Former Fed Employee Admits QE for Wall Street (accountant, real estate, debt)
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There is some evidence to suggest that the unemployment numbers were cooked at the start of this current economic slowdown. .
No, there isn't. The numbers in a never before seen self-reinforcing downward spiral can be difficult to track with real-time precision. That's why there are revision cycles.
Yep and at the start of the recession every month the prior month’s numbers were corrected to a lower unemployment rate. The last time things looked like this was in The Great Depression. There is a historical president for things to be like this.
Quote:
Originally Posted by fairlaker
Quote:
Originally Posted by noneofyourbusiness
Looking at the payout rate divided by the unemployment rate there was a historic correlation. Starting at the start of the recession in 2008 there started to be a divergence in the numbers, understating the unemployment rate by 30 to 50%. They were writing checks for an unemployment rate of over 17% and stating the rate as 9.8% in November of 2010. .
There simply is no necessary relationship between the unemployment rate and either the number of persons receiviing UI benefits or the amount of money paid out under them. You are laboring under a set of severe misconceptions.
I agree with you. There is no requirement to apply for unemployment when you are out of work. I have not done so myself. So without a requirement to apply there is no necessary relationship between being unemployed and collecting benefits.
But for all practical purposes most of the people let go in a recession apply for unemployment benefits, most that are eligible get them and the ratios should be relatively constant over time. So ether the amount of money going to each recipient doubled or the unemployment rate diverged by 50% from the stated amount.
Quote:
Originally Posted by fairlaker
Quote:
Originally Posted by noneofyourbusiness
It would be very interesting indeed to see where the reduction in workforce participation truly is. And in how many of the teens coming out of high school are successfully entering the workforce.
In 2000, the baby-boomers were aged 36-54. They were all in their prime earning years. Each year since then. an annual cohort has moved up into the 55+ age bracket which as a group has an LFPR about half that of those aged 25-54 (40.2% versus 82.2%). Boomers are being replaced at the low end of the 25-54 band, but the numbers of new entrants are low and depressed by the fact of an increasing lifetime income premium in return to education over return to work. Partly offsetting are the high LFPR numbers for expanding immigrant populations, and the fact that even as they retire in large numbers, the share of the 55+ age group that works at something or other is slowly growing. All in all, LFPR has declined since 2000 and will continue to decline over the rest of the current decade, headed toward about 62% from what in 2000 was 67.1%.
What % of the graduating class from high school next year will get jobs next year?
What was it like 20 years ago?
What % of the collage graduates next year will get jobs?
Yep and at the start of the recession every month the prior month’s numbers were corrected to a lower unemployment rate. The last time things looked like this was in The Great Depression. There is a historical president for things to be like this.
Completely different paradigms as between the Great Depression and 2008. Starting in 1940, the unemployment rate has been calculated from responses to a major national survey, now called the Current Population Survey (CPS). The CPS is often referred to as the "household survey" to distinguish it from the Current Employment Statistics program which conducts a large business "establishment survey" from which the number of jobs on non-farm payrolls is determined. The problems with the CPS data in a rapidly changing economic climate are that they only touch whichever week the 12th of the month happens to fall in, the predetermined respondents joining and leaving the survey sample each month may not be neutral with respect to the new economic climate, and the seasonal adjustment factors used to produce headline unemployment rates may also be impacted in ways that can't yet be observed.
Meanwhile, people who think that any of the national economic data are being altered or cooked by anybody anywhere are simply knowledge-free space cadet kooks and morons.
Quote:
Originally Posted by noneofyourbusiness
I agree with you. There is no requirement to apply for unemployment when you are out of work. I have not done so myself. So without a requirement to apply there is no necessary relationship between being unemployed and collecting benefits.
Which is why the number of people receiving UI benefits is simply not used at all in calculating the monthly unemployment rate. It's right up there with the price of tea in China in not being taken into any account whatsoever.
Quote:
Originally Posted by noneofyourbusiness
But for all practical purposes most of the people let go in a recession apply for unemployment benefits, most that are eligible get them and the ratios should be relatively constant over time. So ether the amount of money going to each recipient doubled or the unemployment rate diverged by 50% from the stated amount.
