Unemployment Report: August 7, 2009

Larry..

thanks for the data again..But..

The United States Treasury is EMPTY..

the Collapse of the dollar is a possibility..

And B.O.HOOD and his merry band are Plundering.

Whats an Investor to do in the REAL WORLD..??

Thanks LD, for not only the data but the editorial comments — I appreciate your perspective.

Thanks for the report Larry. I’m still trying to figure this all out. Would someone please correct me if I’m wrong:

Unemployment numbers are slightly “better than expected;”
This causes a big jump in the stock market,
Which makes stocks a more attractive investment relative to treasuries,
And so treasury prices go down, yields go up.
(Mortgage rates are also pressured up as they are tied to the yields of treasuries)
And this is bad for the government, since they are scheduled to auction something like 75 billion dollars worth of treasuries in the coming week, plus it is also not good for the troubled housing market.

This sounds like a juggling act for the Treasury and the Fed, with the Stock Market, treasury sales, and the value of the dollar all up in the air. Good luck. I’m glad I’m broke and don’t have to worry about where to put the money I don’t have and don’t have to compete with Goldman Sachs.

I don’t think it’s smart to say we’re turning around until there is some positive job creation, not just less job losses, but actual gains. Then I will feel something is turning around!

should have said fewer job losses!

You can only get around reality for so long. The economy will never be as it was before.

Take banks for example. Many people think that they are actually making money again. After all they are reporting billions in profits. Perhaps it looks that way now but in matter of months the trillions of dollars that have been pumped into the economy will tip that ship over in the form of inflation. At that point the paper they are holding will become worthless and with it the banks.

Main street on the other hand will suffer from cap and trade and the disruption of the medical and insurance industry. I don’t know the exact number but I ventrue to guess that these legislation will affect at least 30% of the economy and will cost millions of jobs.

But the most disruptive thing that will happen to our economy will come in the form of energy disruption.Soon oil will go way over 100 USD a barrel and will kill any economical recovery that we could have had. This will be a result of peek oil, inflation and cap and trade.

We just never learn. How many times do we have to be reminded that reality can’t be gotten around no matter how hard we try.

$0.02

Does this report cover all those who ran out of unemployment benefits.
Does this report cover all those who had to take jobs at WAY LESS then they previously earned?
Does this report cover all those that are working part time at a FAR LESS hourly wage than before they got layed off.

Wages rising by 0.2% in August could just mean that any jobs created were minimum wage positions and since the minimum wage was increased, the wage increase means little or nothing.

thats goldman sucs

thanks Larry i trust your opinion on these matters.

Excellent analysis.

yep; not all jobs are equal.

Thanks for the update, Larry. Frankly, I do not trust the numbers or the official spin. The fact that nearly 500K workers fell off the reportable data because they’ve given up and/or can no longer get unemployment benefits, makes me doubt the “confetti” moment.

Before I start celebrating, we need to see a reasonable downtick over several months. Hate to rain on the parade, but I’m just not buying it yet.

Interesting graphic just posted on Market Watch:

http://s.wsj.net/public/resources/MWimages/MW-AB444_jobles_MD_20090807140707.jpg

I was asking what this report covers. I have read several places that there are a lot of statistics not included in these reports.

If the people who have run out of unemployment and still not working are now off the list. That would make the list/statistic slanted.

People only working part time and barely making it doesnt really show the full story.

You extensive BS critique on NQ of what Obama is doing to help get the economy back on track is beginning to unravel! And the stimulus plan has not even kicked in yet.

Stock market is up 7%, back well over 9,000 heading to 10,000, unemployment down first time in months, house prices up 1.6% in May (largest one month rise since June 2005) and July was likely a positive GDP month, signaling the technical end to the recession. Conference Board reports that seven of the ten indicators that make up The Conference Board LEI for the U.S. increased in June.

So 1/3 of American workers have been out of work for over 27 weeks. That is a horrifying statistic.

You did hear about the latest Wall Street scandal, right? About software being used to manipulate the market. There’s now an investigation. Oops.

Larry, the following is the most amazing article I have read in a long time–considering who wrote it:

http://www.salon.com/opinion/feature/2009/08/07/reich_unemployment/

It is very well thought out piece & honest. HOWEVER, it is from a DEM from the Clinton administration who is giving a slap to the Obama administration. Apparently, Robert Reich is done drinking the Obama Kool-Aid. All I can figure out is that the Clinton people are starting to distance themselves from the union thugs from Chicago. Is this the first shot over the bow that the Clinton Democrats are splitting? Any comments?

I’m sorry, Confused American, the message on the chart is confusing. It is the percentage of “the unemployed” who have been out of work for over 27 weeks, not the percentage of the total workforce.

Larry:

17%

If we apply the formulas for unemployment that have been used since 1932, unemployment in this country is just over 17%.

This is a case of of figures don’t lie but the liar in chief sure can figure.

By not counting the unemployed who have “given up” looking for work we reduce the number but we didn’t employ them.

