This page has been archived and commenting is disabled.

Has This Chart "Reached A Permanently High Plateau"?

Tyler Durden's picture




 

Despite stocks being at record highs, sell-side strategists proclaiming today's jobs report as great, and the Fed comfortable tapering in the face of transitory weather-related macro weakness, the following chart suggests all is not well... Echoing Irving Fisher, it appears we have reached a permanently high plateau in the duration of unemployment in America...

 

 

h/t @Not_Jim_Cramer

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Fri, 03/07/2014 - 16:55 | 4522767 pound the vix
pound the vix's picture

When are people going to learn.  In the new normal you take the government cheese until they throw you off.  worst case Get a job that pays cash and milk the free shit for all it worth.  What do you think hope and change ment.

Fri, 03/07/2014 - 17:28 | 4522917 zaphod
zaphod's picture

Exactly, this chart is simply a reflection of the new government handouts given for free and which encourage people to not work. 

Take those away and see what happens.

Fri, 03/07/2014 - 18:11 | 4523063 asteroids
asteroids's picture

Bullshit chart. There are people who want to work but haven't found a job in years.

Fri, 03/07/2014 - 23:36 | 4524061 WhyWait
WhyWait's picture

Right! If they chop people off this statistic when they've gone 4 weeks without looking, with unemployment benefits cut to 26 weeks, lots of folks will quit seriously looking within a month or two of their running out, and the reported duration will be capped. That should reduce the reported duration of unemployment - but of course it's nonsense.

Still this statistic shows that something has seriously changed. For that reason it's worth repeating.

Fri, 03/07/2014 - 23:30 | 4524047 WhyWait
WhyWait's picture

zaphod, pound the vix and all: There are people that milk the system. If you're an employer you may have come across them.  But these days far more folks are hustling to find a job as quick as they can because the word is out, if you haven't found a job within 3 to 6 months employers will consider you damaged goods and toss your job application.  You write like someone who doesn't know what it's like now.  There's a level of fear out there.  People are putting up with abuse, bullying, safety violations, even wage theft on the job they never would have stood for ten years ago.  People are taking low wage jobs, temporary and part time jobs they wouldn't have looked at.

Unemployment insurance is no substitute for jobs.  The problem is jobs, especially good jobs, are disappearing.  And the old answers for that aren't working.

Fri, 03/07/2014 - 16:54 | 4522768 SAT 800
SAT 800's picture

Well, Stocks have certainly reached a permanent new high plateau. And we have nothing to fear, but fear itself. And America is entering a new era of permanently high prosperity. And so forth and so and so.

Fri, 03/07/2014 - 16:57 | 4522777 pound the vix
pound the vix's picture

Half of Colorado is now permanently High

Fri, 03/07/2014 - 16:57 | 4522779 JailBank
JailBank's picture

What kind of sucker gets a job after 40 weeks when you can get 99 weeks of unemployment and food stamps for life?

Fri, 03/07/2014 - 17:00 | 4522793 The_Ungrateful_Yid
The_Ungrateful_Yid's picture

A well told sucker.

Fri, 03/07/2014 - 16:58 | 4522781 Hayabusa
Hayabusa's picture

So what, Uncle Sam and Ol Yellen will work together to hit cntl+prnt and roll out the entitlement program duration.  Just sit at home... you will be taken care of.

Fri, 03/07/2014 - 16:59 | 4522787 TruthInSunshine
TruthInSunshine's picture

Buy everything even if it means margin debt. There's never been a better time to BTFATH.

There are only so many shares of stock in existence, and when they're gone, they're gone.

Fri, 03/07/2014 - 17:00 | 4522792 starman
starman's picture

buy the time this fucker leaves office the US will be a fucking financial junkyard!

Fri, 03/07/2014 - 17:11 | 4522842 optimator
optimator's picture

Leave?  He may have to stay on to clean up the junkyard some more as these things take time.

