The Sesame Street Jobs 'Recovery'

Tyler Durden's picture

After deconstructing the labor report for signs of false positives, Michael Cembalest of JPMorgan, sees muddle-through data in the US as sustaining a below trend growth rate - noting his belief that the US economy would not withstand a withdrawal of stimulus (read promise of liqudity to come) right now. While not as ebulient as many on the street, the JPM CIO sees a US job market that is gradually getting better - as is spending. However, what keeps him up at night is the budget deficit (as we noted very specifically last night). Critically, jobless claims have just crossed a threshold that in the past has signaled risk-on is primed to pay-off as the business cycle becomes self-sustaining but at the same time, the budget deficit is at massively 'different-this-time' levels. As he notes: "But as Big Bird used to say, one of these things is not like the other: the US primary budget deficit which supports this recovery is a bigger now", and so the US economy had better improve markedly in order to merely 'pay-the-freight'.

A chart I saw on the history of jobless claims (above) was meant to show how good things may get. In the prior 3 business cycles, when continuing claims fell through 2.2% of the labor force (1982, 1993, 2003), it was a great time to add risk in portfolios. Improving claims signaled that the business cycle was picking up enough steam to be self-sustaining, and last week, the US crossed through this barrier again. But as Big Bird used to say, one of these things is not like the other: the US primary budget deficit which supports this recovery is a bigger now. So, the US economy better improve markedly in order to pay the freight.

When will this chart on the primary deficit (above) matter to financial markets? Only when it becomes a binding constraint, either due to a lack of demand to finance the deficit at current yields, or due to the economic cost of closing it. The timing is uncertain, given Central Bank purchases of Treasury bonds, and a Congress which may leave the problem for another day (or generation). I lose a lot of sleep over this, but I don’t know a lot of other people that do.

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AN0NYM0US's picture

Sesame Street corrupted an entire generation

Careless Whisper's picture

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john39's picture

Chinese build things in Africa.  U.S. blows things and people up around the world.  hmm, I wonder who is going to win the popularity contest here.

rodocostarica's picture

that stadium the chines gave to Africa is nothing compared to the nice one they gave to us here in Costa Rica. top notch all the way and free.


Meanwhile US aid is for high tech and fast boats etc to catch drug smugglers.

Global Hunter's picture

I do like the Ticos style of soccer, I am a bit of a stadium spotter so I will look into this!!!

Decolat's picture

Taught us how to be muppets.

LFMayor's picture

How the fuck would you know, being from China?

JPM Hater001's picture

"Sesame Street corrupted an entire generation"

I assume we are giving the green because of the party last night right??  The seasame party....

AN0NYM0US's picture

– Sesame Workshop (parent of Sesame Street)  Sesame Workshop provides a top-notch creative model for addressing the Millennium Development Goals, and for conducting public diplomacy. But the real significance of this program is that it appropriates the power of citizen diplomacy to the youngest of the youth population.



Sesame Street: A new way to victory in Pakistan?

Funded with a $20 million grant from USAID, the economic assistance arm of the State Department, the Pakistan version of "Sesame Street"

spiceguy's picture

i used to work for this guy. brilliant and refreshingly honest. 

mind_imminst's picture

I have been saying this for a few years now; it is a battle between productivity/technological progress and thieving central banks/governments. Just a hunch, the debt levels are outpacing economic/tech progress, thus we are due for more recession/depression.

MachoMan's picture

This, but with the addition of resource constraints...  People tend to focus on oil as a resource constraint, but fail to acknowledge human ingenuity as a resource constraint...  I'm pretty sure we didn't evolve from some sludge, but instead delusional bullshit...  sludge is a bit diplomatic (and self serving).  I've digressed, but in our past I believe resource constraints have been mitigated in part through technological advancement, which in turn spurs productivity or the illusion thereof.  So, I think as a threshold matter, there is a battle between resources and technological advancement to mitigate the constraints of those resources...  and, really, this may be dispositive since even the best intended government/bank is subservient to the outcome.

Corn1945's picture

I don't quite accept the case that now is the time to add risk to porfolios when the Dow is spitting distance from all time record highs and the economy is very much weaker than the last time it was there.

Perhaps the time to come out with this article was three years ago?

Fox-Scully's picture

Which one is Crazy Harry?

LongSoupLine's picture



"Come and play...everything's A okay..."  - Ben "Big Bird" Bernake

mayhem_korner's picture



BTW, if the labor force is sourced from the BLS, then it is understated - as needed to fit to the predetermined falling UE rate narrative - and we are nowhere near breaking the magical 2.2% number.

