Fin/Inv

Wie bereits seit vielen Monaten berichtet, die umfangreichen Kredit- und Liquiditätshilfen für das US-Finanzsystem und die US-Wirtschaft, laufen vor allem in einem der entscheidendsten Punkte ins Leere - es entstehen keine neue Jobs!

Bereits den 21. Monat in Folge führt die Finanz- und Wirtschaftskrise zu einem drastischen Stellenabbau in den USA! Im September 2009 lag die Anzahl des vom Bureau of Labor Statistics (BLS) gemeldeten Stellenabbaus bei saisonbereinigte -263'000 Jobs! Insgesamt kumuliert sich der Stellenabbau auf gewaltige -7,205 Millionen verlorene Jobs seit Januar 2008! Dies ist der längste und größte Einbruch am Arbeitsmarkt seit Beginn der Datenerhebung durch das BLS im Jahre 1939!

> Im Chart der Stellenaufbau/abbau seit Januar 1985. Die Non-Farm Payroll Employments messen die Anzahl der Stellen in mehr als 500 Wirtschaftszweigen der USA, ausgenommen ist die Landwirtschaft. <

Der Stellenabbau beschreibt das Problem sogar unzureichend, denn eigentlich müssten monatlich ca. 130'000 neue Stellen geschaffen werden, um das Beschäftigungsniveau in der aktuellen Relation zur Struktur und Entwicklung der Bevölkerung konstant zu halten. Selbst im Jahr 2007 lag bereits der Durchschnitt der neu geschaffenen Stellen unter 130'000 im Monat!

Die Daten zum Stellenaufbau/abbau (Establishment Data) über alle Teilbereiche außer der Landwirtschaft werden bei den Unternehmen direkt von der BLS abgefragt. Die Daten zur Beschäftigung der abgefragten Unternehmen reflektieren ein Drittel der lohnabhängigen Beschäftigten.

Die Arbeitslosenquote U-3 stieg im September auf 9,8%, nach 9,7% im Vormonat und 6,2% im Vorjahresmonat auf den höchsten Stand seit Juni 1983, damals mit einer Arbeitslosenquote von 10,1%! Hinter der aktuellen Arbeitslosenquote von 9,8% verbergen sich saisonbereinigte (seasonal adjusted, SA) 15,142 Millionen offiziell registrierte Arbeitslose, ein Anstieg von +214'000 zum Vormonat und von +5,55 Millionen zum Vorjahresmonat!

> Die US-Arbeitslosenquote U-3 im Chart seit 1948. <

> Die 15,142 Millionen Arbeitnehmer ohne Job markieren ein neues Allzeithoch, seit Beginn der Datenerhebungen im Jahr 1939! Der Langfristchart seit 1948! <

> Ebenfalls ein neues Allzeithoch markiert die Zahl der Langzeitarbeitslosen, mit 5,438 Millionen, die länger als 27 Wochen keinen Job haben! Ein brutaler Anstieg von +166,4% zum Vorjahresmonat bzw. um +3,397 Millionen! <

> Im Vergleich zu den anderen Zeitschienen der Arbeitslosigkeit, findet der Anstieg besonders bei den Langzeitarbeitslosen statt, die länger als 27 Wochen keinen Job haben! <

Die folgenden Daten zu den Erwerbsfähigen, dem Stand der Beschäftigung, den Arbeitslosen, der Arbeitslosenquote, sowie die Zahl der Nichterwerbsfähigen (Household Data), werden an Hand einer Umfrage des Census Bureaus bei 60'000 Haushalten für das Bureau of Labor Statistics (BLS) ermittelt!

> Die Anzahl der Beschäftigten sank im September laut den Household Data um kräftige -785'000 und damit wesentlich stärker als man aus den Establishment Data zum Stellenabbau vermuten würde! <

Das die stark sinkende Anzahl der Beschäftigten nur mit einem Anstieg der Arbeitslosenquote von +0,1% zum Vormonat zu Buche schlägt, erklärt sich wie folgt. Die dem Arbeitsmarkt zur Verfügung stehenden Arbeitskräfte (Civilian Labor Force) waren im September rasant auf 154,006 Millionen gefallen! Gewaltige -571'000 Arbeitskräfte sind angeblich dem Arbeitsmarkt abhanden gekommen. Die dem Arbeitsmarkt zur Verfügung stehenden Arbeitskräfte sind mehr als relevant, denn sie sind die Bezugsgröße von der zusammen mit der Anzahl der Arbeitslosen, die Arbeitslosenquote ermittelt wird. Sinkt die Anzahl der dem Arbeitsmarkt zur Verfügung stehenden Arbeitskräfte, wirkt sich dies unmittelbar positiv auf die ermittelte Arbeitslosenquote.

Noch fragwürdiger, intransparent und manipulativ ist der hohe Anstieg im September von +807'000 an Arbeitskräften die dem Arbeitsmarkt (Not in Labor Force) angeblich nicht mehr zur Verfügung standen! Je schlechter die Wirtschaftlage um so weniger Arbeitskräfte stehen dem Arbeitsmarkt zur Verfügung, ein weiterer Statistik-Witz! Nicht für den Arbeitsmarkt zur Verfügung und damit für die Ermittlung der offiziellen Arbeitslosenquote nicht relevant, waren im September insgesamt saisonbereinigte 82,316 Millionen erwachsene Personen!

> 82,316 Millionen Erwachsene, die dem Arbeitsmarkt angeblich nicht mehr zur Verfügung stehen. Ein Anstieg zum Vormonat um kräftige 807'000 und selbst im kumulierten breiten Zeitraum der letzten 12 Monate sind dies 2,577 Millionen, der zweithöchste Anstieg im September 2009 (kumuliert), seit Beginn dieser Datenerfassung im Jahr 1975! <

> Noch deutlicher macht es dieser Chart seit 1948. Er zeigt das Verhältnis der Beschäftigten zur Bevölkerung im arbeitsfähigen Alter. Im September sank das Verhältnis auf 58,8%, auf den Stand von Januar 1984! Der Durchschnitt des Ratios zwischen dem Jahr 2000 bis 2008 lag bei 62,93%! <

Die Anzahl der Beschäftigten (138,864 Mio.) in der Relation zur Bevölkerung im arbeitsfähigen Alter ab 16 Jahre (236,322 Millionen aus: Civilian Labor Force+Not in Labour Force) sank also auf nur noch 58,8%. Zur Gesamtbevölkerung (307,614 Mio.) betrug das Verhältnis sogar nur 45,1%!

