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Hate him or love him we all remember H Ross Perot, his Texas drawl ... his charts. The "establishment" evidently hated him so set out to do a hatchet job on him. However, almost 20 years later with Washington spending like meth addicts with stolen credit cards, we might benefit from looking at Mr. Perot's charts once again. First one on budget deficits looks pretty ugly.
Found this via Market Ticker site.
Perot Charts - Site
Great commentary. Duly credited and quoted exactly as written.
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"Stupidity Bites HARD: Dodd and Frank
"These two are the "banking regulatory chiefs" in Congress of course; Dodd in the Senate and Frank in the House.
Both have steadfastly stood beside the banks through this crisis, especially the really-big banks that have given millions of dollars in campaign contributions.
The same banks that lobbied hard to "reform" bankruptcy so you cannot file Chapter 7 any more when you go bankrupt and stick lenders with the bad lending decisions they made of their own free will. That is, your credit and financial life is ruined, but theirs (which should also be ruined) is not.
The same banks that connived with Congress and The Federal Reserve to get the last pieces of Glass-Steagall repealed - the law that, had it been present, would have prevented nearly all of this crisis.
The same banks that (Citi-cough-cough) got Alan Greenspan to approve a merger with Travelers that Greenspan knew was illegal at the time it was consummated - a merger that was then retroactively made legal with passage of Gramm-Leach-Bliley.
The same banks that lobbied to get an exemption from bucket-shop laws and insurance regulation (indeed, any regulation) for credit-default swaps.
The same banks that, post-ENRON when we all learned about the outright fraudulent accounting enabled by "off-balance sheet" games, not only kept doing it but increased the size of such ventures.
And more importantly, the same banks that lobbied hard this spring to get an exemption from mark-to-market accounting for the "assets" they hold on their books - an exemption they were in fact using without having it, as I will shortly illustrate.
Well now Doddering Dodd and "I've never been frank" Frank are asking for the impossible:
Today, Senate Banking Committee Chairman Chris Dodd and House Financial Services Committee Chairman Barney Frank asked the heads of U.S. banking regulators to look into whether their companies are carrying home-equity loans at “potentially inflated values,” which “may contribute to resistance on the part of servicers to negotiate the disposition of these liens.”
Most of these loans are in fact worth nothing!
Here's the understatement of the year from the same article:
“It is well understood that the four major banks would likely need an additional capital injection should they be forced to mark the second-lien mortgages on their balance sheets to a realistic value,” Greenwich Financial’s Frey said.
Oh, so you mean our wonderful Congress has in fact encouraged and put into policy and law accounting fraud?
Why yes!
In fact the underlying reality is what I've been pointing out all along: the loss on a bad loan is taken when the bad loan is made; all you can do subsequent to that point is pick and choose who has to eat the loss.
The answer to that question should always be "the fool who made the loan", and nobody else.
Ever.
Before the "waiver" on mark-to-market accounting these loans were worth no more than they are today. Yet before that waiver, banks, as I have pointed out in The Ticker previously, were carrying huge books of loans at or very close to "par" - that is, 100 cents on the dollar, despite the fact that when these things trade at all nowdays they are trading for pennies - literal pennies, in some cases as few as one or two!
REALITY folks is that these banks (and many more) are in fact BANKRUPT, right here and now. Again:
“It is well understood that the four major banks would likely need an additional capital injection should they be forced to mark the second-lien mortgages on their balance sheets to a realistic value,” Greenwich Financial’s Frey said.
In English (translation by Tickerguy), for the financially less-literate, this is what Greenwich's Frey said:
These banks have less capital than the loss on these loans if the value of these loans are recorded honestly. That is, their assets are exceeded by their liabilities.
This is the definition of bankruptcy; ergo, these four banks are in fact BANKRUPT right here and now, have been bankrupt, and it is "widely understood", including by Congress, The Federal Reserve, The FDIC and OCC that this is the case. All of these "Regulatory Arms" of our government are in fact actively conspiring in violation of the "Prompt Corrective Action" law to hide this.
