Economic News/Discussion

[Invictus]

LOL, i was pretty drunk when i wrote that last night....forgot about it till i just logged in. Could do a better job of explaining it

Back on the Euro, China to the rescue!!

China to Get ‘More Involved’ in Europe Rescue, Hold Euros

Feb. 15 (Bloomberg) -- China said it will “get more involved” in supporting Europe and sustain its holdings of euro assets, spurring gains in the currency and Asian stocks on optimism the debt crisis will be overcome.

“China will always adhere to the principle of holding assets of EU sovereign debt,” People’s Bank of China Governor Zhou Xiaochuan said in Beijing today. “We would participate in resolving the euro debt crisis,” he said, echoing comments by Premier Wen Jiabao yesterday.

The remarks offer a carrot to European finance ministers, who are increasing pressure on Greece to deliver budget cuts to secure a second bailout. At stake for China is helping to stabilize the economy of its largest market amid a global slowdown that has curtailed export growth.

“Yesterday Premier Wen Jiabao, during the China-EU summit, said explicitly that China will continue to, under the principle of security, liquidity and increasing value, invest in European government debt, and will get more involved in efforts to help resolve the European debt crisis via all possible channels such as the IMF, EFSF and the would-be ESM,” Zhou said, referring to the International Monetary Fund, European Financial Stability Facility and European Stability Mechanism.

Zhou didn’t confirm any specific investment. In October, Klaus Regling, the EFSF’s chief executive officer, said that China had been a “good” and “loyal” buyer of that organization’s bonds.

The MSCI Asia-Pacific Index of shares advanced 1.9 percent at 6:43 p.m. in Tokyo, heading for the biggest increase in a month. The euro strengthened 0.3 percent to $1.3168.

‘Positive Messages’

“Wen and Zhou are giving the best support China can offer now, which is to send out positive messages such as promising not to cut euro assets and to buy European bonds to help bolster market confidence,” said Shen Jianguang, a Hong Kong-based economist at Mizuho Securities Asia Ltd. who previously worked at the European Central Bank. “How much and when China will buy will depend on its foreign-exchange investment strategy -- when they find the pricing and exchange rate favorable.”

Zhou’s comments, in a speech and question-and-answer session with students, came after Wen also said China is willing to get more deeply involved, and that Europe must send a clearer message to show how it’s working to strengthen its finances.

‘Sincere’ Support

“China’s willingness to support Europe to cope with sovereign debt problems is sincere and firm,” Wen said at a joint press conference yesterday in Beijing with European Union President Herman Van Rompuy. “China is ready to get more deeply involved in participating in solving the European debt issue.”

Van Rompuy said he welcomed the interest China has shown in investing in European sovereign bonds and the region’s rescue fund. Meantime, back in Europe, finance ministers are slated today for a teleconference call to prod Greece to do more to qualify for another bailout.

Even as Wen and Zhou spoke of their support for Europe, the central bank warned today the region’s debt crisis will not be solved in the short term and is spreading throughout the euro area.

The crisis could trigger systemic risks to the global economy, the PBOC said in a quarterly monetary policy report posted on its website, adding that major developed economies lack credible fiscal plans. The central bank didn’t specify when the report was prepared.

‘Stronger Message’

China expects “those highly indebted countries to strengthen fiscal consolidation, cut deficits and reduce debt risks in light of their national conditions,” Wen said yesterday. “We hope the EU will soon reach internal consensus, make the political decision and send to the international community a clearer and a stronger message of policy responses.”

Chinese officials are taking their message of support for Europe to the U.S. where Vice President Xi Jinping is on a five- day visit.

The two countries have been in “close policy communication” on the European debt crisis, Vice Finance Minister Zhu Guangyao said at a briefing yesterday in Washington. “Both China and the U.S. hope that the financial stability and economic recovery will be restored in Europe at an early date,” he said.

In Beijing, Governor Zhou said that while the five BRICS countries - Brazil, Russia India, China and South Africa - all hold a “very positive attitude” toward helping Europe, they have to wait for the right time and right opportunity to invest.

Looking for ‘Innovation’

China hopes for more “innovation” from Europe to provide more lucrative products that are “truly appealing” to Chinese investors, Zhou said, reiterating comments by Wen.

The nation has been wooed by European leaders to help fund the temporary European Financial Stability Facility and its permanent successor, the European Stability Mechanism.

China is considering funding options for the EFSF and the ESM through the International Monetary Fund, Wen said on Feb. 2 after meeting German Chancellor Angela Merkel in Beijing. Officials previously said they needed more details on any plan to contribute funds.