In der breiter gefassten Arbeitslosenquote U-6 erscheinen zusätzlich die Arbeitnehmer in Teilzeit, welche aber einen Vollzeitarbeitsplatz suchen (9,179 Millionen, saisonbereinigt), die marginal und geringfügig beschäftigten Arbeitnehmer (2,219 Millionen, nicht saisonbereinigt) und die sogenannten entmutigten Arbeitnehmer (Discouraged Workers, 706'000, nicht saisonbereinigt), welche nicht nachgewiesener Weise einen Arbeitsplatz im 1-Monats-Erhebungszeitraum suchten.

> Auch die saisonbereinigten Arbeitnehmer in Teilzeit, welche aber einen
Vollzeitarbeitsplatz suchen, stiegen im September um +103'000 auf 9,179 Millionen und damit auf ein neues Allzeithoch! Ein Anstieg von +45,9% bzw. um +2,887 Millionen zum Vorjahresmonat! Im Chart die Daten seit Januar 1978. <

> Die nicht saisonbereinigte Anzahl der marginal und geringfügig beschäftigten Arbeitnehmer sank um -51'000 auf 2,219 Millionen. Die Daten seit Beginn der Erhebungen im Jahr 1994. <

> Die Anzahl der nicht saisonbereinigten, sogenannten entmutigten Arbeitnehmer, welche nicht nachgewiesener Weise einen Arbeitsplatz im 1-Monats-Erhebungszeitraum suchten, sank um -49'000 auf 706'000. <

Die saisonbereinigten Daten dieser Gruppen zusammen mit den Arbeitslosen aus U-3 ergeben die Quote U-6:

> Zum Vergrößern bitte die Tabelle anklicken. Die saisonbereinigte Arbeitslosenquote U-6 stieg im September auf 17,0% (siehe Tabelle rechts unten), nach 16,8% im Vormonat und 11,2% im Vorjahresmonat! Quelle: PDF BLS Tabelle Seite 20 <

> Die Entwicklung der US-Arbeitslosenquote U-6 seit Januar 1994, dem Beginn der Datenerhebung. <

Die Zahl der breiter gefassten Arbeitslosen nach U-6 stellt sich im Detail nach den komplett verfügbaren nicht saisonbereinigten Daten wie folgt dar:

U-3 (NSA) 14,538 Mio.

Part Time for Economic Reasons (NSA) 8,255 Mio.

Marginally Attached to Labor Force (NSA) 2,219 Mio.

Discouraged Workers (NSA) 0,706 Mio.

------------------------------------------------------------

Die gesamten nicht saisonbereinigten (NSA) Arbeitslosen und Erwerbsfähigen ohne adäquaten Job, betrugen 25,718 Millionen im September!

Aber auch diese miesen Arbeitslosenzahlen sind geschönt, denn die entmutigten Arbeitnehmer, welche auf Grund fehlender Jobs aufgegeben haben und seit einem Jahr nicht mehr nachgewiesener Weise einen Arbeitsplatz suchen, entfallen seit der Clinton-Ära komplett auch aus der Arbeitslosenstatistik U-6!

John Williams von Shadow Government Statistics (SGS) bereinigt die heutigen Arbeitslosenzahlen U-6 um die offiziell vorgenommenen statistischen Veränderungen bei der Datenerhebung der entmutigten Arbeitnehmer! Unfassbare 21,4% bzw. 32,9 Millionen Erwerbslose, so das Ergebnis von Williams im September!

> Rot, die offizielle Statistik U-3, grün, Level U-6 mit entmutigte Arbeitnehmern, blau, die alternative Berechnung von SGS! Quelle Chart: Shadowstats.com <

Monat für Monat werden laut offiziellem Arbeitsmarktbericht neue Tiefs bei den Industriearbeitsplätzen markiert! Nur noch saisonbereinigte 11,719 Millionen Arbeitsplätze bestehen in der Industrie im September 2009, ein Minus von weiteren -51'000 im Vergleich zum Vormonat. Dies entspricht einem Anteil der Industriearbeitsplätze von nur noch 7,6% an allen dem Arbeitsmarkt zur Verfügung stehenden Arbeitskräften in Höhe von 154,066 Millionen! Der permanente Abbau an Jobs aus der industriellen Wertschöpfung ist Zeichen einer selbstzerstörerischen Deindustriealisierung!

> Mit der Anzahl der Industriejobs geht es seit dem Jahr 2000 stetig bergab! Im September 2009 waren nur noch saisonbereinigte 11,719 Millionen Arbeitnehmer im verarbeitenden Gewerbe (Manufacturing) beschäftigt. Die Anzahl der Industriejobs ist auf dem tiefsten Stand seit April 1941! <

> Die durchschnittliche Wochenarbeitszeit der Production Workers im Chart seit 1964 bis September 2009. Ein Allzeittief seit 45 Jahren mit einer Wochenarbeitzeit von nur noch 33,0 Stunden. <

Nicht nur die Jobs in der Industrieproduktion nehmen ab, auch die Jobs am Bau gehen während der Krise massiv verloren!

> Im September gingen weitere -64'000 Stellen in der Bauwirtschaft verloren. 6,038 Millionen Beschäftige sind noch am Bau. Seit dem Beschäftigungshoch im Januar 2007 mit 7,737 Mio. Jobs sind -1,699 Mio. Stellen verloren gegangen! <

Das Bureau of Labor Statistics hat auch weiter die nicht saisonbereinigten Arbeitsmarktdaten mit Hilfe des Net Birth/Death Model geschönt! Das Net Birth/Death Model schätzt die neugegründeten Firmen und deren Beschäftigungszahlen. Unlogischerweise gehen die Statistiker davon aus, dass viele neue Unternehmen entstehen, je mehr alte liquidiert werden. Eine lächerliche Annahme in einem so dramatischen Konjunkturabschwung! Die dazu gedichteten Stellen auf Grund dieser statistischen Annahme betrugen im September 2009 moderate 34'000, nach 118'000 im August! Das Net Birth/Death Model fließt in den nicht saisonbereinigten Stellenaufbau/abbau mit ein.

> Die Statistikverbieger von der BLS vermuten im größten wirtschaftlichen Abschwung aller Zeiten in den ersten 9 Monaten 2009 gewaltige kumulierte +707'000 neue Jobs in neu geründeten Unternehmen! <

Der US-Arbeitsmarkt ist ein einziges Desaster, dies wird selbst an den offiziellen Daten und den entsprechenden Charts deutlich sichtbar, auch in Anbetracht von einigem Restpotential an Schönfärbung. Ein Aufschwung ohne Jobs und Einkommen ist eine Illusion. Die USA ist weiter mitten in der Finanzkrise, da die Kreditausfälle weiter steigen werden und sie ist weiter in der Wirtschaftskrise, da die schwache wirtschaftliche Erholung vom Arbeitsmarkt nicht mitgetragen wurde und alles nur durch Unsummen an Steuergeldern bzw. staatlicher Neuverschuldung und der Notenbankpresse erkauft wurde.

