Rescesion Over?

[The Sultan of Silly]

pretty sure the recession has been over for a little while

Yep recession has been over for awhile yet the Fed keeps printing money buying billions worth of bonds each month to keep rates artificially low (not a common method for an economy with true organic growth), median family incomes over the last five years have dropped while gas prices have risen, Illinois has lost 90,000 net jobs while it's pension obligations near 100 billion (Wisconsin is far better off economically mostly due to MU's Scott Walker) and US labor force participation is at a 30 year low while many American's who in the past were fully employed are now partially employed but are considered employed statistically.  

Good to know that many posters on this board are as clueless economically as they are about basketball.  

I just had a guy approach me looking to help him network for work this past week who is in his 40's, had a 640 GMAT score, graduated cum laude both undergrad and at grad school at the same Big Ten school and yet hasn't worked in a year and half and his phone never rings in spite of a great resume and references to boot.  I said I'll try to help him but maybe I'll send him to this board instead so he can be enlightened as to the ways of the world according to MU Scoop board boobs.  

[Eldon]

Yep recession has been over for awhile yet the Fed keeps printing money buying billions worth of bonds each month to keep rates artificially low (not a common method for an economy with true organic growth), median family incomes over the last five years have dropped while gas prices have risen, Illinois has lost 90,000 net jobs while it's pension obligations near 100 billion (Wisconsin is far better off economically mostly due to MU's Scott Walker) and US labor force participation is at a 30 year low while many American's who in the past were fully employed are now partially employed but are considered employed statistically.  

Good to know that many posters on this board are as clueless economically as they are about basketball.  

I just had a guy approach me looking to help him network for work this past week who is in his 40's, had a 640 GMAT score, graduated cum laude both undergrad and at grad school at the same Big Ten school and yet hasn't worked in a year and half and his phone never rings in spite of a great resume and references to boot.  I said I'll try to help him but maybe I'll send him to this board instead so he can be enlightened as to the ways of the world according to MU Scoop board boobs.  

Not sure how organic it is, but it's necessary according to many, if not most, prominent economists, including those who are generally friendly to non-interventionist policies (eg, Steve Hanke, Scott Sumner).

In a word, printing profligate sums is bad only if the banks are lending it out.  Plus, the Fed is and has been paying interest on reserves.  All is good on the printing of money front--in Janet we trust.

[The Sultan of Silly]

Not sure how organic it is, but it's necessary according to many, if not most, prominent economists, including those who are generally friendly to non-interventionist policies (eg, Steve Hanke, Scott Sumner).

In a word, printing profligate sums is bad only if the banks are lending it out.  Plus, the Fed is and has been paying interest on reserves.  All is good on the printing of money front--in Janet we trust.

I'm glad you trust the federal reserve as I sure don't. QE has been great for the stock market creating another bubble as it has forced assets into it as there is no alternative to make any kind of return when they have told the world their agenda is to keep the ten year below 3% until their phony calculated unemployment rate is below 6.5%.

Then say things do improve and they turn off the spigot. Rates will move up far faster than they would have without the stimulus and what will you think the market will do when they start announcing they are selling back some of their trillions of balance sheet treasuries to reduce the money supply?  At the very least rates will sky-rocket and push us into another recession. Of course with $17T in debt a rise in rates due to a drop in our credit worthiness alone might force us into very ugly austerity measures. Austerity is very fun manifested by the 25% unemployment Spain and others have had.

If the Fed hadn't implemented all this QE stuff and helped hide how dysfunctional this economy is we might have a different president and Senate right now. Which begs the question does the fed have a true political agenda when they are supposed to be unbiased and work separately from elected politicians?

[ChicosBailBonds]

ding ding...anyone who believes unemployment is 6.5% is a slurper of epic proportions. 

[willie warrior]

ding ding...anyone who believes unemployment is 6.5% is a slurper of epic proportions. 

Of course you can believe. The government cooks the numbers--sort of like using manipulated statistics to support a sports argument.

[ChicosBailBonds]

Of course you can believe. The government cooks the numbers--sort of like using manipulated statistics to support a sports argument.

My issue with it isn't the how, it is the what.  The report used is a faux report.  It doesn't count those that dropped out, stopped looking or are under employed.  In other words, it uses an prettier report that doesn't tell the story.  The more accurate report is available at the same time, but of course that report is never cited.  The U-6 report is what should be used, but neither side ever wants to do this.  So people blindly think things are rosy when they are not.