While there is no necessary or certain relationship, it is typical that fewer than half of unemployed people receive UI benefits. Self-employed people for one are not eligible for benefits unless they had voluntarily paid into the system, which very few do. Those who have not previously worked and contributed to the UI trust funds (e.g., recent widows and college grads) are also not eligible for UI benefits. Some people formerly employed in non-profit and seasonal jobs are not eligible, and some peope have exhausted their benefits and aren't eligible to receive any more. And large numbers of unemployed people simply do not realize that they are eligible for benefits and hence do not apply for them. The actual relationship between the unemployed and those receiving UI benefits at any given time depends on dozens of variables and cannot be known in a durable or general sense.
Quote:
Originally Posted by noneofyourbusiness
What % of the graduating class from high school next year will get jobs next year? What was it like 20 years ago? What % of the collage graduates next year will get jobs? What was it like 20 years ago?
That is one point I’d like to drive home.
Well, both the demographic and cyclical environments were very different in 1993 from what they are today, but the question of what a college degree is actually worth is an old and often bungled one. The Atlantic did a piece on all the confusion last April. Might be interesting.
Completely different paradigms as between the Great Depression and 2008. Starting in 1940, the unemployment rate has been calculated from responses to a major national survey, now called the Current Population Survey (CPS). The CPS is often referred to as the "household survey" to distinguish it from the Current Employment Statistics program which conducts a large business "establishment survey" from which the number of jobs on non-farm payrolls is determined. The problems with the CPS data in a rapidly changing economic climate are that they only touch whichever week the 12th of the month happens to fall in, the predetermined respondents joining and leaving the survey sample each month may not be neutral with respect to the new economic climate, and the seasonal adjustment factors used to produce headline unemployment rates may also be impacted in ways that can't yet be observed.
When I was in grade school my teacher that was teaching me math taught me to check my work. Do the math one way, do it another way and get the same answer and you didn’t make a mistake.
Quote:
Originally Posted by fairlaker
Meanwhile, people who think that any of the national economic data are being altered or cooked by anybody anywhere are simply knowledge-free space cadet kooks and morons.
Look at the estimate of WMDs in Iraq before we went in. The government was putting a lot of pressure on the intelligence community to over estimate the threat of WMDs at the same time they were saying publicly that the estimates were conservative. They wanted to go into Iraq.
Did the government want people to think things were better than they were back in 2008? My take on the matter is yes. Did the publicly stated unemployment rate match the payout rate for unemployment checks? Before 2007 there was a historic small deviation. For 2008 and on there started to be a large deviation. It approached a 50% error in November of 2010. Looking at November of 2007 Vs. November of 2010. Your argument doesn’t hold for seasonal adjustment because they were looking at the same month. As far as rapidly changing situation by 2010 things had stabilized.
Does the math add up? From a historic close correlation to a 50% error what changed?
No they don’t look at unemployment pay out for calculating the unemployment rate. This is why it is tempting to look at it as a way to see if the books are being cooked.
Back in 2008 they were scared of a system crash, or a major bank run, or political unrest.
Quote:
Originally Posted by fairlaker
Which is why the number of people receiving UI benefits is simply not used at all in calculating the monthly unemployment rate. It's right up there with the price of tea in China in not being taken into any account whatsoever.
Exactly why you should be able to use it to see if the books are being cooked.
Quote:
Originally Posted by fairlaker
While there is no necessary or certain relationship, it is typical that fewer than half of unemployed people receive UI benefits. Self-employed people for one are not eligible for benefits unless they had voluntarily paid into the system, which very few do. Those who have not previously worked and contributed to the UI trust funds (e.g., recent widows and college grads) are also not eligible for UI benefits. Some people formerly employed in non-profit and seasonal jobs are not eligible, and some peope have exhausted their benefits and aren't eligible to receive any more. And large numbers of unemployed people simply do not realize that they are eligible for benefits and hence do not apply for them. The actual relationship between the unemployed and those receiving UI benefits at any given time depends on dozens of variables and cannot be known in a durable or general sense.
There may very well be another reason for a 50% divergence in the amount of money paid out for unemployment benefits relative to the stated unemployment rate. The numbers that the government has published have been historically accurate. We have been able to trust them. Post 2000 I don’t trust the government like I use to.