> In Punkto drohende Kreditausfälle bei den US-Banken und den notwendigen Eigenkapitalanforderungen daraus, erinnern wir uns an den Stresstest bei den 19 größten Banken, Ende April 2009. Damals ging man bei der Simulation beim Basis-Szenario von einer Arbeitslosenquote von nur 8,4% aus, selbst das Negativ-Szenario belief sich für 2009 auf nur 8,9%! <

Quellen Daten: PDF US-Arbeitsmarktbericht September 2009, Stlouisfed.org, Bls.gov/data

Kontakt: info.querschuss@yahoo.de

Wenn Ihr Querschüsse per PayPal mit einem beliebigen Betrag unterstützen möchtet, bitte den Button anklicken:

We continue on the topic of Rare Earth Elements, first presented to the broader audience by our very own Travis,  with a guest submission by Doug Hornig, Senior Editor of Casey's International Specualtor

 

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For those now following us on Twitter (www.twitter.com/bespokeinvest), be sure to check out our new Chartfinder Challenge that we plan on posting each Friday. The first person to reply on Twitter with the correct stock ticker will get a free month of Bespoke Premium.

Too apropos to today’s NFP:

And...

HAS ISM PEAKED?

And if it has, will the bullish Wall (and Bay) Street strategists change their views (and will their masters let them?). Strategist after strategist came into our offices ages ago with the doctrine that it didn't matter whether or not ISM was sub-50, just by rising, it meant that conditions in the industrial sector were improving even if still contracting. Well, it's amazing how many "don't worry, be happy" notices we got yesterday, for even if ISM did decline for the first time this year, from 52.9 to 52.6 in September, it is still signifying expansion in the manufacturing sector. Ostensibly, for product-pushing Street economists and strategists alike, what matters at the margin is only when the diffusion index is moving up -- not when it's moving down. Now, how are we sure that the ISM has very likely peaked (as auto production crests – it does indeed now look as though motor vehicle production, which had been the primary factor boosting output and the manufacturing surveys, has now been totally realigned with sales)? Well, because the best leading indicator for the index lies in two of the components -- orders which dropped to 60.8 from 64.9, and inventories which rose to 42.5 from 34.4. In other words, the orders/inventory ration tumbled to 1.43 from 1.89 in August.

 

Folks, that is the largest one-month decline in the ISM orders/inventory ratio since December 1980! The ISM was 53 that month – the next month it went to 49.2 (is that in the market?) and seven months later, we were in the early stages of the famed double-dip recession (which nobody saw coming at the time). Food for thought.

Must read full report from David Rosenberg and Gluskin Sheff:

 

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Bespoke Premium is renowned for having what many clients believe is the most comprehensive and unique earnings season coverage around. With the third quarter reporting period beginning next Wednesday after the close when Alcoa (AA) reports, we've been charging up our charts, tables, and databases for the coming earnings rush all week. Prior to the start of earnings season next...

On September 22, I wrote a lengthy summary of arguments for deflation. 5 weeks later, there's a lot to add.

Nobel prize winning economist Joseph Stiglitz says:

Deflation is definitely a threat right now.

Alan Greenspan said on September 30th:

We are still, by any measure, in a disinflationary environment.

And the President of the Chicago Federal Reserve Bank, Charles Evans, said on September 9th:

Disinflationary winds are blowing with gale-force effect.

Flattening Yield Curve Points Toward Deflation

PIMCO's Bill Gross said:

There has been significant flattening on the long end of the curve,” Gross said in an interview from Newport Beach, California, with Bloomberg Radio. “This reflects the re- emergence of deflationary fears. The U.S. is at the center of de-levering as opposed to accelerating growth.

Gluskin Sheff's David Rosenberg, Tyler Durden and Mish also believe that a flattening yield curve indicates deflation.

Bloomberg notes:

The difference in yield between nominal and inflation-protected Treasury securities maturing in one year is negative 0.4 percent, suggesting investors expect deflation during the next 12 months.

Unemployment

Job losses are accelerating.

JPMorgan Chase’s Chief Economist Bruce Kasman told Bloomberg:

[We've had a] permanent destruction of hundreds of thousands of jobs in industries from housing to finance.

A new report from Advance Realty and Rutgers - America’s New Post-Recession Employment Arithmetic - argues that we will not have a full recovery in unemployment until until 2017, and that:

• The Great 2007–2009 recession is the worst employment setback in the United States since the Great Depression.

• In the twenty months from December 2007 (the start of the recession) to August 2009 (the last month of available data as of this analysis), the nation lost more than 7.0 million private-sector jobs.

• The recession followed a very much-below-normal economic expansion (November 2001–December 2007) that was characterized by relatively weak private-sector employment growth of approximately 1 million jobs per year.

• This was less than one-half of the job-growth gains of the two preceding expansions (1982–1990 and 1991–2001), when average annual private-sector employment grew by 2.4 million jobs per year and 2.2 million jobs per year, respectively.

• In the preceding two expansions combined, private-sector employment growth per year was approximately 435,000 jobs higher than the annual growth in the number of people in the labor force.employment deficit.

• The weak economic expansion sandwiched between two recessions (2001, and 2007–2009) produced a lost employment decade.

• As of August 2009, the nation had 1.3 million (1,256,000) fewer private- sector jobs than in December 1999. This is the first time since the Great Depression of the 1930s that America will have an absolute loss of jobs over the course of a decade.

• From 1980-2000, the US gained a 35.5 million private-sector jobs. During the current decade, America has lost more than 1.7 million private-sector jobs.

• Total “employment deficit” could approach 9.4 million private-sector jobs by December 2009.

New jobs aren't being created.

Even Larry Summers says unemployment will remain 'unacceptably high' for years.

The New York Times points out that U.S. job seekers exceed openings by record ratio.

2 out of 5 Californians out of work.

Almost half of 16-24 year olds are unemployed.

Credit Still Constrained

US credit has shrunk at Great Depression rate prompting fears of double-dip recession:

Professor Tim Congdon from International Monetary Research said US bank loans have fallen at an annual pace of almost 14pc in the three months to August (from $7,147bn to $6,886bn).

"There has been nothing like this in the USA since the 1930s," he said. "The rapid destruction of money balances is madness."

The M3 "broad" money supply, watched as an early warning signal for the economy a year or so later, has been falling at a 5pc annual rate.

Similar concerns have been raised by David Rosenberg, chief strategist at Gluskin Sheff, who said that over the four weeks up to August 24, bank credit shrank at an "epic" 9pc annual pace, the M2 money supply shrank at 12.2pc and M1 shrank at 6.5pc...

US banks are cutting lending by around 1pc a month. A similar process is occurring in the eurozone, where private sector credit has been contracting and M3 has been flat for almost a year.