Fri, 03/07/2014 - 17:06 | 4522800 Ham-bone
Ham-bone's picture

Since March '09 - S&P 500 is up 250%+...how was this achieved? Fed, "foreign", and domestic balance sheets.

Take a look @ the US Treasury Outstanding Public debt (OPD) which grew from $6.5 T ('09) ---> $12.5 T (present)

Who purchased this?

"foreigners"
3.2 T ---> 5.8 T (90% in Notes/Bonds)

Fed
$300 B (primarily bills) ---> $4.2 T ($2.2 T notes/bonds, $0 bills)

Domestic sources
'09 $2,542 ($500 B bills, $2 T in Notes/bonds) ---> '13 $4,142 ($2.14 T in Bills, $2 T Notes/Bonds)

Of the entire $10 T of US OPD notes/bonds, 80% are now owned by Fed & "foreigners". Despite the doubling of OPD, domestic sources (everything ex-Fed, ie. states, pensions, insurers, mutual funds, etc.) on net purchased zero. This meant these Trillions in new assets were freed up for equities, CRE, RE, etc.

WHAT NOW???

Now the Fed, who purchased over 100%+ of all OPD notes / bonds in '13 (70% of all new issuance plus mopping up significant rollover) is tapering new purchases (to zero? no word yet on a wind down of balance sheet). Domestic sources show no signs of buying low yielding notes/bonds new issuance or rollover OPD at anything near these yields.

This means all new issuance and all loose rollover OPD must be purchased by "foreigners" and presumably @ continuing historically low yields...b/c if yields begin rising, "foreigners" and Fed will take large losses on their holdings. I guess it's up to these "foreigners" to continue buying ever more debt at ever lower yields to avoid a potential rate shock? But is this likely as US runs smaller trade and budget deficits (less $'s to recycle)???  If "foreigners" continue to purchase despite the smaller trade/budget deficits, can we simply revise the category' as "Fed QE/Foreigner  shadow QE", "perhaps, maybe real Foreigners", and Domestic.

Absent the Fed or "foreigners" who bought all new notes / bonds OPD since '09, domestic sources @ record levels of leverage would need to sell risk assets to purchase Treasury's likely @ rising yields...anybody believe this will happen?

Thoughts???

Fri, 03/07/2014 - 17:09 | 4522827 pound the vix
pound the vix's picture

Yeah, Yeah, but do I get my foodstamps, unemployment, welfare, obamacare, Obamaphone, heating oil subsidy, and section 8 housing allowance this month or not? 

Fri, 03/07/2014 - 17:10 | 4522836 NOTaREALmerican
NOTaREALmerican's picture

 

Of course,  your welfare is as safe as this welfare:  Big-Ag, Big-MIC, Big-Road, Big-Water, Big-Airport, Big-Energy, Big-Ed, Big-House, Big-Fin, Big-OldFart, Big-OldFartHealthcare, Big-AntiDrug, & Big-PoliceState.

 Everybody loves the socialism they are living off of.

 

Fri, 03/07/2014 - 17:09 | 4522831 optimator
optimator's picture

Bet the FED loaned some bucks to "Foreigners" so they could buy Tresuries.

Fri, 03/07/2014 - 17:22 | 4522857 Ham-bone
Ham-bone's picture

TIC report admits as much...below is cut/paste from TIC..."foreign" ownership only denotes country from which Treasury was purchased, not nationaliy of who purchased it or where "money" came from...or who actually owns it.

I'm not even sure if it's "illegal" (black letter law) for the Fed to purchase additional Treasury's via Foreign locations (ie, Belgium, Luxembourg, Ireland, etc.)...anybody know???

 1/  Estimated foreign holdings of U.S. Treasury marketable and non-marketable bills, bonds, and notes reported monthly under
     the Treasury International Capital (TIC) reporting system. Holdings of Treasury bonds and notes are reported on TIC Form
     SLT, "Aggregate Holdings of Long-Term Securities by U.S. and Foreign Residents," including preliminary SLT data for the
     most recent month. The data in this table are collected primarily from U.S.-based custodians. Since U.S. securities held
     in overseas custody accounts may not be attributed to the actual owners, the data may not provide a precise accounting of
     individual country ownership of Treasury securities (see TIC FAQ #7 at:
     http://www.treasury.gov/resource-center/data-chart-center/tic/Pages/ticf...).

