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I consider the U-6 to be a better rate to use when comparing to historical numbers because its methodology is much better aligned.
U-6 is far more general than anything that has been used in the past.
Quote:
Originally Posted by Bob from down south
Anyone with even the most rudimentary understanding of exponential math should be positively frightened by these numbers and their implications.
And anybody with even the most rudimentary understanding of the monetary system knows the analogy you are making is misleading. The federal deficit is just not comparable to household debt. The federal government HAS to have run a deficit for the monetary system to work, the FED's money creation is tied to debt creation usually at the federal government. The current deficit is high, but not so high to be truly problematic. Other developed nations with much less than the US have run higher deficits for years, not only that the US has had higher deficits in the past and paid them off over time.
The theory is simple, you run deficits during a recession and pay them down when the economy is growing. This is no different than a household using savings during a recession and building it back up when times are better. The federal government can't have "savings", it can only grow and shrink its deficit. The real problem here is that the previous administration increased the deficit when it should have been shrinking.
Quote:
Originally Posted by Bob from down south
This fundamental shift in borrower ethos and behavior alone could easily put the banks right back to where they were in Sept 08.
Not really. It will certainly hurt earnings, but so long as its slow and steady the banking system will deal with it just fine. The problems in 08 were caused by sudden shocks in the financial system, at this point the cat is pretty much out of the bag.
Residential mortgages are yesterdays news, the problems now are in commercial loans and soon to be private equity debt. The private equity problem is going to be interesting, the companies that were bought out have huge debt burdens and have been sucked dry of their wealth. The debt from the buyout boom during the bubble is just starting to come.
To me this is somewhat exciting though, some of the large corporations I compete with are likely to collapse.
If they decide to retire and are no longer looking for work even causally then as far as I know they won't be counted.
Causally or casually?
My point was that the numbers of these people are going through the roof even though many of them aren't prepared to retire and are actively looking for a way to work those extra few years they need to collect full SS benefits, finish paying off their house, etc.
On top of those people, there are a lot of disabled people out there who qualify for SSI/SSD who have been canned from their jobs as well. These people aren't being counted because they go from part time work to no work without being able to collect unemployment benefits.
Add in the 1099 employees (such as housing contractors and consultants) who can't collect benefits and can't find work, and then the numbers jump even more.
Since all these people aren't being counted, the official stats aren't even close to the "true number" of unemployed people even though the DC spin machine would like all of us to believe the 10% number you seem so fond of.
I've said this in other threads and I'll say it here, people elected Obama because they were tired of Bush. The stock market, the budget, the recession and all had started long before Obama was even elected. He was elected to change things around. The problem is people aren't giving him time to do it! They expect him to have it done before his first year is over. This problem isn't just between Bush and Obama, it happens every time a new president takes place.
Somebody said Obama is already talking about just serving one term. News to me! All I've heard is he's not backing down.
My point was that the numbers of these people are going through the roof even though many of them aren't prepared to retire and are actively looking for a way to work those extra few years they need to collect full SS benefits, finish paying off their house, etc.
So is this more flatulence or do you have actual data to support the claim that it is "going through roof"? This sort of thing always occurs, and certainly as the unemployment rate increases it should increase. But, the increase should be proportional to the increase in the unemployment rate hence its not really important metric as for as the employment market is concerned.
It would perhaps be important if it was occurring at a rate that was disproportional to the change in the unemployment rate. Is there any reason besides flatulence, that suggests this is the case?
Quote:
Originally Posted by sterlinggirl
Add in the 1099 employees (such as housing contractors and consultants) who can't collect benefits and can't find work, and then the numbers jump even more.
I see you are still stating this falsehood. 1099 employees are included in the unemployment statistics.
So is this more flatulence or do you have actual data to support the claim that it is "going through roof"? This sort of thing always occurs, and certainly as the unemployment rate increases it should increase. But, the increase should be proportional to the increase in the unemployment rate hence its not really important metric as for as the employment market is concerned.
It would perhaps be important if it was occurring at a rate that was disproportional to the change in the unemployment rate. Is there any reason besides flatulence, that suggests this is the case?
I see you're back to your tired old tactic of leading with an insult when somebody contradicts your lack of real world experience.
