Financial News

[southsider2k5]

Who said it was good?

 

Nevermind.

 

If you drop 10% and recover 2%, that can show that things are recovering, but it still doesn't mean things are better. That can be a simple function of people finally having to spend, as was demonstrated by the statistics that came out after cash for clunkers was done, that showed high amounts of backlogged buying had taken place. It becomes a statistical anomaly at some point. I don't believe "surprising growth" in retail sales means anything more than it does anywhere else, especially since lots of those numbers can be interrelated. When you buy a new house, lots of people buy new furnature, new TVs, new stereos etc.

[Balta1701]

You mean the housing credit? I am talking about retail spending here.

No. The stimulus package included a huge tax cut over 2 years for every taxpayer. It was larger than the stimulus checks sent out last year, just more spread out over the course of the next 2 years, rather than a lump sum payment. If it lasted 10 years, it would have been the largest tax cut in history.

[NorthSideSox72]

If you drop 10% and recover 2%, that can show that things are recovering, but it still doesn't mean things are better. That can be a simple function of people finally having to spend, as was demonstrated by the statistics that came out after cash for clunkers was done, that showed high amounts of backlogged buying had taken place. It becomes a statistical anomaly at some point. I don't believe "surprising growth" in retail sales means anything more than it does anywhere else, especially since lots of those numbers can be interrelated. When you buy a new house, lots of people buy new furnature, new TVs, new stereos etc.

That is more or less what I was getting at - there is just a difference between you and I on sustainability. I don't see it as a single wave, but, I could be wrong.

 

[NorthSideSox72]

No. The stimulus package included a huge tax cut over 2 years for every taxpayer. It was larger than the stimulus checks sent out last year, just more spread out over the course of the next 2 years, rather than a lump sum payment. If it lasted 10 years, it would have been the largest tax cut in history.

Weird, I noticed no tax cut, but I do vaguely recall some talk about it. I'll have to go back and look - when did it happen?

 

Of course, if that were true, that would sort of go against your stances on tax cuts, wouldn't it?

 

[Balta1701]

Weird, I noticed no tax cut, but I do vaguely recall some talk about it. I'll have to go back and look - when did it happen?

 

Of course, if that were true, that would sort of go against your stances on tax cuts, wouldn't it?

The fact that tax cuts were stimulative doesn't mean that they were the most effective variety of stimulus. No one said you would get a zero multiplier from tax cuts (although corporate tax cuts are disturbingly close). Just that we might be closer to out of this if we'd focused the money on job creation.

 

Via the WSJ:

On a smaller scale, a middle class couple can expect to find an additional $26 in their weekly paychecks starting June 1, thanks to a tax cut in the gigantic bill. A single person will see an extra $13 in the paycheck.

If you do the math, over 52 weeks, that's the equivalent of a $1352 check for a full family over a 1 year period. That was one of the larger parts of the stimulus bill.

[NorthSideSox72]

The fact that tax cuts were stimulative doesn't mean that they were the most effective variety of stimulus. No one said you would get a zero multiplier from tax cuts (although corporate tax cuts are disturbingly close). Just that we might be closer to out of this if we'd focused the money on job creation.

 

Via the WSJ:

If you do the math, over 52 weeks, that's the equivalent of a $1352 check for a full family over a 1 year period. That was one of the larger parts of the stimulus bill.

Hmmmm. Well that could certainly be playing a factor in this. I guess I hadn't noticed any change in my tax deductions on my paychecks, but now I'll go home and look.

 

[Rex Kickass]

Initial Unemployment numbers drop sharply to 466,000 this week, down from last weeks, 501,000.

 

http://money.cnn.com/2009/11/25/news/econo...laims/index.htm

 

What's the number here that signals job growth, I've heard 400k but I don't know. Nice to see us starting to get close at least.

[kapkomet]

Initial Unemployment numbers drop sharply to 466,000 this week, down from last weeks, 501,000.

