We've had two months of smartly increasing continued claims for unemployment, a sign job losers aren't getting rehired quickly

 

The investment cheerleaders in the US are arrayed against the Fed's rising interest rate regime and lie when they say interest rates are coming down

The yield curve recovered 98 basis points in the last week to close at 5488 on Nov 18.

Despite all the alarming volatility in US Treasuries, the curve is little changed from Oct 28 at 5487 or Oct 19 at 5486, one month ago.

The upward trend remains intact. Raising the Fed Funds rate to 3.83% has produced an overall yield curve at 4.22%.

There's plenty more to be done.

The lying rhetoric is designed to persuade the Fed to halt ("You've done enough!"), enlisting as many dupes along the way as it can to join the chorus, since easy money is the industry's goose that laid the golden egg.

But easy money is why this country is $31 trillion in debt, and why inflation is raging at an average of 8.3% in the first half of 2022.

Since March foreigners have held $300 billion less of the stuff on net through September, which is not a good sign.

But consider that there's about $2.9 trillion in US Treasury notes issued in 2020 alone paying just 0.6% on average and maybe you can understand why.

Meanwhile investors holding bonds are down 30.95% year to date (TLT) at the same time the S&P 500 is down 17.33%. A total bond index like VTSAX is down less, 16.92% year to date, which is cold comfort.

But that's not the Fed's biggest problem.

The Fed's biggest problem remains the so-called "dual mandate", to maintain stable prices AND full employment at the same time.

Our disgusting Congress foisted the latter on the Fed in 1978, which was nothing but a damned if you do, damned if you don't abdication of its own political responsibility dumped onto the appointee of the executive.

But the disgusting Congress represents the disgusting people, who want tax cuts AND infrastructure spending at the same time.

The dual mandate didn't stop Paul Volcker from doing what needed to be done to subdue inflation from 1979, but those were different times when the political tables were the reverse. Volcker was a Democrat appointee saddling a new Republican president with an unemployment rate of 9.7% by jacking up the cost of money. 

Jay Powell is a Republican appointee who will have to do the same to a Democrat president to end the current madness.

The pressure on him to relent comes from every quarter. 

We'll see if the new Republican House has the cojones to back him, which it should if it gives a fig about the future of the country.

But Jay Powell will have to prove that he has the cojones first, because the Congress is full of girly men.

He has hardly begun to fight.

Full time employment averaged a surprisingly strong 50.1% for the first ten months of 2022 in Friday's report

 Still lower than 2019 but pretty good given the circumstances.

The percentage holding full-time jobs through September 2022 held above 50%, disappointing the ubiquitous advocates of a Fed interest rate pivot

 Full time as a percentage of civilian population in September was 50.3%, and for 2022 through September averaged 50.15%.

Not bad, considering.

The Fed will see little evidence in this figure that its interest rate increase policy is harming employment.

Stocks on Friday collapsed after a head fake to start the week to within 1.5% of the 52-week lows set a week ago.

Long term investment grade bonds and US Treasury securities also revisited lows from 9/27/22, coming within pennies of those benchmarks.

30-year yield for UST is back up to 3.86%. It was 3.87% on 9/27. At the beginning of 2022, yield was a paltry 2.01% by comparison.

UK gilts are experiencing the same action despite the Bank of England intervening to buy bonds. 

The bond crisis is not over.

With yields soaring across the board no one wants to own the lower paying outstanding issues, which are legion, destroying their value.

But everything in the global economy is based on those, piled up in earnest after The Great Financial Crisis of 2008, and in orgiastic frenzy afterwards during the late pandemic.

Bond yields in 2022 are telling you that they are overvalued by 92%.

Stock market valuation is telling you a similar thing.

From 1938 through 2019 the median ratio of the S&P 500 to GDP is 81. In 2020 we averaged 154, or 90% overvalued.

This is the major deflationary headwind facing the world, the other side of the COVID-19 inflationary shock coin.

Push here, it comes out over there.

Modern central banking cannot escape this conundrum any more than the gold standard could.

The only thing the individual can do in this situation is to owe nothing and save everything, preferably in your hands.

Good luck.

 

 

 

 

 

 

 

 

 

 

 

 

The rentier class at CNBC, FinTwit, Wall Street, is in a panic about Fed rate hikes and just lies this morning about the latest battle: Payrolls beat expectations but CNBC says payrolls slowed

 Well yeah, they slowed from 315k, but that was EXPECTED.

The parasites who derive their main livelihood from the returns on financials are in a panic over Fed rate hikes designed to reduce inflation. Whether those will do that or not is beside the point.

This is all about their carry trade. 

The Fed has been making cheap money available since December 2002 to restart the stock market and it has hardly stopped . . . until lately. The politics of inflation have finally caused the Fed to pivot on this long-standing policy, and they couldn't be more angry.

The top 10% borrow at cheap government rates and plow the money into private financial products which pay higher rates which the 90% have to pay. They prosper, gloriously, off the difference. But increase their cost of borrowing and you are diluting the gravy train.

Ever since the Fed started raising rates in earnest earlier this year, the rentiers have been trying everything they can to get them to pivot, without success.

This morning the hope was that a really poor employment report would get the Fed to back off, except the 263k figure beat expectations of 250k.

The Fed is likely to stay the course and keep raising rates.

CNBC paints this as slowing in keeping with the rentiers' rhetorical narrative aimed at the Fed, which has a dual mandate to maximize employment and maintain stable prices.

Never mind that the dual mandate is nuts since unstable prices exact a far greater cost on the people than unemployment ever does. Inflation doubling makes everyone pay 100% more for everything indefinitely, whereas unemployment affects fewer and is definitely cyclical.