Quote:
Originally Posted by fairlaker
Well, both the demographic and cyclical environments were very different in 1993 from what they are today, but the question of what a college degree is actually worth is an old and often bungled one. The Atlantic did a piece on all the confusion last April. Might be interesting.
Boombustblog.com has some interesting stuff to read that is quite contrary to what the mainstream has to offer.
1) I've come to recognize the program for what it really is: the greatest backdoor Wall Street bailout of all time.
2) Corporations are all dodging taxes to offshore accounts and then repatriating them so they're paying a 5% tax rate instead of 35% (and in many cases 0%). All big corporations are doing this like Bank of America, Google, Exxon Mobil, General Electric, Ford, and hundreds of others.
1) Your second sentence proves QE3 NOT a Wall Street Bail Out.
The large corporation are NOT Wall Street.
They are the Business Community.
Wall Street refers to brokerages and their customers.
Wall Street refers to the Stock market Investors, the Stock buyers and sellers, the people with cash assets that return interest or dividends to them.
The vast majority of those people are retired and depending upon those incomes to survive or owners of active IRA accounts that will be the source of survival when they retire.
2) The large corporations who have cut their expenses by the reduction of Taxes levied on them by the Federal Government are trying to exist in a very hostile business environment.
Their survival is our survival, as a nation as buyers of the necessities they produce for us.
Think about it sanely, these corporation have NEVER actually paid any taxes at all.
These companies have ALWAYS passed on to us, the buyers, any supposed Tax on them by including that tax as one of its business expenses.
These corporations are SAVING us the Taxes that they would have had to pay and would have included in the purchase prices of what they sell us. The Price of their wares would be higher by that same amount.
These businesses are trying to survive in an economy where prices can not go up, because consumers demand is way down.
These companies are keeping price stagnant because wages are stagnant or lower, and employment is 50%.
They have hurt no one by moving away from the Taxes which should have been lowered so business can build again.
Attacking these American corporations by calling them Wall Street is falling for the communism propaganda of Saul Alinsky, which always rabble rouses the foolish thoughtless people who really need to learn who is really their enemy.
Last edited by cupid dave; 11-27-2013 at 08:25 AM..
The Fed is the main reason this nation has failed. All it has done is inflate with a few pauses for insiders to buy assets with cheap money. The only way to fix the economy is to eliminate central banks and fractional reserve lending. Trouble is, the financial parasites will create some other scheme.
The ONLY way to fix this economy is to enlarge it, to grow the GNP.
Our problem is that the GNP in 2010 should have been $20 trillion dollars, but was only $14 Trillion:
Both 911 at the beginning of 2000 and the Housing Bubble of 2008 depressed our normal GNP expansion s the chart shows, and retarded the growth to the $20 trillion dollar mark where it was clearly heading.
We SOLVE this problem by building confidence in the future so as to encourage more Consumer Spending, not swamping the public with political claims of dire consequences nor media storms of what is evil and fingering Business as the culprit.
2) Where does uninterrupted printing of money end?
There is a decline in the worker participation in the work force.
3) Where does that end? When does that end?
4) Where is the evidence to suggest that things will improve in my lifetime?
5) Where are the jobs for the up and coming generation?
6) When will things get better?
6) Things will get better when the Consumer Demand spends $20 Trillion dollars at the market place (i.e.; GNP reaches $20T).
1) The debt ends when taxes are levied on $20 Trillion, rather than $14T.
2) Printing money is just Borrowing from ourselves, instead of China, and at a much better rate of interest.
3) $20 Trillion dollars in business will require more workers to meet the demand this 130% increase in consumer spending.
4) The evidence is in the charts that illustrate the problem of the low GNP we are experiencing now.
5) The jobs come as Business grows in direct proportion to the growing GNP.
So true.
The trick is to identify the real power and find a way to collapse it.
The opposing Power is politicians who behave in ways that satisfy their constituencies in order to keep their job.
They do not understand the problems of the economy, but they do hear what their constituents are saying.
So, the POWER to oppose these politicians who do not know what to, and will only do what needs be done if the people who vote for them amass and are clearly heard.
Hence, WE are the ultimate problem.
We complain and ***** and criticize, but we have no clear united sense of the problem nor any real solution either.
