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Goldilocks Unemployment: A Disgusting Bowl Of Porridge
Submitted by Mark St. Cyr
Goldilocks Unemployment: A Disgusting Bowl Of Porridge
It’s no wonder we find ourselves in this collective business environment of malaise and atrophy when people who are supposed to be informed, or anything else relating to business, use terms to describe the most recent jobs report as a “Goldilocks” print: i.e., “Not too bad – Not too good.”
This term was the moniker de jure of Friday’s cadre of financial media economists, analysts, and next in rotation fund manager. Nothing more than cheerleaders to stagflation is what they’ve all proven themselves to be in my opinion than anything else.
The actual print was that the economy created 223K new jobs vs expectations of 228K. Where the overall jobless rate now stands at 5.4 vs 5.5. The kicker? Not in the labor force: 93,194,000 up from 93,175,000. Let that last number sink in a moment.
We currently have over 93 Million able-bodied people without jobs – and growing. This is why it’s near incomprehensible, as well as outright disgusting to me that such a dismal showing in both the headline number as well as the onerous implications of such a downward revision to the month prior, coupled with the outright fallacy of suggesting the rate of unemployment has moved closer still to statistical “full employment” came with near giddiness and if not outright back slapping. i.e., “This is a Goldilocks print. Not too hot – not too cold. With a report like this – The Federal Reserve won’t dare raise rates and might actually have to contemplate instituting another round of QE if not outright QE4ever!” And yes; that was the reaction paraphrased across the financial media outlets. Again, personally – I found it all repulsive.
We now have the lowest participation rate since 1977 when Jimmy Carter was president. Although I was young during that period, I was around and working. (and when I wasn’t working, I was out looking daily) I will tell you this: one of the words never bandied about during that period when it came to describe any jobs or employment report was “Goldilocks.”
As a matter of fact it was during that period of time the term “stagflation” came into prominence. The difference? It was used to describe an abysmal economy while hoping at some point the winds would change and we could regain our bearings to move out from under such stifling economic conditions. Today?
As these conditions have once again reared their ugly head the difference is today: these conditions are celebrated by the so-called “smart crowd” as reason to JBTFD! (just buy the dip) For this malaise sends the “right” signals to the Federal Reserve they should dare not raise interest rates off the zero bound anytime soon, and instead prolong this economic atrophy with the possible infusion of yet another round of QE. After all with economic malaise like this – NASDAQ™ 10K here we come!
The best term I’ve heard yet to describe the current economic malaise, as well as market conditions, was coined by Bruno de Landevoisin: Stealthflation. The term says it all. Under the radar there’s deflation or the now less offensive “dis-inflation” happening everywhere.
Currently under the guise of “economic omnipotence” resulting from the outright adulterations of the capital markets, along with its cancerous effects metastasized within our economy; they’re spoon-feeding bogus “analysis” to an uninformed as well as ill-informed populace by a bunch of next in rotation “financial experts” that now have more in common with school cafeteria workers plopping out this weeks version of mystery meat. All while smiling and reciting: “Trust us, it’s good for you.” (My apologies to “lunch ladies” everywhere)
Scenes resembling the above can be seen daily when the next in rotation economist, fund manager, or big bank chief investing guru comes on to tout “how all this bad is just terrific for the markets.”
If you question the validity of the data? You’re either shouted down, talked over, or insulted with charges of: “You’re mad because you’ve been on the wrong side of the trade for X number of points, or months, or _________.”(fill in the blank)
Unless you stand in line like these roving bands of porridge seekers with bowls out pleading in their best Oliver Twist voice at the altar of the FOMC “Please, may I have another round of QE?” you’re the one who’s scolded or branded as some “economic heretic.”
It wouldn’t surprise me if CNBC™ in some desperate attempt to regain viewers might contemplate a reality segment where they actually “Put to the stake Live and On Air!” any who dare question their cafeteria “smart crowd.” Who knows, it can’t do worse than they are already. But I digress.
Again the economic stealth of all this malaise is that it seems that there are “economic benefits” as a result. There are – if the economy was only about “The Markets.”
The markets are vital when they are allowed to function according to the rules inherent within free market capitalism: where markets are allowed to clear through the true price discovery model. But that’s not what’s going on today.
People today look at these markets, or hear the latest prints touted as “proof” we’re on the right path. i.e., “The markets were up today near 300 points!” Or, “Employment figures show we created over 200K once again, and the UE figure dropped to 5.4%. Hooray!” However that porridge being spoon fed down the throats of the populace has more in common with the repulsive process for making Foie gras than anything else. And just like the goose – it’s just as harmful when used to evaluate the health of one’s financial future.