By not counting work cut backs, as we always have in the past, we also paint a better picture through Obamanomics..

Over 200,000 Calif. Stare workers have been cut back three days a month.

That works out to 600,000 days/month of job cuts and lost wages.

That’s 22 work days of July divided into 600,000 works out to 27,272 jobs but— Who’s counting, not Obama.

When you add all the ‘tricks’ of obamanomics up and actually count all of the lost jobs ??? Unemployment is just over 17%

This was all reported by Bloomberg and Drudge.

By not counting work cut backs, as we always have in the past, we also paint a better picture through Obamanomics..

This is a HUGE factor. As anecdotal evidence, at a previous place of employment of mine all 200 employees have taken a 20% pay cut and reduction in hours/work load. That has been since December. In my new area, several friends who work part time for supplemental family income are complaining about their reduction in hours.

This economy is not well, and I find it outrageous that this administration keeps telling us we are not experiencing what we are actually experiencing!

Yes SONIC..

More Obama FOOL~AID..

The New Card Game is “DUMMY DOWN”…

Don’t forget they want to cut the Postal Service Back to Five days a week..too..MY Carrier says the Government is already shutting down Operations around here too..

Wait until the Government is in “Total Control” of Health care..and all Our Lifes…

Obama’s Czars can experiment with Socialized medicine (as therefore US) all they want ..

You Know, hey Lets give em RED Pills and Blue Pills and until they ALL get Attention Deficit Disorder..

A.D.D.

Then We care or even know What a Deficit is, or If we have One..

Then A.D.D. will be known as American’s Doped to DEATH…

But they will give us a BLACK Pill…so we die HAPPY.

The One with the little JOKER face on it..

The collapse of the dollar is not just a possibility, it is already happening. The US Dollar index was above 89 in March ’09 and is now at 79. that is around 11% decline in the dollar value in just a few months.

Given the fact that not all of the 700 billon stimulus have been monetized, expect to see further devaluation of the dollar that might equal a 50% decline in value.

this will send consumer prices soaring but we will be surprised that inflation will not reflect double digits since the government has been using a CPI formula (from Alan Greenspan) that substitutes luxury items with cheaper items (The famous Greenspan quote of “the price of filet mignon can be substituted by the price of hamburger” and still show accurate inflation numbers).

what would be the net effect of this?

1) as the dollar collapses (and it will, just ask George Soros and Warren Buffett as they’ve been shorting the dollar for well over two years now), consumer prices go up but as it would not be reflected in CPI numbers, employers will not raise incomes that much (this explains why income in the past few years haven’t risen as much, no inflationary pressures to support it since the CPI numbers have been so low). rising consumer prices with stagnant income will only hurt the middle class and the poor.

2) the invisible inflation will inflate corporate earnings temporarily and create another stock market bubble. consumer confidence rises since the stock market is rising yet corporate earnings will eventually start to stagnate due to the dwindling buying power of consumers and stagnating income due to the dollar devaluation and manufactured low inflation numbers. the bubble will eventually burst and a deeper recession (or a depression) will occur.

manufactured numbers like the unemployment numbers posted, and low CPI only makes matters worst. it is a way to “social engineer” consumer confidence and entice people to start spending more without realizing that their buying power is going down. eventually it all unravels and the resulting recession is deeper than the last.

the “weak dollar” policy is not a policy exclusive to democrats; republicans have been doing it to. to be more accurate, it was the Alan Greenspan policy to begin with and was allowed to proliferate by both parties.

that policy has been a failure as it only sought to entice consumers to spend and not build any tangible wealth that secures people’s assets or buying power, it even aggravates any economic weakness by giving employers to keep salary increases low due to the low inflation numbers.

after decades of weak dollar policy, we are now facing the imminent meltdown of the dollar’s value and the only people that would benefit from it are the likes of Buffett and Soros that are shorting the dollar and are able to buy other currencies.

watch for the dollar index to sink to around 60 by next year, and maybe more after that. precious metals prices will start increasing again (as technical chart patterns are already suggesting) and a commodities rally will begin again (signals the start of inflationary pressures).

before this year is over, we may lose a total of 30% of the dollars value and maybe another 30% by next year and without accurate CPI numbers, people’s incomes will not increase yet corporate earnings will….who gets screwed there and who rakes in the profits?

edit that:

that policy has been a failure as it only sought to entice consumers to spend and not build any tangible wealth that secures people’s assets or buying power, it even aggravates any economic weakness by giving employers A REASON NOT to keep salary increases low due to the low inflation numbers.

the “weak dollar” policy also explains why it takes both parents to work in order to make ends meet now even though incomes in dollar terms seems to have increased compared to past decades.

the dollar has been devaluing for decades and since CPI numbers are skewed it is having devastating effects on the economy for decades.

Thanks Chicago…

Very interesting to Read..I agree that they are manipulating the numbers…and trying to Start another bubble rally..no matter HOW they do thier Infusions..

I track all Market Sectors daily..

I appreciate Your Comments here Chicago..

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