We have pledged some $12 trillion dollars in "aid" and spent over $2 trillion in actual money trying to prop up these institutions. The gambit has failed and indeed was doomed from the start, because insolvency always eventually asserts itself.
The lie of accounting fraud only works so long as you can mark to some "fantasy"; as soon as you're forced to reconcile what you claim something is worth against an actual transaction your ruse is discovered and the game is over.
In this case if those loans are restructured the insolvency is exposed because the actual cash value received to extinguish the obligation is recorded on the firm's books and the embedded, hidden loss is flushed out into the open.
This is also why you have people living in homes for a year or more without making a payment and without being foreclosed on, and it is why you have foreclosed properties that have not been sold. So long as the bank doesn't actually do something that forces a market price to be put on the house where there is a delinquency they can claim their mortgage with a $500,000 principal balance outstanding is actually worth $500,000. If they sell the house for $300,000 the $200,000 that they have already lost but are hiding through these accounting shenanigans must be recognized.
This is out-and-out fraud folks, and it is far, far bigger than Madoff ever was. If you remember some months ago I penned this:
That is, you cannot prevent a loss from appearing and being recognized unless you allow people to lie about the value of securities, place them off-balance-sheet in opaque containers where nobody can see what's inside (and thus how they're performing) and "lever up" to issue yet more debt (credit) to cover the cash flow that should be happening but isn't.
If you're wondering why I keep harping on the same points over and over it is because I have been warning of this catastrophe and its consequences, along with the willful blindness and complicity of our government in this charade and scam for more than two years.
Those who have paid attention have managed to mostly-avoid the catastrophe, at least for their stock market holdings. They got out in the beginning of 2008 when it became evident that despite months of warning and clear evidence our government was going to conspire with these robber barons to commit fraud right up until the moment when the truth became impossible to hide any more and our entire economic system came crashing down around our ears, all in the name of protecting a handful of companies and their cronies, along with their ill-gotten "gains" and "bonuses."
Folks, this bubble and the consequence thereof for our economy and nation was not an accident. It was not merely a matter of "greed". Greed, all on its own, is not necessarily bad, despite what The Bible says. Greed drives human ambition, and ambition in turn drives true innovation. Absent "greed" we would not have the personal computer, electricity in our homes, air conditioning, microwave ovens, mechanical refrigeration, the Internet or cell phones. All of these things exist because someone got "greedy" and decided to try to make a profit.
It is when greed combines with fraud - that is, the knowing and intentional deceit practiced by one for the purpose of screwing someone else, that we have a problem. It is when honesty is discarded in favor of a "faster and simpler way" to make money - that is, instead of a fair bargain someone decides they would rather steal, either by lying, bribery or "convenient" omission.
We will not exit this economic downturn on a durable, sustainable basis, nor will we normalize our economy - that is, return it to a structure where economic prosperity is based on production instead of the scam of lying about asset values - until the hidden insolvency of institutions is flushed to the surface and recognized in bankruptcy court. In turn we must reverse the disastrous "bankruptcy reform act" so that both creditor and debtor, whether they be corporations or individuals, are afforded both the same harm from going bust and the same protection.
Until Chris Dodd and Barney Frank, along with the rest of the clowns that inhabit The Capitol, 1600 and 1500 Pennsylvania Avenue, come to the realization that the game-playing cannot possibly work and that it is time to tell the truth, we will continue to spiral down into the abyss.
The important point to take from this is not that forcing honesty will make the pain go away. It will not. It will, however, limit the duration of the pain, and stop compounding the errors and thus the necessary economic harm that must come.
We had a good deal of economic pain that had to be taken in the year 2000. The vast majority of it was not.
As a direct consequence of the willful fraud that our government and banking interests engaged in to avoid that economic pain in 2000, we have now more than doubled the economic pain that must be taken in 2008 and 2009.