What doesn’t get near any of the attention that it should buried within these reports are the other figures that are hidden in plain sight as they are “reported” in a stealth like fashion. i.e,, “Oh, and the prior month’s numbers that were horrible? They were revised downward to – horrific. Nothing to see here, carry on, hope you enjoy your lunch.”
Unaware by many; the prior month’s abysmal report of 126K was revised lower to a pathetic 85K. That’s a reduction or “miss” of over 30%!
If we use the same revision or “miss” used to calculate last month’s report it’s entirely plausible today’s Goldilocks’ print of 223K could actually be closer to 153K. If so, what happens to Goldilocks?
Keep in mind – these are the stats of the BLS, and as such is it unreasonable to contemplate they would try to throw the best possible outcome or “look” to these reports? And even they felt the need to revise down last months figures from lackluster to abysmal! So what faith should one put into today’s report? That alone should send a shiver down one’s spine. But it doesn’t end there.
This financial meddling causes even greater distortions and malfeasance throughout the entire economic landscape.
Companies that should go out of business or downsize to better address their true economic health – don’t. They’re able to saddle their companies with burdensome debt prolonging their sclerotic endeavours leaving no room for the upstarts or level competitors that can beat them handily in both practice and ingenuity; for many will be unable to secure the financing needed because the “big boys” or “favored lobbied status” are allowed to continually operate and compete at “cash burn” rates with buy backs and more that would make a Silicon Valley startup jealous.
And speaking of “The Valley” here too the stealth of malfeasance plays out its onerous part just under the surface. Here companies that shouldn’t even be listened too, let alone funded, are able to burn through cash and subsequent rounds of funding in direct proportion to the availability of cheap and fast money made possible via the QE mechanism.
With so much “free cash” still sloshing around looking for anything with a possible “One out of Million” shot of making a penny. The game is still on as: to throw as many darts as possible. Rather, than take the time required to effectively sift through and gauge reality with fantasy. Because it’s still an “odds bet” rather than an “objective financial analysis” concern.
And it’s precisely in this type of environment startups that have real potential – for real profits – get lost in the quagmire of unicorn and rainbow pitch funding.
Today’s latest reincarnation of Oliver Twist by those of the so-called “smart crowd” with their bowls out pleading for another round of QE, are also the first to espouse their reasoning for why you, or I don’t get why all this putrid porridge is good for us. All they’ll say is, “It’s different this time.” Well maybe they have a point.
Back during those roaring days of screaming sideways into nowhere land known as the “Carter years,” then president Jimmy Carter gave what has been labeled as “The Malaise speech.” Actually the real name designated was “A Crisis of Confidence.”
That speech was an attempt in theory as to help bolster confidence that the economic conditions of poor employment, poor GDP growth, and a list of other economic measures could in fact be overcome if we regained our composure, and had faith and confidence, we could do better. The issue today?
The economic “smart crowd” is now confident (if not to a fault) that the malaise along with the deterioration in GDP as well as nearly every (if not all!) recent macro data point – is just the right mix of “not too hot – and not too cold” we need to stay right smack dab in it, waiting for the next meeting of the FOMC to see if the cafeteria will reopen so they can beg “Please…can they have another round?”
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If it makes the state look bad, change it!
Bullshit R Us, on the banks of the Potomac.
STOP IT!
That's almost 100 million people who've achieved their dream if Early Retirement courtesy of the Socialist States of America without even having to worry about Minimum Required Distributions and the like.
It's Utopia!
Heaven Upon Earth and You're Birching!
Shame on you People.
Nattering Nabobs of Nay-saying Negativism.
Fucking Commie Spoilsports.
#Iguessabortedblacklivesdontmatter
"A couple thousand claims here and a couple thousand claims there and pretty soon you're talking about minutiae when you should be worried about the big stuff."
-Senator Knukles T Hopnscotch
Yeah Senator, while you were Skull & Bonesing it through Yale, we were dodging rounds and punjab sticks on the Malaise Peninsula, keeping the world safe from capitalism.
The elite shit on the poor all the time, bragging about the shit storm they caused and rubbing everyone's face in it must give them some sort of sick joy I suppose, but every dog has their day...
I just can't wait for the Eastern Alliance to come knocking... Tick Tock BITCHES!
The end is near. "Where logic ends, the fed and .gov begins"
No, the 'end is not here', but that's a popular sentiment among the misguided here.
Same as the old.
Clinton or Bush?
Hint: Nothing changes.
