Mish's Global Economic Trend Analysis |
- Unicredit Debt Collection Scam "Serves" Fake Court Papers by Fake Cops and Fake Judges
- Jobs Expand by 151,000, Unemployment Steady at 9.6%; Birth-Death Methodology Changes for the Better; Reflections on the Numbers
- R&D Spending Declines First Time in Decade
- South Korea, Hong Kong, Brazil, China, Volcker Complain about Bernanke's QE Policy
- Ron Paul Questions Fed Authority, Vows Another "Audit the Fed" Effort
Unicredit Debt Collection Scam "Serves" Fake Court Papers by Fake Cops and Fake Judges Posted: 05 Nov 2010 12:08 PM PDT This story is so outrageous that I cannot figure out why it has not gone viral on the internet. Unicredit America Inc, a debt collection firm, had people dress up (pretending to be police), serve fake papers to people requiring them to show up in court. People showed up in a fake court for a fake hearing with a fake witness stand, and an individual in black pretending to be a judge. Please consider Debt Collector Scam Reaches New Low: The Unicredit Bogus "Courtroom" Scam It isn't easy for consumers to protect themselves these days, from robo-signers, foreclosure-rescue scams, and all manner of abusive collection tactics, but the Unicredit scam may take the prize for sheer audacity. It seems that Erie, Pennsylvania debt collection agency Unicredit not only set up a fake courtroom, complete with phony judge, with which to bamboozle and intimidate, but it dressed up employees like sheriff's deputies to "serve" faked court papers on consumers.I concur with the advice of Dana Wilkinson, Attorney at Law who wrote the above. If you are facing financial difficulties, please see the article for additional tips on how to protect yourself. For still more reasons on why you need to consult an attorney in these matters please consider Pennsylvania Attorney General Files Charges How could anyone at Unicredit possibly think what they did was legal? Straight from the Pennsylvania Attorney Generals website: Erie debt collection company sued; accused of using bogus "hearings" and fake "courtroom" to collect from consumers Attorney General Tom Corbett today announced that a consumer protection lawsuit has been filed against an Erie debt collection company accused of using deceptive tactics to mislead, confuse or coerce consumers - including the use of bogus "hearings" allegedly held in a company office that was decorated to look like a courtroom.Question Authority Max Keiser talked about this incredible scheme in Fake Markets! Fake Finance Max Keiser and co-host, Stacy Herbert, look at the scandals of fake judges using fake deputies to collect fake debts in fake courts and of Irish austerity under imposed under fake pretences. In the second half of the show Max talks to David McWilliams about Ireland's first ever economics festival, Kilkenomics, and the financial and banking crisis that inspired it. The video is 25 minutes but covers a wide variety of topics including "fake authorities" in the US and Ireland demanding repayments in fraudulent ways. The video is well worth a listen in entirety. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List |
Posted: 05 Nov 2010 10:58 AM PDT Today the BLS reported jobs expanded by 151,000. This should not be totally unexpected as I noted last night in Gaming the Jobs Report that TrimTabs called for +95,000, ADP +43,000, and Gallup showed a surge in October hiring. Moreover, recent ISM surveys were stronger than expected. The important question this morning is whether or not this surge is sustainable. I do not think it is, nor does TrimTabs. Here is the Email alert from TrimTabs once again (sorry, no link). TrimTabs Sausalito, CA – November 3, 2010 – TrimTabs Investment Research estimates that the U.S. economy added 95,000 jobs in October, the first monthly increase since May.I strongly concur with that last paragraph in red above. I had a typo in the headline number from TrimTabs yesterday (now corrected). The TrimTabs estimate was +95,000 not +75,000 as I had in the title. No changes were made to the body of my post. Had I read that properly I would have upped last night's estimates higher by 20,000. I was very aware today's report might be on the hot side. This is what I said ... Anything from +40,000 to +110,000 seems like a reasonable guess. I certainly would not be surprised to see a number in the upper end of that range. Stores are hiring, Black Friday sales are starting 3 weeks early, and ISM reports seemed surprisingly strong.Please see Recap and Reflections at the end of this article to put things into proper perspective as to what today's numbers mean. BLS October Report Please consider the Bureau of Labor Statistics (BLS) October 2010 Employment Report.
