Posts filed under “Cycles”
“The overall unemployment rate, which reached 10.2% on a seasonally adjusted basis last month, remains below the post-World War II peak of 10.8 percent, reached in late 1982. But the proportion of workers who have been out of work for a long time is higher now than it has ever been since the Great Depression.
The persistence of joblessness for so many people — 5.6 million Americans have now been out of work for more than half a year even though they have continued to seek employment — may provide the greatest challenge for the Obama administration if it decides to seek a new economic stimulus program.”
The NYT graphic nearby (click for larger size) shows how rapid and steep the rise in Unemployment has been what compared to some other ugly eras.
This certainly isn’t the Best of Times, at least one indicator seems to be improving:
“The short-term unemployment rate — the proportion of the work force that has been jobless for less than 15 weeks — has begun to decline, however, and stood at 4.5 percent in October after peaking at 4.9 percent in May.
That decline is a signal that the recession, which officially began in December 2007, probably has ended. In past recessions since World War II, the National Bureau of Economic Research has always dated the end within two months of the peak in short-term joblessness.”
Job Losses Mount, Enduring and Deep
NYT, November 13, 2009
Fascinating New Yorker piece on Martin Armstrong, a technical analysts/cycle forecaster I have been reading about for some time — his is a long sordid tale, but the bottom line is he is in jail. Its his cycle work that is so fascinating. Nick Paumgarten looks at his attempts to predict the financial markets using…Read More
Econo-Smackdown! Here’s an interesting difference of opinion: PIMCO‘s Mohamed El-Erian believes a return to the old ways of thinking threatens recovery. ECRI‘s Lakshman Achuthan disagrees, stating the U.S. economic recovery is ‘far from fragile.’ • Return of the old ways of thinking threatens recovery • U.S. economic recovery is ‘far from fragile’-ECRI Gotta love it…Read More
Former Morgan Stanley Analyst Andy Xie explains why this will not be a regular cyclical recovery following the credit collapse and great Recession:
“In a normal economic cycle, an inventory-led recovery would be followed by corporate capital expenditure, leading to employment expansion. Rising employment leads to consumption growth, which expands profitability and more capex. Why won’t it work this time? The reason, as I have argued before, is that a big bubble distorted the global economic structure. Re-matching supply and demand will take a long time.
The process is called Schumpeterian creative destruction. Keynesian thinking ignores structural imbalance and focuses only on aggregate demand. In normal situations, Keynesian thinking is fine. However, when a recession is caused by the bursting of a big bubble, Keynesian thinking no longer works.
Many policymakers actually don’t think along the line of Keynes versus Schumpeter. They think in terms of creating another bubble to fight the recessionary impact of a bubble burst. This type of thinking is especially popular in China and on Wall Street. Central banks around the world, although they haven’t done so deliberately, have created another liquidity bubble. It manifested itself first in surging commodity prices, next in stock markets, and lately in some property markets. Will this strategy succeed? I don’t think so.”
Full article after the jump
Andy Xie: New Bubble Threatens a V-Shaped Rebound
“There is a real danger this is going to be a double dip and that after six months or so we’ll have some more bad news. We could slide down again in the fourth quarter.” -Martin Feldstein > Normally, I don’t get too excited when some economist or another makes these proclamations. However, Feldstein is…Read More
Art Cashin has been on a floor broker on the NYSE for UBS for as long as I can remember. His daily missives on CNBC are the highlight of their broadcast day. “Back On The Cycle – David Rosenberg, formerly chief economist at Merrill Lynch and now at Gluskin Sheff was a guest host on…Read More