 

http://money.cnn.com/2009/11/25/news/econo...laims/index.htm

 

What's the number here that signals job growth, I've heard 400k but I don't know. Nice to see us starting to get close at least.

What? If we get to unemployment claims to a number, we have "job growth"?

 

This is a bump for temporary holiday work.

[jasonxctf]

What? If we get to unemployment claims to a number, we have "job growth"?

 

This is a bump for temporary holiday work.

 

ive heard this too. there is a number (i thought I had heard 500,000) where anything below that signaled job growth.

 

the thing to keep in mind is that these are initial jobless claims. this will always be a positive number since people (even in a good economy) are always losing their jobs, quitting, etc. You can't have a negative amount of people filing for unemployment for the first time. The best it could ever be is 0.

 

So back to the magic number, even in a bad economy, people are being hired for work. So the question mark is, how many people are being hired this week for work? Now this number can never be negative either. The worst it could be is 0.

[kapkomet]

ive heard this too. there is a number (i thought I had heard 500,000) where anything below that signaled job growth.

 

the thing to keep in mind is that these are initial jobless claims. this will always be a positive number since people (even in a good economy) are always losing their jobs, quitting, etc. You can't have a negative amount of people filing for unemployment for the first time. The best it could ever be is 0.

 

So back to the magic number, even in a bad economy, people are being hired for work. So the question mark is, how many people are being hired this week for work? Now this number can never be negative either. The worst it could be is 0.

I see what you're saying.

[NorthSideSox72]

What? If we get to unemployment claims to a number, we have "job growth"?

 

This is a bump for temporary holiday work.

No, its seasonally adjusted, so its not a holiday bump.

 

And actually, you need two numbers to figure out job growth - there is no magic number of UE claims, IMO, that signals growth, because it is not about growth anyway. Growth is jobs added, which is a different number. 400k new claims might be reported and we lose jobs, 500k reported and we are gaining them. The are related but not perfectly correlated.

 

[Cknolls]

This brings up an oddity that I have noted lately, that is good for discussion here.

 

One number the markets are sensitive to is consumer confidence. The assumption is that, when consumers are more confident, they spend more. More granular numbers are available too, like % of people who plan to spend $X in some period of time. Those numbers haven't recovered at all.

 

And yet, the actual spending seen as reported by real sales numbers for retailers have risen, slightly, in recent months.

 

My posit, which I think I've stated before, is that the lowering of spending by consumers shot lower than was really sustainable by the American market. Basically, Americans are so used to spending so much, that they couldn't hunker down THAT much, for THAT long.

 

But a further point here is that, I think, the recession causes people to think, and say, they will cut down spending my X amount. But that doesn't mean they actually do it. Certainly, for those who are losing jobs or income, their cut backs will be real. But remember, even a huge jump in UE like we have seen in this recession, going from 6%-ish to 10%-ish (or 10%-ish to 17%-ish, depending on which number you want to use), is still only having that profound effect on 4 to 7% of the population. For most others, changes that effect them directly are smaller. They will continue to spend.

 

Anyone else have a competing theory, as to why these numbers have diverged?

 

 

 

People could be reprioritizing their debts. Using cash flow to pay credit cards and monthly bills and not their mortgages.

[NorthSideSox72]

People could be reprioritizing their debts. Using cash flow to pay credit cards and monthly bills and not their mortgages.

So, are you saying that they use the cash flow to pay down debts and bills, and then spend more on those cards because the balances are down? Thus, the retail sales impact?

 

 

[Cknolls]

So, are you saying that they use the cash flow to pay down debts and bills, and then spend more on those cards because the balances are down? Thus, the retail sales impact?

 

 

Just a thought. Maybe the thinking is: If we keep current on necessities, by the time the economy recovers enough, i.e. jobs, we can deal with the bank and the mortgage.

[Balta1701]

No, its seasonally adjusted, so its not a holiday bump.