Zhou said today that China can channel its investments through three avenues. The central bank can participate through foreign-exchange reserves it manages and a second option is support from China Investment Corp., the country’s sovereign- wealth fund.

Currency Reserves

The third source of help could come from financial institutions including China Development Bank and Export-Import Bank of China, and other institutional investors including Chinese enterprises, Zhou said.

China, which holds the world’s largest foreign-exchange reserves of $3.18 trillion, has previously signaled it wants to diversify the holdings away from U.S. dollar-denominated assets. The country doesn’t publicly disclose a breakdown of its reserves.

The PBOC has “always had confidence in the euro’s outlook” and as China’s foreign-exchange reserves have increased, the nation has “adjusted and increased the proportion of investment in the euro,” Zhou said.

Government leaders have “expressed clearly” through the Group of 20 nations that China will not reduce the proportion of its investment in euro assets during the global financial crisis and European debt crisis, Zhou said.

Moody’s Investors Service cut the debt ratings of six European countries on Feb. 13, including Italy, Spain and Portugal, and said it may strip France and the U.K. of their top Aaa ratings, citing Europe’s debt crisis.

Spain was downgraded to A3 from A1 on Feb. 13, Italy to A3 from A2 and Portugal to Ba3 from Ba2, all with negative outlooks. Slovakia, Slovenia and Malta also had their ratings lowered.

http://www.businessweek.com/news/201...old-euros.html

[jimzinsocal]

Some improvement on weekly new claims data:

The advance number of actual initial claims under state programs, unadjusted, totaled 361,928 in the week ending February 11, a decrease of 39,328 from the previous week. There were 424,400 initial claims in the comparable week in 2011.
The advance unadjusted insured unemployment rate was 3.1 percent during the week ending February 4, a decrease of 0.1 percentage point from the prior week's unrevised rate. The advance unadjusted number for persons claiming UI benefits in state programs totaled 3,964,007, a decrease of 133,493 from the preceding week. A year earlier, the rate was 3.6 percent and the volume was 4,575,640.

The total number of people claiming benefits in all programs for the week ending January 28 was 7,681,911, an increase of 18,304 from the previous week.

If anyone wants the seasonally adjusted data see here or watch any of the major media

http://www.dol.gov/opa/media/press/eta/ui/current.htm

[BlackDragon24]

Some improvement on weekly new claims data:

The advance number of actual initial claims under state programs, unadjusted, totaled 361,928 in the week ending February 11, a decrease of 39,328 from the previous week. There were 424,400 initial claims in the comparable week in 2011.
The advance unadjusted insured unemployment rate was 3.1 percent during the week ending February 4, a decrease of 0.1 percentage point from the prior week's unrevised rate. The advance unadjusted number for persons claiming UI benefits in state programs totaled 3,964,007, a decrease of 133,493 from the preceding week. A year earlier, the rate was 3.6 percent and the volume was 4,575,640.

The total number of people claiming benefits in all programs for the week ending January 28 was 7,681,911, an increase of 18,304 from the previous week.

If anyone wants the seasonally adjusted data see here or watch any of the major media

http://www.dol.gov/opa/media/press/eta/ui/current.htm

Chart-fu - lowest numbers in initial claims since Mar 2008.

[Dutchcedar]

^^^ In response to your chart-fu...

COSTELLO: I want to talk about the unemployment rate in America.
ABBOTT: Good Subject. Terrible Times. It's 9%.
COSTELLO: That many people are out of work?
ABBOTT: No, that's 16%.
COSTELLO: You just said 9%.
ABBOTT: 9% Unemployed.
COSTELLO: Right 9% out of work.
ABBOTT: No, that's 16%.
COSTELLO: Okay, so it's 16% unemployed.
ABBOTT: No, that's 9%...
COSTELLO: WAIT A MINUTE. Is it 9% or 16%?
ABBOTT: 9% are unemployed. 16% are out of work.
COSTELLO: IF you are out of work you are unemployed.
ABBOTT: No, you can't count the "Out of Work" as the unemployed. You have to look for work to be unemployed.
COSTELLO: BUT THEY ARE OUT OF WORK!!!
ABBOTT: No, you miss my point.
COSTELLO: What point?
ABBOTT: Someone who doesn't look for work, can't be counted with those who look for work. It wouldn't be fair.
COSTELLO: To who?
ABBOTT: The unemployed.
COSTELLO: But they are ALL out of work.
ABBOTT: No, the unemployed are actively looking for work. Those who are out of work stopped looking. They gave up. And, if you give up, you are no longer in the ranks of the unemployed.
COSTELLO: So if you're off the unemployment roles, that would count as less unemployment?
ABBOTT: Unemployment would go down. Absolutely!
COSTELLO: The unemployment just goes down because you don't look for work?
ABBOTT: Absolutely it goes down. That's how you get to 9%. Otherwise it would be 16%. You don't want to read about 16% unemployment, do ya?
COSTELLO: That would be frightening.
ABBOTT: Absolutely.
COSTELLO: Wait, I got a question for you. That means there are two ways to bring down the unemployment number?
ABBOTT: Two ways is correct.
COSTELLO: Unemployment can go down if someone gets a job?
ABBOTT: Correct.
COSTELLO: And unemployment can also go down if you stop looking for a job?
ABBOTT: Bingo.
COSTELLO: So there are two ways to bring unemployment down, and the easier of the two is to just stop looking for work.
ABBOTT: Now you're thinking like an economist.
COSTELLO: I don't even know what in the world I just said!
And now you know how and why Obama's unemployment figures are improving and will continue to improve all the way to November 6, 2012.