The Independent notes:

A second credit squeeze and a £200bn national "funding gap" threatens to sabotage the recovery in the British economy, the IMF warned yesterday.

In its latest Global Financial Stability Report, the fund said that a combination of a soaring government deficit and the borrowing needs of British companies and consumers – coupled with a still broken banking system – would leave the UK with a national "funding gap" of 15 per cent of GDP, or around £200bn next year, much higher than in either the US or the euro area.

Housing

Moody's forecasts that housing won't return to pre-bust levels until 2020, "Florida and California will only regain their pre-bust peak in the early 2030s"

Treasury says millions more foreclosures are coming.

Fannie Mae's serious delinquency rate is skyrocketing.

Half of all borrower who are getting help with loan modifications end up redefaulting.

And apartment rental prices are falling world-wide.

Business

The creation of small businesses is way down.

Experts are projecting unprecedented corporate defaults.

Ghost fleets of unused ships lie rusting in port.

States

State tax revenues have plunged 17%.

More Signs of Deflation

Bloomberg writes:

The U.S. faces the possibility of deflation for the first time since the Eisenhower administration...

Consumer prices are experiencing deflation, with the consumer price index sliding for six straight months from year- earlier levels, the longest stretch of declines since a 12-month drop from September 1954 to August 1955, according to the Labor Department...

While the economy contracted 2.7 percent during the 1953 recession, it shrank 3.8 percent in the current recession, the most since the 1930s. Economists at New York-based JPMorgan Chase & Co. and Goldman Sachs Group Inc., the second- and fifth- biggest U.S. banks by assets, say there’s so much deflationary excess labor and plant capacity in the economy that the Fed won’t raise interest rates until at least 2011.

Paul Krugman writes:

A new report from the International Monetary Fund shows that the kind of recession we’ve had, a recession caused by a financial crisis, often leads to long-term damage to a country’s growth prospects. “The path of output tends to be depressed substantially and persistently following banking crises.”

The U.S. Census Bureau reports that 40 million Americans are living in poverty.

Albert Edwards makes the case for balance sheet-based deflation, arguing that - even as the government tries to inflate its way out of all its problems and printing trillion in new treasuries - it is unable to catch up with the non-governmental balance sheet collapse:

The US Federal Reserve recently published their comprehensive flow of funds data for the US. This showed that the household sector continued to pay down debt for the fourth consecutive quarter. Corporates also started to pay down debt sharply in Q2 at a similar $200bn pace. The non-financial private sector paid down debt at a $435bn pace in Q2. This compares to a $2,116bn pace of expansion in 2007 (see chart below). Add to that the financial sector unwind and the total private sector is unwinding debt faster than the government is able to pile it up (hence the red line is still negative)! The lesson from the balance sheet recession in Japan is that the massive private sector headwind to growth has a long, long way to run.

If that is the case, we can expect, just like Japan, frequent relapses back into recession. The market now understands how an end of inventory de-stocking can boost GDP, i.e. it is the change in the change that matters. Similarly as Dylan Grice points out - link, it is the change in the fiscal deficit that is a net stimulus or drag to GDP. A massive 6pp stimulus last year is likely to turn into a 2pp drag on growth next year (see chart below). With continued private sector de-leveraging likely next year and beyond, how can one seriously not expect the global economy to relapse back into recession next year taking nominal GDP deep into an abyss?

AP writes:

As in the 1980s, much of that shift will be driven by baby boomers. For the 78 million people born from 1946 through 1964, the Great Recession hit at a particularly inopportune time – during peak years of earning and saving before retirement. Boomers range from 44 to 63 today – the youngest is nearly 10 years older than the oldest was in 1982. They are running out of time and are most likely to remain cautious spenders and become aggressive savers even as the economy improves.

The housing bubble mistakenly led boomers and millions of others to believe their home was their retirement nest egg. If they left their home equity alone during the boom, they've taken a hit the last couple years but are still ahead. But many treated their home like a personal bank and spent the gains by tapping a home equity line of credit.

Alix Partners finds:

While American industry is struggling to get through what could become the worst recession since the Great Depression, Americans say that even after the recession ends, their spending will return to just 86% of pre-recession levels, which would take a trillion dollars per year out of the U.S. economy for years to come. According to this in-depth survey of more than 5,000 people, Americans plan to save (and therefore not spend) an astounding 14% of their total earnings post-recession, with the replenishment of their 401(k) and other retirement savings leading the way among their biggest long-term concern.

As Huffington Post notes:

"There will be a fundamental shift in the kind of cars we buy, a fundamental shift in the homes we buy, and a fundamental shift in consumption generally," says Matt Murray, an economist at the University of Tennessee. "And that is not something that took place in the 1980s."

Yet another indication of just how dismal the economy is, was the recently announced non-existent demand for raw material imports, particularly steel, which saw was a mere 775k tons in August imports, a 66.5% decline from August of 2008, or a dollar value of $758 million down 76% from the $3.2 billion imported in August 2008. After a brief "second derivative" headfake in July numbers, the August results indicate that even as economists expect a massive pick up in inventories and what not, domestically America is using raw materials at a fraction of even 2008's run rate.

How this information will affect steel makers and service centers is as of yet unknown, although with destocking already having been occurring for many months, the complete lack of any tangible desire to restock is truly surprising.

Click on graph for larger image in new window.

This graph is from Doug Short of dshort.com (financial planner): "Four Bad Bears".

Note that the Great Depression crash is based on the DOW; the three others are for the S&P 500.

From the WSJ: Starwood-Led Group Likely Winner of Corus Assets

... a group of investors led by ... Starwood Capital Group is emerging as the likely winner ... of the failed Corus Bank's condominium loans and other property ...

The assets have a face value of about $5 billion but the winning bid is expected to be far less than that ... To minimize the losses to taxpayers from the failure of Corus, the FDIC will take a 60% equity stake in the partnership that ends up owning the Corus assets ...The FDIC also will provide financing to the partnership.

And more hotels going down ... from a Lodgian press release: (ht Zach)

The Merrill Lynch Fixed Rate Pool 3, secured by six hotels, is in default. The loan matured on October 1, 2009. The company has engaged in negotiations with the lender regarding extension and modification of the loan, with no resolution to date. Unless some agreement is reached in the near-term, the company intends to return the hotels to the lender in full satisfaction of the debt;

The company has stopped servicing the debt secured by the Crowne Plaza in Worcester, Mass., and intends to return the hotel to the lender in full satisfaction of the debt;

3:00pm EDT: Apologies for my long absence but I had a half dozen issues to deal with this morning plus I had to attend two phone conferences. In the meantime I see that we’ve been treating water around VWAP since the open with a slight bias to the upside.