But...the seasonal adjustments are always, always tricky. Let's say that my seasonal adjustment gave extra weight to what happened the previous year. Last year's holiday season had retail sales shrink like 4% from the year before. Thus, if I was comparing to a number that included last year's data, I might expect less hiring than I'd get in a typical year because last year was so far down.

[southsider2k5]

No, its seasonally adjusted, so its not a holiday bump.

 

And actually, you need two numbers to figure out job growth - there is no magic number of UE claims, IMO, that signals growth, because it is not about growth anyway. Growth is jobs added, which is a different number. 400k new claims might be reported and we lose jobs, 500k reported and we are gaining them. The are related but not perfectly correlated.

 

With all of the layoffs and cutbacks, most places are very thin. It is conceivable that you could have much larger than normal holiday season temporary hiring going on.

[jasonxctf]

WASHINGTON – In a sharp improvement, more than half of U.S. states added jobs in October, though economists said many of the gains likely occurred in temporary employment.

[NorthSideSox72]

With all of the layoffs and cutbacks, most places are very thin. It is conceivable that you could have much larger than normal holiday season temporary hiring going on.

Or, they are hiring fewer of those because the anticipation is for fewer shoppers. Both will play a part.

 

[kapkomet]

People are only hiring temps so they can fire them all after the holidays. I know that's a part of the number of the falling unemployment claims, "seasonally adjusted" or not.

 

[Balta1701]

People are only hiring temps so they can fire them all after the holidays. I know that's a part of the number of the falling unemployment claims, "seasonally adjusted" or not.

BUT...that's how turnarounds in the job market typically start...with increasing temporary work hiring.

[kapkomet]

BUT...that's how turnarounds in the job market typically start...with increasing temporary work hiring.

True. However, I have heard that and heard that, and I think people are looking for a ray of sunshine anywhere. Frankly, I do not see it. January's unemployment is going to take a huge s***, except then there's going to be a lot of people who fall off the radar - so that's going to make it look like the percentage is "steady".

[Texsox]

All politics is local

Unemployment is as local as it gets. For 99% of Americans the only unemployment rate we care about begins and ends at our driveway. I know way too many talented people that are still actively looking. That's all I need to know. The rest is all mouse sweat and floofy dust.

[mr_genius]

All politics is local

Unemployment is as local as it gets. For 99% of Americans the only unemployment rate we care about begins and ends at our driveway. I know way too many talented people that are still actively looking. That's all I need to know. The rest is all mouse sweat and floofy dust.

 

Indeed.

[kapkomet]

All politics is local

Unemployment is as local as it gets. For 99% of Americans the only unemployment rate we care about begins and ends at our driveway. I know way too many talented people that are still actively looking. That's all I need to know. The rest is all mouse sweat and floofy dust.

AYep.

 

It's ridiculous, frankly.

 

One year next Wednesday. Hell of a lot of good two masters and a CPA does me. I'm overqualified or I want too much money, even though I have cut my salary requirements 40-50% from what I was making. Then, they say, "well, he'll just leave when it gets 'better' ". Hey dumbf***s, it's NOT going to get "better" like "better" used to be. There's no infastructure in place to add that many jobs.

 

But the reality and bottom line is, there's just not the positions open that there used to be. Period.

 

[NorthSideSox72]

Down drops 200+ within minutes of the opening bell, on fears related to an announcement from DubaiCo, who wants to delay/defer payments on loans. The gov't run company has over $60B in loans, and is just now hitting the first balloons. Investors see a possible ripple effect. Yikes.

 

The long term game for the Middle East is uglier than just the current wars and religious/cultural conflicts. The region is realizing they won't be able to live off oil forever, so they go into tourism, with heavy debts. If the debts cause problems, the governments will have to pour more oil money in to cover. They then would likely reduce supply levels and increase prices, causing spikes in oil and gas. As consumers use this to go further and further away from oil, the loop feeds on itself, until the region plummets into economic hell.

 

Scary stuff for them, and all the more reason for the US to get off oil before others do, so at least we don't have to get as entangled in that nightmare situation.