What must be recognized is that there are only two choices: We can accept that amount of economic pain in full, here and now, or we can continue to add to it and try to put it off until later.
Doing the latter appears to be beyond our ability to succeed, meaning that we are only adding to the harm that must be absorbed at a rapidly-increasing rate.
It has been time to face the music since 2000, and it still is. We are now in the "exponential blow-off top of pain" phase, and instead of garnering years of respite (at the cost of even more trouble) we are only gaining weeks or months.
The clock has, quite simply, run out."
http://market-ticker.org/archives/1203-Stupidity-Bites-HARD-Dodd-and-Frank.html
Your representatives and senators can NOT read your minds, they need emails and calls from us as tangible evidence for them to move forward to audit the Federal Reserve.
Interesting take on the direction of US financial markets.
"Russian Scientists: H1N1 linked to Genetically Modified Food
Monday, 22 June 2009
Source Macedonian International News Agency
"Scientists from Russia’s Ministry of Health are warning in a secret report to Prime Minister Putin that they have discovered a ‘critical link’ between the H1N1 influenza (Swine Flu) virus and genetically modified amylopectin potatoes that are consumed in massive quantities nearly exclusively by Westerners and sold in fast food restaurants as French Fries.
According to these reports, the protease enzyme genetically modified in the potatoes being sold through Western fast food restaurants as French Fries to protect against Potato virus X causes an “explosive” replication of the H1N1 influenza virus by increasing the acidic conditions of the endosome and causing the hemagglutinin protein to rapidly fuse the viral envelope with the vacuole's membrane, then causing the M2 ion channel to allow protons to move through the viral envelope and acidify the core of the virus, which causes the core to dissemble and release the H1N1’s RNA and core proteins into the hosts cells.
Evidence confirming these dire findings by top Russian scientists is also supported by the World Health Organization who in their reporting on the current Influenza Pandemic, clearly shows that the H1N1 virus is nearly totally confined to those Western Nations allowing their citizens to consume these genetically modified potatoes, and which include: The United States with over 17,000 cases being reported with 45 deaths; Canada with 2,978 cases; the United Kingdom with 1,226 cases; and Australia with 1,823 cases.
Important to also note about the World Health Organization’s statistics on the spread of the H1N1 Pandemic influenza virus is that the South American Nation of Chile is the only country in the World outside of The United States, Canada, United Kingdom and Australia to allow the planting of these genetically modified potatoes due to their Free Trade Pact with the US and who are reporting 1,694 cases of this disease.
Also important to note are that most of the World’s largest Nations do not allow the planting of these genetically modified potatoes and therefore are reporting very limited outbreaks of the H1N1 Pandemic influenza, including Russia with 3 cases, China, the World’s most populated country, with 318 cases, and India, the World’s second largest country, with 16.
These reports further state that with the linkage between the H1N1 Pandemic influenza virus and fast food French Fries made from genetically modified potatoes the most venerable people to being infected are the youngest who, by far, are the largest consumers of these types of cheap Western foods, and which was recently confirmed by the Washington Post News Service that reported:
“Of the 5,000 confirmed and more than 100,000 probable cases of swine flu, the average age of infected people is 15; two thirds are younger than 18.”
These reports further warn that though the genetic history of this insidious man-made influenza seems to initially offer some protection for those Nations not consuming these genetically modified potatoes, to believe so would be a “grave mistake” as new evidence is emerging that this H1N1 Pandemic influenza virus is rapidly mutation, and as we can read from these two reports:
“The new strain of influenza appears to have mutated to become more infectious for humans, the online edition of science magazine Nature reported Monday, referencing research by a team including Prof. Yoshihiro Kawaoka of Tokyo University's Institute of Medical Science.
The surface of influenza virus particles are covered with thorn-shaped proteins called hemagglutinin (HA), which allows the virus to stick to human cells.
