sâmbătă, 4 octombrie 2014

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis


Shifting Debts: The Gold Standard: Both Good and Necessary

Posted: 04 Oct 2014 12:55 PM PDT

In response to Reader Question on a Credit-Based Society: Can Interest Ever Be Repaid? I received an email from reader Keith Weiner at Monetary Metals.

Keith writes
Hi Mish,

I hope all is well.

I liked your reply to the reader question. I think it boils down to one thing. With fiat money, there is no extinguisher of debt. Debts are paid using dollars, but the dollar is itself a debt. The dollar is just a bite-sized piece of the Treasury bond. Paying a debt with a debt merely shifts it around.

The debt must rise exponentially, by at least the accrued interest, and more if the government wants what passes for growth.

The Gold Standard Institute is sponsoring an event in NYC on Nov 1. I will be talking about this problem, and numerous others that plague the dollar.

Would you be willing to share the link on your site? It's for a good cause that I think is near to your heart as well. :)

Thanks so much for whatever you can do.

Best Regards,
Keith
Keith is one of the good guys. If you are in the area, the conference should be well worth attending.

Date: November 1, 2014
Time: 1:00 to 5:00pm on
Place: The 3 West Club, Midtown Manhattan
Cost: $50 (click here to register)

Conference Link: The Gold Standard: Both Good and Necessary.

You are cordially invited to join us for a presentation of ideas you won't get anywhere else. The gold standard is the monetary system of the free market—of capitalism. Advocates of the gold standard should make the clear connection from gold to freedom, and from freedom to self-interest. Advocates of freedom should understand the destruction wrought by the dollar, and it's not simply rising prices.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Seth's Blog : Learning from the State Department

 

Learning from the State Department

Ambassadors do two things that are really difficult for most people within organizations:

1. They listen and send the notes up the chain. They're at the front line, and they listen to what's happening and figure out how to get the right people back home to hear what's being said.

2. They apologize. Not for things they did wrong, but for things that others did wrong.

If you work for a company that you don't own, if you interact with customers, you're a brand ambassador. The person who runs the cash register or answers the phone or makes sales calls is a brand ambassador, in the world on behalf of the amorphous brand, whatever that is.

I recently bought a few shirts from a big chain. They left the anti-theft tags on the shirts, which of course meant a drive and a hassle to go back to a different store in the chain to get them taken off.

Challenge number one is that the disrespected, overworked cashier will never be asked about what she learned from her interaction with me. There's nothing in place for information to flow.

And challenge number two is that she steadfastly refused to apologize for the hassle. It wasn't her fault, she knew, so what was there to apologize for?

We invented ambassadors because nothing can replace face to face interaction, particularly when messages travel sometimes quite slowly through complex organizations. Just like now.

This seems obvious, and it is, until you realize that organizations make two huge mistakes:

A. They don't hire brand ambassadors, they hire clerks and bureaucrats, and treat them and pay them accordingly.

and

B. They don't manage and lead brand ambassadors, don't measure and reward and create a cadre of people who can listen for the brand and speak for the brand.

Would you send the clerk on aisle 7 to speak to a head of state or vital partner on behalf of your company? Because that's what he's doing right now.

       

 

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vineri, 3 octombrie 2014

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis


What Do Treasury Yields Say About Job Expectations, Inflation Expectations, and the Recovery?

Posted: 03 Oct 2014 11:29 AM PDT

Curve Watcher's Anonymous notes some interesting reactions in the treasury bond market following a string of good job reports.

Today the jobs numbers once again beat expectations: Nonfarm Payrolls Rose by 248,000 and the unemployment rate fell to 5.9%.

In seven out of the last eight months, jobs rose by over 200,000. Last month was the exception, but even then, the initial job report was revised up 69,000 to +180,000.

In light of such purportedly strong data, especially with the Fed tapering ending this month and expectations across the board of fed hikes, yield on the long bond should be rising.

The yield curve also should be steepening, at least if one believes in the recovery. Let's take a look to see what is actually happening.

30-Year Treasury Yield



Note: The above chart is off by a factor of 10. At the time I snapped that chart, the 30-year treasury yield was 3.143%

Yield on the 30-year long bond shot up on the job report but is now in the red for the day. This is not what one would expect following a strong jobs report.

Nonetheless, one day does not prove much. Let's take a look at the 5-year and 30-year treasuries over time.

30-Year and 5-Year Treasury Yields Since 2010



click on any chart for sharper image

The long-term trend since 2010 has been a gentle flattening of the curves.

Moreover, since the beginning of the year the spread between 30-year and 5-year treasuries has decreased significantly as the following chart shows in detail.

Treasury Spread 30-Year Minus 5-Year



The above chart shows weekly closes. The last data point is from September 26.

At the end of the day, the spread will be a bit lower than shown above. I currently have the spread at 1.396 (3.133 on the 30-year minus 1.737 on the 5-year), down about 10 basis points this week.

Instead of the curve steepening as one would expect in a recovery, the 5-30 spread curve has been declining since hitting a peak of 3.0 in November of 2010.

Conclusion

The bond market does not think much of an ongoing recovery or future price inflation prospects, and neither do I.

By the way, I occasionally get asked "Who is Curve Watcher's Anonymous?" The answer is me.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Nonfarm Payrolls 248K; Unemployment 5.9%; Employed +232K; Labor Force -97K

Posted: 03 Oct 2014 08:47 AM PDT

Initial Reaction

The payroll survey shows a net gain of 248,000 jobs vs. an expectation of 215,000 jobs. Last month was revised up by 69,000 to 180,000. The six-month string of plus 200,000 jobs remains broken.

Last month the household survey had a gain in employment of only 16,000. That number was not revised up.