I felt the brain cells burn when I read this article. I'm dumber
brain cell dying or not ... 93 million not working / paying taxes is like 25% of your nations human capital.
Time for a War... just a little one as i'm pretty full from the last few.. Burp!
25%?!?
There's 320 million in America. Or thereabouts.
No small number of them are children. Disabled. Old. Etc.
10%? 20?
Forget 25%
By my back of the napkin estimate, you're talking more like 40% Maybe half.
And then ... figure in some 20-30 million government employees. They really don't count towards a productive economy at all.
Then they're the tens upon tens of millions who work in jobs that might as well be government. Defense contractors. Even doctors and nurses, if you consider the ultimate source of their paychecks.
How many union labor jobs rely soley or in part on this freeway expansion or that new courthouse?
Yes, taking these numbers at face value is terrifying, but the reality is much, much worse.
It’s the latest in a wave of announcements about cutbacks in an industry that’s struggling to come to terms with crude oil commodity prices half what they were a year ago.
http://www.bizjournals.com/houston/news/2015/05/04/woodlands-oil-and-gas...
Is that you shaking like a leaf under the other end of the tarp?
I thought it was!
So its all fucked up. We've known this for quite some time. The government lies to us. We've known this for just as long or longer.
Now what?
Now they will come for you just for saying what you have said. That's what
Pssst...they're tracking your every move with GPS and night goggles!
Stay down, I think I hear someone coming!
(sobbing) Dammit! (gushing wail) Quit treating me like an Adult! (weeping uncontrollably)
The history books will call it Nigganomics! Where everything was a facade and everything was lies!
But will it be worse than Canklenomics?
Under President Cankles, you will be wishing for the good old days of Obummer.
Nancy Pelosi told me that every dollar paid to the idle nets two back into the economy, and Harry Reid told me this is a boon for Cowboy Poetry.
From the people who brought you "Funemployment!"
There are several reasons for them to manipulate (lie about) the UE number. Number 1 is their "governmental projections". Without a "5.X%" print, none of the projections work; Social Security, budget, bonds,etc. They lie about the GDP and the UE to stall the coming Revolution.
If they put in the 11% UE, and the real GDP, then the SS system is broke NOW, not in thirty years. Some with bonds, gubermint projections and everything.
Simply put the promises were never meant to be fulfilled, it is just now the math is VERy hard to hide. In a couple years, there will be no place to hide. with 100 million UE in the United States, and the TPP expanding immigration and H1B visas from India, and China up to 60% increase of total immigration.
TPTB KNOW this, and they know they can;t keep it going. The main thing, they have to keep the myth "projections" looking good to keep the plates spinning, but the illusion is bound to fail sooner rather than later.
My bet is they sacrifice Greek in the next 2-3 months.
fap fap fap fap fap fap fap
Real unemployment is 23% and growing with the downturn. Even PhD assholes know it. They lie to influence behavior. That's what behavioral economics is all about -- lying to the masses so there's no run on the banks.
How could it not be. From 1990's through today the corporate jobs have been replaced by automation. Once it was all set up they added more efficiencies by firing all of the 'consultants' who brought them automation.
Now what?
people have been trained that if they go shopping the economy will improve. well, they went shopping but this time the fraud con o me didn't reward them with a way to make money so it is getting really surly out there. anyone else notice that?
I suggest a model of economic organization that resulted in not only full employment, but also provided workers with a chance for housing, food and medical care right close to the employment centers, no not communism. That socialism has proven a failure time and time again. But we Americans once had full employement. It was called slavery, and was at the heart of the Southern States economic system, which provided good corporate profits for the major commodities producers. This simple system was full employment, nobody need go without work. Only one simple rule had to be followed:
Ol' man river, dat ol' man river
He mus' know sumpin', but don't say nuthin'
He jes' keeps rollin'
He keeps on rollin' along
He don' plant taters, he don't plant cotton
An' dem dat plants' em is soon forgotten
But ol'man river
He jes' keeps rollin' along
You an' me, we sweat an' strain
Body all achin' an' wracked wid pain,
Tote dat barge! Lif' dat bale!
Git a little drunk an' you lands in jail
Ah gits weary an' sick of tryin'
Ah'm tired of livin' an' skeered of dyin'
But ol' man river
He jes' keeps rolling' along
Niggers all work on de Mississippi**
Niggers all work while de white folks play**
Pullin' dose boats from de dawn to sunset
Gittin' no rest till de judgement day
(Don't look up an' don't look down)
(You don' dar'st make de white boss frown)
(Bend your knees an' bow your head)
(An' pull dat rope until you're dead)
Let me go 'way from the Mississippi
Let me go 'way from de white man boss
Show me dat stream called de river Jordan
Dat's de ol' stream dat I long to cross
You an' me, we sweat an' strain
Body all achin' and wracked wid pain
Tote dat barge! Lift dat bale!