Index of Aggregate Weekly Hours Production and non-supervisory work hours ticked up by .1 to 33.6 hours. Average hourly earnings rose $.07 at $19.17. BLS Birth-Death Model Black Box For those unfamiliar with the birth/death model, monthly jobs adjustments are made by the BLS based on economic assumptions about the birth and death of businesses (not individuals). Birth Death Model Revisions 2009 click on chart for sharper image Birth Death Model Revisions 2010 click on chart for sharper image Birth/Death Model Methodology The big news in the BLS Birth/Death Model is the BLS is going to move to quarterly rather than annual adjustments. Effective with the release of January 2011 data on February 4, 2011, the establishment survey will begin estimating net business birth/death adjustment factors on a quarterly basis, replacing the current practice of estimating the factors annually. This will allow the establishment survey to incorporate information from the Quarterly Census of Employment and Wages into the birth/death adjustment factors as soon as it becomes available and thereby improve the factors. For more details please see Introduction of Quarterly Birth/Death Model Updates in the Establishment Survey In recent years Birth/Death methodology has been so screwed up and there have been so many revisions that it has been painful to watch. It is possible that the BLS model is now back in sync with the real world. Moreover, quarterly rather than annual adjustments can only help the process. Please note that one cannot subtract or add birth death revisions to the reported totals and get a meaningful answer. One set of numbers is seasonally adjusted the other is not. In the black box the BLS combines the two coming out with a total. The Birth Death numbers influence the overall totals but the math is not as simple as it appears and the effect is nowhere near as big as it might logically appear at first glance. Birth/Death assumptions are supposedly made according to estimates of where the BLS thinks we are in the economic cycle. Theory is one thing. Practice is clearly another as noted by numerous recent revisions. Household Data The number of unemployed persons, at 14.8 million, was little changed in October. The unemployment rate remained at 9.6 percent and has been essentially unchanged since May.Table A-8 Part Time Status click on chart for sharper image There are now 9,154,000 workers whose hours may rise before those companies start hiring more workers, about where we were a year ago. The number is down from last month but massively higher than the reported 8,300,000 reported in January. Table A-15 Table A-15 is where one can find a better approximation of what the unemployment rate really is. click on chart for sharper image Grim Statistics The official unemployment rate is 9.6%. However, if you start counting all the people that want a job but gave up, all the people with part-time jobs that want a full-time job, all the people who dropped off the unemployment rolls because their unemployment benefits ran out, etc., you get a closer picture of what the unemployment rate is. That number is in the last row labeled U-6. It reflects how unemployment feels to the average Joe on the street. While the "official" unemployment rate has held steady, at an unacceptable 9.6%, U-6 is much higher at 17.0% Looking ahead, there is no driver for jobs. Moreover, states are in forced cutback mode on account of shrinking revenues and unfunded pension obligations. Shrinking government jobs and benefits at the state and local level is a much needed adjustment. Those cutbacks will weigh on employment and consumer spending for quite some time. Expect to see structurally high unemployment for years to come. Keep in mind that huge cuts in public sector jobs and benefits at the city, county, and state level are on the way. These are badly needed adjustments. However, economists will not see it that way, nor will the politicians. Recap and Reflections This is the first respectable jobs report in years. The reports earlier this year were padded by part-time census hiring. This report was all private hiring, a very good thing. However, it is important to put this into perspective. It takes approximately 125,000 jobs a month just to hold the rate steady. Here we have +151,000 and a falling participation rate with the unemployment number flat. This apparent anomaly can be explained by the fact that unemployment numbers are derived from the household survey while the reported jobs number comes from the establishment survey. The key point to remember is even if we were to see +150,000 jobs a month for the next year, it would not put a dent in the unemployment rate. In fact, if the participation rate rose, it could even go up. Moreover, it is highly unlikely jobs rise by +150,000 jobs a month, on average, for a whole year. This month's rise in jobs was fueled by retail hiring. Retail hiring is not sustainable. Nor is the rise in manufacturing. We might see a few more months of this (or not), but this is highly unlikely to be the start of something big or sustainable. I still expect to see the unemployment rate back up above 10% in this cycle. While today's report may not be as good as it gets, it certainly is close to as good as it gets on a sustainable basis. Expect to see the unemployment rate stubbornly high for a decade. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List |
R&D Spending Declines First Time in Decade Posted: 05 Nov 2010 09:09 AM PDT Corporations are reluctant to spend money, even research and development notes the Wall Street Journal article R&D Spending Drops at Major Firms Research and development spending at major companies declined last year for the first time in more than a decade, according to a survey by management consulting firm Booz & Co. But R&D as a percentage of revenues was up slightly from a year earlier because revenues dropped at a faster rate than R&D spending.The Jobs number came in hot today although the unemployment rate was flat. This should not be too surprising as ADP, TrimTabs, and Gallup all suggested a surge in October hiring as did recent ISM reports. I will have more on jobs in just a bit. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List |