The one chart that however keeps fascinating me is LQD. To see a second consecutive down candle like of that magnitude is very significant and indicates that bond traders are rushing out of risky assets. The big question is whether or not this will continue to have an impact in equities - but let’s not forget that bond traders are (usually) a lot smarter than their equity trading cousins.

Thus far the lower channel border is holding. I’m not sure yet if we are sub-dividing into 2nd waves here or if something else (i.e. more worrisome to the bears) is going on. If we run up from here I would have to completely revise the wave count of the past two months as an a-b-c at this stage would violate the {i} wave of late August. We need of course be open to this - the labels we attach to waves in development are not chiseled in stone and it’s always good to not get locked into a mental framework. Unfortunately however we cannot second guess the process either - at this point nothing has happened that would violate our blue scenario. If we breach above 1069.62 then we know for sure - in the interim any rips continue to be short trading opportunities. I know that sucks as said move would suck the life out of any of our puts - but that’s life in the fast lane - if you try to get in early you will have to sweat through these limbo situations. And the bulls will do their very best to test our resolve - prepare head fakes. Not saying that it will happen but when you enter into a trade the word ‘hope’ should be erased from your vocabulary.

3:53pm EDT: VWAP breached on both ES and NQ - very very cool - let’s see how far this thing will go.

3:57pm EDT: The fight for battle bot supremacy has begun:

Since it is Friday ...

From Bloomberg: Banks With 20% Unpaid Loans at 18-Year High Amid Recovery Doubt

The number of U.S. lenders that can’t collect on at least 20 percent of their loans hit an 18-year high, signaling that more bank failures and losses could slow an economic recovery.

[There are] 26 firms with more than one-fifth of their loans 90 days overdue or not accruing interest as of June 30 -- a level of distress almost five times the national average ...

For banks with 20 percent of loans overdue, “either they’ve got a massive amount of capital, or the FDIC just hasn’t gotten around to them,” said Jeff Davis, an analyst with FTN Equity Capital Markets in Nashville.

And here is a classic quote:

“Everything was so positive for so long in this area, it came as a surprise when it stopped,” said John Medernach, Benchmark’s CEO ...

“I stop and think of all the rich farmland that has been developed into subdivisions during the boom years,” Medernach said. “It makes you wonder what we’ve been doing.”

Hey, Hoocoodanode? (Who could have known?)

The article includes a table with all 62 banks. Here are the "leaders" according to Bloomberg:

Company	Location	Nonaccrual Loans as % of Total
Community Bank of Lemont	Lemont, IL	49.45
Eastern Savings Bank FSB	Hunt Valley, MD	48.01
City Bank	Lynnwood, WA	43.95

Nice chart via Annaly Capital, showing the “Mother of All Jobless Recoveries.”

You can see why the Rutgers study showing a full jobs recovery not taking place until 2017 is very possible.

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Thanks, Scott!

Grrrr.... after hearing packs of lies all day on "Tout TV" regarding the radically worse-than-expected employment report, and on the back of my own report on the data, I am compelled to post some CHARTS.

Let's start with this one:

Note that all of these are from the BLS "A" tables - that is the actual count of people from a survey, not the cooked, "birth-death-adjusted" nonsense that BLS calls a "headline" number.

This first chart shows the bad news - the blue line is monthly change from the previous month.  It is very noisy, as you'd expect.

The solid line is annualized change - that is, the actual count compared to one year prior. 

Notice that employment went to a negative 12-month rate of change right at the start of 2008 - coincidentally, right at the start of the official "start" of the recession.

Also note that the last recession, which began at the end of the first quarter of 2001, also had the rate of change on a 12-month basis go negative at roughly the same time.

(Not-so-coincidentally, you also got a 12 month advance warning of the recession when the trend changed in both cases too.  Now you know what one of the indicators I used in my 2008 "Outlook" Ticker in which I said we would enter a formal recession was.....)

I want to to pay particular attention to the bottom of the last recession, which was (officially) 11/01.

Notice that the spike bottom in the first derivative, that is, when the rate of change on a 12 month basis turned positive, was almost exactly when NBER called that recession (in retrospect) "over".

Has the first derivative turned in the table at this point on an annualized basis?  NO.

First question: What does this say about the calls that "the recession is over"?

You will also note that in terms of the 12 month rate of change this recession is more than three times as severe in its impact on employment as was the 2001 recession.  In fact, "by the numbers" we have 8,236,000 fewer people employed now than we had at the peak in July of 2007.

It is, however, worse than it first appears.  Here's the second chart, and this is the chart that, if you're sentient, should be sending cold chills up and down your spine:

Again, the monthly change data is in light blue, the annualized in red.

This chart shows that since 1999 (the furthest back I have ready access to the BLS data in easy-to-chart form) the number of persons that are not in the labor force has continually risen on a 12 month trend basis.  While it has reached "zero" on two occasions and gotten close once more the number of people in the country but not in the labor force continues to rise.

If we were a "gentifying" population this would be bad.  But the boomers are not yet starting to retire in significant numbers; at present we are adding about 150,000 "working age" people to the population each and every month, or about 1.8 million annually.

YET WE ARE LOSING PEOPLE IN THE LABOR FORCE AS THEY EITHER GIVE UP OR DECIDE TO LIVE ON THE DOLE!

This is an unmitigated catastrophe, and it did NOT abate during the so-called "economic expansion" of the 2000s.  If that was a true economic expansion - that is, driven by people going to work and earning a productive living - then the "NILF" numbers would have contracted on a 12 month trailing basis during that so-called "expansion."

They did not, which means the so-called "expansion" didn't come through productive labor.

To put this in context unless this number is at -1800 (or less) we are not "absorbing" the new workers that come into the market - that is, while we "lost" 8.2 million jobs in this recession thus far we have also managed to stuff at least twice that many more people of working age who aren't working into this country in that same amount of time, and none of them show up in the official "unemployment" statistics because none of the people in the "Not In Labor Force" bucket are "looking for work."

If that "expansion" did not come through productive labor, where did it come from?

Do I REALLY need to put this graph up again?

What comes next?

Below we highlight one-year charts of the percentage of stocks above their 50-day moving averages in the S&P 500 and its ten sectors. After coasting along at 80% or higher for a couple of months, the percentage of stocks above their 50-days in the S&P 500 has fallen to 53% in a matter of days. Had we not rallied off...

........when I speak of now being not a fantastic entry point for shorts, but long-term, it hardly making much difference.

Below is one of nearly 200 stocks that have similar characteristics. Namely: (a) wonderful long-term potential for a drop (b) the opportunity to push up a little higher next week for a better entry.

I'm in this position, and my stops on all my positions remain pretty loose. Should we have a rally next week - - and the last 90 minutes of today should be MIGHTY interesting - well...........you are going to see one happy bear here.

Maersk has ships laid up, which also means their crews have been off work.

Now, they will be let go.

