533K Jobs GONE! in November (collection, unemployment, stock market, inflation)

[neil0311]

Originally Posted by Woof

I don't remember 500K hitting the jobless ranks in one month, and more than that predicted for the following months.

The job loss last month represents less than 1 percent of the nation’s payroll. In comparison, the 602,000 jobs lost to a much smaller U.S. economy in December 1974 represented nearly 8 percent of the total.

I'm not trying to minimize the problem, but rather trying to inject some proportionality and context. You guys are making some baseless and alarmist statements, when in reality we don't know what will happen, but we do have some history to compare against. The sky isn't falling and we're not headed for soup lines, unless you convince yourselves and make it a self-fulfilling prophecy.

[chet everett]

You don't have to remember it, the data is right here: Unemployment Insurance Weekly Claims Data

Hyperbole is not helpful. No recession is ordinary. Each time the economy fails to grow a lot of people take it on the chin.

The scope of the current crisis is certainly broader than anything that has been seen, and the efforts that have already been undertaking are similarly extraordinary. While some would argue that the efforts have been futile that seems less than accurate -- credit markets are still operating for many purposes, though not enough to completely smooth over the difficulties.

The markets have taken on a distressing "hair trigger" tendency that is not fostering any confidence, in fact that volatility is eroding confidence in more than just investing, but in the fate of the economy. Foolishly. People are not going to give up the lifestyles to which they've adapted in favor of some unsustainable agrarian distortion of soot-smudged 1930's Hollywood "DEPRESSION ERA" scenario. Given how few people are employed in the agriculture sector these days IF WE WERE to get to unemployment over 20% (by any, even highly distorted measure) there would be massive displacement in sectors as diverse as healthcare, transportation, and even government.

There are many things that contributed to the current crisis, and the realization of the seriousness of the crisis was somewhat sudden. Real estate bubble, mortgage backed securities, lack of wage growth, untenable stock prices, hyperbolic political rhetoric and "news" commentary to match, run away oil prices and equally dramatic shifts, horrible mismatch between existing vehicle options and realistically saleable models, monetary policy that was likely too focused on a narrow definition of prosperity, unprecedented global change/trade -- all these things are going to give PhD candidates in Econ fodder for years of dissertations once that data is compiled and freely available.

Meanwhile there are going to be a lot of people taking it on the chin for quite a while. The traditional peaks in new unemployment claims come in the second week of January -- in the not too distant past (thing 9-11) those have been in excess off 800K. Unlike in that period, the odds of people "shopping their way out" of this downturn are significantly less. There is, however, an awful lot of "bully pulpit" stuff that the new administration might do to at least temper the downturn. While I have no illusions that DIRECT government funding efforts will take quite a bit longer to get off the launching pad, it is pretty clear that there is A LOT of dough pumping around the system, if the mood turns positive that dough could get quite productive, but even MORE likely is that river of money will encourage firms NOT to whack too quickly. To initiate mass layoffs and then be on the sidelines as money goes looking for someplace to grow is a risk that will not be undertaken lightly. The job losses will undoubted in come the kind of low skill, easy to enter fields that already have crummy wages and poor options for growth. If the new administration wants to REALLY do something for CHANCE they will not only extend unemployment (and put that on the Fed tab. like has happened in past) BUT ramp up skills building job training efforts. Perversely the hardest thing about that may be WHERE to target the skill efforts -- certainly "green tech" is not large enough or mature enough or able to ramp quickly enough to absorb the workers.

Another reality that is going to be very hard to swallow is the impossibility of acting quickly on any sort of expansion of the legal US work force that may come from immigration changes. People that came here for work may find their prospects better 'back home', but that is debatable too: Unemployment rate - Country Comparison

[CouponJack]

Originally Posted by neil0311

I think you're waaaay off base here. Unemployment hit a spike of 24.9% during the great depression, and there were several factors then that are not in evidence now. Scaring people and being alarmist doesn't help but worsens the situation. People need to step back from the ledge and take a breath.

