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Why Is Goldman Suddenly Banging The Table On The Scariest Chart In The Jobs Report

Tyler Durden's picture




 

Following the January jobs report, Goldman's chief economist Jan Hatzius appeared on CNBC but instead of joining Steve Liesman in singing the praises of the "strong" the report (which apparently missed the memo about the crude collapse), he decided to do something totally different and instead emphasize the two series that none other than Zero Hedge has been emphasizing for years as the clearest indication of what is really happening with the US labor market: namely the recession-level civilian employment to population ratio and the paltry annual increase in average hourly earnings.

This is what Hatzius said (2:40 into the clip):

"The employment to population ratio is still 4% below where it was in 2006. You can explain 2% of that with the aging of the population that still leaves quite a lot of room potentially, and the wage numbers are telling us we are just not that close, although we are getting closer."

Full clip:

Closer to what? Why the most dreaded event for any FDIC-backed hedge fund in the world: the Fed not only ending some $3 trillion of liquidity injections but actively starting to remove liquidity by tightening monetary conditions and rising rates.

Hatzius' punchline: "I think the case for "patience" is still quite strong." In other words, the US may be creating almost 300K jobs per month, but stocks are still not high enough.

So how should one look at today's BLS report: well, for political purposes the data is great - just look at those whopping revisions; but when it comes to the markets, please focus on the the unadjusted, ugly details beneath the headlines. Those which we have been showing for months and months. Because there always has to be something that prevent the Fed from hiking, and killing Chuck Prince's proverbial music, in the process ending Wall Street's 6-year-old "dance" ever since the 666 S&P lows.

At this rate soon Goldman Sachs will become a bigger "skeptical realist" than Zero Hedge.

Finally, which chart is Hatzius talking about? The one below, showing the uncanny correlation between the US civilian employment to population ratio and the annual rate of increases in hourly earnings, and the fact that neither is capable of actually increasing under the "NIRP Normal" recovery.

 

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Fri, 02/06/2015 - 14:52 | 5752573 flacon
flacon's picture

"Jan Hatzius" That's not even an AMERICAN name! Europeans at the helm. 

Fri, 02/06/2015 - 14:55 | 5752582 Dr. Richard Head
Dr. Richard Head's picture

Banksters have zero country affilitation, as they consider themselves to be gods - or at least doing God's work.

Fri, 02/06/2015 - 15:00 | 5752599 max2205
max2205's picture

Hourly earnings as in Me love you long time ?

Fri, 02/06/2015 - 15:07 | 5752617 WhyDoesItHurtWh...
WhyDoesItHurtWhen iPee's picture

Jan assHatzuis

Fri, 02/06/2015 - 15:13 | 5752637 SWRichmond
SWRichmond's picture

The labor market is tightening?  From a 30-year low participation rate to a 29 year low?  What the fuck are these people talking about?

Fri, 02/06/2015 - 15:27 | 5752692 Dr. Engali
Dr. Engali's picture

It's complicated stuff, and we are too stoopid to understand. Got that muppet?

Fri, 02/06/2015 - 16:13 | 5752760 Shocker
Shocker's picture

Goodwork ZH

 

You can only say Recovery so long

Layoff List: http://www.dailyjobcuts.com

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Fri, 02/06/2015 - 17:03 | 5753176 mattgallis
mattgallis's picture

This has to be the most poorly recorded CNBC clip on youtube.

Fri, 02/06/2015 - 18:16 | 5753433 WillyGroper
WillyGroper's picture

Slo mo death of a nation.

I went to another 92 yr old family business seed, grain, garden, chicks...closed. The corporate iron hammer.

Fri, 02/06/2015 - 15:28 | 5752694 Took Red Pill
Took Red Pill's picture

I guess Goldman Sachs gets it's news from ZH!

Fri, 02/06/2015 - 16:03 | 5752855 ebworthen
ebworthen's picture

By labor market tightening he means people getting squeezed and having to work more for less (if they have work).