The Solution is that we must demand an increase in purchases, measured in terms of dollars spent, so as to enlarge the GNP to $20 trillion dollars asap.
1) Your second sentence proves QE3 NOT a Wall Street Bail Out.
The large corporation are NOT Wall Street.
They are the Business Community.
Wall Street refers to brokerages and their customers.
Wall Street refers to the Stock market Investors, the Stock buyers and sellers, the people with cash assets that return interest or dividends to them.
The vast majority of those people are retired and depending upon those incomes to survive or owners of active IRA accounts that will be the source of survival when they retire.
2) The large corporations who have cut their expenses by the reduction of Taxes levied on them by the Federal Government are trying to exist in a very hostile business environment.
Their survival is our survival, as a nation as buyers of the necessities they produce for us.
Think about it sanely, these corporation have NEVER actually paid any taxes at all.
These companies have ALWAYS passed on to us, the buyers, any supposed Tax on them by including that tax as one of its business expenses.
These corporations are SAVING us the Taxes that they would have had to pay and would have included in the purchase prices of what they sell us. The Price of their wares would be higher by that same amount.
These businesses are trying to survive in an economy where prices can not go up, because consumers demand is way down.
These companies are keeping price stagnant because wages are stagnant or lower, and employment is 50%.
They have hurt no one by moving away from the Taxes which should have been lowered so business can build again.
Attacking these American corporations by calling them Wall Street is falling for the communism propaganda of Saul Alinsky, which always rabble rouses the foolish thoughtless people who really need to learn who is really their enemy.
Yet this post is one big piece of propaganda as well, complete with logical and factual errors:
How you conveniently decide to literally interpret Wall Street when it is used as a label for the basic financial mechanism that it is. Wall Street is a reference to the financial aspects of our system which isn't necessarily capitalist. Infact the more financial it is, the less capital in nature it is since capital isn't making the decisions. Its something much more akin to "creditorism" . That is the whole reason the "quarterly report" complex is criticized because its notheing but creditors running the show in the short term.
You are also just plain wrong on taxes being passed on. Only taxes that are broadly applied in competitive industries can be passed on. This was Adam Smith's criticism of a tax on salt, but this cannot be applied in all cases.
The last instance of fraud in your post ignores that not only are many of these large corporations financial firms quitel literally on Wall Street , like Chase, Citi, and JP Morgan, but also those not even suspected like GE, and GMAC. House hold names like JNJ are nearly 70% owned by institutions.
The ONLY way to fix this economy is to enlarge it, to grow the GNP.
Our problem is that the GNP in 2010 should have been $20 trillion dollars, but was only $14 Trillion:
Both 911 at the beginning of 2000 and the Housing Bubble of 2008 depressed our normal GNP expansion s the chart shows, and retarded the growth to the $20 trillion dollar mark where it was clearly heading.
We SOLVE this problem by building confidence in the future so as to encourage more Consumer Spending, not swamping the public with political claims of dire consequences nor media storms of what is evil and fingering Business as the culprit.
The only way to fix it is to change the monetary system and tax policy to something that the general public has a prayer to understand. As of now they cannot conceive of it because they are trying to reach net equity in a system that cannot ever reach higher than zero net equity. Mathematically speaking, large liabilities must exist somewhere. The choice for now is middle class, public sector and real estate debt to create these asset vehicles. Gross saving keeps rising but net saving does not.
6) Things will get better when the Consumer Demand spends $20 Trillion dollars at the market place (i.e.; GNP reaches $20T).
1) The debt ends when taxes are levied on $20 Trillion, rather than $14T.
2) Printing money is just Borrowing from ourselves, instead of China, and at a much better rate of interest.
3) $20 Trillion dollars in business will require more workers to meet the demand this 130% increase in consumer spending.
4) The evidence is in the charts that illustrate the problem of the low GNP we are experiencing now.
5) The jobs come as Business grows in direct proportion to the growing GNP.
1)Question how will the consumers spend $20 trillion? How do you get that?
2)The inflation tax can be quite a bitter pill.
3)This requires a 130% increase in GDP to get how do you get the 130% in the first place.
4)Ya what is driving the low GDP?
5)The answer to why DGP is low gets you to what needs to be done to get GDP up.
So why is GDP low?
I think there are many factors lots of them.
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