Calculated Risk Blog retires its unemployment recession chart

This tracks seasonally adjusted figures, of course. Not seasonally adjusted total nonfarm employment still has not recovered to peak under Bush.

Discussion here:

This graph shows the job losses from the start of the employment recession, in percentage terms - this time aligned at maximum job losses.  Employment is now back above pre-recession levels and this graph will be retired until the next recession (Of course this doesn't include population growth).

The agony under rule by Democrats: 75 months later, 6.25 years, employment remains 113,000 short of the previous peak in 2007

For a graph and discussion, see Calculated Risk, here:

"This shows the depth of the recent employment recession - worse than any other post-war recession - and the relatively slow recovery due to the lingering effects of the housing bust and financial crisis." 

For a second graph and discussion, see here:

"This graph shows the job losses from the start of the employment recession, in percentage terms - this time aligned at maximum job losses.  At the recent pace of improvement, it appears employment will be back to pre-recession levels next month (Of course this doesn't include population growth)."

Bank Failure Friday April 25th 2014: The 6th Of 2014

Allendale County Bank, Fairfax, South Carolina, failed on Friday costing the FDIC $17.1 million.

It was the sixth bank failure of 2014, and the 498th since February 2007.

FDIC insured institutions number 6,812 through 12/31/13.

Calculated Risk reports on the unofficial problem bank list and statistics here:

For the week, there were nine removals and one addition that leave the list at 513 institutions with assets of $167.3 billion. A year ago, the list held 775 institutions with assets of $285.3 billion.

Americans Still Earn Way Too Little To Afford The Median Priced Home

The national median price for an existing home in December 2013 was $196,300.

Median household income at the end of 2013 had reached $52,297.

That's a ratio of 3.75:1, which is even higher than the 3:1 ratio which prevailed a year ago, and 44% higher than the recommended ratio of 2.6:1.

Either housing is still much too high or wages are much too low to support ownership of the median priced home in the United States. It is more likely that both things are true.

And forget about buying a new house on such an income.

The median new house price reached a new record in December at $270,200, vaulting the ratio to 5.17:1.

Housing prices have continued to rise because of deliberate government policy to reinflate the housing bubble.

Sellers should sell and buyers should beware. 

Feckless Obama Does Nothing About The Now 5.75 Year Long Employment Recession

Unemployment has ticked up to 7.3% in October as another 720,000 people bailed out of the labor force. 

An astounding 91.5 million could be in the labor force but are not. Since the start of the recession in December 2007, over 12 million people have left it, 11.7 million of which left it AFTER the recession ended in June 2009. 

You have to go back to 1979 to get a labor force participation rate as low as 62.9 like we have today. At 58.3 the civilian employment population ratio was last this bad back in 1983.

Job growth increased again to average 190,000 added per month in the last year as up-revisions to previous monthly reports were taken into account. At this rate it would take over five years to put everyone who left the labor force back into it, assuming you didn't also have to accommodate all the new entrees into the labor force from population growth. Many of those who left will simply never re-enter because they will reach retirement eligibility before they'll find a job.

The broadest measure of unemployment included 11.3 million out of work, 8.1 million working part-time for economic reasons (peak was in excess of 9.2 million), and 2.3 million marginally attached to the workforce, or 21.7 million total.

CalculatedRiskBlog's famous graph of this longest and deepest employment recession in the post-war now extends the streak to 69 months, or 5.75 years.

The report from the Bureau of Labor Statistics may be found here.

The Number Of Wage Earners Is In The 5th Year Of Depression, Still 1.95 Million Fewer In 2012 Than In 2007

The jobs depression is now 5.67 years in length.

The number of wage earners counted by the Social Security Administration reached a peak in 2007 at 155.57 million, and the long-awaited number for 2012 is just out here in the last couple of days: 153.63 million.

2012 marks the fifth consecutive year we have fallen under the 2007 record high for the number of employees earning income subject to Social Security taxation.

The 2012 figure is just under the 2006 figure of 153.85 million wage earners, so you might say things were closer to 2005 levels in 2012 than to 2006.

September Unemployment Falls To 7.2%, The Broadest Measure To 13.6%

Obama: Making this time different than all the rest

The BLS employment situation report is late, here, due to the government shutdown.

The number of unemployed remains high at 11.3 million, accounted for in the headline rate of 7.2%. The U6 measure at 13.6% includes those, plus the part-time for economic reasons and the marginally attached workers, which all together still number 21.5 million, unchanged from August.

Just 148,000 jobs are said to have been added in September, but the average number of jobs added monthly over the last year now comes in at 185,000, or 2.22 million. In August the figure was 184,000 and two months prior to that 182,000, so there has been very minor progress in job growth.