After analyzing multiple samples of the new flu virus, the team ascertained that in some cases the HA of the new H1N1 strain have mutated, allowing the strain to stick to human cells more easily.
According to Kawaoka, the same mutations have been found in HA of the H5N1 strain of influenza, the highly virulent bird flu, which kills about 60 percent of those it infects. Kawaoka said the virus is still in the process of mutating into a form even more infectious to humans.”
-and-
“Brazilian scientists have identified a new strain of the H1N1 virus after examining samples from a patient in Sao Paulo, their institute said Tuesday. The variant has been called A/Sao Paulo/1454/H1N1 by the Adolfo Lutz Bacteriological Institute, which compared it with samples of the A(H1N1) swine flu from California.”
More ominously to be examined in these reports is the response of the United States to this Pandemic which, to date, is the World’s largest infected Nation (reporting 7 more H1N1 flu deaths today) and which has already declared a Public Health Emergency and, just yesterday, passed a bill in its Congress allocating $7.7 Billion to prepare themselves for this catastrophic disease."
http://macedoniaonline.eu/content/view/7227/54/
Yahoo video which I can not get to post.
http://cosmos.bcst.yahoo.com/up/player/popup/?rn=3906861&cl=14420078&ch=4226716&src=news
CIA Director Leon Panetta has terminated a "very serious" covert program the spy agency kept secret from Congress for eight years, Rep. Jan Schakowsky, a House Intelligence subcommittee chairwoman, said Friday.
Schakowsky is pressing for an immediate committee investigation of the classified program, which has not been described publicly. Rep. Silvestre Reyes, D-Texas, the chairman of the House Intelligence Committee, has said he is considering an investigation.
"The program is a very, very serious program and certainly deserved a serious debate at the time and through the years," Schakowsky told The Associated Press in an interview. "But now it's over."
Democrats revealed late Tuesday that CIA Director Leon Panetta had informed members of the House Intelligence Committee on June 24 that the spy agency had been withholding important information about a secret intelligence program begun after the Sept. 11 terrorist attacks.
Schakowsky described Panetta as "stunned" that he had not been informed of the program until nearly five months into his tenure as director.
Panetta had learned of the program only the day before informing the lawmakers, according to a U.S. intelligence official. The official spoke on condition of anonymity Friday because he was not authorized to discuss the program publicly.
Panetta has launched an internal probe at the CIA to determine why Congress was not told about the program. Exactly what the classified program entailed is still unclear.
The intelligence official said the program was "on-again/off-again" and that it was never fully operational, but he would not provide details.
Schakowsky, D-Ill., said Friday that the CIA and Bush administration consciously decided not to tell Congress.
"It's not as if this was an oversight and over the years it just got buried. There was a decision under several directors of the CIA and administration not to tell the Congress," she said.
Schakowsky, who chairs the Intelligence subcommittee on oversight and investigations, said in a Thursday letter to Reyes that the CIA's lying was systematic and inexcusable. The letter was obtained by The Associated Press on Friday.
She said Reyes indicated to her the committee would conduct a probe into whether the CIA violated the National Security Act, which requires, with rare exceptions, that Congress be informed of covert activities. She told AP she hopes to conduct at least part of the investigation for the committee.
She said this is the fourth time that she knows of that the CIA has misled Congress or not informed it in a timely manner since she began serving on the Intelligence Committee two and half years ago.
In 2008, the CIA inspector general revealed that the CIA had lied to Congress about the accidental shoot down of American missionaries over Peru in 2001. In 2007, news reports disclosed that the CIA had secretly destroyed videotapes of interrogations of a terrorist suspect.
She would not describe the other incident.
Schakowsky said she thinks Panetta is changing the CIA for the better, adding that the failure to inform Congress was indicative of "contempt" the Bush administration and intelligence agencies under him held for Congress.
"Many times I felt it was an annoyance to them to have to come to us and answer our questions," she said. "There was an impatience and a contempt for the Congress."