[jimzinsocal]

http://www.gallup.com/poll/152753/Un...-February.aspx

[AMDScooter]

Chart-fu - lowest numbers in initial claims since Mar 2008.

Sweet.. but my highly selective chart-fu is better than yours..





Seems like we did this just a few days ago. Oh ya.. we did..

A lot of numbers have been "adjusted" due to the census.. most of them accounting for some of the significant drops in unemployment. Even with the BLS "fudge factor", this chart gives the best indication of where things are headed.

Labor Force Statistics from the Current Population Survey



Real Jobless Rate Is 11.4% With Realistic Labor Force Participation Rate

One does not need to be a rocket scientist to grasp the fudging the BLS has been doing every month for years now in order to bring the unemployment rate lower: the BLS constantly lowers the labor force participation rate as more and more people "drop out" of the labor force for one reason or another. While there is some floating speculation that this is due to early retirement, this is completely counterfactual when one also considers the overall rise in the general civilian non institutional population. In order to back out this fudge we are redoing an analysis we did first back in August 2010, which shows what the real unemployment rate would be using a realistic labor force participation rate. To get that we used the average rate since 1980, or ever since the great moderation began. As it happens, this long-term average is 65.8% (chart 1). We then apply this participation rate to the civilian noninstitutional population to get what an "implied" labor force number is, and additionally calculate the implied unemployed using this more realistic labor force. We then show the difference between the reported and implied unemployed (chart 2). Finally, we calculate the jobless rate using this new implied data. It won't surprise anyone that as of December, the real implied unemployment rate was 11.4% (final chart) - basically where it has been ever since 2009 - and at 2.9% delta to reported, represents the widest divergence to reported data since the early 1980s. And because we know this will be the next question, extending this lunacy, America will officially have no unemployed, when the Labor Force Participation rate hits 58.5%, which should be just before the presidential election.

Over a million people left the labor pool in a month and ur breaking out the party hats and trying to pimp this as a stimulus success story? Man.. you bamma dweebs are really grasping at straws.

Some more chart-fu for the bammites to chew on.



http://www.hoosieraccess.com/2012/02...mise-not-kept/

“Today I’m pledging to cut the deficit that we inherited by half by the end of my first term in office.” — President Barack Obama, February 23, 2009

Three years ago, Barack Obama promised to cut the deficit by half. He has failed. Not only has he failed, he has made it worse.

First, let’s address Obama’s claim that he “inherited” the deficit. As you can see in the numbers provided by the Office of Management and Budget, the deficits under President Bush peaked in 2004, and than began to decline. The budget deficit in 2007 – the last budget approved by the Republican Congress before Nancy Pelosi became speaker – was $160 billion. When the Democrats took over, the deficit exploded. So, yes, Barack Obama inherited a huge deficit from the Democrats in Congress.

You can also see above that it is irresponsible spending, not revenue, that is driving the debt.

Barack Obama, with the help of a Democratic Congress, has put us on an unsustainable path. This country cannot afford four more years of this man’s destructive policies. He must be defeated.

And the SCOAMF's "plan".... no plan... kick the can.



Geithner: You're Right, We Have No Plan To Avert Fiscal Melt-Down; All We Know Is That We Don't Like Your Plan

I've said this forever, but the Democrats can't speak a plan aloud, because there are only two options:

1. Reduce benefits, which they don't want to do, as they're playing Mediscare yet again.

2. Massively increase the tax burdens on the middle class, which they claim they don't want to do, but they do. All of their schemes rely on pulling more money from the middle class which is, as Willie Sutton said of banks, "where the money is."