First, you had no FDIC backed deposits in 1929-1933, and many banks went under and took depositor's money with them. That hasn't and won't happen.

Second, you had no umemployment insurance during the depression, so those who were unemployed (24.9% of the workforce in 1933 remaining above 10% through 1941) had no or very little income and their spending stopped completely. Foreclosures reached much higher levels than today.

Third, the dustbowl. Not happening today.

Fourth, protectionism and tariffs increased during the depression. Not happening today.

Fifth, monetary policy was much different during the early 1930's as the money supply contracted and the Fed sat on the sideline.

Sixth, fiscal policy was much different during the latter days of the Hoover administration, as taxes were raised on corporations, individuals, and on imports.

Yes, we're in a tough time. Yes, we may see unemployment go higher. Some say as high as 10% or 11%, but nothing like the nearly 25% in 1933.

The real issue will be how do we come back off this stimulus and keep inflation from being a problem in the aftermath of recovery, and how do we handle this ever skyrocketing national debt. IMO, we have more to fear from the aftermath of this recession then we do from the recession itself. There are already some economists who see a bottom in both the equity and housing markets (leading indicators) and although we may see bad employment numbers for the next few months, they lag the recovery, and we may actually start on the way back while employment remains tight and unemployment numbers continue to increase.

Neill, judging by your posts it seems like you think the bottom is already here and things should start to improve within a couple of months....

This is the most bullish opinion I have heard. I don't agree at all but I wanted to see where you stood....

[Woof]

No recession is ordinary. Each time the economy fails to grow a lot of people take it on the chin.

I didn't mean ordinary as in "unimportant", I meant that it wouldn't be a normal cycle of a coupla years or so down and then we pop up stronger than ever.

The markets have taken on a distressing "hair trigger" tendency that is not fostering any confidence, in fact that volatility is eroding confidence in more than just investing, but in the fate of the economy. Foolishly. People are not going to give up the lifestyles to which they've adapted in favor of some unsustainable agrarian distortion of soot-smudged 1930's Hollywood "DEPRESSION ERA" scenario. Given how few people are employed in the agriculture sector these days IF WE WERE to get to unemployment over 20% (by any, even highly distorted measure) there would be massive displacement in sectors as diverse as healthcare, transportation, and even government.

I'd say the current sucker rally of the stock markets is giving people a foolish sense of complacency about what's happening to the economy. But no, most people won't give up their urban lifestyles to buy a farm - few would have that option even if they could afford to buy farmland and had the skills. I can't and I don't.

Some members here have wisely become semi self-sufficient, they've bought the property and learned the skills some time ago. They'll get by. So will people like you who have been successful and have invested diversely.

That leaves vast numbers of soon to be unemployed people without much of anything, not even enough land for a decent garden, and for whom govt will become increasingly unable to provide a safety net. They will suffer. I'm talking about Great Depression style suffering - malnutrition, soup kitchens, etc. for maybe a third of the population or more. It would be best if some of them wised up and started prepping as best they can .... that would be better than smiling and reassuring them that things are going to look bleak for a while, but then perk right back up in a year or two.

It's better to be prepared than to be complacent and brimming over with consumer confidence. But .... it's getting late to prepare, and not many have even begun.

I think we're about to become a thirdworld country over the next few years. People ought to prepare for that to whatever extent they can, such as learning to live without reliable electricity and healthcare, and learning skills and trades that might possibly be in demand in a ruined economy.

There are many things that contributed to the current crisis, and the realization of the seriousness of the crisis was somewhat sudden. Real estate bubble, mortgage backed securities, lack of wage growth, untenable stock prices, hyperbolic political rhetoric and "news" commentary to match, run away oil prices and equally dramatic shifts, horrible mismatch between existing vehicle options and realistically saleable models, monetary policy that was likely too focused on a narrow definition of prosperity, unprecedented global change/trade....