Yes I have data, but before I lay my cards on the table I'm betting that you don't have anything to back up your claims that the current rate of involuntary retirement is statistically insignificant.
the "naysayers" understand that we are only "increasing" our GDP with a massive increase in our debt ceiling and massive government spending. i see that our legislators have added another 2 TRILLION DOLLARS to our debt ceiling. how long do you think this is sustainable? i think the economic numbers are HORRIBLE considering how much money has been pumped into the system and how little benefit the average american has seen from all of this money pumping, though i do acknowledge that goldman sachs has had a very good year.
furthermore, none of the problems have been fixed and interestingly enough our congressional watchdog has just issued a report on that:
again, after all of these "reports" issued ask the average american if things are better for them personally but, more importantly, ask if the government spending is sustainable.....
also, anybody who thinks that the "crisis is over" needs only to look at today's AP headlines:
Funds flee Greece as Germany warns of "fatal" eurozone crisis
Germany has triggered a near-panic flight from southern European debt markets by warning that there will be no EU bail-outs, even though it fears the region's economic crisis has turned dangerous and could prove "fatal" for the entire eurozone.
Last edited by floridasandy; 01-31-2010 at 04:53 AM..
This is something you guys have yet to get....the economy is not a matter of "real world experience". One persons experience means jack.
Quote:
Originally Posted by sterlinggirl
Yes I have data, but before I lay my cards on the table I'm betting that you don't have anything to back up your claims that the current rate of involuntary retirement is statistically insignificant.
You're not getting the point of what I'm saying, it was a logical point not a factual point. If the "involuntary retirement" rate increases and decreases at a rate that is proportional to the unemployment rate (which seems likely) than knowing this information is not all that useful in terms of tracking the health of the economy. Why? Because it would not tell you anything above and beyond the unemployment rate. Now, if it was disproportionate then it could be something important to look at. And hence my question, is there any reason to believe its disproportionate?
By the way, this is much the same reason why it usually does not matter which measure of unemployment you look at. They all move together, if the movements started to become disproportionate that could signify something meaningful.
Neil Barofsky, the special inspector general of TARP had this to say:
"Even if TARP saved our financial system from driving off a cliff back in 2008, absent meaningful reform, we are still driving on the same winding mountain road, but this time in a faster car," Barofsky wrote.
But..the Treasury had this to say about Barofsky's plead for regulations:
"Treasury said it welcomed Barofsky's oversight but resisted the call to erect new barriers against conflicts of interest. The new rules "would be detrimental to the program," Treasury spokeswoman Meg Reilly said in a statement. The existing compliance rules "are a rigorous and effective method of protecting taxpayers," she said.
Watchdog: Bailouts created more risk in system - Yahoo! News (http://news.yahoo.com/s/ap/20100131/ap_on_bi_ge/us_bailout_watchdog - broken link)
Our government is letting the bankers play with their relaxed set of rules.
We've bailed them out but didn't reign in their leash.
Do you know how long it will take the unemployment rate to become good again with 2% GDP growth? Let's just say you'll probably be dead first.
The problem with this recession has always been the recovery and so far all the concerns are proving to be valid. What is going is going to return the economy to full-employment? The bubble has ripped a hole in the economy by mis-allocation resources....what is going to fill it?
The problem is that at 2% growth it will take a very very very long time to get at full-employment again. There needs to be multiple quarters of 5%+ growth, not just one.
The idea that we are better off now vs 12 months ago because its possible that in the future there are real improvements makes no sense. That some potential existed 12 months ago....but it was of course not realized. Will it be this time? Time will tell.
The federal government HAS to have run a deficit for the monetary system to work, the FED's money creation is tied to debt creation usually at the federal government. The current deficit is high, but not so high to be truly problematic.
The theory is simple, you run deficits during a recession and pay them down when the economy is growing. This is no different than a household using savings during a recession and building it back up when times are better. The federal government can't have "savings", it can only grow and shrink its deficit. The real problem here is that the previous administration increased the deficit when it should have been shrinking.
Not really. It will certainly hurt earnings, but so long as its slow and steady the banking system will deal with it just fine. The problems in 08 were caused by sudden shocks in the financial system, at this point the cat is pretty much out of the bag.
Residential mortgages are yesterdays news, the problems now are in commercial loans and soon to be private equity debt. The private equity problem is going to be interesting, the companies that were bought out have huge debt burdens and have been sucked dry of their wealth. The debt from the buyout boom during the bubble is just starting to come.
A number of excellent points from your posts.
We do not know what lies ahead. Certainly, we are in bad shape and might very well be worsening. Much depends on the direction taken by policy. Thus far, the the actions taken by Obama and friends are worrisome. Worse yet is the inexplicable support of Obama's policies.
Time will tell. The need is for an institutional fix that reduces systemic risk and enables productivity. What is not needed are morality plays, the picking winners, or policies that unilaterally disable productivity while competitors' policies are increasingly enabling.
S.
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