The April unemployment number fresh on Friday morning will reinforce the trend that is accelerating. We are at an all-time-high of continuing claims of unemployment -- going back all the recessions to 1971. The new jobless claims continue to spike, now at mid 600k, and show that there is no strength anywhere. All the bank maneuvers, all the sparring in Congress, all the globe-trotting by POTUS and delicate diplomacy at G20, cannot answer the facts. The loss of jobs is what is ripping down the morale of the country and making all the other challenges more grinding, and the smart guys say that we are a long way from where the unemployment number will end.
The Consumer Is Spooked.
Last evening I received an email from an online service that sells porcelain dessert plates each year for Christmas season. Each year a different design with a Christmas star somewhere on the top of the illustration. When my daughter was small, I bought one each year for her to have as a collection when she is a grown-up with a home for Christmas. For several years I have forgotten, or was distracted, and I fell behind. From an email, I saw the plates on a severe sale -- marked down from $85 and $75 to $39. The whole collection is more than one hundred and twenty years old, and the early plates are several thousand dollars. I checked off three plates and put in the order, with free shipping, for $117. Great deal I told myself. And then this morning, when I read Calculated Risk, the WSJ headlines on the GM fiasco, and the failure of the G20 to make progress on protectionism, on the American banks, I realized that my return to American consumerism was premature. I wrote the company immediately to cancel the order. The service returned a note an hour later confirming cancellation, with a thanks. This is why folk are losing their jobs. Because of a spooked, ruminative, even superstitious consumer like me. I am certain they need the business. I am certain that their warehouse is their fortune. I am certain that they reduced those plates to draw me in and do business in a slow season. I responded quickly, demonstrating their correct practice. Yet then -- I cancelled my own best idea, my best interest. I rationalized my decision when I saw the headlines on the FASB shenanigans with mark-to-market, as if calling a solid waste site landfill makes everything safe. (Or as Baseline Scenario argues, "Investors are not idiots.") My refusal probably means someone's job, or means hours are reduced for someone. Multiply my anecdote by millions of similar hesitations each hour of the day, and you can see why there is no end in sight.
There Is A New Planet Image.
On a day of my gloom and irrational fear -- scared of Christmas plates -- it lightens my heart when I read of the sudden fresh discovery of the image of a new exoplanet at 130 light-years distance around a young star HR 8799. The grand robot Hubble took the photograph 10 years ago of the star. We knew there were three planets there, because of the star wobble, but we could not see them because of the starlight. Using a new image-filtering technique, a Toronto team has identified the outermost exo -- seven times Jupiter's size. There is the thrilling suggestion that it has water vapor in its atmosphere:
"The planet seems to be only partially cloud covered and we could be detecting the absorption of water vapor in the atmosphere," says Travis Barman of Lowell Observatory, Flagstaff, Ariz. "The infrared light measured from the Hubble data is consistent with a spectrum showing a broad water absorption feature (at 1.4-1.49 microns), but the level of absorption seen is lower than it would be if the photosphere were completely devoid of dust. Dust clouds can smooth out many of the spectral features that would otherwise be there--including water absorption bands," Barman says. "Measuring the water absorption properties will tell us a great deal about the temperatures and pressures in the atmospheres, in addition to the cloud coverage. If we can accurately measure the water absorption features for the outermost planet around HR 8799, we will learn a great deal about their atmospheric properties. Hubble, situated well above the Earth's atmosphere, is excellently located for such a study."
In a time of great doubt here on modest, rocky and wet Earth, it is a gift to have a new friend that may have water vapor in its atmosphere. It isn't quite a Christmas star on a porcelain plate, but it is a joy. The formula remains, where there is heat and liquid water, there is the fundamentals for life in the universe as we know it. And jobs.
For decades now, Americans have been relentlessly castigated by its own intellectual class for consuming too much and too often; for living too high on the hog and (in the process) damaging our planet. The lesson has finally sunk in. Americans are no longer buying. You’d think the Enviro-Nazis would be happy. And, perhaps they are – for now.