Average hours worked remains unchanged at 34.5 hours for private non-farm employment, and average hourly earnings are up 2.1% in the last year, or 49 cents, to $24.09/hour.

Don't spend it all in one place.

Obama's employment recession, already easily the very worst and deepest in the post-war, is now 1.75 years longer than Bush's at 5.67 years and counting. And unless things improve dramatically on the jobs front, it looks to me like it's going to take almost another year for Obama's red line in the graph to get back to zero.

On 4th Anniversary Of TARP, 12% Of Banks Are Still In Trouble

nonperforming bank loans as percentage of total

The FDIC reports as of June that it has 7,246 member banks with $14 trillion in assets. Four years ago there were 8,384 member banks with assets of $13.6 trillion. Bank failures and consolidation in the industry have reduced the total membership by over 13 percent in the interim.

Bank failures have cost the Deposit Insurance Fund, funded by member premiums, in excess of $80 billion, costs which are inevitably passed on to bank customers. TARP was deliberately morphed into a fascist capital injection scheme when it became clear that identifying and buying toxic mortgages was an unworkable solution, cooked up as it was in a panic. The capital injections effectively made taxpayers unwilling stockholders in troubled "financial" institutions, some of which were not commercial banks to begin with but were allowed to become so to obtain protection.

Meanwhile bank nonperforming loans in the US continue at a high level, over three times higher than prior to the financial crisis in 2008, despite TARP's measly billions, and despite the real action trying to circumvent free-market capitalism involving trillions of dollars of Federal Reserve liquidity interventions.

An unofficial list of problem banks tracked here currently shows 874 institutions still under some form of FDIC supervision for irregularities of one kind or another, four years after the passage of the Troubled Asset Relief Program signed by President Bush on October 3, 2008.

Sen. Barack Obama voted for the TARP program in the US Senate, as did Sen. John McCain, his opponent for the presidency, joining the rest in the US Congress who wanted to make it appear they were doing something about the crisis. In the wake of TARP the stock market crashed anyway in the succeeding month, preparing the way for the debacle of March 2009 five months later. The mortgage market remains effectively dead, along with housing, net worth, and employment, zombies all. 

How much better off we would be today if we had simply embraced the failure prescribed by capitalism instead of denying it. Bankruptcy courts would have been busy selling off assets to responsible actors, debts would have been adjudicated, and a few high profile bad players may have actually gone to trial, and jail, by now.

Instead it's just more of the same: government of the bankers, by the bankers, and for the bankers.

Worst Employment Recession Since WW2: After 4 Years, Jobs Recovery Not in Sight

The unemployment report yesterday shows some job gains, but the overall rate of unemployment remains unchanged from the month before at 8.3 percent, and jobs recovered have retraced only a small portion of the territory lost.

In every other jobs recession since the Second World War jobs recovered to the starting point in every case but one within 2.7 years. Bush's relatively mild job recession took 3.9 years to fully recover.

We are 4.1 years out and job losses are still at the severe depths last reached in the recessions of 1948 and 1957, as shown here.

America once knew how to bounce back quickly.

Not anymore.

The Tax Man Stands In The Way Of The Deleveraging Crisis

Household net worth in Q3 2011 has fallen to $57.4 trillion, and relative to GDP this is still well above historical peaks in the post-war period in the 20th century.

If total household net worth relative to GDP fell to the post-war historical peak before the recent silliness, at present levels of GDP this implies a further pull-back in total household net worth of roughly 7 percent, or $4 trillion, to $53.4 trillion.

It is interesting to note that mortgage debt relative to current GDP also as shown here should correct down about 33 percent to match the post-war historical peak of that metric. With about $10 trillion in mortgage debt currently outstanding, a 33 percent adjustment down comes to $3.3 trillion, a figure very similarly sized to the outsized net worth noted above.

In other words, we could come a long way toward rectifying both metrics almost instantly by taking from net worth and paying down mortgage debt, if only the tax man didn't stand in the way.

It should be emphasized that roughly $5 trillion of $18 trillion in retirement funds stands ready in IRA accounts alone to address this problem, if only government gave people the freedom to do so.

Another interesting point suggests itself.

The post-war average GDP of 3.5 percent per annum has utterly failed to materialize in the first decade of the 21st century, as GDP has averaged instead in the neighborhood of 1.7 percent per annum.

Both net worth and debt measured against an economy pumping out 50 percent more GDP would mean I wouldn't be writing about this right now.

I'd be too busy relaxing and getting ready to make lots of money tomorrow.

There's more than one way to skin a cat: less meddlesome tax policy, or growth-oriented economic policy.

Preferably both.