Git a little drunk and ya lands in jail
Ah gits weary an' sick o' tryin'
Ah'm tired o livin' an' skeered o' dyin'
But ol' man river
He jes' keeps rollin' along!
spin. the declining population in japan will wreak havoc upon the economy eventually bankrupting it in 20 years.
the usa is at full employment with all the workers who want to work working. time to raise interest rates to prevent inflation from an over heated economy.
the real story is japan is screwed by its demographics but the declining working population may be a silver lining in the long run as productivity gains reduce the need for manual labor, physically or mentally.
the usa is plain screwed. the labor overcapacity problem in the usa is a huge drag upon the productivity of labor and therefore the standard of living for the nation. the usa has no where to go but down until the labor over capacity problem is fixed in the form of low wages compared to other value added producing countries or a massive die off(like what happens in nature when there is an overcapacity of a species). sometimes it looks like the dark shadow is going for the mass dieoff since the problem is really global.
That's an insightful comment, and something few people seem able to grasp. I never believed Japan was screwed, it's just temporary blip until it sorts itself out in a few years and Japan arrives at a much more stable and liveable land. America? Yes, the growing population of poor idiots and third world clowns is gonna bury us.
I believe history will report that the demise of the US was due to the H1-B visa.
You can be sure that history will not report the real reason for its demise: non-gentile illegals flowing in from 1921 to 1965.
I have a question for someone far smarter than I. It seems to me that part of the issue with counting unemployment is that more and more people can't file for unemployment when they lose their job. In other words, more people are independent contractors filing 1099s so when they lose a contract they cannot actually file for unemployment. Am I right on this? I was looking and found that there is an estimate that 30% of the workforce is made up of contractors. I would think this is low as this point. Wouldn't it be possible to make some comparison on unemployment by looking at IRS records of the number of filers of 1099s. I would enjoy reading someone's knowledgable insight on the subject.
When Obamcare was put in effect companies began to require workers to have less than 30 hours in order not to reach the threshold for healthcare registration at 40 hours
perhaps there was a more insidious reason - they wanted throw huge number of people on 1099 so that when laid off they couldnt be able to get unemployment insurance
The world is simply in process of balancing the standard of living between countries. And being a planet with finite resources (and a population that continues to grow), the "haves" unfortunately have to suffer a drop in living standard in order for many in second and third world countries to rise up from poverty.
Perhaps a more interesting question to ask is whether the rise in living standard brings an associated rise in "happiness" (however that may be defined). The main intention of "consumerism" was to leave the consumer constantly wanting more, and by consequence, continually dissatisfied with his/her lot in life.
So what are we (of the first world that raped and pillaged the rest of the world for centuries) supposed to do? Put up barbed wire fences at all the borders? Reinstate tariffs? Move back into 1200 sq.ft.bungalows and wash dishes by hand?
I certainly don't have the answers, but neither can I be completely surprised the the global "equalisation" that is in process is causing the first world to squeal like a stuck pig all the way!
you are partially correct. the equalization of the world economies so that a dollar buys a soda for a dollar no matter where it is sold in the world would occur naturally if labor were free to move where it was needed. they freed up capital but not labor unless it is useful to the goal. the only people in the dfirst world who are squealing and wwill continue to squeal are the people who will pay for the transition. the .1% will not get hurt.
the problem with this globalization deal is china and russia, the rest of the brics and the 130 nonaligned nations have decided the usa will not run the new game. the usa will rspond in the most violent way possible to maintain its hegemonic position. the rest of the world wants a peaceful transition. the usa will have none of it. if you are american you'll be looking at a lot less than a 1200 sq/ft bungalow. you may have a real russian made ak47 aimed at you by someone you don't understand telling you to stand over there.
Yes, you are right. The 0.1% will be fine (behind the curtain pulling the strings). And you are right the the USA will squeal like a stuck pig all the way and lash out. I am actually Canadian (and even more so a Quebecer...so a little different from the ROC (rest of Canada), of Greek heritage (Jewish Greek father who had nothing when he came to Canada in 1948 to do his masters at McGill) and christian mother from a wealthy family that grew and sold raisins. So I grew up in 3 cultures, and never asked how much something cost in real money (remembering trips to Greece as a kid when there were 30 drachmas to the $, then 100 3 years later!)
