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Everything's Fine... If You Ignore History
Submitted by Salil Mehta via Statistical Ideas blog,
This must be the "new normal" everyone?'s talking about?. Where a cyclical low ?in the unemployment rate?, to the low 5 percent range?,? is met with a courtly high stock market and talks of an impending rise in rates. Sure there is a feeling in some pockets ?of the economy ?that "things" are much better out there, even though by some measures the ?labor data is unfortunately, still stuck in a rut even through the global financial crisis.
?For example, ?Q1 U.S. GDP contracted? again? (and by nearly 1 percentage point more than GDPNow had originally estimated!) And despite Wall Street cheer, Q2 GDP ?may only come in at about 1 percent. ?And on the tangible employment front, it is important to look at alternative measures of employment to get a proper read on how things genuinely align to a time when we all shared similar "good feelings" in our past. ?After all, a feeling of "better" should often be associated with a significant proxy in the past that serves as a benchmark for that term.
?Let's look at the employment to population ratio. Th?e? ratio ?for May just ticked up 0.1 percentage points, to a cyclical high of 59.4 percent. Still, this level is well shy of the 62.0 percent? that was the? worst reading reached ?in? 2003 (in the aftermath of the 2001 recession). Don't be fooled by this conservative estimate of being only a 2.6 percent point difference; on a labor force of 157 million that is equal to 4 million not-employed people.
The official unemployment rate doesn't take into account the broader population, so even though ?its current 5.5 percent ?appears to be an improvement (the level resides between the previous cycle's high of 6.3 percent in 2003 and ?its?? low of 4.4 percent ?in? ?2006-? 2007), we must seek a broader unemployment measure to better reflect the economy's changing labor force (or should we say the chang?e in who's not in the labor force?)
The U-6, the official broadest formulae for unemployment and underemployment in the U.S., is at 10.8 percent. ?This? level is still completely higher than the worst reading we saw in 2003 (10.4 percent). In fact prior to the current cycle, we have to ?go back in time 2 cycles (a lengthy 21 years) in order to see a U-6 reading that is ?even worse than ?the current ? 10.8%. Given the inclusion now, of the marginally attached people from the labor force, every 1 percent difference in the U-6 rate is also not a small amount; it is equal to 1-2 million Americans negatively impacted (and we are still a couple percentage points higher on U-6 versus where we'd prefer to be.)
What this all evidences is that in some elements of the economy, and some influential portions of the population, things feel great (perhaps as good as ever!) But for a few million people in ?the economy it still feels depressing. Just looking at the fairly, well appreciated U-6, and seeing that is now finally within a 1/2 percentage point (of the worst ?from the 2001 ?recession? fallout) and thinking some are forced to embrace th?is now as a sign of a recovered market. Something seems premature when celebrating the employment to population ratio, or even the U-6, both of which are just as easy to see alongside the headline payroll numbers. It's because at the end of the day, the "new normal" shouldn't be one where our current best is still worse, then our prior worst.
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I want to see more hockey sticks. Fix those charts or you're fired.
One word, "Orderly".
History? We are writing history every day. I don't believe there are any problems that they can't pretend to fix. Everything has been faked for years now. 2008/09 was an anomaly when too many got caught with their pants down. It was impossible to cover up. There was a seismic shift of sorts.
Obviously it will crash or rather implode into its own footprint but until that happens and TPTB have a firm grip on the rudder, all one can do is to stick with what you know. Store wealth the only way you know.
If you've got the stomach for it, by all means play with leverage. Just be secure and don't bet the farm or get caught with your pants down when the tide goes out.
You need shelter (preferably owning outright), source of quality food and an exit strategy to live completely off the grid on Day X. Maybe you're fortunate to be able to live off the grid already.
Government is not your friend. The police and military will turn on you if that is what they're ordered to do. All you can do is to make sure your offspring and their offspring will carry you to the next level and beyond.
Don't let a career own your life. The one life you live now is all you got. There are no second chances when you're terminally ill one day or you lost your farm or the family. Exceptions are very rare so don't even bank on it.
ez. flip it around the x-axis.
Moar immigration will fix the shortage of workers problem.
YES! More H1B's will be coming to ease the housekeeper and landscaper shortage.
Lets not forget disney!
http://www.nytimes.com/2015/06/04/us/last-task-after-layoff-at-disney-train-foreign-replacements.html
H1B? Fuck that, just smuggle them accross the border! We can put them in all the high paying jobs that "Americans won't do."
"When I use a word," Humpty Dumpty said in rather a scornful tone, "it means just what I choose it to mean -- neither more nor less."
"The question is," said Alice, "whether you can make words mean so many different things."
"The question is," said Humpty Dumpty, "which is to be master - - that's all."
(Through the Looking Glass
It's not a problem unless we say it is....
War is Peace
Freedom is Slavery
Ignorance is Strength
Dont even ask me what a double seasonal adjustment is.
Hugs and Kisses,
Ministry of Truth
"Double seasonally adjusted" - this is double-speak for "Stop asking fucking questions you proles, you don't know what this means because we can pretend to be so much smarter than you! Pay your fucking taxes and just be glad that we're letting you use our system for another day before we decide to crash it."
Clearly the economic cycle of U6 needs to be triply, seasonally adjusted- the last 10 years have been abnormally Winter-like.
More o'that climate change...
Just to clarify, the purpose of the Atlanta Fed's GDPNow forecast is to provide a real-time projection of the BEA's first quarterly estimate of GDP growth, which it nailed last quarter (predicting 0.1% growth, while the official first estimate came in at 0.2%). It's not intended to predict the BEA's later revisions to that same quarter, as the model moves on to the next quarter. For now, it's the only bit of truthiness that comes from the Fed, and the latest projection of 1.1% for Q2 is well below Street consensus of 2.6%.
We've replaced history with software. BTFD
A walk down memory lane shows that the biggest credit bubble in history has burst and the world is about to get sucked into the greatest deflationary vortex of all time.
It's a bubble...
http://www.globaldeflationnews.com/anatomy-of-a-bubble-how-the-federal-r...
...and it's deflationary.
http://www.globaldeflationnews.com/inflation-vs-deflation-part-1which-on...