Are jobless claims peaking?

[Sharky]

Re: Are jobless claims peaking?

better to put your $$ in real stuff than let it be eaten away by inflation.

Unless the depreciation rate on the real stuff exceeds the rate of inflation. Depreciation on leveraged assets can be a real killer....

[cjppjc]

Re: Are jobless claims peaking?

If you're expecting your house to go down 40%, but you're also expecting 100% inflation (or hyperinflation :eek, and all the items you're upgrading your house with will also go up 100%, I think investing in one's house is a good idea . . . assuming you don't have to sell it for awhile.

Plus you get the added benifit of enjoying the updates.

[FRED]

Re: Are jobless claims peaking?

So the author is looking at the average of a second derivative of a highly massaged number, after ignoring seasonal adjustments, and without taking into account statistical error or noise, and is then using that to infer a first derivative / trend?

What a bunch of crap. He should get a job with Lehman or maybe the Treasury; his analysis seems right up their alley.

iTulip 101:

• This depression was not induced on purpose by the Fed, the first economic contraction since The Great Depression that the Fed has not created
• It will continue until the debt is inflated away
• Previous Fed induced recession measures do not apply to the current case

[Rajiv]

Re: Are jobless claims peaking?

iTulip 101:

• It will continue until the debt is inflated away

Debt cannot be inflated away without the printing press (in other words, the problem cannot be taken care of by new loans -- money has to be printed and spent into circulation -- not created as a loan that has to be paid back).

All the leveraged debt is owned by banks and owed to banks -- hence the monetization is going to the banks, and not to J6P

Till the time the Leveraged debt is taken care of, J6P is not going to get much other than UI

The big question is -- "When the deLeveraging is done, will the economy become healthy again, or will it suffer a prolonged malaise?"

[grapejelly]

Re: Are jobless claims peaking?

We are in a period where it looks like jobless claims are peaking, and the stock market is rallying...but I submit these are simply normal ups in a long term down period.

The reason is that deleveraging has so far to go, and the "solutions" governments are applying to the problem is raising the real cost of labor in proportion to other inputs.

This increases unemployment of course. This causes government to spend more on "jobs" programs, raising the real costs of labor as a proportion to other inputs, to an even greater extent, resulting in more unemployment.

For example, if GM and Chrysler filed for bankruptcy with no government intervention, new labor contracts would vastly reduce compensation to automotive employees. The same firings and layoffs at other firms, small and large, would cut the real costs of labor down. This would DECREASE unemployment claims but lower the compensation of labor.

This is not being allowed to happen, on many levels. And the "jobs" being created are bloated useless government jobs, which pay too much in competition to the private sector, and therefore guarantee higher unemployment that goes with higher compensation that is not allowed to reach a market level.

[Guest]

Re: Are jobless claims peaking?

And the "jobs" being created are bloated useless government jobs, which pay too much in competition to the private sector, and therefore guarantee higher unemployment that goes with higher compensation that is not allowed to reach a market level.

"Which pay too much in competition to the private sector" ... :eek: :eek: Where?? Where they at? Lemme get one of them plum Government jobs! I wanna be a fat parasite here. Lead me to them!

[Sharky]

Re: Are jobless claims peaking?

"Which pay too much in competition to the private sector" ... :eek: :eek: Where?? Where they at? Lemme get one of them plum Government jobs! I wanna be a fat parasite here. Lead me to them!

Wasn't there a report in the news recently about some fire marshal in California earning something like $250K plus full medical and retirement?

Or how about $30/hr with full benefits for very basic janitorial work?

Then there's Congress: get elected for even one term, and you're rewarded with a life-long pension.

[GRG55]

Re: Are jobless claims peaking?

Wasn't there a report in the news recently about some fire marshal in California earning something like $250K plus full medical and retirement?

Or how about $30/hr with full benefits for very basic janitorial work?

Then there's Congress: get elected for even one term, and you're rewarded with a life-long pension.

Given that every year, quite reliably, about one-third of California [or so it seems] goes up in flames [fanned by those notorious Santa Ana winds], that fire marshall probably earns his pay...:rolleyes:

[To an outsider like me, California is one of those unique places on earth, like Bangladesh, that seems to attract more than its share of natural disasters. Ever notice that whatever part of the state didn't get burned out in the dry season, ends up in the ocean as a mudslide in the wet season?]

[FRED]

Re: Are jobless claims peaking?

We are in a period where it looks like jobless claims are peaking, and the stock market is rallying...but I submit these are simply normal ups in a long term down period.