From Fairplay

MAERSK’S UK operation will cut 113 officer jobs in the light of vessel lay-ups, the company told Fairplay today.

Lay-ups of 11 UK-flagged Maersk container ships meant the company was carrying “surplus officers for quite a number of months,” said Caroline Wolton, a Maersk Company representative in London.

Maersk Company – part of the AP Møller-Maersk Group – has met Nautilus, the maritime union representing the employees, to prepare a redundancy package, Wolton added.

Volunteers for redundancy will be taken from the pool of officers employed by Maersk Offshore in Guernsey and Bermuda.

And... they won't be taking on any new European crew, instead hiring less expensive crews from Asia.

Also, Maersk Company will no longer automatically employ cadets graduating from its training schemes because “it would be inappropriate to be taking on new employees at this time”, the company said in a release. There are about 560 British officers currently employed by Maersk.

This latest round of redundancies follows APM’s announcement yesterday that its container division Maersk Line will replace 170 Danish seafarers with Asians to save costs.

In a rare example of corporate accountability and humility, the president of Toyota, arguably the best run auto company in the world, Akio Toyoda, had some very harsh words for not just his company's recent decline, which he characterized as "grasping for salvation", but for his own failure at prevent this collapse. One wonders when Mr. Toyoda's American counterparts, whose own failures are orders of magnitude worse, will do admit even a minor fraction of comparable culpability.

As Autoweek reports:

The world's largest car company was once targeting annual sales of 10 million vehicles but now expects sales of 7.3 million this year, down from 8.97 million in 2008, Toyoda said today at a news conference.

Citing the five stages of corporate decline outlined by Jim Collins, author of How the Mighty Fall, the Toyota chief warned that his company has slumped to stage four, which Collins calls “grasping for salvation.”

“We are grasping for salvation,” Toyoda said, adding that the company already has spiraled through the first three stages: (1) hubris born of success, (2) undisciplined pursuit of more and (3) denial of risk and peril. His self-admonitions echoed the apologies commonly made by Japanese executives who take responsibility for financial turmoil or corporate scandal.

“Toyota has become too big and distant from its customers,” the grandson of the automaker's founder said as he prepares for a second-straight year of substantial financial and unit-sale decreases.

What is shocking is the humility in Toyoda's confession: while Toyota is nowhere near Jim Collins' Fifth stage "Capitulation to irrelevant or death", this is precisely the circle of hell in which the Detroit 3 find themselves yet continue deluding themselves that they provide relevant, innovative products. Ironically, these same American companies never cared to admit as they were spiraling out of control through the first four stage either, and now it is far too late for redemption. And compliments of a subsidy-happy and union-friendly administration, US auto makers will continue their perpetual state of denial, long after Toyota has been reduced to a shadow of its former self, despite having an incomparably better business model.

And as to why not just subsidies, but a Bernanke-mandated policy of trade isolationism, simply for the sake of pumping up a Ponzi stock market, will be the ultimate reason for capitalism's downfall, as otherwise efficient companies are unable to compete in a world market supported by a flounder reserve currency, this is what the Toyota president had to say:

Toyoda called the current dollar-yen rate "very tough," saying the weak U.S. currency made it difficult to return to profit on an unconsolidated level.

If anyone thinks Toyota is alone in its plight of taking on the Fed's printing presses head on (even as Japan's finance minister inexplicably is for a strong Yen policy and thus suicidal to his country's trade balance), you are wrong. As America is a major net global importer (or has been until Bernanke decided to kill the dollar), all who wish to sell their wares to the US consumer are at a significant disadvantage as they have to cut prices, thus eating into profit margins and bottom line earnings.

Will things change? No. After all Obama needs to subsidize every single dead or dying industry in order to spend the billions of dollars that the Chairman has printed. Expect numerous such dislocations in all aspects of the US economy. Ironically, even Toyoda is against an ongoing tidal wave of endless government subsidies:

Toyoda said he would welcome an unlikely extension of Japan's cash-for-clunkers program beyond March, while adding it would not be prudent to keep depending on the government for help.

Unfortunately, at this point in the life cycle of American capitalism, "depending on the government for help" is the only thing the shattered business world of a formerly great country can rely on.

h/t Dvolatility

Mention the brand Chrysler, and for me, it brings back memories of slinging metal down the highway, pitching 300s and Town & Country minivans to those with a sense of flair to go along with their practicality, or, well, lack of funds for what they really wanted- something else.

Even with the then-new 300C, a manager, who sold them in America's Golden Automotive Age- the 1950's and '60s told me- "Chryslers were always Cadillacs for cheap people..."  And, looking back on 300s, Imperials, Dynasties and New Yorkers- he may have been on to something.

Historically, Chrysler vehicles were America's innovation brand, much like Honda is to Japan, and Mercedes-Benz is to Germany.  Now, before you start slinging insults- Chrysler really was once known as quite the engineering company, bringing out a whole laundry list of dynamic firsts thoughout history.  But that's just it.  It's history. 

CNNMoney.com published a story entitled "Chrysler: Check Engine Now" and it got me thinking of the excitement and the vex that has been the troubled automaker.

Bottom-line, their product pipeline is weak, so is their public perception.

While Dodge Rams, Jeeps and Minivans with Sto-N-Go seating that folds flat to the floor is decent...  It only goes so far, especially in this ultra-global, highly competitive marketplace that, not only has expanded- but it's also improved. 

Look at the Korean makes, Hyundai and Kia.  Ten years ago, you wouldn't even think of them, now, they're remarkable players in their niches.

Chrysler has some niche brands- look at Jeep.  But one brand is not enough.  Not anymore.

There are a lot of cars guys waiting to pounce Chrysler dealers when the Fiat 500 hits. 

But, for those of us who remember the initial frenzy that was the PT Cruiser, being cute, small and different only goes so far. 

It's a fad.

And if it's one company that has exploited fads, it's Chrysler. 

The American in me, hopes they can survive for the next generation of car nuts to appreciate all the good they've done- at least for a little while. 

  

Submitted by Edward Harrison of Credit Writedowns.

Yves’ posting will be at a low ebb over the next week (post-book trauma!). So, I will be covering some of the bases in the interim.  Expect at least a post per weekday through next week.

Below is one I wrote on the employment numbers which came in at 9.8% and a 263,000 job loss. I mention my expectation that job losses will end within the next 6 months. However, that doesn;t mean the unemployment rate will remain near 10%. The non-farm payrolls and the unemployment numbers come from two different reports.  Moreover, expect a lot of discouraged workers to re-enter the labor force, further ballooning the U-3 (baseline) number. The broader jobless number is already 17% – a depressionary-level reading.