Let The Wurlitzer Play's picture

Who wrote this - "Oscar The Grouch"


Dr. Engali's picture


 "I lose a lot of sleep over this, but I don’t know a lot of other people that do"


Maybe you're running in the wrong circles,because I know a whole lot of people who do.

dukeness's picture

Is it just me, or does the Obama trend on claims look like Carter's? We know how he fixed the economy.

Alcoholic Native American's picture

No, deficits like tax revenues no longer matter on the federal level.  Major austerity and budget cutting would cause major civil unrest.  A slow gradual economic decline has already been planned and appropriate security measures are gradually being implemented throughout the U.S. to deal with the plebes who find the systematic gutting and looting of their country dissatisfactory.

It is all a matter of national security now.  All the "zero government please give me austerity because I'm retarded crowd" will just have to be patient.  It's in the works, but sorry, no mad max for you.

mayhem_korner's picture

A slow gradual economic decline has already been planned


If that's the case, it's misguided because it's about as easy to control as a slow, gradual avalanche.

Alcoholic Native American's picture

I'm interested to see how it works out as well.

SheepDog-One's picture

No it wont be slow, it will be a sudden overnite collapse. Many are in delusion and think theyll be able to coast thru this because they have some savings or whatever. Theyll find thats a wrong answer.

Alcoholic Native American's picture

I disagree, barring a major uncontrolled spike in gasoline prices.

SheepDog-One's picture

A collapse is due, and those have never been 'slow, gradual, controlled events' not even once.

MachoMan's picture

History rhymes at best...  I think we're in uncharted waters in many ways...  we understand the forces that will create the crash (namely the lack of existence of the free lunch), but we're terrible at timing...

SheepDog-One's picture

No problem, yea we had a little market red earlier but all green now back to the new normal 'muddle thru' economic model. Hooray for USA....fuck yea....

haskelslocal's picture

Sometimes discovery is as easy as seeing the big picture.

$400B in stock buy backs this year thus far courtesy the Fed/Bank/Corp/Executive trickle down filter = $400B not reinvested in plant/property/equipment/productivity/labor.

Money laundering, plain and simple.

Vince Clortho's picture

Bump.  Your post nails it.

Well done.

the not so mighty maximiza's picture

Yeah it does, basiclly since 2008 the WHOLE system has become a money laundering operation. 

alien-IQ's picture

just imagine how deep the loss of manufacturing jobs would be if we did not count McDonalds burger flippers as "manufacturing jobs" (which we do)?

alexwest's picture

# deficit ex-interest , percent of GDP..


by default gov spending (aka deficit spending) goes to GDP formula, so on one hand we boost up GDP by deficit spending, on other hand we dont count interest on this accamulate debt... nice

only economist could have come /w such nonsense


alexwest's picture

i wonder excluding me did anybody analyse article before posting here?


rsnoble's picture

I was losing a lot of sleep till I became an alcoholic.

slewie the pi-rat's picture

debt is a weight

the debt of thePeople is the weight upon Liberty

just b/c someone works at the morgue, like michaelC here, doesn't mean his personal affairs are in order and non-threatening, basically, overall

i got out of debt decades ago and everything got also got quite refreshingly simple, overall;  healthy, almost

perhaps you know this;  perhaps you could imagine;  perhaps you can't even imagine, right now;  perhaps michael can't;  his affairs may be debt-based, since it is the "norm" for many, but i hope not, since his liberty to be himself at work may be under-"weight"-ed

usually, it is our personal affairs which get us counting sheep

here, our bankster is concerned about the deficit and he claims to be losing sleep over what the pols are doing, and pointing out the "markets" may develop [didya get this?] a lack of demand to finance the deficit at current yields and that the "economic cost" to close the deficit would be (somehow) too high, too

so he probably is thinking the FED might print, too, huh, or at least telling his "readers" that if they can decipher wtf he is doing, here;  if interest rates aren't "attractive" enuf, of course...  L0L!!!  dude!  thanks for stopping, ok?

we already know the FED might hafta print, and also that benzelbub is looking at that "demand to finance the T" across different rates/"prices" for the Ts right now, i mean RIGHT NOW, isn't he?

[if you said "yes" and are female, i will pat you on the ass, ok?]  this bankster guy is obviously a totally-owned subsidiary of moloch and in quite deep, too, i would imagine

perhaps he might re-assess the "reason" he can't sleep at night...

dbomb12's picture

Nothing to see here folks, move along

DavidC's picture

"I lose a lot of sleep over this, but I don’t know a lot of other people that do".