The House is expected to take up the 2010 intelligence authorization bill next week. It includes a provision that would require the White House to inform the entire committee about upcoming covert operations rather than just the "Gang of Eight"-- the senior members from both parties on the House and Senate Intelligence Committees and the Democratic and Republican leaders in both houses.
The White House this week threatened to veto the final version of the bill if it includes that provision.
Democratic aides said the language may be softened in negotiations with the Senate to address the White House's concern.
But Schakowsky said the wider briefings are the best remedy to avoiding future notification abuses.
Republicans charge that Democratic outrage about the Panetta revelation is just an attempt to provide political cover to House Speaker Nancy Pelosi, who in May accused the CIA of lying to her in 2002 about its use of waterboarding.
What Pelosi knew about the CIA's interrogation program and when she knew it -- and why she did not object to it sooner -- is expected to be emphasized by Republicans during debate over the intelligence bill."
http://www.foxnews.com/politics/2009/07/10/key-house-democrat-calls-cia-investigation/
They're hoping we'll forget about it.
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"Breaking: Senate postpones cap-and-trade
posted at 1:33 pm on July 9, 2009 by Ed Morrissey
Source HotAir.com
The Washington Post reports that the Senate Environment and Public Works Committee will hold off on consideration of the House cap-and-trade bill until September at the earliest:
President Barack Obama’s push for quick action by Congress on climate change legislation suffered a setback on Thursday when the U.S. Senate committee leading the drive delayed work on the bill until September.
Senate Environment and Public Works Committee Chairman Barbara Boxer said her self-imposed deadline of early August for finishing writing a bill to combat global warming has been put off until after Congress returns from a recess that ends in early September.
“We’ll do it as soon as we get back” from that break, Boxer told reporters. Asked if this delay jeopardizes chances the Senate will pass a bill this year, Boxer said, “Not a bit … we’ll be in (session) until Christmas, so I’m not worried about it.”
But Boxer did not guarantee Congress will be able to finish a bill and deliver it to Obama by December, when he plans to attend an international summit on climate change in Copenhagen.
Two weeks ago, when the House barely pushed this through a vote, Barack Obama’s poll numbers still looked good enough to imply that there may not be consequences for hobbling the economy with ludicrous taxes, fees, and penalties for energy production. With his poll numbers eroding quickly and the electorate losing patience with high unemployment and Porkulus’ failure, that doesn’t seem like a safe bet any more. As the economy continues to drag, cap-and-trade will look more like a disaster than the mythical one it purports to avoid.
The Democrats simply don’t have the votes now on cap-and-trade, and unless the economy suddenly lurches back to life, the political situation will be worse in September. That doesn’t mean we can let up on the pressure, as Michelle says. Keep calling your Senators to tell them that a vote for cap-and-trade means adding to the unemployment lines — starting with themselves.
Update: This might have had something to do with it, too:
“I cannot support the House bill in its present form,” Byrd said in a statement. “I continue to believe that clean coal can be a ‘green’ energy. Those of us who understand coal’s great potential in our quest for energy independence must continue to work diligently in shaping a climate bill that will ensure access to affordable energy for West Virginians.” …
Senator Byrd’s was one of the two sponsors of the Byrd-Hagel Resolution, which the senate unanimously passed, 95–0, in 1997. Byrd-Hagel stated the sense of the Senate that the United States should not be a signatory to any protocol that did not include binding targets and timetables for developing nations as well as industrialized nations or “would result in serious harm to the economy of the United States.” Byrd-Hagel prevented Clinton from even trying to ratify the Kyoto Protocol, which like the Waxman-Markey “cap and trade” climate change legislation, would have put the U.S. economy at an economic disadvantage to China and India."
http://hotair.com/archives/2009/07/09/breaking-senate-postpones-cap-and-trade/
"DeMint: America is ‘Where Germany Was Before World War II'
by David Weigel" 7/9/09 9:42 AM
"Last night, Sen. Jim DeMint (R-S.C.) gave a short talk and Q&A at at the National Press Club about his book “Saving Freedom.” DeMint told a room of around 100 people about a conversation he’d had with an Iranian immigrant who was panicking about the surge of government spending and control under President Obama and the Democrats. Americans should listen to immigrants like her, said DeMint.