In July, I blogged on an interesting take on how employment affects equity returns during cyclical recoveries by Van Hoisington and Lacy Hunt. Their thesis was that a recovery in which employment lags the overall upturn significantly is bearish for stocks. Since then, employment has indeed lagged other economic indicators.  Witness the most recent employment situation summary released earlier today.

Nonfarm payroll employment continued to decline in September (-263,000), and the unemployment rate (9.8 percent) continued to trend up, the U.S. Bureau of Labor Statistics reported today. The largest job losses were in construction, manufacturing, retail trade, and government.

Household Survey Data

Since the start of the recession in December 2007, the number of unemployed persons has increased by 7.6 million to 15.1 million, and the unemployment rate has doubled to 9.8 percent…

The civilian labor force participation rate declined by 0.3 percentage point in September to 65.2 percent. The employment-population ratio, at 58.8 percent, also declined over the month and has decreased by 3.9 percentage points since the recession began in December 2007.

Establishment Survey Data

Total nonfarm payroll employment declined by 263,000 in September. From May through September, job losses averaged 307,000 per month, compared with losses averaging 645,000 per month from November 2008 to April. Since the start of the recession in December 2007, payroll employment has fallen by 7.2 million.

In September, construction employment declined by 64,000. Monthly job losses averaged 66,000 from May through September, compared with an average of 117,000 per month from November to April. September job cuts were concentrated in the industry’s nonresidential components (-39,000) and in heavy construction (-12,000). Since December 2007, employment in construction has fallen by 1.5 million.

Employment in manufacturing fell by 51,000 in September. Over the past 3 months, job losses have averaged 53,000 per month, compared with an average monthly loss of 161,000 from October to June. Employment in manufacturing has contracted by 2.1 million since the onset of the recession.

In the service-providing sector, the number of jobs in retail trade fell by 39,000 in September. From April through September, retail employment has fallen by an average of 29,000 per month, compared with an average monthly loss of 68,000 for the prior 6-month period.

Government employment was down by 53,000 in September, with the largest decline occurring in the non-education component of local government (-24,000)…

In September, the average workweek for production and nonsupervisory workers on private nonfarm payrolls edged down by 0.1 hour to 33.0 hours. Both the manufacturing workweek and factory overtime decreased by 0.1 hour over the month, to 39.8 and 2.8 hours, respectively. (See table B-2.)

In September, average hourly earnings of production and nonsupervisory workers on private nonfarm payrolls edged up by 1 cent, or 0.1 percent, to $18.67. Over the past 12 months, average hourly earnings have risen by 2.5 percent, while average weekly earnings have risen by only 0.7 percent due to declines in the average workweek. (See table B-3.)

The change in total nonfarm payroll employment for July was revised from -276,000 to -304,000, and the change for August was revised from -216,000 to -201,000.

A few points here:

1. Losing over 250,000 jobs per month nearly two years into recession is an indication of a still weak employment market.  This is 400,000 jobs per month below where we want to be.
2. Why is the labor force participation rate still falling? This is a sign of a deteriorating, not improving labor market.
3. Manufacturing is still shedding workers even though industrial production is rising. That demonstrates a weakness whose source is record low capacity utilization.
4. Local and state governments are cutting workforce and countering the stimulus provided by the Federal Government as I indicated in January they would.
5. The workweek is a record low and this is crimping earnings power.

Conclusion: the labor market is till weak, weaker than it should be at this point in a cyclical recovery. Unless this changes in the fall and winter, a double dip recession is going to be more likely. While the preceding points stress the negative, I should point out that my baseline view is for job losses to continue to diminish, albeit at a slow pace. I would anticipate job gains to appear by the end of the year or early in 2010.

That gets me back to Hunt and Hoisington and partial recovery. Even if we see job gains by Q1 2010, this will be a full 6 months after the manufacturing sector turned up. This must limit consumption because spending can only increase through higher employment and income or increased debt and leverage. As most of the cost-cutting and productivity gains inherent in those cuts is now behind us, the heavy lifting begins. Earnings growth is likely to be weak in this environment.

How a fully priced equity and corporate bond market continues to rally in the face of these factors is beyond me. I see government bonds as a better bet than either corporates or equities for the medium-term.

Update: I failed to mention the rather large (over 800,000 jobs) benchmark revision of prior unemployment data.  It’s this sort of thing which makes people not trust the numbers.  But, revisions are always necessary if you are going to do month-to-month measurements in an economy as large as the United States.

Here’s what the BLS said:

Preliminary Estimates of Benchmark Revisions to the Establishment Survey

In accordance with usual practice, the U.S. Bureau of Labor Statistics is announcing its preliminary estimates of the upcoming annual benchmark revision to the establishment survey employment series. The final benchmark revision will be issued on February 5, 2010, with the publication of the January 2010 Employment Situation news release.

Each year, the Current Employment Statistics (CES) survey employment estimates are benchmarked to comprehensive counts of employment for the month of March. These counts are derived from state unemployment insurance tax records that nearly all employers are required to file. For national CES employment series, the annual benchmark revisions over the last 10 years have averaged plus or minus two-tenths of one percent of total nonfarm employment. The preliminary estimate of the benchmark revision indicates a downward adjustment to March 2009 total nonfarm employment of 824,000 (0.6 percent).

Once again today's job numbers show Collectively, Economists Are A Perpetually Optimistic Lot. Payrolls were expected to drop 175,000, the median of 84 estimates in a Bloomberg News survey of economists. Forecasts ranged from decreases of 260,000 to 100,000.

Jobs losses this month totaled 263,000, worse than even the most pessimistic economist projection.

Actually, economists missed by another 13,000 because revisions subtracted 13,000 from payroll figures previously reported for August and July.

Moreover, the unemployment rate hit the highest level since 1983.

Bloomberg discusses the above in U.S. Economy: September Job Losses Exceed Forecast.

What really caught my eye though is the expected backward revision coming February 2010.

The Labor Department today also published its preliminary estimate for the annual benchmark revisions to payrolls that will be issued in February. They showed the economy may have lost an additional 824,000 jobs in the 12 months ended March 2009. The data currently show a 4.8 million drop in employment during that time.

The projected decrease was three times larger than the historical average, the Labor Department said. Most of the drop occurred in the first quarter of this year, probably due to an increase in business closings, the government said.

Birth / Death Revisions

For months on end, I have been harping about how ridiculous the Birth/Death Model assumptions are, most recently in Jobs Contract 21th Straight Month; Unemployment Rate Hits 9.8%

At this point in the cycle birth death numbers should have been massively contracting for months. The BLS is going to keep adding jobs through the entire recession in a complete display of incompetence.

The Wall Street Journal has more on this story in Early Job Cuts Worse Than First Thought, as More Companies Go Belly Up.

“Most of the additional job loss… appears to be due to in part to an increase in the number of business closings,” said BLS Commissioner Keith Hall in a statement.