Well, that's much of it .... these are forces that have burrowed and corrupted below our notice, they add together to destabilize a complex world economy that was never too stable to begin with.

That's what often happens to complex dynamic systems. A relatively small force or two out of the ordinary hits them, then they start falling apart.

Humpty Dumpty sat on a wall. Humpty Dumpty had a great fall. All the king's horses and all the king's men Couldn't put Humpty together again

[chet everett]

Originally Posted by Woof

That leaves vast numbers of soon to be unemployed people without much of anything, not even enough land for a decent garden, and for whom govt will become increasingly unable to provide a safety net. They will suffer. I'm talking about Great Depression style suffering - malnutrition, soup kitchens, etc. for maybe a third of the population or more. It would be best if some of them wised up and started prepping as best they can .... that would be better than smiling and reassuring them that things are going to look bleak for a while, but then perk right back up in a year or two.

It's better to be prepared than to be complacent and brimming over with consumer confidence. But .... it's getting late to prepare, and not many have even begun.

I think we're about to become a thirdworld country over the next few years. People ought to prepare for that to whatever extent they can, such as learning to live without reliable electricity and healthcare, and learning skills and trades that might possibly be in demand in a ruined economy.

Have you been to actual Third World countries? If you have then you know that the millions of acres of tract home, shopping malls, office parks, and high rises in the US would have to be torn down and replaced with tin shacks, slaughtered-while-you-watch-no-refrigeration markets, open sewers, and general chaos.

Why, exactly, would our utilities become intermittent? Are cranes going to dismantle our hospitals and medical offices? Will pharmacies switch over to selling various roots and barks?

If you seriously believe those things are right around the corner then you really ought to stop using the interwebs and work on you skills telling tales around a campfire, because you have one heckuva a career as a shaman ahead of you when the lights go out...

[texdav]

I can rememebr the 70's and htis is nopthign like that except in some regions. When the unemployment as figured today reaches 12% and inflation reaches double digits;then it is as bad. I do think that some regions have near this without the inflation.You will notice the difference when you go out and shop plus loom at restaurants.At least where I live restaurnts are full and the shoping is normal.

[gwynedd1]

Originally Posted by Woof

I didn't mean ordinary as in "unimportant", I meant that it wouldn't be a normal cycle of a coupla years or so down and then we pop up stronger than ever.

I'd say the current sucker rally of the stock markets is giving people a foolish sense of complacency about what's happening to the economy. But no, most people won't give up their urban lifestyles to buy a farm - few would have that option even if they could afford to buy farmland and had the skills. I can't and I don't.

Some members here have wisely become semi self-sufficient, they've bought the property and learned the skills some time ago. They'll get by. So will people like you who have been successful and have invested diversely.

That leaves vast numbers of soon to be unemployed people without much of anything, not even enough land for a decent garden, and for whom govt will become increasingly unable to provide a safety net. They will suffer. I'm talking about Great Depression style suffering - malnutrition, soup kitchens, etc. for maybe a third of the population or more. It would be best if some of them wised up and started prepping as best they can .... that would be better than smiling and reassuring them that things are going to look bleak for a while, but then perk right back up in a year or two.

It's better to be prepared than to be complacent and brimming over with consumer confidence. But .... it's getting late to prepare, and not many have even begun.

I think we're about to become a thirdworld country over the next few years. People ought to prepare for that to whatever extent they can, such as learning to live without reliable electricity and healthcare, and learning skills and trades that might possibly be in demand in a ruined economy.

Well, that's much of it .... these are forces that have burrowed and corrupted below our notice, they add together to destabilize a complex world economy that was never too stable to begin with.

That's what often happens to complex dynamic systems. A relatively small force or two out of the ordinary hits them, then they start falling apart.