And never mind the Fed has NO mandate to suppress interest rates, buy securities, and bail out the world.

But I digress.

You are being lied to and manipulated . . . constantly.

Because they can, and it works.

 

Pandemic overstaffed Amazon cut 100k jobs in 2Q2022

 During the second quarter, Amazon’s workforce shrank by roughly 100,000 jobs to 1.52 million, the biggest quarter-to-quarter contraction in the company’s history. 

More.

In July 2022 full time employment as a percentage of civilian population reached 50.7%

 Full time usually peaks in the summer.

The average year to date through July is 50.06%.

50.6% of civilian noninstitutional population works full-time in June 2022, just above the 2019 full year average

 

Famous last words: Recession "not expected"

 

June jobs report is not expected to show an economic slowdown or a recession looming

 

• The economy is expected to have added 250,000 jobs in June, a strong number though lower than the 390,000 in May, according to economists surveyed by Dow Jones.

 

Due to redistricting in Michigan, unfortunately I don't get to vote against Peter Meijer, but I do get a slightly better Republican in John Moolenaar on importing cheaper foreign labor

 

Full time as a percentage of civilian population vaults to 50.4% in May 2022, the 2019 average level

 Full-time usually peaks in the summer months.

The average level for the year through May 2022 is 49.8%.

Bloomberg economic model forecasts 25% tariffs between democratic and autocratic countries would roll back globalization to 1990s levels and leave the world 3.5% poorer

Arguably that would be a good thing for American workers, but Bloomberg doesn't care about that.

 

For three decades, a defining feature of the world economy has been its ability to churn out ever more goods at ever lower prices. The entry of more than a billion workers from China and the former Soviet bloc into the global labor market, coupled with falling trade barriers and hyper-efficient logistics, produced an age of abundance for many.But the last four years have brought an escalating series of disruptions. Tariffs multiplied during the US-China trade war. The pandemic brought lockdowns. And now, sanctions and export controls are upending the supply of commodities and goods.All of this risks leaving advanced economies facing a problem they thought they’d vanquished long ago: that of scarcity. Emerging nations could see more acute threats to energy and food security, like the ones already causing turmoil in countries from Sri Lanka to Peru. And everyone will have to grapple with higher prices.

More.

The story never mentions how those newly introduced extra billion plus workers reduced economic outcomes for the already established middle classes around the world, especially in America where the full time job of the 1990s became a thing of the past.

If I'm repeating myself, I don't care.

 

 

 

49.8% of civilian population had full time jobs in April 2022: Potential room for at least 9.9 million more full time at year 2000 experience

On average in 2022 to date, there were 130.871 million employed full time at average civilian noninstitutional population level of 263.382 million, for 49.7% employed full time on average through April 2022.

Think of all the work we could be doing in this country, but are not.

 

Welcome to February 2022 CIVPART data at 62.3%, otherwise known as September 1977

 

The 2020 average was revised to 61.8 and the 2021 average is 61.7.

One way to grow the participation rate, as seen in the first chart, which is monthly, is TO NOT HAVE TO COUNT PEOPLE.

How do you do that?

The economy sucks so bad you drop out of the labor force, which instantly shrinks its size. So as jobs recover a little bit the participation rate looks better because more people compared with the smaller underlying base are working again.

 

Not in labor force on an average basis hit an all time high in 2021 of 100.24m, pushed mostly by the 2008 catastrophe for older workers, while growth in the labor force has been anemic to flat because people aren't having enough kids.

People who remember the malaise of the Jimmy Carter era who are still alive today can relate. 

CIVPART hovering on the 63% line was the Trump era's "greatest economy ever", lol.

Click any graph to enlarge.

 

It takes an economist to say that the labor market is on fire

But as it stands “we have to take the numbers at face value, and they paint a picture of a labor market on fire,” wrote Jefferies economists Aneta Markowska and Thomas Simons, with the Fed likely heading towards “a more sustained tightening cycle and a higher terminal rate.”

Reuters.

Full-time employment in the US in January was 49.3% of civilian noninstitutional population, a far cry from what it could be. The measure could recover to 50.4% pre-pandemic and it still wouldn't be "on fire".

Bouncing back would be a good thing, is fully expected, and could be actually happening, but confusing it with boom levels as Trump did would remain an illusion. 

Housing affordability turned down again in 2020 as housing prices climbed ever higher and incomes fell

The key to joining the middle class has always been the full-time job, without which you cannot afford a house.

The rich have taken away the keys.

Democrats won control of all the important levers of federal government in 2020, but "democracy is on life support"

I'll say.

With Democracy on Life Support, GOP Wants to Pull Plug

Brad Bannon, The Hill

 

Democracy as brought to you by Democrats in 2020 has meant surrender to the Taliban in Afghanistan, 

 

The Science ™ mutating every four weeks,

 

doubling down on a vaccine which hasn't "shut down the virus", 

 

a 30.5% increase to currency in circulation since Democrats took the House in 2018,

 

inflation raging by nearly 11% over the period and people pretending not to know why,

 

the purchasing power of the US dollar falling by 9.6%,

 

the total public debt up $8 trillion, 37%, 

missing full-time jobs of at least 13 million,

 

illegal immigration soaring under Biden to the third-highest in 97 years, 

 

toleration of unprecedented race riots and violent crime in every major American city,

 

designating parents irate over public schools propagandizing students about race "terrorists",

 

and that's just off the top of my head, which I still have because Democrats don't own the Supreme Court . . . yet.

 

 

 

 

 

The full-time jobs deficit in 2021 in the United States was at least 13 million, and 4.6 million fewer had such jobs who once did under Trump