Fri, 03/07/2014 - 17:15 | 4522854 Yen Cross
Yen Cross's picture

  @ Ham-bone

   Excellent post!

   No, I don't think it will continue to happen. We're already seeing retarded bond buyers chasing complete trash in southern Europe for yield, when we know there's no way in hell those bonds should be priced at the levels they are.

 

Fri, 03/07/2014 - 19:12 | 4522922 Ham-bone
Ham-bone's picture

thanks.

Based on the "you break it, you buy it" theory, once you drive yields to the floor and everybody loads up (Japan, Spain, US, Italy, yadda yadda)...you can never allow a "return" to normal yields without wiping out all holders including the CB's???

So to keep the game interesting you come up w/ new ways of running "QE" by insinuating someone else is buying it instead of CB's...I don't know, it's a theory...but it makes more sense to me than US Domestics act logically by not buying low yielding crap treasury's but "foreigners" look at the same asset like it's...dare I say...gold...and no matter how much is offered, no matter how gigantic their holdings are, they always seem to just want more.  Would make a lot more sense if "foreigner" was simply replaced by the word "Fed"...that I would get.

Fri, 03/07/2014 - 17:03 | 4522805 Carl Popper
Carl Popper's picture

Of course it has.  This isn't the new normal but the old normal.

 

Historically the percentage of the adult population employed for payroll has been two thirds of what it is now.  Many people are choosing not to work for wages, stay at home parents for example. 

 

There is so much surplus wealth in this country that nobody truly starves even if they don't work.   Downscale your life and shop at resale stores.  One income is enough for a careful family living in the right place.  Kids can stay home and mooch off parents.  Life is very easy in the USA for people who don't have high material expectations. 

Fri, 03/07/2014 - 17:16 | 4522862 McMolotov
McMolotov's picture

Shop at resale stores? Don't have high material expectations? Piffle.

My TV told me I have to go into debt to be a good Ameri-consumer and one of the cool kids.

Fri, 03/07/2014 - 17:50 | 4522991 Carl Popper
Carl Popper's picture

Beans and rice are very cheap too, bought by the hundredweight.  I bought a very nice leather belt for fifty cents and jeans that didn't even look worn for five bucks.  

 

All sorts of housewares and furniture abound.  I am sick of supporting consumer culture, unless we are talking about consumption of chics lol.  

 

Take a cue from immigrants who know how to live well on half the average income. 

Fri, 03/07/2014 - 17:06 | 4522817 optimator
optimator's picture

Means the FED will simply print forever or until the unemployment rate goes down.  As long as the FEd prints it can't go down.  100 years of progress for the Banksters.

Fri, 03/07/2014 - 17:08 | 4522826 NOTaREALmerican
NOTaREALmerican's picture

Re:  it appears we have reached a permanently high plateau

This is fantastic news.   Wall Street hates uncertainty!  

Buy now or be priced out forever!

Fri, 03/07/2014 - 17:39 | 4522964 Rising Sun
Rising Sun's picture

fat tails!!!!!

 

we call this the outlier move - coming from an outlier president - makes sense

Fri, 03/07/2014 - 17:55 | 4523024 Postal
Postal's picture

But, but, but... if you're unemployed, then "obviously" there's something wrong with you!

Fri, 03/07/2014 - 23:03 | 4523971 holdbuysell
holdbuysell's picture

This apparent state transition reminds me of the article posted on ZH about moving from one state of equilibrium to another very rapidly with no going back, at least easily.

Great, but long, read here:

"Trade-Off": A Study In Global Systemic Collapse

http://www.zerohedge.com/news/trade-study-global-systemic-collapse

 

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