 years at the current rate.

 

 

Mon, 12/02/2013 - 19:04 | Link to Comment novictim
novictim's picture

Uncle, could you rework that to make it clear and understandable and then repost.  

Did that 33% refer to Fed ownership of the Market?  The mortgage/MBS market?  THe bond market?  

Mon, 12/02/2013 - 19:12 | Link to Comment Chump
Chump's picture

How did you miss this at the top of the front page (highlighted even)?  You spend all day here dropping your turds, try reading something.

http://www.zerohedge.com/news/2013-12-02/chart-day-fed-now-owns-one-third-entire-us-bond-market

 

Mon, 12/02/2013 - 18:00 | Link to Comment Walt D.
Walt D.'s picture

"with the public seeing only a rapidly collapsing unemployment rate as evidence of their success". 

Until the public starts to see out of work friends and relatives going back to work, and high school and college graduates getting jobs commensurate with their education, they are not going to believe that things are getting better.

The only people who believe these lies are the few who get their information from the main stream media. 

Mon, 12/02/2013 - 19:21 | Link to Comment are we there yet
are we there yet's picture

We have 0 % unemployment when 100% of working able people stop looking for employment.

Mon, 12/02/2013 - 22:18 | Link to Comment QQQBall
QQQBall's picture

Yes, but the more the FED loans into existense, the lower the Federal deficit. QE forevah

Do NOT follow this link or you will be banned from the site!