The Mess That Greenspan Made - Part 12

Another Way to Look at the Job Market

Among the Federal Reserve’s dozen or so ways to look at the labor market as they debate monetary policy next week will no doubt be this new alternative found at the Wall Street Journal Economics blog in which the difference between the U3 jobless rate and the U6 gauge of under-employment is charted (recall that U6 includes U3 plus discouraged workers and those stuck in part-time jobs who would like full-time work).

Interestingly, back in January 1994 (the first month that U6 is available), the two components were slightly different. The U3 rate back then – about three years after the 1991 recession – was nearly 12 percent and the U3 rate was 6.6 percent versus, today, when U6 is 11.0 percent and U3 is 5.5 percent.

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Thursday Morning Links

MUST READS
Euro pulls out of dive, stocks edge higher – Reuters
Delight or Dread as Euro Falls – NY Times
ECB buys $10.3 billion of bonds in first 3 days of QE – MarketWatch
Euro’s Freefall Toward U.S. Dollar Parity Continues – Forbes
German central bank: ECB stimulus means less reform pressure – AP
ECB ‘Chasing Own Tail’ as Bond Rates Turn Negative: SocGen – Bloomberg
Dollar Surge Versus Euro May Be ‘Only Half Over’ – Barron’s
Soaring Dollar Could Unleash a Currency Crisis – Fiscal Times
Sovereign debt, bailouts and contagion in the Eurozone – voxeu
Exporting Europe’s Stagnation – Krugman, NY Times
The U.S. Has Too Much Oil and Nowhere to Put It – Bloomberg
Watch American passenger rail shrivel up and die in this animated map – Vox

MARKETS/INVESTING
Global shares steady as US rate hike jitters fade – AP
Wall St. banks launch massive buybacks, boost dividends – USA Today
Buy the best performing stock sector for 87 years – MarketWatch
Those stock buybacks are just another Wall Street scam – MarketWatch
Are U.S. stocks ready for rate hikes? 10 things to know – FP
Gold snaps eight-day losing streak as dollar retreats – Reuters
World top 10 gold miners face negative free cash flows – Mineweb
Gold price in danger zone not attracting bargain hunters – Mining.com
Three Catalysts for the Price of Gold – Daily Reckoning

ECONOMY/WORLD/HOUSING/BANKING
Why salaries don’t rise – Washington Post
A Better Gauge of Labor Slack May Be the Gap Between Two Jobless Rates – WSJ
The Great Immoderation: How The Fed Is Sowing The Next Recession – Contra Corner
PBOC Pledges to Press on With Rate Liberalization Amid Slowdown – Bloomberg
No Reason Why India Can’t Resume 8-9% Growth: IMF – Business World
South Korea joins global easing with surprise rate cut as growth falters – Reuters
France Consumer Prices Fall For Second Straight Month – RTT News
Mortgage applications slip slightly in first week of March – Housing Wire
That’ll Kill the High-End Housing Bubble in US Trophy Cities – Wolf Street
Three Banks Uncover the Path to Payouts in the Fed’s Stress Test – Bloomberg
Here’s what Fed interest rate hikes mean – CBS News

 

The Jobs “Recovery”

Between the dubious calculation of the 5.5 percent unemployment rate (e.g., last month’s decline from 5.7 percent had much more to do with the 354,000 people who left the labor force than the 96,000 who found jobs) and the quality of the jobs the American economy now creates (e.g., employment for waiters and bartenders surpassed the 11 million mark for the first time last month), the current environment will someday probably be looked back upon as “the recovery that wasn’t” despite all the signs being clear to see such as the chart below from this item stumbled upon at Confounded Interest.

It seems that more people have been added to the disability rolls than to the labor force over the last four years and, while I suppose it’s better that the former are not starving, I can’t help but recall a conversation with an 82-year old skiier a couple weeks ago where he described his recent double-knee replacement surgery.

While being quite pleased about being out and about again (I hope I’m still skiing at 82), his biggest gripe was that all the other people getting knee replacements were much younger and obese. “No wonder they need new knees”, he remarked.

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Monday Morning Links

MUST READS
The bull market for stocks turns 6 – AP
‘Six-stock candles’: Wall Street bull turns 6 – USA Today
All eyes on Apple’s Cook as Watch launch expected – Reuters
Eurozone prepares to reject Greek reform deal – Telegraph
Greece crisis: Varoufakis says bailout referendum is possible – BBC
European Central Bank launches trillion-euro stimulus – AP
ECB Starts Buying German, Italian Government Bonds Under QE Plan – Bloomberg
China’s international payments system ready, could launch by end-2015 – Reuters
Shale Oil Production Will Fall 600,000 Barrels Per Day By June – SRSrocco Report
Friday’s Market Plunge Shows Us What’s Wrong With the Fed – RCM
Greenspan’s Insulting Admission of Fed Culpability – Solidus Center
What Does That Difference Mean? – Hussman Funds

MARKETS/INVESTING
Global stocks fall after US jobs data sparks rate concern – AP
Apple Watch potential time bomb for investors – USA Today
Why It’s So Hard to Change Your Mind About the Markets – AWOCS
U.S. Investors Apt to “Ride Out” Stock Market Volatility – Gallup
European Stocks Decline Amid Greece, U.S. Interest-Rate Concerns – Bloomberg
GM plans $5B stock buyback, avoids showdown with hedge funds – AP
Gold rises as dollar pauses but further weakness seen – Reuters
Unless you’re Mad Max, gold isn’t an investment for everyone – FP
How The World Is Being Fooled About Chinese Gold Demand – BullionStar

ECONOMY/WORLD/HOUSING/BANKING
Big Government Is Getting In The Way Of Big Data – Five Thirty Eight
The Texas And North Dakota Oil Busts Through The Eyes Of Henry Hazlitt – Forbes
Tesla shedding jobs in China as sales target missed – Reuters
China trade surplus hits new record as exports grow – BBC
Brazil’s leader urges patience amid scandal, economic woes – AP
Japan Q4 GDP revised down to 1.5 per cent – Economic Times
German trade surplus narrows as exports drop – AP
The Rich Could Fall Out of Love With London – Bloomberg
Obama’s nod to China could bring NYC real estate boom – NY Post
Government hurts housing market more than it helps – mySA
“Patient” is History – Fed Watch

 
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