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Originally posted by Capitalizt bwahahahahahahahahahahahahahahaha!! *gasp gasp* hahahahahahahahahahaha!! (continued) Gotta love government statistics. More people are getting fired each month yet the unemployment rate drops...lolol Sorry krypt, but people who exhaust their unemployment benefits and drop off the dole are not suddenly employed and contributing to the economy. They are still unemployed but uncounted..just as people who have given up looking for work aren't counted (they are labeled "discouraged" workers and not included in the statistics.) The true unemployment rate is probably closer to 18% today. If you want to play games and say the number of people filing weekly claims are the only ones unemployed, go for it. Heck, why don't we reduce unemployment benefits to 60 days? That should knock the official unemployment rate down to 1%. Happy days are here again!

I know I'm responding late to this post, however, I feel the need to correct the misconception that once you run out of unemployment benefits you are dropped from the unemployment numbers. That is false. I said this during the Bush administration and I'll repeat it, you will be included in the unemployment figures so long as you are actively looking for work even IF your unemployment benefits run out. This has long been a falsehood employed by the left to my constant irrirtation from 2000-2008. The BLS consisted of legitimate statisticians during the Bush administration and continue to be so during the Obama administration. It's quite amusing to see partisan hacks perform a complete 180 to align to their ideaological viewpoints.

As a matter of fact Capitalizt, your suggestion that we should reduce unemployment benfits in order to reduce the unemployment rate is humorously ironical. The Obama administration has been extending unemployment benfits via the stimulus bill which has many economists agreeing that many workers are becoming discouraged at a lesser rate than normal which may be distorting (increasing) the unemployment rate than would happen otherwise.

That said, everything I've said so far is moot on multiple levels. Fine the decline of the official unemployment figure to 9.4% doesn't include discouraged workers ... however the U6 unemployment figure which DOES include that group shows a decline from a record high of 16.5% to 16.3%.

And of course you know that the most important indicators at this point are the second derivatives of these measures ... we're dealing with sine waves not step functions.

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Originally posted by occrider I know I'm responding late to this post, however, I feel the need to correct the misconception that once you run out of unemployment benefits you are dropped from the unemployment numbers. That is false. I said this during the Bush administration and I'll repeat it, you will be included in the unemployment figures so long as you are actively looking for work even IF your unemployment benefits run out. This has long been a falsehood employed by the left to my constant irrirtation from 2000-2008. The BLS consisted of legitimate statisticians during the Bush administration and continue to be so during the Obama administration. It's quite amusing to see partisan hacks perform a complete 180 to align to their ideaological viewpoints. As a matter of fact Capitalizt, your suggestion that we should reduce unemployment benfits in order to reduce the unemployment rate is humorously ironical. The Obama administration has been extending unemployment benfits via the stimulus bill which has many economists agreeing that many workers are becoming discouraged at a lesser rate than normal which may be distorting (increasing) the unemployment rate than would happen otherwise. That said, everything I've said so far is moot on multiple levels. Fine the decline of the official unemployment figure to 9.4% doesn't include discouraged workers ... however the U6 unemployment figure which DOES include that group shows a decline from a record high of 16.5% to 16.3%. And of course you know that the most important indicators at this point are the second derivatives of these measures ... we're dealing with sine waves not step functions.

as always, its a pleasure to read your posts.

as an aside, do you think bernanke will be getting a second term?

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Originally posted by pkcRAISTLIN as always, its a pleasure to read your posts. as an aside, do you think bernanke will be getting a second term?

He better be otherwise I think the markets will tank. I always believed that Bernanke's study of the great depression has been critical in the Fed's decision to employ innovative measures to combat the financial crisis. And I'm personally a believer that this would have been the second great depression if the fed had not acted as it had ... I base that decision on my experiences at a major (but not too big to fail bank) and colleagues at too big to fail banks. I was posting here back then and if you remember I was VERY alarmist.

After hearing an interview on NPR and seeing an interview on PBS the book "In Fed we Trust" seems like it would be a good read.

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Originally posted by occrider He better be otherwise I think the markets will tank. I always believed that Bernanke's study of the great depression has been critical in the Fed's decision to employ innovative measures to combat the financial crisis. And I'm personally a believer that this would have been the second great depression if the fed had not acted as it had ... I base that decision on my experiences at a major (but not too big to fail bank) and colleagues at too big to fail banks. I was posting here back then and if you remember I was VERY alarmist.

yeah, i think you'd be asking a lot to expect a better performance in such crazy, unpredictable times. i have a certain amount of admiration for people (like bernanke & paulson) who swallowed their ideology due to special circumstances, and did what was necessary.

god forbid someone like ron paul be involved in such an occasion!