This month the household survey shows a respectable gain of 232,000, pretty much in line with the establishment survey.

Nonetheless the household survey over the past six months has been much weaker than the establishment survey. One or the other is apt for some serious revisions.

The labor force fell by 97,000. Those not in the labor force increased by 315,000. This follows  last month's increase of those not in the labor force of 268,000.

The civilian labor force rose by 217,000. It would take that increase in employment to hold the unemployment rate steady.

Thus, the unemployment rate fell by 0.2% primarily on the basis of people dropping out of the labor force.

All things considered, this was a pretty strong report.

BLS Jobs Statistics at a Glance

  • Nonfarm Payroll: +248,000 - Establishment Survey
  • Employment: +232,000 - Household Survey
  • Unemployment: -329,000 - Household Survey
  • Involuntary Part-Time Work: -174,000 - Household Survey
  • Voluntary Part-Time Work: +35,000 - Household Survey
  • Baseline Unemployment Rate: -0.2 at 5.9% - Household Survey
  • U-6 unemployment: -0.2 to 12.0% - Household Survey
  • Civilian Non-institutional Population: +217,000
  • Civilian Labor Force: -97,000 - Household Survey
  • Not in Labor Force: +315,000 - Household Survey
  • Participation Rate: -0.1 at 62.7 - Household Survey

Additional Notes About the Unemployment Rate

  • The unemployment rate varies in accordance with the Household Survey, not the reported headline jobs number, and not in accordance with the weekly claims data.
  • In the past year the working-age population rose by 2,278,000.
  • In the last year the labor force rose by 389,000.
  • In the last year, those "not" in the labor force rose by 1,889,000
  • In the past year, the number of people employed rose by 2,330,000 (an average of 194,1677 a month)

Please note that over the course of the last year, the working-age population rose by more than the number of people employed. In normal times, the unemployment rate would have gone up slightly. Instead, the unemployment rate fell from 7.2% to 5.9%.

Over 100% of the decline in unemployment in the past year is due to people dropping out of the labor force, rather than strength in employment!

September 2014 Employment Report

Please consider the Bureau of Labor Statistics (BLS) July 2014 Employment Report.

Total nonfarm payroll employment increased by 248,000 in September, and the unemployment rate declined to 5.9 percent, the U.S. Bureau of Labor Statistics reported today. Employment increased in professional and business services, retail trade, and health care.

Click on Any Chart in this Report to See a Sharper Image

Unemployment Rate - Seasonally Adjusted



Nonfarm Employment January 2003 - September 2014



click on chart for sharper image

Nonfarm Employment Change from Previous Month by Job Type



Hours and Wages

Average weekly hours of all private employees rose by 0.1 hours to 34.6 hours. This was the first increase in seven months. Average weekly hours of all private service-providing employees also rose by 0.1 hours to at 33.4 hours.

Average hourly earnings of production and non-supervisory private workers was flat at $20.67. Average hourly earnings of production and non-supervisory private service-providing employees was flat at $20.46.

Last month numbers appear to have been revised lower by $0.01 as last month I reported production and non-supervisory private at $20.68 and service-providing at $20.47.

For discussion of income distribution, please see What's "Really" Behind Gross Inequalities In Income Distribution?

Birth Death Model

Starting January, I dropped the Birth/Death Model charts from this report. For those who follow the numbers, I keep this caution: Do not subtract the reported Birth-Death number from the reported headline number. That approach is statistically invalid. Should anything interesting arise in the Birth/Death numbers, I will add the charts back.

Table 15 BLS Alternate Measures of Unemployment



click on chart for sharper image

Table A-15 is where one can find a better approximation of what the unemployment rate really is.

Notice I said "better" approximation not to be confused with "good" approximation.

The official unemployment rate is 5.9%. However, if you start counting all the people who 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.

U-6 is much higher at 11.8.0%. Both numbers would be way higher still, were it not for millions dropping out of the labor force over the past few years.

Labor Force Factors

  1. Discouraged workers stop looking for jobs
  2. People retire because they cannot find jobs
  3. People go back to school hoping it will improve their chances of getting a job
  4. People stay in school longer because they cannot find a job
  5. Disability and disability fraud

Were it not for people dropping out of the labor force over the past several years, the unemployment rate would be well over 9%. Some of those dropping out genuinely retired. However, millions retired involuntarily. That is, they needed to retire and collect social security because they had no job and no income. Such folks are no longer in the labor force even if they want a job. The falling unemployment rate is very deceiving, painting a picture of improvement that simply does not exist.

A gallup survey on the economy better reflects how the average Joe feels: 38% Think Economy Getting Better, 56% Say Worse.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Damn Cool Pics

Damn Cool Pics


50 Mistakes Dudes Make While Getting Dressed [Infographic]

Posted: 03 Oct 2014 11:36 AM PDT

It's not just clothes that make the man, it's knowing the rules well, and then choosing which ones you want to break. Not all of these tips will work across all body types, but we're sure you'll be a better-dressed guy after looking at this than if you had never come across it at all. It's a tough world out there, so we might as well look impeccable while surviving in it. Here's 50 Mistakes Dudes Make While Getting Dressed.

Click on Image to Enlarge.

Via complex

The Vehicles Of The Mexican Drug Cartels

Posted: 03 Oct 2014 10:41 AM PDT

If you're going to try and smuggle drugs in Mexico, you've got to get creative when it comes to the vehicles you use.




















100 Biopic Actors vs. the Real People They Played

Posted: 03 Oct 2014 10:25 AM PDT

Biopics can be hit or miss. If you get the right actor for the lead role, it can be a huge success, if you don't then it's destined to fail. These are the actors who have played iconic roles set side by side with the real people they played. Do you think they pulled it off?