They understand socialism. They understand tyrants. But none of us have ever had it here. We don’t even know what it looks like. Part of what we’re trying to do in “Saving Freedom” is just show that where we are, we’re about where Germany was before World War II where they became a social democracy. You still had votes but the votes were just power grabs like you see in Iran, and other places in South America, like Chavez is running down in Venezuela. People become more dependent on the government so that they’re easy to manipulate. And they keep voting for more government because that’s where their security is. When our immigrants get here, they’re worried, because they see it happening here.
DeMint worried that it was the “eleventh hour” for freedom, but he disputed a question from a man who wondered if America was ripe for another revolution. “The reason I’m convinced we can do this in a civilized way is that I’ve seen, on a number of issues, that when people get informed and want to change their government, the government will change.”
http://washingtonindependent.com/50152/demint-america-is-where-germany-was-before-world-war-ii
Found this video on a financial site. Interesting opinion on things.
Also interesting how speeding fines, etc., are THE new revenue source for states, counties, cities.
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Recession, Depression, What Michelle Worry?
"First Lady requires more than twenty attendants
By Dr. Paul L. Williams Tuesday, July 7, 2009
By the staff ofthelastcrusade.org
Source CanadaFreePress.com
“The world is a dangerous place to live; not because of the people who are evil, but because of the people who don’t do anything about it”
--Albert Einstein
“In my own life, in my own small way, I have tried to give back to this country that has given me so much,” she said. “See, that’s why I left a job at a big law firm for a career in public service, “ Michelle Obama
No, Michele Obama does not get paid to serve as the First Lady and she doesn’t perform any official duties. But this hasn’t deterred her from hiring an unprecedented number of staffers to cater to her every whim and to satisfy her every request in the midst of the Great Recession. Just think Mary Lincoln was taken to task for purchasing china for the White House during the Civil War. And Mamie Eisenhower had to shell out the salary for her personal secretary.
How things have changed! If you’re one of the tens of millions of Americans facing certain destitution, earning less than subsistence wages stocking the shelves at Wal-Mart or serving up McDonald cheeseburgers, prepare to scream and then come to realize that the benefit package for these servants of Miz Michele are the same as members of the national security and defense departments and the bill for these assorted lackeys is paid by John Q. Public:
$172,2000 - Sher, Susan (CHIEF OF STAFF)
$140,000 - Frye, Jocelyn C. (DEPUTY ASSISTANT TO THE PRESIDENT AND DIRECTOR OF POLICY AND PROJECTS FOR THE FIRST LADY)
$113,000 - Rogers, Desiree G. (SPECIAL ASSISTANT TO THE PRESIDENT AND WHITE HOUSE SOCIAL SECRETARY)
$102,000 - Johnston, Camille Y. (SPECIAL ASSISTANT TO THE PRESIDENT AND DIRECTOR OF COMMUNICATIONS FOR THE FIRST LADY)
Winter, Melissa E. (SPECIAL ASSISTANT TO THE PRESIDENT AND DEPUTY CHIEF OF STAFF TO THE FIRST LADY)
$90,000 - Medina, David S. (DEPUTY CHIEF OF STAFF TO THE FIRST LADY)
$84,000 - Lelyveld, Catherine M. (DIRECTOR AND PRESS SECRETARY TO THE FIRST LADY)
$75,000 - Starkey, Frances M. (DIRECTOR OF SCHEDULING AND ADVANCE FOR THE FIRST LADY)
$70,000 - Sanders, Trooper (DEPUTY DIRECTOR OF POLICY AND PROJECTS FOR THE FIRST LADY)