The reason is that deleveraging has so far to go, and the "solutions" governments are applying to the problem is raising the real cost of labor in proportion to other inputs.

This increases unemployment of course. This causes government to spend more on "jobs" programs, raising the real costs of labor as a proportion to other inputs, to an even greater extent, resulting in more unemployment.

For example, if GM and Chrysler filed for bankruptcy with no government intervention, new labor contracts would vastly reduce compensation to automotive employees. The same firings and layoffs at other firms, small and large, would cut the real costs of labor down. This would DECREASE unemployment claims but lower the compensation of labor.

This is not being allowed to happen, on many levels. And the "jobs" being created are bloated useless government jobs, which pay too much in competition to the private sector, and therefore guarantee higher unemployment that goes with higher compensation that is not allowed to reach a market level.

See: Debt Deflation Bear Market: First Bounce - Eric Janszen

[Diarmuid]

Re: Are jobless claims peaking?

Taking a US goverment job can be very lucrative also if you happen to be the CEO of a large Investment bank on Wall street and you take the job of Treasury secretary and therefore have to sell all your 3.2 million existing shares to ensure you have no "conflicts of interest" :p for $152.50 per share (top of the marrket maybe?) and further more you get a nice tax defferal on any tax payments on the 492 mil you just earned.

[we_are_toast]

Re: Are jobless claims peaking?

iTulip 101:

• This depression was not induced on purpose by the Fed, the first economic contraction since The Great Depression that the Fed has not created
• It will continue until the debt is inflated away
• Previous Fed induced recession measures do not apply to the current case

It seems you are implying that we will have high inflation in a period of depression level unemployment. Doesn't seem like wages can participate in the inflation with unemployment so high. This is a formula for a transformational decline in the standard of living.

I'm not sure how a population that is accustomed to "we want it all and we want it now", will adjust to being a one car family living with family, friends, and in small apartments.

[GRG55]

Re: Are jobless claims peaking?

It seems you are implying that we will have high inflation in a period of depression level unemployment. Doesn't seem like wages can participate in the inflation with unemployment so high. This is a formula for a transformational decline in the standard of living.

I'm not sure how a population that is accustomed to "we want it all and we want it now", will adjust to being a one car family living with family, friends, and in small apartments.

We'll probably see a different sort of "two tier society" begin to form. Inflation implies there is "too much money chasing too few goods". So which goods will those be? Those are the economic sectors where labour will have pricing power. Jim Roger's flippant comment that in this cycle it will be the farmers, not the bankers, that are driving the Maseratis may have some truth to it...

[charliebrown]

Re: Are jobless claims peaking?

Well, BLS numbers are out today.
http://www.bls.gov/news.release/empsit.t12.htm

U3 feb 2009 8.9, mar 9.0
U6 feb 2009 16.0, mar 16.2

Also the duration of unemployment is still increasing. I have read, (probably on this site) that duration of unemployment is much more accurate predictor of economic health than pct. of unemployed.

I really think there ought to be a U7, which is U6 + severly underemployed full time workers. U6 includes part timers that want full time work, but it does not include full timers who might be working a 40k full time job that previously had a 80k+ full time job.

I'm in IT and there are a lot of these people out their. An associate of mine told me his company is now paying $80 per hour for full time contracted IT staff. That is down from $120 a few years ago. I'm sure the same is true in finance, or any other knowledge based industry where brains can be out-sourced.

[GRG55]

Re: Are jobless claims peaking?

Well, BLS numbers are out today.
http://www.bls.gov/news.release/empsit.t12.htm

U3 feb 2009 8.9, mar 9.0
U6 feb 2009 16.0, mar 16.2

Also the duration of unemployment is still increasing. I have read, (probably on this site) that duration of unemployment is much more accurate predictor of economic health than pct. of unemployed.

I really think there ought to be a U7, which is U6 + severly underemployed full time workers. U6 includes part timers that want full time work, but it does not include full timers who might be working a 40k full time job that previously had a 80k+ full time job.

I'm in IT and there are a lot of these people out their. An associate of mine told me his company is now paying $80 per hour for full time contracted IT staff. That is down from $120 a few years ago. I'm sure the same is true in finance, or any other knowledge based industry where brains can be out-sourced.

Not only is the hourly wage rate declining, but the report shows that hours of work are still declining for those that are "employed".

http://www.bls.gov/news.release/empsit.nr0.htm

[GRG55]

Re: Are jobless claims peaking?

An interesting historical comparison chart from calculatedrisk, showing job losses in percentage terms for each of the recessions since 1948. There's some other good analysis and charts on the BLS report over there...

http://www.calculatedriskblog.com/