Under the lens-audio_slides-08-15-11

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  • The 08-05-11 Non Farm Payrolls report showed the labor participation rate "at a 30-year low".The most recent poll from Thomson Reuters and University of Michigan shows that consumer confidence is the lowest its been for 30 years.That's not a coincidence.If people can't find work, they'll have no confidence in their ability to pay for the things they want or need, or in the economy as a whole.The administration - despite its rhetoric - is doing nothing to decrease unemployment(and see this), and is solely helping the super-rich at the expense of everyone else.Given this situation, it shouldn't be a huge surprise that:73% of Americans think the country is headed in the wrong direction79% are dissatisfied with the U.S. political systemIn fact only a small percentage think that the government is acting with the "consent of the governed"
  • Were it not for people dropping out of the labor force for the past two years, the official U3 unemployment rate would be well over 11%. ShadowStats shows the U6 to be over 23%. The Great Depression was defined by unemployment over 20%. US Payrolls +117,000 US Unemployment Rate -.1 to 9.1%, Participation Rate -.2 to 63.9% accounting for drop in unemployment. Actual number of Employed (by Household Survey) fell by 38,000 Unemployment rose by 156,000 Those dropping out of the labor force rose by 374,000 Civilian population rose by 182,000, Labor Force declined by 193,000
  • At 58.1%, we haven’t seen these levels since the recession of 1983 and match the tops of 1953 and 1973
  • Today's employment situation report showed that conditions for the long term unemployed went mixed in July while remaining distressed by historic standards.Looking at the charts you can see that today’s sorry situation far exceeds even the conditions seen during the double-dip recessionary period of the early 1980s, long considered by economists to be the worst period of unemployment since the Great Depression.Workers unemployed 27 weeks or more declined to 6.18 million or 44.4% of all unemployed workers while the median number of weeks unemployed declined to 21.2 weeks and the average stay on unemployment jumped to 40.4 weeks, a new high for the series.
  • The July Employment Situation report showed that in July “total unemployment” including all marginally attached workers declined slightly slipping to 16.1% from the prior month's level of 16.2% while the traditionally reported unemployment rate declined to 9.1%.The traditional unemployment rate is calculated from the monthly household survey results using a fairly explicit definition of “unemployed” (essentially unemployed and currently looking for full time employment) leaving many workers to be considered effectively “on the margin” either employed in part time work when full time is preferred or simply unemployed and no longer looking for work.The Bureau of Labor Statistics considers “marginally attached” workers (including discouraged workers) and persons who have settled for part time employment to be “underutilized” labor.The broadest view of unemployment would include both traditionally unemployed workers and all other underutilized workers.To calculate the “total” rate of unemployment we would simply use this larger group rather than the smaller and more restrictive “unemployed” group used in the traditional unemployment rate calculation.
  • Friday’s employment situation report showed that in July the full time unemployment rate went flat at 9.8% of the civilian workforce remaining near the highest rate seen in 41 years.The Bureau of Labor Statistics considers full time workers to be those “who have expressed a desire to work full time (35 hours or more per week) or are on layoff from full-time jobs”.Full time jobless workers currently account for roughly 88.5% of all unemployed workers.
  • We have over 46M Americans on Food StampsWe have over 17M Families on Food StampsWe have 1 in 7 Americans on Food StampsWe are spending $6.12B a month or over $72B a year... And this doesn’t count the absolutely exploding activity at charity Food Banks. Churches and communities are now dramatically burdened with this!!As a logical consequence of the prolonged economic downturn it appears that participation in the federal food stamp program is continuing to rise.In fact, household participation has been climbing so steadily that it has far surpassed the last peak set as a result of the immediate fallout following hurricane Katrina.The latest data released by the Department of Agriculture shows that in May, a whopping 1,105,217 new recipients were added to the food stamps program, an increase of 12.14% on a year-over-year basis, while household participation increased 14.22%.Individual participation as a ratio of the overall civilian non-institutional population has increased 11.43% over the same period.Participation continues to increase with nominal benefit costs climbing a lofty 12.32% on a year-over-year basis to $6.12 billion for the month.REMEMBER There are almost 5 million Americans on welfare. There are 50 million Americans on Medicaid. There are 8 million Americans receiving unemployment compensation. There are 10.5 million Americans on Social Security disability. This is the symbolic bread being provided to the masses to keep them tranquilized, pliable, satisfied and ignorant of their civic duty. The government has renamed bread as “social benefits” and now distributes $2.3 trillion of bread per year to the ”needy”. This constitutes 15% of the country’s GDP and will continue to grow for decades or until the American Empire collapses.THIS DOESN’T INCLUDE FOOD BANKSDemand climbs at U.S. food banks
  • TERRIBLE NEWS BUT BETTER NEWS THAN WE HAVE BEEN GETTING!Employment Situation Report showed that though July, net nonfarm payrolls increased rising 117,000 from June Private nonfarm payrolls added 154,000.Net private sector jobs increased 0.14% since last month climbing 1.68% above the level seen a year ago.Stillremains a whopping 5.58% below the peak level of employment seen in December 2007.
  • Friday 08-12-11 we were treated to the August reading for the University of Michigan Consumer Sentiment report which showed a reading of 54.9, the third worst reading in history and well below the median estimate of 62.0. This has been the case now for the past month in which economists have been way off the mark in terms of their estimates and reality. This often occurs at major tipping points (both bearish and bullish) as economists often extrapolate past results into the future and thus overshoot at economic peaks and undershoot at economic troughs. The string of overshoots in estimates from the ISM Manufacturing Index to GDP to consumer sentiment indicates we are yet at another economic inflection point in which the economy is rolling over. What is troubling about the Michigan Consumer Sentiment reading is that it often leads turns in consumption trends. First consumer’s moods change and then spending patterns follow suit. The sharp drop in consumer sentiment suggests consumers are likely to pullback sharply on spending in the months ahead.
  • The is Neilson latest Global Consumer Confidence report. This is not just a US nor EU problem – it is a Global issue!
  • one reliable leading indicator for the U.S. ISM Manufacturing index is the Australian Consumer Confidence reading which typically leads the ISM by several months and is forecasting an ISM reading near 40 by November.
  • World Bank's Zoellick Cautions on Economy - The global economy and markets are heading into "a new danger zone" that will require strong policy action to restore confidence, Robert Zoellick, the president of the World Bank, said. The collective result of global monetary tightening over the past year has been a marked deceleration in global growth, and now it appears their actions have gone too far as leading economic indicators have not only decelerated but have dropped into negative territory. Shown below is the composite leading economic indicator (LEI) for the 34 countries of the OECD. The growth rate for the LEI has now turned negative after being positive for the first time since October 2007. Looking back over the last decade, the only false signal in the OECD LEI that didn’t lead to a recession here in the U.S. was in 2003, though that signal came after a prolonged bear market and sluggish economy. However, the current reading is coming after a strong bull market in equities and thus carries far more significance. I do not expect we are seeing a false signal.The fact that the 34-member OECD LEI is now negative tells us risks are as high as they were in the last recession and that another global recession may be upon us. Within the OECD, the G7 block of countries shows most of the weakness with their own LEIs turning negative in April. Countries that now have negative LEI readings as of June are listed below:CanadaMexicoUKGermanyFranceItalySpainSwitzerlandBrazilThe collective OECD LEI is being pulled lower by the developed countries while the emerging countries LEIs, while decelerating, are still positive. Here in the U.S., economic breadth is also deteriorating and pointing towards a possible recession occurring later in the year. While individual countries can bring down the collective OECD growth rate, individual states within the U.S. can bring down the national growth rate. Thus, it is never a good sign to see more and more states slip into contractionary mode as when enough states' economic growth rates rolls over, eventually so too does the country. 
  • …. one more sign of the U.S. slipping into recession was the recent GDP report which showed real GDP on a year-over-year basis has slipped below the 2% growth mark. Going back more than half a century shows this 2% level is vitally important to hold as we have slipped into a recession within 12 months every time, no exception. Thus, the recent 1.6% growth rate is not an encouraging sign for the U.S. economy going forward.Since August 7th, here are a few of the actions being taken by global central bankers:Fed extends 0% rates until mid-2013Bank of England indicated it's ready to add stimulusSwitzerland is intervening in currency markets by printing more francs to fight currency overvaluationJapan concerned over its overvalued currencySouth Korea kept rates flat two consecutive months signaling tightening may be over; the Kospi is down 11.2%ECB after 18 month hiatus is stepping up bond purchases, including the debt of Italy & SpainFrance, Italy, Span and Belgium introduce a ban on short-selling financial stocks for the next two weeks

