steve graves

Unemployment Claims: Best Data We've Seen in a Long Time

Two points.
First, if you graph out Weekly Initial Unemployment Claims it's plain that the continued drop recently announced is only slightly steeper than the established trend-line. And you say that if this continues for a month or so then you'll completely revise your prediction for the nature of the recovery that we may or may not be experiencing? Seems like you could have looked at a chart a month ago and made essentially that same decision.
Secondly, isn't this probably merely a reflection of seasonal (i.e., retail) hiring, the benefits of which would easily be over-shadowed by a poor retail season (which happens to be what most retail experts are now predicting)? In other words, you seem a hare's breath away from fundamentally revising your basic outlook on the assumption that 10 percent unemployment is somehow going to translate will into a half-decent retail season. You obviously know that our unemployment rate has surged from 6.6 percent in October 2008 to 10.2 percent last month, and that it's on track for roughly a three-and-a-half percent increase year over year, which would make that the largest such increase since the 1930s. Seems like a dismal holiday season for retailers (which will trigger...) is a foregone conclusion, especially considering that household debt levels are still near historical highs, bankruptcies and foreclosures are soaring and insecurity abounds.
Thoughts?

Unemployment, Retail Numbers Don't Add Up

Nice research Todd, but your 1099 theory is up there the grassy knoll and the "missle" that hit the Pentagon. Anyone who seriously believes there are more jobs out there than official statistics would indicate (as opposed to say, fewer) is obviously huddled up in a very comfortable place far removed from the actual real world. Where there aren't.

Friday's Jobs Report: Unemployment Bumps 10%?

Michael,

Exceptionally well said in response to the ridiculous post prior. The whole 'Obama is a socialist' line of argument is an excuse to avoid actually thinking, generally resorted to by those who lack the necessary equipment to do so anyway. Most of the so-called socialistic responses to our financial crisis were initiated during the prior (i.e., Republican) administration, not to mention the fact that socialism and capitalism are shades of a spectrum rather than some sort of isolated ideals. To the simpletons, when the government promotes and protects an industry they refer to this as capitalism but when the government regulates that same industry then their efforts become socialism. All modern democracies are socialistic (on many, many levels) by definition, but I suppose when your psyche is locked in the Cold War and your thought patterns are corroded by Fox News then everything becomes black and white, either/or, good or evil. The government is evil! Corporations are good! Sarah Palin in 2012!

Hey wait a minute, maybe the world really is going to end in 2012. If she's elected, maybe it should.

We're Living Through the Best of Times

John,

You two should write a book - sort of a Socratic dialogue. Maybe you could even throw in a wacky Keynesian (Krugman?) for balance (not to mention comic relief).

Bottom line is the future is very likely somewhere in the gray areas between your two insightful visions. The U.S. has obviously been living on borrowed time (i.e., steadily rising debt) since the 70s and we are in the midst of the inevitable reckoning. Will everything crash down around us and go up in flames? Probably not; on the other hand, our Phoenix act - if indeed there is one - will be arduous and excruciatingly drawn out. When half your economy is derived from military spending, health care and finance your best days may very well be behind you. Time, as always, will tell.

At any rate, thanks for all of your great contributions over the years, John. It's folks like you who make free speech actually mean something.

SG

We're in a Pattern of Increasingly Longer Employment Recoveries

Tack,

You're basing your argument on what is probably no more than a few percent of the workforce - i.e., those who would rather continue to collect unemployment rather than accept a job that pays them considerably more (the degree of unemployment compensation is based upon a percentage of prior earnings...). You either need a new argument or perhaps simply a white flag; either way, aren't there better places to make a stand for the argument that the government is disrupting the natural "law" of supply and demand? What about bailouts?

We're in a Pattern of Increasingly Longer Employment Recoveries

Tack,

Subsidizing unemployment, right or wrong, is the only thing preventing outright revolution. Concluding that unemployment compensation is the cause of rising unemployment - i.e., ignoring all other factors that are obviously at work in this dynamic - is like proclaiming that law enforcement is what causes crime. Might sound witty booming off the floor of the senate but it's still bad logic.

The Housing Bounce: Why It's Artificial

Only in the long run, Zack. If you're horizon is myopic, which I'm guessing yours is, then everything's fine and dandy.


On Sep 30 07:05 AM Zack Miller wrote:

> does it matter?

Credit Policies Still Threaten Recovery

Absolutely brilliant in its simplicity. Easily the best and most concise piece I have yet read on Seeking Alpha. Hats off, Graham.

Long-Term Economic Growth Prospects Remain Subpar

"Given the rapid drawdown in inventories, the snap-back should be equally dramatic."

You just made the point that this recovery is different, that for the first time (ever, essentially) U.S. consumers will not be in the position to help it along much, and then you predict that the snap-back in inventories will be as equally dramatic as the draw-down. But if we've created an unsustainable amount of retail business during the recent era of debt-financed mass consumption isn't it possible that the snap-back you're refering to will be more of a whimper than a bang?

Too Early for the Fed to Stop Purchasing U.S. Treasuries?

How can you claim that the Fed's purchase of Treasuries "seems not to have any positive impact on the yield curve"? Just because bond yields have risen doesn't imply that their efforts have had no effect; who's to say that yields wouldn't be considerably higher if the Fed hadn't increased demand by purchasing $260 billion worth over the last several months? On the contrary, isn't it logical to suspect that these purchases have indeed propped up prices up and held yields lower than they otherwise would have been? Isn't that simply how the law of supply and demand works?

Delinquencies in Prime Mortgages on the Rise

"Corporations should be taking advantage of the cheap credit situation and borrow against assets to raise operating cash and maintain payroll. This would maintain earnings since consumers don't buy without income. Public entities should reduce spending and cut tax rates to enable individuals to pay down debt and increase savings while maintaining their current spending levels. Individuals should continue buying the things that they want and need because they know that they will continue to remain employed."

And the dictatorship of the proletariat should simply wither away just as soon as it's no longer needed. No offense Russ, but your vision of government, corporations and consumers suddenly synchronizing towards some mega-goal that benefits everyone is beyond fantasy. Not to mention the fact that it does nothing to cleanse the massive amounts of debt from the system, which is the basic problem that has to be addressed. Bottom line is there's no painless way out of our predicament; a generation of rising debt, swelling trade deficits and declining savings rates must be atoned for. Reality bites.

More Asset Bubbles and a Dollar Primed for Collapse

Good piece, Alexander. But let's not forget that China has its own problems as well. To assume that they can thrive without the U.S. consumer is to take a major leap of the imagination, and one that is not necessarily warranted given everything that we know (i.e., history). There is every indication that they (and their banking system) are going to have a rough 2010.

Economic Collapse Is Accelerating

All I have to say Jeff, is thank God for free speech. Keep balancing the mainstream media hype with logic; sooner or later the world's going to stop tapping its little red slippers together and catch up. Cheers -

CIT: A Turning Point in the Financial Crisis

It's only 'spectacular news' if the economy turns around and starts growing at a healthy rate soon, which is not going to happen, which means it's not spectacular news. The logic here is fundamentally flawed.

U.S. Economy - The Government Has Made Things Worse

Correction:
Should be, every bit as high as a more hands-off approach