Steadily increasing taxes and fees may also have contributed – and that was the whole point of it: to get Americans to spend less on themselves and more on their neighbors. The blow-back could have been anticipated. Now, government welfare coffers are running on fumes, even as an increasing number of citizens clamor for safety net services. The Holy Grail Keynesian solutions we are consistently asked to endorse include raising taxes even further; close loopholes and send the productive sectors scurrying oversees. Add a dollop of protectionism, and you have the perfect storm resulting in economic meltdown.
We’re already into borrowing heavily from the unborn. They will enter the world with a staggering personal debt. Moreover, they will likely lack the same opportunities their parents enjoyed. As such, they can be expected to add to the debt of countless future generations.
One hundred years from now, people will likely have forgotten what it means to have a free and robust economy. As hard times become the norm, people adjust. Textbooks will fail to remind us of the salad days and of all the things that were once possible; things that have been irretrievably lost.
The G20 Summit simply served to underline current trends. It essentially gave its blessing to the printing of paper by governments – as much as needed to placate shrinking public appetites. It is difficult to believe that the best and the brightest of us - those who we ourselves have picked to manage our affairs – do not see that the path they have chosen will lead us to ultimate economic ruin; that currencies thus inflated cannot help but become bogus. And that too, perhaps, was the point: to force people into a new (perhaps communal agrarian) way. Barter must certainly be a part of it; as well as empty store shelves; and severely restricted personal freedoms. It’s the only way the new system can possibly work.
The clear winner will be our planet. As someone (population czar) will surely be charged with the task of determining how many of us will live, populations will diminish. Hence there will be less need for resources and the earth can expect to revive. For one thing, those without jobs can expect to be labeled ‘expendable’. However, should ‘global warming’ continue and water shortages persist despite men’s best laid plans, only then will we come to understand our limitations; that man is only an infinitesimal cog as far as our great planet is concerned; and that all our efforts toward adopting a hair shirt mentality with regard to the environment are mere vanity. And Galileo will be proven right once again when he suggested that mankind is not the center of the universe after all.
John,
You are the best!
John-
You've made the same mistake with that grpahic that the MSM continue to make--their action is probably not mistaken but calculated.
Numbers are misleading--once must talk in terms of percentages--the population has grown during that period of time. the number version is more dramatic (and contributes to the scare you mention) but it overstates the case. the converse can be said--"we have more people working today than at almost any point in times past." On a percentage basis, I think we just approaching the early '80's levels--not good news but at least is has perspective.
All I can say...is get rid of the Federal Reserve.
Goodbye to the American dollar and hello Global currency!
All these bankers should be locked up for the biggest Ponzi scheme in history.
It will get a lot worse before it gets better.
In conversation with an acquaintance last week-
The company he has been with for years (energy related) ran internal data on new hires over the past two years and to no one's complete surprise they found that within the 90 day probationary period, 60% of new employees either quit their jobs or were fired for various reasons, such as- not calling in when absent, not showing up for work, regularly coming in late, non- performance when at work, using cell phones and text messaging all the time, insubordination, just being disinterested, and, of course, personal problems which relate to all the above.
He spoke disparagingly of the resumes, the interviews, the training that ends up for naught, and in general, the overall seeming futility of the process which, with these kind of trends, is a constant hassle and a revolving door.
This is a great company with top o' line benefit packages for career people. His opinion is that it is difficult to find someone who really wants to earn a living.
I guess he's sort of an old school hardass.
from BreakingViews.com:
Stick to it
BY EDWARD HADAS
Tax havens: The crackdown on tax havens is already being hailed as one of the good things to come out of the financial crisis. Rightly so. Now that punitive tax rates have disappeared, there’s no justification for errant rich states, pesky principalities and dodgy developing nations to profit from helping the rich of the world stay that way.
In the weeks before the London G20 summit, most of the main centres of tax relief signed up with what the OECD calls “the internationally agreed tax standard”. Those that don’t sign up or don’t follow through on their commitments to share tax information with inquisitive foreign governments will be treated as financial pariahs.