When you rule the world (so to speak), it is very very difficult to let go. As you say, the 0.1% don't give a flying f**k - the money will come from wherever. It certainly is the working class that is disappearing. I get very frustrated at some of the racist comments on this website directed at black Americans (and occasionally Latinos) who WERE a big part of the working lower middle class, and whose opportunities have been wiped out by globalisation.
At almost 59, I am realising that small sometimes is more beautiful, local family and community is more important than wealth, and happiness certainly does not come from having more stuff. I hope this spreads....
A few Ebola chem-trails and we'll be right as rain again.
Its a fairly simple equation. Technology is designed to augment and eventually replace human workers. Jobs and technology can't both grow at the same time. Aside from jobs created in technology itself the only way to maintain anything like full employment, is for the overall population to decline proportionally.
Just give us more QE g-damn it!
"Unless you stand in line like these roving bands of porridge seekers with bowls out pleading in their best Oliver Twist voice at the altar of the FOMC “Please, may I have another round of QE?” you’re the one who’s scolded or branded as some “economic heretic.”
Yup.
Our government is driven by junk Big Data, which results in the ever increasing size of the data errors.
An example is NSA massive program to read, monitor and analysis everyone's emails, phone and skype calls, and credit card date and then correlate them to your travel plans, and letters mailed and so on. This is all a huge waste of time as 99.7% of the people you need to track already have some type of criminal record... The other .03% are illegls and don't show up because they have no records to tract in the first place.
The employment data is a joke because the actual number of people hired is modified monthly by Government Actuaries. You see their work all the time right before an election when official employment levels rise, only to be modified later.
The inmates have completely taken over the institution.
So, employed people goes up by 200k, and we're crying over a 19k jump in non-workers. Are you kidding?
So you are good with 93 million working age people idle? ok.
Riddle me this:
How many months of 200k job increases would it take, to reduce that 93m to zero?
FED forecasts about everything for last decade is at least 90% off despite rampant manipulations of numbers. No institution with such a record would survive outside autocratic regime. And that's exactly what we got.
In such system any anecdotal observations are as good as any wider statistics if honestly done since we a dealing with is "soft" command and control system with directives through cronies of decision makers, secret insider leaks, profit guaranties and bias algorithmic trades instantly rewarding those few chosen with billions daily with no investigation allowed guarantied.
All of it is nothing but criminal collusion to ruin pensioners and hard working people. In economy meaningless jargon replaced quantitative analysis, and newspeak replaced qualitative assessments. And economists became high priests of economic, becoming political, propaganda of ruling oligarchs, in form of fake market prices, fake volumes, fake earnings and fake leverage.
True purpose of official "scientific" economy as well as lies spewed throughout other so-called sciences, has been neatly and concisely summarized in:
https://contrarianopinion.wordpress.com/2015/01/07/triumph-of-con-science/
Deeper and comprehensive look at origing of the problem can be found at:
https://contrarianopinion.wordpress.com/2015/04/14/plutus-and-the-myth-o...
U3 v U6 unemployment rate.
People are asking the wrong questions. The questions being asked all assume that the Fed is the only power and will adjust markets as they see fit.
The question that needs to be asked is: "How do we get the Fed monkey off of our backs and create viable society without it?"
The Fed society is a Randian failed society. Those who produce nothing of value rule over those who produce everything, simply through their ability to create money out of thin air and give that money monopoly status.
If everyone is able to produce their own money and not just the central banks, the central bank money would be worthless and the bankers would have no power. How did the central banks get appointed overlords of the world?
Insightful comment. We are a failed society, many just don't know it yet. Decades of lies and living un-natural lives has led us to our current insanity. Otherwise, to answer your question, I'll refer to a propagandist meme from 1979, which many of the plebs still believe today.
https://m.youtube.com/watch?v=yAMRXqQXemU
Was in the local mall last week, first time in a year or so. Absolutely no middle class at all. Punks (can't say thugs) in t shirts and retirees in dirty wrinkled clothes I wouldn't even burn. We're going down the cosmic bunnyhole of government propaganda, where we stop nobody knows. I don't think it's going to be pretty.
Sounds like the mall I used to go to 30 years ago lol.
I used to like having a day off thru the week to go to town and avoid the crowds. Now there are times I can't tell a tuesday from a saturday.
This is sour grapes from a group of losers that lost out on the stock market bull. Not content with those losses, they plowed their already meager funds into gold and gold equities - only to see it fall even further.
It's hard to imagine a bigger assemblage of financial ne'er-do-wells and under-achievers.
"Zero Hedge, Home of the Dumb Money."