$65,000 - Burnough, Erinn J. (DEPUTY DIRECTOR AND DEPUTY SOCIAL SECRETARY)
Reinstein, Joseph B. (DEPUTY DIRECTOR AND DEPUTY SOCIAL SECRETARY)
$62,000 - Goodman, Jennifer R. (DEPUTY DIRECTOR OF SCHEDULING AND EVENTS COORDINATOR FOR THE FIRST LADY)
$60,000 - Fitts, Alan O. (DEPUTY DIRECTOR OF ADVANCE AND TRIP DIRECTOR FOR THE FIRST LADY)
Lewis, Dana M. (SPECIAL ASSISTANT AND PERSONAL AIDE TO THE FIRST LADY)
$52,500 - Mustaphi, Semonti M. (ASSOCIATE DIRECTOR AND DEPUTY PRESS SECRETARY TO THE FIRST LADY)
$50,000 - Jarvis, Kristen E. (SPECIAL ASSISTANT FOR SCHEDULING AND TRAVELING AIDE TO THE FIRST LADY)
$45,000 - Lechtenberg, Tyler A. (ASSOCIATE DIRECTOR OF CORRESPONDENCE FOR THE FIRST LADY)
Tubman, Samantha (DEPUTY ASSOCIATE DIRECTOR,SOCIAL OFFICE)
$40,000 - Boswell, Joseph J. (EXECUTIVE ASSISTANT TO THE CHIEF OF STAFF TO THE FIRST LADY)
$36,000 - Armbruster, Sally M. (STAFF ASSISTANT TO THE SOCIAL SECRETARY)
Bookey, Natalie (STAFF ASSISTANT)
Jackson, Deilia A. (DEPUTY ASSOCIATE DIRECTOR OF CORRESPONDENCE FOR THE FIRST LADY) "
http://canadafreepress.com/index.php/article/12652
"True Unemployment Rate Already at 20%
July 8th, 2009
Via: MSN:
Source Cryptogon.com
"Really, how hard is it to find a job? Was June’s horrid numbers, in which 467,000 people lost their jobs compared to 345,000 in May, a one-time fluke? Or does it mean that all those Wall Street economists who believe the economic recovery is starting are dead wrong?
Not to scare you, but the situation is actually worse than it seems. Over the years, the government has changed the way it counts the unemployed. An example of this is the criticized Birth-Death Model which was added in 2000. The model is designed to account for the birth and death of businesses and the resultant lag in survey data. Unfortunately, the model doesn’t work that well during economic contractions (like we have now) and consistently overstates the number of jobs being created each month.
John Williams of Shadow Government Statistics specializes in removing these questionable tweaks to the government’s statistical data to better align current numbers with the methodology used to gather historical data. After reviewing the data, Williams believes that “the June jobs loss likely exceeded 700,000.” David Rosenberg of Gluskin Sheff notes that the fall in the number of hours worked in June (to a record low of 33 per week) is equivalent to a loss of more than 800,000 jobs.
There are similar issues with the way the unemployment rate is measured. The headline rate only jumped from 9.4% to 9.5% because of a drop in the number of people in the workforce. The more inclusive “U-6″ measure of unemployment, which includes discouraged workers, jumped from 16.4% to 16.5%. But even this doesn’t adequately capture the situation on the ground: Back in the Clinton Administration, the definition of discouraged worker was changed to only include those that had given up looking for work because there were no jobs to be had within the last year.
By adding these folks back in, William’s SGS-Alternate Unemployment Measure rose to a jaw-dropping 20.6%. Separately, the Center for Labor Market Studies in Boston puts U.S. unemployment at 18.2%. Any way you cut the numbers, the situation is very bad. According to David Rosenberg, one-in-three among the unemployed have been looking for a job for more than six months and still can’t find one."
At least that's the buzz on financial blogs this past weekend. Below are links to headlines and very interesting discussions about potential future implications.
One commentary just picked up added last edit.
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