Depth and Breadth of Current Employment Recession Still Far and Away Worst in Post WW2 Period

So says calculatedriskblog here:

Real House Prices Are Back To Q1 1999 Levels

So calculatedriskblog here: "In real terms, all appreciation in the '00s is gone." 

No Bank Failures on the Friday Before Christmas

George Bailey, eat your heart out.

There were two failures a week and a day ago, which appear to be the last we're going to have in 2011.

#91 was Premier Community Bank of the Emerald Coast, Crestview, Florida, costing the FDIC $31.2 million.

#92 was Western National Bank, Phoenix, Arizona, costing the FDIC $37.6 million.

An unofficial list of problem banks here stands at 973 institutions with just under $398 billion in assets, not very different from last year at this time when it was 919 banks and $408 billion in assets.

Extend and pretend continues, which allows banks slowly to heal. But modern banking is rotten to the core nonetheless, just like everything else, in my humble opinion.

Mish is an ignoramus: "Newspapers are surely dieing a slow death"

Maybe because no one can read, or write, the English language anymore.

Try this on for size from the end of the same blog post:

My site, ZeroHedge, Calculated Risk can all be shut down if a newspaper or other cite thinks we went beyond fair use in quoting an article.

That's a college freshman's tired mistake, or used to be.

If I wrote that the author of the above was a cereal malefactor, would you get it?

Seen here.

Involuntary Part-Time Has Surged 10 Percent in September Since July 2011

As always, calculatedriskblog has the best charts, here:

The Bureau of Labor Statistics' recent data is shown here:

Household Net Worth Through March 31, 2011 Still $7.7 Trillion Off Peak

As reported here on June 9th: [N]et worth was at $58.1 trillion in Q1 2011.

All Housing Price Appreciation in the Last Decade is Now Gone

So says Calculated Risk Blog here:

In real terms, the National index is back to Q3 1999 levels, the Composite 20 index is back to September 2000, and the CoreLogic index back to May 2000. 

In real terms, all appreciation in the last decade is gone.

But there is still considerable room to drop before all excesses of the bubble, which began its inexorable rise in 1997 coincident with the provisions of the Tax Payer Relief Act of 1997, are expunged. The only question is, How much will prices overshoot to the downside of those 1997 levels?

"The act exempted from taxation the profits on the sale of a personal residence of up to $500,000 for married couples filing jointly and $250,000 for singles. This is for residences that were lived in for at least 2 years over the last 5." (source)

I am not convinced that the bottom is in.

Let's Index the Federal Budget to Existing Housing Prices

Existing housing prices are down roughly 32 percent from the highs (see here). Many are underwater on their mortgages, but people are making do, muddling through, because they have no other choice.

Why can't government do the same?

A 32 percent cut to federal spending currently at $3.819 trillion dollars would be $1.22 trillion. That would reset the budget to $2.6 trillion.

Freeze the federal budget there and index it to the Case-Shiller housing price index. When housing recovers in value, the feds can have a similar raise. If housing values continue to decline, the feds get a similar cut.

Linking the federal budget to the health of the American dream?

Sounds fair to me.

Maybe those SOBs might do their jobs for a change.

The Date Your Home Became Just Another Commodity: August 5, 1997

When you could begin to sell every two years and avoid the capital gain.

The chart here shows the first stirrings late in the year of what was to become the housing bubble.

August 5, 1997 marked the date when the Taxpayer Relief Act of 1997 was signed into law by President Clinton.

"When the bill passed in the summer of 1997, it stipulated that married couples would pay no taxes on the first $500,000 in profits from the sale of a house. At the time, this wasn’t seen as an incentive for people to start trading up or flipping houses—although, according to the National Association of Realtors, single-family-home sales jumped 13 percent the year after it passed, and some economists have said it instantly added value to homes, and fueled their rise in prices. But if you drove over that bridge, into the 21st century, and combined this windfall with record-low interest rates and lower down-payment mortgage requirements, the synergy changed the way people bought homes: Instead of looking at how much house they could afford, people started looking at how much mortgage they could carry. (In other words, you could roll the profits into a pricier house, put less down, and still wind up with a lower monthly mortgage payment.) Taken by itself, the Taxpayer Relief Act of 1997 didn’t cause the economic meltdown. But it was one more piece of kindling on the cord that would eventually become the bonfire of all our vanities."

-- Bruce Feirstein, here

The mortgages behind those houses had started to become mere commodities, too, at about the same time:

Securitization accelerated in the mid-1990s. The total amount of mortgage-backed securities issued almost tripled between 1996 and 2007, to $7.3 trillion.


Hurting us where we live.

Housing Prices Fall to Q1 2000 Levels

With more declines of at least 5 percent expected.

Story here.