Quite! I suspect that a number of ZHers feel the same way.


Mysteerious Rooshian Vooman's picture


And speaking of Sesame Street, Mysteerious Rooshian Vooman just got this by e-mail:

Au revoir, mademoiselle

Well, it's official. French Prime Minister François Fillon has declared that the title mademoiselle (Miss) will no longer be included on any government forms or documents. The decision comes after months of campaigning by two French feminist groups, Osez le féminisme! (Dare To Be Feminist!) and Les Chiennes de garde  (The Watchdogs), who argue that the term places an unfair emphasis on a woman's marital status. Mademoiselle literally means "my young lady" (ma + demoiselle), just as madame comes from "my lady" and monsieur "my lord." Monsieur has long been used to identify both single and married men, as the archaic male equivalent of mademoiselle, mon damoiseau, never became an honorific title. Now madame will be used for all women, whether single or married, and is thus best translated as "Ms." instead of "Mrs." 

 The Prime Minister's order will also replace nom de jeune fille (maiden name) and nom patronymique (patronymic) with nom de famille (family name), and nom d'époux/nom d'épouse (married name) with nom d'usage (used name).

Mysteerious Rooshian Vooman has to wonder whether 9-year-old girls will be addressed as "madame." The French are as flat broke as the Yankee Empire, and yet this is how they spend their time. Quelle bêtise!


Mysteerious Rooshian Vooman's picture

Reminds Mysteerious Rooshian Vooman of the 70s at the height of the feminist "movement" in America. An American "woman" was evengelizing a Frenchwoman about the Gospel of Feminism and about the horror of women's being considered  "Sex objects." And the Frenchwoman's response was, "If anybody told a Frenchwoman that she was a sex object, she would say 'Thank God!'"


gwar5's picture

A last they're tackling the big problems. I always thought the more informal, "Ho" was way underated, so maybe now it can make a comeback.

Mysteerious Rooshian Vooman's picture



LOL! Well, if nothing else, it'll be easier to pronounce and spell. Mysteerious Rooshian Vooman thanks you for your note.

gwar5's picture

And this is why Romer's, stupid plans did not work and Team Owebama is all gone. Too much debt. Couple of Stanford economists already pointed this little problem out over ten years ago before our dear leaders embarked on our current fiscal madness. 

Just more confirmation the Krugmanots are the uninformed, incurious, economic knuckledragging deniers. But if an economic muppet like me already knew this then how could they not know?  Summers and Stiglitz certainly knew and said so, but not publicly. So it's all fake and purposeful. Question is where are they really taking us?



tahoebumsmith's picture

There really is a bright side to the current job " SURGE" lol if you look at the real picture. In the future our kids will be able to get a degree alot cheaper as they will only need to take speech and language classes to prepare them for their new jobs. How much training will you need to be able to enthusiastically say " Welcome to Walmart" or learn the spanish version "Bienvenido a Walmart"... Or " Welcome to McDonald's, would you like fries with that" or the ever more understood version "Bienvenido a McDonalds le gustaría papas fritas con eso? This is the sad surge we are seeing in the American labor force. With a masters degree in enthusiam or speech you may land the better job at Walgreens or CVS seeing how one seems to pop up everyday on a new corner somewhere in America. Yesterday I was in Safeway with my 16 year old daughter and she said she wanted to try and get a job at the Starbucks inside the store. We walked over to see about getting an application and were greeted by their 2 employees both in their 50's. When my daughter asked for an application they informed her that she would never get the job as they have people with MBA'S applying everyday. She felt like she had been gypped out of the opportunity to even get a start in the workforce. I can't imagine what it must be like to graduate from college with degree in sales and marketing and $50k in debt knowing the only closing line you were going to use today was ""Bienvenido a McDonalds le gustaría papas fritas con eso? or knowing that the only benefits you may recieve is an occasional Big Mac that had been sitting in the warming bin too long.

OutLookingIn's picture

What jobs?

The jobs the BLS and Department of Labor say are being created?

Just like the magician who creates a rabbit from a hat? Maybe we should consult the 'Cat in the Hat!'

Probably get more honesty from that then from government stats.

Show me the jobs! Flippin burgers and washing toe jam out from fat chicks feet? Four 8 bucks an hour, no benefits,

Lies, more lies and bloody statistics! Show me the jobs! Where are the "Hiring Now" signs?