The BLS’s birth/death model underestimated just how many businesses were folding — particularly during the January through March quarter — as the recession worsened.

Economists had been bracing for a downward revision, but not necessarily one of this magnitude, which means the U.S. has likely shed more than 8 million jobs since December 2007. For example, in a note Thursday, Goldman Sachs economist Ed McKelvey said he expected the revision to be “on the order of -150,000 to -200,000.”

“It’s a huge number, much more than usual,” said Nigel Gault, chief U.S. economist at IHS Global Insight. The government’s models “tend to assume dying firms get replaced, but that didn’t happen.”

Mr. Gault said the revisions suggest the economy was doing even worse in the first quarter than previously assumed, and cast doubts on the recovery.

Look for the BLS to partially correct previous errors in the January jobs report (coming out in February). Note that the BLS claims "Most of the drop occurred in the first quarter of this year, probably due to an increase in business closings."

Probably?

In other words the BLS is going to revise the number by 824,000 and does not even know why even though supposedly it knows when and by how much.

At any rate, that is an extra 68,666 jobs per month the BLS was off between March 2008 and March 2009 with most of the drop coming January-March 2009.

If the BLS conveniently changes the participation rate, the reported unemployment rate may not even drop.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

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 when 2 smart guys disagree . . .

The prior week's insider transaction indicated a significant moderation in insider selling, with insiders selling only 27.7x more than they bought, at $106.1 million vs $3.8  in buys versus sells, respectively. Obviosuly insiders are catching wind that things are now truly back to normal.Source: finviz.

 

Terrific book review for Bailout Nation in Asia Times:

“For the past three decades, finance replaced doctor or lawyer as the smart career choice. The cleverest people gravitated to business schools and then to Wall Street, some detouring to Silicon Valley during the dot-com boom. So how did these masters of the universe create the worst global economic misery in 80 years?

It was stupidity and arrogance, pure and simple, fund manager and TheStreet.com columnist Barry Ritholtz contends in Bailout Nation, the same traits that led a previous generation of America’s best and brightest to the tragedy of Vietnam (and a group of more recent, less illustrious ideologues to the debacle in Iraq). At least Camelot’s villains thought they were doing good for the world. The modern bankers and traders and quants and arbs who acted so irresponsibly, almost exclusively with other people’s money, were simply trying to make themselves obscenely wealthy.

These “idiots”, as Ritholtz often calls them, richly deserve every ounce of approbation he musters. He repeatedly contends that rather than being bailed out, they deserve to have been bankrupted, exposed as charlatans, hooted out of their professions, tarred, feathered, and in some cases jailed. . .

In his very readable book that will delight general readers as well as finance buffs, Ritholtz traces the history of US bailouts.

When things fell apart in September last year, Ritholtz says, the government should have nationalized AIG, separating the giant’s solvent insurance business from its loopy financial funhouse. Instead, US taxpayers have doled out $173 billion and counting to repay not widows and orphans holding policies on dear departed dads, but a coterie of Wall Street tycoons and overseas banks escaping the consequences of their foolish risks. That’s not capitalism but socialism for the wealthy at taxpayer expense.

Bailout Nation’s straightforward, compelling account puts the crisis in context, explains why the US government responded so stupidly, offers solutions, and advises how to prevent a repeat. Ritholtz’s indictment of the financial and political establishment isn’t terribly unique, but it’s devastatingly accurate.”

Outstanding!

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Source:
Named and shamed
Bailout Nation: How Greed and Easy Money Corrupted Wall Street and Shook the World Economy by Barry Ritholtz with Aaron Task
Reviewed by Muhammad Cohen
http://www.atimes.com/atimes/Global_Economy/KJ03Dj01.html

From the American Bankruptcy Institute: Consumer Bankruptcy Filings Surge Past One Million During First Nine Months of 2009

Consumer bankruptcies totaled 1,046,449 filings through the first nine months of 2009 (Jan. 1-Sept. 30), the first time since the 2005 bankruptcy overhaul that filings have surged past the 1 million mark during the first three calendar quarters of a year, according to the American Bankruptcy Institute (ABI), relying on data from the National Bankruptcy Research Center (NBKRC). The filings for the first three-quarters of 2009 were the highest total since the 1,350,360 consumer filings through the first nine months of 2005.

"Bankruptcy filings continue to climb as consumers look to shelter themselves from the effects of rising unemployment rates and housing debt," said ABI Executive Director Samuel J. Gerdano. "The consumer filing total through the first nine months is consistent with our expectation that consumer bankruptcies will top 1.4 million in 2009."

The September 2009 consumer filing total reached 124,790, a 41 percent increase from the 88,663 consumer filings in September 2008.

Click on graph for larger image in new window.

This graph shows the non-business bankruptcy filings by quarter.

Note: Quarterly data from Administrative Office of the U.S. Courts, Q3 2009 based on monthly data from the American Bankruptcy Institute.

The quarterly rate is close to the levels prior to when the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) took effect. There were over 2 million bankruptcies filed in Calendar 2005 ahead of the law change.

There have been 1.05 million personal bankruptcy filings through Sept 2009, and the American Bankruptcy Institute is predicting over 1.4 million new bankruptcies by year end - I'll take the over!

A part of today's BLS announcement that has not received much attention is the BLS' own disclosure that it "may" have lost an additional 824,000 jobs in LTM period ended March 2009, in addition to the already disclosed 4.8 million job losses. From the BLS:

In accordance with usual practice, the U.S. Bureau of Labor Statistics is announcing its preliminary estimates of the upcoming annual benchmark revision to the establishment survey employment series. The final benchmark revision will be issued on February 5, 2010, with the publication of the January 2010 Employment Situation news release.

Each year, the Current Employment Statistics (CES) survey employment estimates are benchmarked to comprehensive counts of employment for the month of March. These counts are derived from state unemployment insurance tax records that nearly all employers are required to file. For national CES employment series, the annual benchmark revisions over the last 10 years have averaged plus or minus two-tenths of one percent of total nonfarm employment. The preliminary estimate of the benchmark revision indicates a downward adjustment to March 2009 total nonfarm employment of 824,000 (0.6 percent).

Table B shows the March 2009 preliminary benchmark revisions by major industry sector. As is typically the case, many of the individual industry series show larger percentage revisions than the total nonfarm series, primarily because statistical sampling error is greater at more detailed levels than at a total level.

 

All this simply means is that once the full extent of the collapsing employment picture is revealed on February 5 next year, the market will explode to record highs: after all the worse the economic news are, the better for the stock market. With Obama and the Chairman's "Moral Hazard National Doctrine," all unprecedented bad news mean is that ever more and more and more dollars will be burned at the altar of major insider selling and financial company/REIT follow on offerings, courtesy of the US government inflated stock market bubble.