South Korea, Hong Kong, Brazil, China, Volcker Complain about Bernanke's QE Policy Posted: 05 Nov 2010 03:39 AM PDT A parade of countries have expressed grave concerns over the Fed's misguided Quantitative Easing policy. South Korea Aggressively Considers Curbing Capital Inflows On Wednesday South Korea Warns It's Close to Curbing Capital Inflows South Korea on Thursday issued its strongest warning in months that it was close to taking steps aimed at curbing fund inflows, saying it would "aggressively" consider taking such measures.Brazil Central Bank Says QE Causes Distortions and Excessive Liquidity Please consider Brazil's Meirelles: Fed's latest move on G20 agenda The head of Brazil's central bank said on Thursday that the U.S. Federal Reserve's latest plan to lower domestic borrowing costs and jumpstart the ailing economy would cause further "distortions" in world markets and complicate his country's efforts to stem the rise of its currency.Hong Kong Monetary Authority Warns of QE Related Housing Bubbles Bloomberg reports Fed Easing Worsens Hong Kong 'Bubble' Risk, Chan Says The U.S. Federal Reserve's expansion of stimulus will add to the risk of a housing bubble in Hong Kong and may force extra measures to cool prices, said Norman Chan, the head of the city's central bank.China Central Bank Says "Unbridled Printing is Biggest Risk to Global Economy" A China central bank says U.S. dollar printing is huge risk Unbridled printing of dollars is the biggest risk to the global economy, an adviser to the Chinese central bank said in comments published on Thursday, a day after the Federal Reserve unveiled a new round of monetary easing.Fed Governor Richard Fisher Blasts QEII On October 7, Fed Governor Richard Fisher blasted the idea of QEII in To Ease or Not to Ease? What Next for the Fed? In my darkest moments I have begun to wonder if the monetary accommodation we have already engineered might even be working in the wrong places. Far too many of the large corporations I survey that are committing to fixed investment report that the most effective way to deploy cheap money raised in the current bond markets or in the form of loans from banks, beyond buying in stock or expanding dividends, is to invest it abroad where taxes are lower and governments are more eager to please. This would not be of concern if foreign direct investment in the U.S. were offsetting this impulse. This year, however, net direct investment in the U.S. has been running at a pace that would exceed minus $200 billion, meaning outflows of foreign direct investment are exceeding inflows by a healthy margin. We will have to watch the data as it unfolds to see if this is momentary fillip or evidence of a broader trend. But I wonder: If others cotton to the view that the Fed is eager to "open the spigots," might this not add to the uncertainty already created by the fiscal incontinence of Congress and the regulatory and rule-making "excesses" about which businesses now complain?Why QEII Will Backfire Let's review a snip from Three Reasons QEII Will "Backfire"; Pavlov's Dogs and the "No Choice" Argument Yet Again Dr. El-Erian, CEO and co-CIO of PIMCO states several reasons why QEII will backfire.Bernanke Out of Control Points number 2 and 3 are already in play. 2. Emerging economies burdened by capital inflows in the wake of QEII will react with currency wars, protectionism, and capital controls 3. Resultant commodity price increases will increase input costs and reduce earnings of American companies Paul Volcker on QE Please consider Volcker: future inflation risk limits QE effect Former U.S. Federal Reserve Chairman Paul Volcker on Friday repeated his scepticism about the benefits of the Fed's latest quantitative easing, citing concern about long-term inflation.There is no way QEII can possibly do any good, and at least two current Fed governors know it. So does former Fed chairman Paul Volcker. Bernanke claims to be a student of the Great Depression. The reality is he is an academic wonk with no real world experience in anything. He has proven three things however: 1. He will not listen and cannot be taught 2. He has no common sense whatsoever 3. He is dedicated to bubble blowing in response to crises Other than that, Bernanke is perfectly suited for the job. On second thought, those traits are why he was appointed in the first place. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List |
Ron Paul Questions Fed Authority, Vows Another "Audit the Fed" Effort Posted: 04 Nov 2010 11:20 PM PDT Ron Paul is back at it with another "Audit the Fed" campaign, this time with a House and Senate far more to his liking. Please consider Ron Paul vows renewed Fed audit push next year. U.S. Republican Representative Ron Paul on Thursday said he will push to examine the Federal Reserve's monetary policy decisions if he takes control of the congressional subcommittee that oversees the central bank as expected in January.Rand Paul's Victory Speech In case you missed it, please consider Rand Paul's victory speech. One play of that video is all you need to hear to know that Bernanke's life is going to be a lot more miserable after this election. Several senators were elected who are openly hostile to the Fed. Rand Paul is one of them. Tea Party candidates won 29 seats in the House. They too will make Bernanke miserable. Some people claim the election will not change anything. I bet otherwise. But it will take time. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List |
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