I've met mumerous 65+ folks in the past few months who had good careers and saved but who are back in the labor force for the money; the pension, the S.S., the IRA/401K is not enough to pay for healthcare, housing, insurance, utilities, taxes, food.

Fri, 02/06/2015 - 15:19 | 5752661 lasvegaspersona
lasvegaspersona's picture

max

that is usually quoted in 'minutes'

Fri, 02/06/2015 - 15:00 | 5752600 11b40
11b40's picture

American name?  What would that be?  Running Bear, Little Feather, Two Dogs Fuuking?

Fri, 02/06/2015 - 15:08 | 5752625 LetThemEatRand
LetThemEatRand's picture

Hatzius' Indian name is "muppet raper."

Fri, 02/06/2015 - 15:25 | 5752688 Dr. Engali
Dr. Engali's picture

Walmart shopper.

Fri, 02/06/2015 - 15:38 | 5752728 bnbdnb
bnbdnb's picture

Not sure.

Fri, 02/06/2015 - 15:09 | 5752630 Taffy Lewis
Taffy Lewis's picture

Do you pronounce that "Hates us"?

Fri, 02/06/2015 - 15:20 | 5752663 StackShinyStuff
StackShinyStuff's picture

They hates us cuz they aintz us

Fri, 02/06/2015 - 15:35 | 5752717 artytom
artytom's picture

Is LIESman an American name?

Fri, 02/06/2015 - 16:36 | 5753039 PontifexMaximus
PontifexMaximus's picture

....even German.....uh, who would have thougt so, but, GS knows full well how to 'allocate' nationalities on their score board! God gave them the "modus operandi" manual!

Fri, 02/06/2015 - 18:06 | 5753405 lordkoos
lordkoos's picture

Unless your name is Sitting Bull, etc your name isn't "American" either.  History much?

Fri, 02/06/2015 - 15:09 | 5752579 Chuck Knoblauch
Chuck Knoblauch's picture

Goldman looks so smart telling you what I've been screaming all morning.

Fools. Idiots. Morons.

Stop buying stocks and bonds on margin.

Fri, 02/06/2015 - 16:00 | 5752843 NotApplicable
NotApplicable's picture

Stop? Sorry, but there is no such button on this ride.

Fri, 02/06/2015 - 20:40 | 5753961 e_goldstein
e_goldstein's picture

but, but stawks!

Fri, 02/06/2015 - 14:55 | 5752583 heisenberg991
heisenberg991's picture

Jan Brady could beat this guy up.

Fri, 02/06/2015 - 14:56 | 5752585 NOTW777
NOTW777's picture

lol - i think the case for fraud, ponzi and corruption is stronger

Fri, 02/06/2015 - 15:11 | 5752595 Chuck Knoblauch
Chuck Knoblauch's picture

Goldman is the wolf coming to the pig's rescue.

How many pigs did you eat this morning?

How many of you idiots will lose money today?

Beware of the Trojan Horse.

Fri, 02/06/2015 - 15:15 | 5752646 LetThemEatRand
LetThemEatRand's picture

These fuckers don't even feel the need to hide in the horse any longer.  

Fri, 02/06/2015 - 15:18 | 5752655 Chuck Knoblauch
Chuck Knoblauch's picture

Who's going to prosecute?

Lynch?

LOL!

Fri, 02/06/2015 - 16:03 | 5752857 unrulian
unrulian's picture

I believe that would be a Goldman horse

Fri, 02/06/2015 - 15:00 | 5752602 venturen
venturen's picture

QE6! If we just borrow more...it will be alright

Fri, 02/06/2015 - 15:02 | 5752609 Der Meister
Der Meister's picture

Chuck.

Wonderful comment !

Fri, 02/06/2015 - 15:07 | 5752623 Chuck Knoblauch
Chuck Knoblauch's picture

The daytrader will be killed in 2015 the same way they were killed in 2000, with margin calls.

Fri, 02/06/2015 - 15:05 | 5752615 vote_libertaria...
vote_libertarian_party's picture

Said another way...