I actually think the Democrats want a crisis, because in crisis, the politically impossible becomes merely the politically unpalatable.

Good video of the confrontation between Geithner and Ryan.

Geithner confesses that his very own chart and very own numbers show the country melting down into sub-Greece territory in out years. And his plan? He doesn't have one:

Treasury Secretary Timothy Geithner, speaking on behalf of the Obama White House, to Rep. Paul Ryan: "You are right to say we're not coming before you today to say 'we have a definitive solution to that long term problem.' What we do know is, we don't like yours."

[Invictus]

[kbohip]

All the charts in the world don't matter one bit when we have more people on food stamps than ever before, a number that's gone up 20 million since 2008 alone, and a president that doesn't think all the debt he's piled up since he took office will have any ill affects. Those numbers don't lie, and it's a bad premonition of things to come.

[SteveW]

Chart-fu - lowest numbers in initial claims since Mar 2008.

Exactly what's this supposed to mean? Jobless claims down from 4 years ago. New jobless claims? This has little or nothing to do with the current staggering unemployment rate.

What about the masses who's extended umemployment benefits have long since ran out?

You've got to be smarter than that....

[Keven]

Exactly what's this supposed to mean? Jobless claims down from 4 years ago. New jobless claims? This has little or nothing to do with the current staggering unemployment rate.

What about the masses who's extended umemployment benefits have long since ran out?

You've got to be smarter than that....

Notice his chart says "initial claims". As in, people claiming unemployment for the first time.

If all those people who first claimed unemployment in 2008 are still on unemployment, it means Obama has done jack shit for the economy.

But, did you guys see the Paul Ryan vs. Tim Geithiner video I posted in the Obama thread? They were having their own chart-fu argument in the House Budget Committee hearing! I thought it was kind of funny.

[SteveW]

^ Yes indeed. In a time of severe downturn the numbers will be more inaccurate as the mean time of unemployment is longer. i.e. those out of work and seeking work won't show up on the BS radar chart and slanted government statistics.

Actual unemployment numbers are likely double what that graph shows. In many areas it's been acknowleged as such, in others it's still being swept under that carpet.

Barack Obama and his Administration are the biggest set of Flim Flam artists ever seen in the WH.

[AMDScooter]

Notice his chart says "initial claims". As in, people claiming unemployment for the first time.

If all those people who first claimed unemployment in 2008 are still on unemployment, it means Obama has done jack shit for the economy.

But, did you guys see the Paul Ryan vs. Tim Geithiner video I posted in the Obama thread? They were having their own chart-fu argument in the House Budget Committee hearing! I thought it was kind of funny.

Funny until you notice the money quote from that exchange in regard to this graph
:

Turbotax Timmay: “You could have taken it out to 3000 or to 4000”

Ryan: “Yeah, right. We cut it off at the end of the century because the economy, according to the CBO, shuts down in 2027 on this path.”

Bamma's surrogate is a laugh riot.

[jimzinsocal]

Pretty tough to celebrate the 3rd anniv of the stimulus as a positive thing and pass a law extending unemployment benefits at the same time. I mean come on..how can we argue the stimulus has worked? Oh yeah..the jobs saved spin I suppose.
In the end the case for real unemployment success finds its way to positive GDP growth which we havent seen. GDP is essentially stalled/treading water so its tough to make a solid case for employment advances.
Also..if we study the unadjusted new claims numbers for the past couple of months...the trend isnt particularly positive. We had weeks in 2011 around the 350,000 mark...June..July I believe and then things seemed to turn more negative.
But I wont argue the numbers really. I see things one way and another sees something else. How were built and I understand.
When we see rises in GDP..real improvement and not based on onventory building? Ill know the employment situation is resolving itself via the private sector.

Added...give this a spin yourselves. Select 2011 and 2012
http://www.ows.doleta.gov/unemploy/claims.asp

[Keven]

It surprises me how unconcerned liberals are about our growing national debt. Even our own guys here like BD and Justin. The left seems to think that you just raise taxes on the rich and everything will be fine.

[SteveW]

They've done nothing to curb spending and in fact it's been borrow and spend thus far - p!ssing the standard of living for future generations down the drain.

What's it's about now is Re-Election pure and simple. So, the Spindoctoring will be abundant.

Obama, Nancy and the rest of the Libberals took a bad situation and made it worse - a lot worse. They kicked the can down the road for next camp. Not just in the US Economy, hey let's look at Iran.....

The FDIC was designed to protect investors, not institutions. So, WTF happened???