Humpty Dumpty sat on a wall. Humpty Dumpty had a great fall. All the king's horses and all the king's men Couldn't put Humpty together again

Hi Woof,

Well that depends. One could be self sufficient but depending on the level of chaos how will you defend your food stores? If it gets down to it, sure you may win a defensive fire fight or two but if it gets that bad forget it. You will have to guard your produce and survive it.
I think people can do very well in Urban areas. The 3000 square foot house becomes cheap if 4 families live in it. Networking is more important than "self" sufficiency. I do not have all the skill sets I need but I have some. Even a suburban guy like me knows how to grow veggies, fish, jerk meats, grill with wood, purify water, make cheese, cook at a near professional level, hand load , shoot straight and other such redneck skills. I can network much easier here with those having skills that compliment mine. Get with a church, they have lots of land. I would be spoiled as an intensive gardener with all the space.
It is usually the slums that get really hit really hard because they usually cannot organize well.

[Woof]

I don't know if they'll be torn down, Chet, but they'll probably have plenty of squatters if they can't be leased out.

There are tent cities and other homeless encampments right now, and they'll continue to increase in size unless the police in a given area disperse them.

Utilities are already struggling to maintain what they have, in the face of rising costs for equipment and rising demand - from customers who are less able to pay, who put off paying the electric bill because they have to make rent/mortgage payments and need to put some food on the table.

Whether hospitals and medical offices get demolished will depend on the desire of whoever owns the property after they're shut down (not all of them, but many will close). But I wouldn't be surprised to see a rise in alternative medicine if the current healthcare system collapses ..... yes, pharmacies will be selling more roots and barks than they do currently, and they may not be packaged as nicely as they are now.

Just about every summer parts of California already experience rolling blackouts. The lower cost of fuel will prevent that from being a problem for now, but it ain't gonna stay low forever.

[chet everett]

Originally Posted by texdav

I can rememebr the 70's and htis is nopthign like that except in some regions. When the unemployment as figured today reaches 12% and inflation reaches double digits;then it is as bad. I do think that some regions have near this without the inflation.You will notice the difference when you go out and shop plus loom at restaurants.At least where I live restaurnts are full and the shoping is normal.

Now either texdav is giving a slightly more balanced view of the REALITY or he is one of those real devious type survivalists that sends these messages of false normalcy through an elaborate satellite linked network of anonymizing relays so will never be able to find the true location of his secret lair and its enormous cache of SPAM, Bush's Baked Beans, and LimeAid -- you can live for 30 years off that if you have to!!!

[Woof]

Originally Posted by gwynedd1

Hi Woof,

Well that depends. One could be self sufficient but depending on the level of chaos how will you defend your food stores? If it gets down to it, sure you may win a defensive fire fight or two but if it gets that bad forget it. You will have to guard your produce and survive it.
I think people can do very well in Urban areas. The 3000 square foot house becomes cheap if 4 families live in it. Networking is more important than "self" sufficiency. I do not have all the skill sets I need but I have some. Even a suburban guy like me knows how to grow veggies, fish, jerk meats, grill with wood, purify water, make cheese, cook at a near professional level, hand load , shoot straight and other such redneck skills. I can network much easier here with those having skills that compliment mine. Get with a church, they have lots of land. I would be spoiled as an intensive gardener with all the space.
It is usually the slums that get really hit really hard because they usually cannot organize well.

Very very few people are totally self-sufficient ..... you bring up some good points. I'm just urging people to prepare in any way they can, and the best way to do that is through networking, banding together to help each other and for common self-defense.

Urban and suburban survival are very different from rural. One of the big problems is the possibility of having prepped to some extent, only to lose one's home through job loss and foreclosure. Hopefully there will be family to help.

One of the best ways to prepare for the problem of slums erupting into riots and general lawlessness, is to not be located near one. That's about all I can think of to do, other than lay low (which everyone should be doing). It won't be a good idea to waddle down the street looking through your wallet and complaining loudly about how canned foods give you indigestion.