 

"We are scared to death the Fed is stupid enough to start raising rates so we need to edu-mecate them otherwise"

Fri, 02/06/2015 - 15:23 | 5752640 Chuck Knoblauch
Chuck Knoblauch's picture

Today proves to me that Goldman already knows what the Fed is going to do.

The Fed isn't going to raise rates in June.

Goldman is going to milk this cow.

 

 

Fri, 02/06/2015 - 15:07 | 5752622 walküre
walküre's picture

GS forged the Greek's accounting to ensure one day Greece's debt would hurt the Euro and potentially blow up the EU. It's by design so that the USD is guaranteed to survive the Euro which is a stronger currency in a far larger economy than the US.

GS also instrumental in peddling US debt and later-on aiding the US in defaulting on its obligations by telling its goons at the Fed to run the printers.

Draghi is ex GS and running the ECB and the Euro into the ground.

It's just one gigantic conspiracy to support the US and the US Dollar cabal.

BRICS could easy adopt Canada and expand into the Eurozone.

No wonder the US is running the old template to try and foister wars upon us in every corner of the world.

But if the world stands together against the US, this conspiracy can be overcome and a new system can emerge.

Fri, 02/06/2015 - 16:09 | 5752892 toys for tits
toys for tits's picture

walküre

I'm not necessarily disagreeing with your theory about this conspiracy, but how exactly do you envision all these other countries rising up against the US? 

Through the UN, IMF, or world bank issuing a single currency?

Canada is a drop in the world wide bucket with only .5% of the world's population, and they're no prize debt-wise either.  Canada would be slitting its throat if it rejected the US.

IMO, this shit will come down to individual and family survival.  Political borders will disappear. 

Sat, 02/07/2015 - 12:39 | 5755641 oudinot
oudinot's picture

tits for brians:  For your information, Canadians burned down the White House in the War of 1812, and will do it again if you bitches try to steal our land, resources.

Fri, 02/06/2015 - 23:05 | 5754395 TheReplacement
TheReplacement's picture

Nah.  We're gonna have a war instead.  Plenty of examples in history to show how this has to go.

Fri, 02/06/2015 - 15:08 | 5752624 surf0766
surf0766's picture

Raise rates and lets get this fuckn' show on the road.

Fri, 02/06/2015 - 15:10 | 5752626 f16hoser
f16hoser's picture

So, if I take the Birth/Death Model divide by the square root of Hillary's Fat-Ass, I get the BLS Number? WOW

 

Pr(Xtn+1 = in+1 ! Xt0, Xt1 + i1, = i1,....XXtn = in) = pinin+1(tn+1 - ttn)  /  (( o )) = BLS

 

 

Fri, 02/06/2015 - 15:10 | 5752627 SheepDog-One
SheepDog-One's picture

It's all coming back around to the free money, or a lack thereof. GS and Wall St doesn't give a rip about jobs or peasants pay, they want free money and more of it!

Fri, 02/06/2015 - 15:13 | 5752641 realmoney2015
realmoney2015's picture

I believe this is a case of sprinkling a little truth in with a bunch of lies to gain credibility. Most people are aware that the economy sucks. They can’t lie 100% of the time or the charade would end quicker. The bigger truths will remain hidden by the gatekeepers. They will keep their precious Fed hidden in the dark. It’s good to keep an eye on what these ‘experts’ are saying, but don’t read much into anything ever say.

Keep preparing for the upcoming storm. Buy guns, ammo, food, water, water filters, lighters, emergency supplies, candles and silver. Kill two birds with one stone: https://www.etsy.com/shop/ScentSavers?ref=hdr_shop_menu

 

Fri, 02/06/2015 - 15:16 | 5752649 NoWayJose
NoWayJose's picture

Translation from Goldmanese to English -- "Ve need to keep finding MOAR obscure data to prevent those Schweinhunds at the Fed from raising rates and turning us into just a bank"

Fri, 02/06/2015 - 15:16 | 5752650 Elliott Eldrich
Elliott Eldrich's picture

Why am I reminded of "Robert's Box" by Procol Harum? You know, the song about a junkie pleading to a doctor for just one more fix? Goldman is singing this last line over and over...

