Employment Report Fictions and Fed Actions

Due to the fiction that is the monthly employment report I won't mention it except for 2 things:

#1 the economy continues to build jobs almost solely on the backs of healthcare and government. Here are my comments on this (if you are new to blog - this link is critical to read) [Apr 2: The Underemployment Rate is Rising]

we have 2 huge bureaucracies - federal government and healthcare. To keep the government from going even more insolvent, we should in theory be cutting jobs from these 2 white elephants. Healthcare costs spiral out of control and we hire more people - I believe healthcare is now 16% of GDP. But how do you cut costs without cutting jobs? Thats the other dark secret - most of our recent gains in jobs are either government or healthcare-related. So how do you fix the long term problems in either? Chicken or egg? They are sapping our national wealth away by their huge excesses/costs BUT they also provide the main job growth as well. As with everything my expectation is the "kick the can down the road" theory will continue - keep growing these massive bureaucracies (create more jobs and costs now) and let another generation pay for it.

#2 the Birth Death model is continuing to account for most of job "creation" - this is an utter joke. [Jan 27: Monthly Jobs Report & Birth/Death Model]

In brief the government guesses how many jobs were created by companies too new/too small to be calculated. So they have major leeway in "creating jobs" out of thin air.

This is how many jobs they created out of thin air this month: 267,000 (of which are 45,000 jobs in construction...)

Again folks, this is all fiction to reassure the American people everything is fine; tell me in what world the US is adding 45K construction jobs in the past month? Maybe in Walley World. Without the birth death model our -20K turns into nearly 300K jobs lost. But don't worry - be happy.

EDIT: I walked over to Mish's website and he says you cannot add -267 to -20 and get -287K so I'll take his word for it... he does berate this labor report for about 35 reasons however :) He calls the data from Bizarro World.

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As for the Federal Reserve... what can I say - they continue to create liquidity any way possible. They have been doing historic things for months now... they even took the steps of taking mortgage-backed securities on their books at the last ebb in the crisis. Today's move? They will now be taking bonds backed by auto loans, credit cards, and student loans off the banks books as loans in return for Treasuries. Basically the Federal Reserve balance sheet is now an open flea market.

But again don't worry - everything is fine - that is why they are taking these historic steps... I mean these once in a lifetime steps are just part of a normal, orderly (did I mention healthy?) market and it's all good. Just buy stocks.

And again this is how they are "fighting inflation" - creating more paper money to flood the system... if this is fighting inflation I am scared to see what happens when they stop fighting it. There is only 1 quote in this story you need to know, and why inflation is ramping worldwide

• ``The world is awash in liquidity, it just isn't reaching the right financial borrowers,''

Yes it is going into all commodity and assets instead - (including equities) - pumping them higher and higher. You will see this at the grocery store, and gas station in months and months to come. (but hey your Ameritrade account will also be pumped up as speculators can use this money to chase a fixed amount of stock with an apparent unlimited amount of US Peso) Enjoy.

Comments

[dectra]

Well, what exactly did you expect from our current 'leader'? Everyone with an ounce of self respect admits bush is a lightweight, and his incompetent and criminal disregard for oversight of the nation's economy has landed us squarely where we are. Now the question is how to stop them from digging the hole any deeper....

1. Reinstate the prohibitions that a bank holding company can own other financial companies. (which was repealed in 1999 by the Gramm-Leach-Bliley Act. )

2. Have a write down deadline for financial institutions, such as the end of 2008. After that, tell the superbanks and Citigroup boys "you eat your losses.

Only after we've actually cleared the books and ensured that it can't happen again will we move out of this mess.

[User 180638]

There is a critical shortage of writers who tell the truth. The liars get what they want; stock market goes higher and they fill their pockets.

[notsosmart]

its turned into a world of liars but also a world that for the most part believes these lies.even the blogs have an agenda & the stats are manipulated to self serve.i have no connection or agenda but since no one has figured out a way to pave over the ocean buy oil tanker stocks.it helped with the hidden 12% inflation with great dividends.

[chinooking]

i agree with your thought's on jobs,this is a quote from congressman rick larsen in response to my query on the job's stats. ,,In your letter, you expressed concern that national unemployment statistics do not capture all unemployed workers because not all unemployed people are eligible for unemployment benefits. You may be interested to know that the Bureau of Labor Statistics (BLS) does not rely on unemployment insurance statistics to determine national unemployment rates. Rather, the BLS conducts a monthly survey known as the Current Population Survey (CPS). The CPS includes questions on employment status, and the BLS uses this data to develop a more accurate estimate of national employments statistics.

what a crock they do not even look at the un-employment roll's which would not include all the inelligable sub and contractors without work ---lie's and more lie's

[sivere]

Please link, distribute, etc. the proclamation at


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