Looking at the threatened sanctions, it’s easy to see why the tax havens rolled over. The “toolbox” of countermeasures includes cutting off aid to poor countries, withholding taxes on cross-border payments and not allowing tax deductions for business expenses in the bad lands. That’s enough to change tax evasion from a national profit centre to an economic disaster.
The G20’s success is welcome, but raises two impertinent questions. First, considering how quickly the promises of compliance came once the G20 nations got tough, why did it take so long? The answer is simple. Politicians weren’t really keen to put substantial pressure on Switzerland, Luxembourg, Andorra, Vanuatu and the like. Tax havens – like offshore havens for gambling, prostitution and other vices – are fun to condemn but pleasant to use.
Second, will the G20 nations stick to their resolve? Post-crisis resolutions could easily prove as durable as the typical New Year variety. The newly beefed up global Financial Stability Board and the OECD’s Financial Action Task Force are supposed to ensure enforcement. They should work fast and hard to establish good habits. Otherwise, politicians and their rich friends will once again discover the need for a safe haven from populist extremists.
edward.hadas@breakingviews.com
Context News
The G20’s, Declaration On Strengthening The Financial System, issued after the London conference on April 2, includes a section on “Tax havens and non-cooperative jurisdictions”.
The G20 said, “We welcome the new commitments made by a number of jurisdictions and encourage them to proceed swiftly with implementation.”
The declaration includes a list of possible penalties:
increased disclosure requirements on the part of taxpayers and financial institutions to report transactions involving non-cooperative jurisdictions;
withholding taxes in respect of a wide variety of payments;
denying deductions in respect of expense payments to payees resident in a non-cooperative jurisdiction;
reviewing tax treaty policy;
asking international institutions and regional development banks to review their investment policies; and,
giving extra weight to the principles of tax transparency and information exchange when designing bilateral aid programs”.
Annex to G20 communiqué
Re-reading Mr B's post here, I looked closer at the street scene pic where people are in line leaning against the wall and I remembered how I was taught not to slouch against a wall. It just doesn't look good.
Hmm... for a moment imagine that you are the interviewer of these prospects... no, better yet, imagine that you are the owner of a family business where these people are hoping to go to work and you want a coffee and a piece of pie. On your way to the shop you walk by this corner and what do you think?
Are they pleasant thoughts? Study the picture
follow to my post above re unemployment claims as a % of workforce.
http://mjperry.blogspot.com/
"With March employment data now available, the graph above of Initial Jobless Claims as a Percent of the Labor Force (1970-2009) has been updated to reflect the March labor force of 154,048,000, and the March average for initial unemployment claims (650,937 for the 4-week moving weekly average). That measure of initial jobless claims adjusted for the size of the labor force shows that we are currently above the levels of the last two recessions (1990-1991 and 2001), but still far below the levels of the previous three recessions in the mid-1970s and early 1980s.
For current initial jobless claims to reach the peaks of the 1970s and 1980s of about .60% (see chart above), we would have to have initial jobs claims today of about 925,000, or 42% above current levels. By this measure of the employment situation, it seems unlikely we'll get anywhere close the recessionary levels of the 1970s and 1980s.
A similar chart (via Charles Brady of the Fox Business Channel) and analysis was featured in today's The Gartman Letter (subscription required) of the "Continuing Claims as a Percentage of the U.S. Labor Force" (see chart below): "
Is there any way to tell from spectroscopy if there are liberals on a planet, so we can rule it out as being uninhabitable?
Maybe, baby, I just don't know
They say to look, for a rainbow
Where some water and some hot air
Split the light into prisms there
I pursued one once, one fine day
So fast it was, to my dismay
I saw the end upon the ground
Steadily moving without bound
And I thought as I lost the chase
Our world turns at a quicker pace
Such a sight ne'er again to see
A rainbow running 'way from me
I tell this truth and do not doubt
That there is gold they talk about
It won’t be touched by mortal hand
And cannot be caught or outran
Oh drat! Add this last line to me simpleton's poem: 'Yet, at it’s end I want to stand'
"I have longed to move but am afraid
Some life, yet unspent, might explode
Out of the lie hissing on the ground
Like some sulphurous reminder of November
And, cracking to the air, leave me half blind."
Dylan Thomas
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