"Just a pinch to ease the pain, I'll never trouble you again."

Fri, 02/06/2015 - 16:54 | 5753138 roadhazard
Fri, 02/06/2015 - 15:20 | 5752664 Chuck Knoblauch
Chuck Knoblauch's picture

Someone just got fucked today.

How did it feel?

Fri, 02/06/2015 - 15:23 | 5752674 Gab Timov
Gab Timov's picture

Why they don't just telly the truthy?

Fri, 02/06/2015 - 15:23 | 5752677 Puncher75
Puncher75's picture

I think this proves beyond a shadow of a doubt that Keynesianism and Krugmanism are the proper path to utopia.  Thoughts?

Fri, 02/06/2015 - 16:02 | 5752852 Caleb Abell
Caleb Abell's picture

Keynesianism is spending money on things like interstate highways, new schools, roads, bridges, etc ... which creates job and leaves infrastructure that benefits the public for a long time.

 

Emptying the treasury into the pockets of the TBTF banks at a rate of a trillion a year isn't related to keynesianism or any other economic policy ... its corruption, theft and gangsterism.  Nothing more, nothing less. 

 

Likewise spending a trillion a year on a war machine based on a desire to dominate the world will end like all other such attempts ... in bankruptcy and ruin.

Fri, 02/06/2015 - 15:24 | 5752680 SnatchnGrab
SnatchnGrab's picture

So wait, Goldman Sachs and the Fed AREN'T whores cohabitating the same bed?

Fri, 02/06/2015 - 15:41 | 5752741 2muchtax
2muchtax's picture

It may just be a signal that it's time to flip the switch

Fri, 02/06/2015 - 15:46 | 5752783 the grateful un...
the grateful unemployed's picture

actually there is a bit of tension there, the fed head is essentially a cabinet position, undersecretary of treasury, and while TARP and everything since 2008 has given the banks more power, what good is all that power if you can't use it? QE is a government regulation on banks, raising their reserve requirements, now that QE is over, the regulation is an unfunded mandate, and unfunded mandates never come to any good end. additionally the fed has been given surreptiously the power to create money, which they deploy through credit expansion (low interest rates) and monetization, but private financial credit demand, and shadow banking also creates demand for money (last month the monetary base expanded but not the money supply) [in 2007 this private expansion or creation of credit led to demand which caused the Fed to crash the market to get control of the process again, now the pressure is building once more] in simple terms its a free economy versus a centrally planned economy.

Fri, 02/06/2015 - 15:27 | 5752697 Bangalore Torpedo
Bangalore Torpedo's picture

And the 92+ million Americans no longer in the workforce because they can't find work?  That number isn't scary?  The 1 Trillion we spend every year on .gov salaries, pensions, and perks....a scarier number???

Fri, 02/06/2015 - 15:54 | 5752820 Caleb Abell
Caleb Abell's picture

Plus the trillion a year on the war machine.

Fri, 02/06/2015 - 15:33 | 5752714 homiegot
homiegot's picture

But, but, but...

Fri, 02/06/2015 - 15:36 | 5752720 the grateful un...
the grateful unemployed's picture

hmm lets see more people working fewer people collecting government benefits, so government shrinks and since government is the engine of job creation (hillary clinton) that means fewer jobs..

Fri, 02/06/2015 - 15:38 | 5752733 Banker Buster
Banker Buster's picture

I love hearing these guys trying to talk their position.  As markets going up they are saying "yeah it's because employment is strong and everything is great"  Now they are about to get their free cookie jar taken way from them, suddenly it's "Things aren't great at all"  

 

Same goes for Warren "the crony" Buffett.  

Fri, 02/06/2015 - 15:39 | 5752737 Shizzmoney
Shizzmoney's picture

If Greece leaves the Euro, the Fed won't be able to raise rates (in spite HAVING to because they would be fighting off currency devaluation). 

Goldman would be fucked because if the Fed raises rates, ALL of its bets go sour and they get exposed. 