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Originally posted by occrider After hearing an interview on NPR and seeing an interview on PBS the book "In Fed we Trust" seems like it would be a good read.

thanks, i might check it out as ive gotten older i feel economics should've been something i'd taken at school instead of just lazing around in politics

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New jobless claims rise unexpectedly to 558,000. (they were expeced to drop to 545,000).

http://finance.yahoo.com/news/Fed-s...2.html?x=0&.v=7

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Originally posted by The17sss New jobless claims rise unexpectedly to 558,000. (they were expeced to drop to 545,000). http://finance.yahoo.com/news/Fed-s...2.html?x=0&.v=7

'

Looks like we'v reached a ceiling.

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Originally posted by Krypton ' Looks like we'v reached a ceiling.

I keep thinking that... there's gotta be a point where job loss numbers can't keep "unexpectedly" rising, right? Retail sales also dropped .1% in July... unexpectedly of course. lol

http://finance.yahoo.com/news/Retai...2.html?x=0&.v=1

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Originally posted by Krypton ' Looks like we'v reached a ceiling.

Doubtful. Unemployment is always a lagging indicator and it has been showing surprisingly large upticks relative to GDP as compared to prior recessions. This has been confounding economists' standard predictions based on past relationships between unemployment and GDP. I believe unemployment will finally peak after broaching 10%. However, there are some positive swings in other economic indicators:

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The sun also rises Aug 6th 2009 | WASHINGTON, DC From The Economist print edition The economy may be pulling out of recession but unemployment is still surprisingly high. Celebrations should be delayed Illustration by S. Kambayashi WHEN Barack Obama visited Elkhart, Indiana, in early February, a few weeks after his inauguration, it was a sombre affair. In the previous 12 months the area’s unemployment rate had more than tripled to 18.3 %. The president pleaded for the passage of a massive fiscal stimulus, insisting that “doing nothing is not an option.” By the time he returned to Elkhart on August 5th he was quite a bit sunnier. Local factories are “coming back to life”, he proclaimed. A few days earlier he had declared the economy to have done “measurably better” than expected. Mr Obama’s good spirits are well grounded: America’s recession appears to be coming to an end. On July 31st the government reported that real gross domestic product (GDP) contracted in the second quarter, but at only a 1% annual rate. Much of that decline reflected business’s determination to keep factories and workers idle and fill new orders out of existing inventory. Now, stocks are so depleted that production will soon have to restart. The clutch of data now available for July has strengthened expectations that GDP will rise in the current quarter by as much as 3%. An index of manufacturing activity rose to its highest level since last August, and manufacturers reported that new orders were growing briskly, the best in over two years. Car sales jumped 15% to an annualised 11.2m and manufacturers are ramping up production. Sales of existing houses have risen. Even battered Elkhart got some good news: on August 4th Dometic, a supplier of recreational-vehicle parts, said that with some help from local incentives it would add 240 jobs to its operation in the town. Mr Obama and his aides have wasted no time in crediting the $787 billion fiscal stimulus for spurring this recovery. In fact the stimulus’s contribution so far has been relatively modest. More important was last autumn’s massive injection of public capital, loans and loan guarantees into the financial system, and this spring’s bank stress tests. These stopped the spiral of declining asset prices, credit withdrawals and bank failures that had threatened to turn a recession into a depression. One of the most encouraging bits of news is that the S&P/Case-Shiller 20-city index of house prices fell just 0.2% between April and May, the smallest fall in two years. Stable house prices would do wonders in reducing loan delinquencies, shoring up the banks’ balance-sheets and restoring the flow of credit. Despite the good news, Mr Obama’s approval ratings, though high, are slipping. This, in part, is because the single most important economic benchmark, employment, remains grim, surprisingly so. Unemployment usually responds to economic growth in a relationship that was captured by an economist, Arthur Okun, in the 1960s. But it has risen more during this recession than most formulations of Okun’s Law would suggest. The publication last week of revisions to earlier GDP data explains some of the discrepancy. The revisions show that GDP has declined a cumulative 3.7% since the end of 2007, thus tying with 1957-58 as the deepest recession since the Depression (before these revisions, the decline was shown to be 2.5%). Even so, Michael Feroli, an economist at JPMorgan Chase, says that Okun’s Law would have predicted an unemployment rate of just 8.6% during the second quarter, whereas it actually averaged 9.3%. Several factors are at work. Expanded unemployment-insurance benefits encourage some workers to keep looking for a job rather than drop out of the workforce altogether, adding perhaps half a percentage point to the unemployment rate, according to the Fed. The evisceration of their wealth may have led people to look for work rather than retire or stay at home with the children. And firms have been unusually quick to slash payrolls. Some may be husbanding cash more carefully because of the credit crunch. Others may simply be more pessimistic about an eventual recovery. Whatever the reason, one result is that productivity is rising, cushioning profit margins. Robert Hall of Stanford University, who heads the academic committee that dates recessions, says Okun devised his law in an era when productivity usually fell during recessions: “When productivity rises, the law fails. Though I was a great fan of Okun’s, I’m afraid his law is obsolete.” The difference with Europe is especially striking. In the euro zone GDP has fallen further than in America but unemployment has risen less (see chart). Employers are slower to sack workers than in America, partly thanks to government subsidies that encourage them to shorten working hours instead (see article). This means that European unemployment will probably be slow to fall once GDP recovers. But it looks as if it will be slow to come down in America as well. Firms are unlikely to do much hiring until growth seems durable, and so far it does not. Replenishing inventory will be a temporary fillip without an increase in consumer demand. Car sales have been strong in great part because of the federal cash-for-clunkers programme, which allows Americans to get up to $4,500 for their old car when they exchange it for a new one. The programme was supposed to run until November 1st but its $1 billion was snapped up within days of its start on July 24th. The House of Representatives has voted for an extra $2 billion and at mid-week the Senate was expected to do likewise. But cars bought now may mean fewer cars bought later. If growth peters out again later this year, it will dash the expectations Mr Obama has done so much to raise by touting his stimulus. Dick Moore, Elkhart’s mayor, has been so enthusiastic about federal support that some county officials harrumph that he sleeps in Obama pyjamas. Though the president obligingly promised $39m for a local unit of Navistar to make electric trucks, it will take time for the firm to scale up production and hire workers. Meanwhile, Dorinda Heiden-Guss, who heads the county’s economic-development group, has been barraged with requests from companies seeking incentives. But many of them do so without a semblance of a business plan. Another caveat: all numbers are subject to revision, perhaps years later. Even the Depression is getting worse. According to the latest revisions, GDP fell 26.7% between 1929 and 1933: the pre-revision figure was a mere 26.6%. Today’s green shoots could still be revised away.

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Sorry I wasn't clear enough. Looks like the stock market has reached a ceiling. Especially looking at these unemployment numbers, I don't see any reason why stocks can go higher by any substantial amount. People can't spend if they don't have a job, are on unemployment, getting paid less, or worried about losing their job. Can't forget about the increased savings rate. Gotta spend money to make money. Perhaps a flat trend for a while like 2004-2005.

I bought Diana Shipping (DSX) today. I like the $13 price.

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Originally posted by Krypton Sorry I wasn't clear enough. Looks like the stock market has reached a ceiling. Especially looking at these unemployment numbers, I don't see any reason why stocks can go higher by any substantial amount. People can't spend if they don't have a job, are on unemployment, getting paid less, or worried about losing their job. Can't forget about the increased savings rate. Gotta spend money to make money. Perhaps a flat trend for a while like 2004-2005.

Although you're also seeing the cost of secured borrowing reduce with reduced interest, thereby freeing up other cash.

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Originally posted by Brizzo "It's all gone Pete Tong" is actually a phrase in Europe, England I believe. Pretty sure that's where Pete Tong got his DJ name from as well.

The infamous Rojam ID. 14 years, 9 months and counting...

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Originally posted by fbgdavidson Although you're also seeing the cost of secured borrowing reduce with reduced interest, thereby freeing up other cash.

Stuff like this make the current quarter very hard to read. Everything is mixed. Everyday I watch CNBC. Some days is just all optimism and other days is doom and gloom. Some days are both good and bad. I'm like WTF!? Are we good or bad? We'r neither short term. Long term of course, we'r good. But it's hard to maintain a long-term view watching CNBC everyday.

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