Transcript

  • 1. This chart is from the discussion recordedAugust 12th, 2011
    JOBS – GROWTH CYCLE
  • 2. This chart is from the discussion recordedAugust 12th, 2011
    NON FARM PAYROLLS REPORT
    • US Payrolls +117,000
    • 3. US Unemployment Rate -.1 to 9.1%, Participation Rate -.2 to 63.9% accounting for drop in unemployment.
    • 4. Actual number of Employed (by Household Survey) fell by 38,000
    • 5. Unemployment rose by 156,000
    • 6. Those dropping out of the labor force rose by 374,000
    • 7. Civilian population rose by 182,000, Labor Force declined by 193,000
    • 8. Average Weekly Workweek was unchanged at 34.3 hours
    • 9. Average Private Hourly Earnings Increased by 10 Cents
    • 10. Government employment decreased by 37,000 - a genuine bright-spot
    Were it not for people dropping out of the labor force for the past two years, the unemployment rate would be well over 11%.
  • 11. This chart is from the discussion recordedAugust 12th, 2011
    NON FARM PAYROLLS REPORT
  • 12. This chart is from the discussion recordedAugust 12th, 2011
    NON FARM PAYROLLS REPORT
  • 13. This chart is from the discussion recordedAugust 12th, 2011
    NON FARM PAYROLLS REPORT
  • 14. This chart is from the discussion recordedAugust 12th, 2011
    NON FARM PAYROLLS REPORT
    I
  • 15. This chart is from the discussion recordedAugust 12th, 2011
    FOOD STAMP PROGRAM
  • 16. This chart is from the discussion recordedAugust 12th, 2011
    NON FARM PAYROLLS REPORT
  • 17. This chart is from the discussion recordedAugust 12th, 2011
    JOBLESS RECOVERY
  • 18. This chart is from the discussion recordedAugust 12th, 2011
    JOBLESS RECOVERY
  • 19. This chart is from the discussion recordedAugust 12th, 2011
    CONFIDENCE & SENTIMENT
  • 20. This chart is from the discussion recordedAugust 12th, 2011
    CONFIDENCE & SENTIMENT
  • 21. This chart is from the discussion recordedAugust 12th, 2011
    CONFIDENCE & SENTIMENT
  • 22. This chart is from the discussion recordedAugust 12th, 2011
    CONFIDENCE & SENTIMENT
  • 23. This chart is from the discussion recordedAugust 12th, 2011
    GROWTH
  • 24. This chart is from the discussion recordedAugust 12th, 2011
    GROWTH