Now of course the Fed, in my view, goes total Japanese and sits on CTRL-P......but that would cause some malfunction that results in social chaos (severe austerity).  It always has.

This will be fun.

Fri, 02/06/2015 - 15:48 | 5752789 2muchtax
2muchtax's picture

I don't think the FED does anything until GS is on the right side of the trade

Fri, 02/06/2015 - 15:48 | 5752787 Pie rre
Pie rre's picture

Making the case for more QE?

Fri, 02/06/2015 - 15:50 | 5752794 BullyBearish
BullyBearish's picture

So Goldman is making the case for continued free money courtesy of ZIRP...how unusual

Fri, 02/06/2015 - 15:53 | 5752813 LawsofPhysics
LawsofPhysics's picture

Yes, fuckers, let me guess, "tanks in the streets"?

 

Fuck em.

Fri, 02/06/2015 - 15:52 | 5752811 LawsofPhysics
LawsofPhysics's picture

What is there to "explain"?  The black market is booming.  The "official market" is what it is...

 

Full faith and credit.

Fri, 02/06/2015 - 16:01 | 5752844 huggy_in_london
huggy_in_london's picture

one of the worst economists on the street.  He is particularly unimpressive in person to listen to.

Fri, 02/06/2015 - 16:06 | 5752870 juggalo1
juggalo1's picture

No one has said the economy is doing great or that workers should be happy. But the relentless doom and gloom message is odd. Sure things aren't where they were in 2006, but they are a hekuva lot better than where they were in 2010 or 2011. It was a good jobs report, and while it doesn't get us where we want to be it is a step in the right direction.

Fri, 02/06/2015 - 16:41 | 5753073 Toolshed
Toolshed's picture

Go back to watching cnbc and drinking the fema supplied koolaide, because yuou simply can't handle the truth........or refuse to recognize and accept it.

Fri, 02/06/2015 - 17:14 | 5753219 Quantum Darwinism
Quantum Darwinism's picture

Ever heard of 'statistical adjustments'.

Fri, 02/06/2015 - 17:09 | 5753195 Dead Man Walking
Dead Man Walking's picture

how can she say we are near max employment when there's 100MM people unemployed?

Fri, 02/06/2015 - 17:18 | 5753240 PontifexMaximus
PontifexMaximus's picture

BTW, is Jan Hatzius the famous token n...... in the God's factory?

Fri, 02/06/2015 - 17:32 | 5753293 Clesthenes
Clesthenes's picture

You mention a $3 trillion QE.

My research indicates a QE of $12-$18 trillion.  Our difference is owing to unrecognized consequences of governments’ attempts to guarantee bank deposits.

By these attempts, the government would seize a failed bank and guarantee all deposits up to, for example, $250,000; amounts over that limit would be lost.

This immediately created major problems for individuals and companies with larger deposits.  A company with a “cash” (checking account) balance of $5,000,000 (add as many zeroes as you like), was suddenly at risk to lose very large amounts of money.

A relative stampede ensued as large depositors sought means to avoid these losses.  A result was a so-called zero-balance checking accounts (aka many names).  By this operation, balances would be swept into US Treasuries at the close of business every day.  Then, if the bank failed (was seized) after closing, the company would lose nothing.

Soon, there weren’t enough Treasuries to meet demand.  This led to the huge demand for Mortgage Backed Securities (MBS) as alternatives to US Treasuries.

As a result of these operations, huge amounts of “money” disappeared from the so-called “monetary base”; which, formerly, consisted of paper currency and bank reserves.  Pre-crisis of 2007, this “monetary base” stood at $0.9 trillion, as evidenced by the Federal Reserve balance sheet.  The resulting invention of “cash equivalents” has ballooned to somewhere between $12 and $18 trillion.

So, in the time of some 7-8 years, the “money supply” has ballooned from $0.9 trillion to $15 trillion (approx.).  What Price Gold… will give you more dots to connect.

What do you think lies ahead?  That’s right: a hyper-inflation of the dollar to extinction; and it will take everything with it – on a planet-wide scale.

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