[The Sultan of Silly]

My issue with it isn't the how, it is the what.  The report used is a faux report.  It doesn't count those that dropped out, stopped looking or are under employed.  In other words, it uses an prettier report that doesn't tell the story.  The more accurate report is available at the same time, but of course that report is never cited.  The U-6 report is what should be used, but neither side ever wants to do this.  So people blindly think things are rosy when they are not.

I love it when I get to agree with Chicos! 

[Eldon]

My issue with it isn't the how, it is the what.  The report used is a faux report.  It doesn't count those that dropped out, stopped looking or are under employed.  In other words, it uses an prettier report that doesn't tell the story.  The more accurate report is available at the same time, but of course that report is never cited.  The U-6 report is what should be used, but neither side ever wants to do this.  So people blindly think things are rosy when they are not.

It is not a faux report.  The U-6 is there, as you point out.  The U-3 is what it is; it answers the question: Of those who want a job, what percentage cannot find one.  That's it.  It's simple.  It is not intended to answer anything else.

Besides, the U-6 is almost consistently above the U-3 by the same amount anyway, a level effect.  In other words, if the BLS is making any type of mistake in their calculations of the unemployment rate, it is not a problem, so long as they are consistently doing so. 

Put yet another way, think of the reported unemployment rate as one of the many indices that measure the health of the economy.  And when you do, compare it to its previous value.  As a measure of the overall health of the overall economy, the value of the U-3 doesn't matter as much as its direction of change.

If you are unhappy with the measure, don't blame the BLS, Bush, Obama, etc.  Blame the media for not reporting the "true" measure (though my stance is that this figure doesn't need to be reported).

[Eldon]

I'm glad you trust the federal reserve as I sure don't. QE has been great for the stock market creating another bubble as it has forced assets into it as there is no alternative to make any kind of return when they have told the world their agenda is to keep the ten year below 3% until their phony calculated unemployment rate is below 6.5%.

Then say things do improve and they turn off the spigot. Rates will move up far faster than they would have without the stimulus and what will you think the market will do when they start announcing they are selling back some of their trillions of balance sheet treasuries to reduce the money supply?  At the very least rates will sky-rocket and push us into another recession. Of course with $17T in debt a rise in rates due to a drop in our credit worthiness alone might force us into very ugly austerity measures. Austerity is very fun manifested by the 25% unemployment Spain and others have had.

If the Fed hadn't implemented all this QE stuff and helped hide how dysfunctional this economy is we might have a different president and Senate right now. Which begs the question does the fed have a true political agenda when they are supposed to be unbiased and work separately from elected politicians?

Don't you think that they've thought of this?  Both before and after "turning on the spigot?"

[The Sultan of Silly]

Don't you think that they've thought of this?  Both before and after "turning on the spigot?"

Sure they thought of it and they probably know there is no such thing as a soft landing once you start printing money to artificially manipulate your money supply, interest rates and currency.  I think they were more afraid of not doing anything and have some politicians scream bloody murder that they were not doing enough to help grow the economy again. 

Of course they also have limited terms and get to leave before all this might come to roost so Bernanke knew he was leaving soon and this could deflect any scapegoating if this later blows up saying he left years ago (a similar trick used by Jeffrey Skilling of Enron). 

There is a reason why gold has been trading around $1,200 to $1,800/oz since they've started QE when it's intrinsic value is probably around $800/oz based on historical prices....it's not only because of it's viewed as a safe-haven in black swan events but also because as you devalue a currency then people start to move their money to hard assets like gold that will rise with inflation. 

[rocket surgeon]

reports, nunbers, statistics, etc., are always good to support an argument.  many of these facts are usually necessary to support an argument.  however, they can also be manipulated to support or blow apart arguments.  good or bad, you cannot fool the people.  the real economical situation hangs over our heads like the weather.  if it's cloudy out, and the weathermen keep telling us it's sunny and warm, the reality is what it is.  my point is, the people feel it.  even those in business' and working.  it just doesn't feel right.   ones money doesn't go as far and more of it goes toward expenses leaving less for discretionary means and savings.  most times over the past, our economy has typically "fixed" itself with a little tweaking here and there.  over the past 10 years or so, our people in charge, have all tried to come to the rescue with their forced "fixes" while hammering us with new laws and regulations. in doing so, they are essentially trying to move our economy forward with one foot on the brake.  many with selfish intentions or a delusional ideas that they are actually doing something.  the bottom line is, they should just get out of the way and we will know when things are getting better, because, well, they will be getting better and it will go from cloudy to partly sunny to...whatever and all the numbers in the world won't have to tell us that.       

[ChicosBailBonds]

It is not a faux report.  The U-6 is there, as you point out.  The U-3 is what it is; it answers the question: Of those who want a job, what percentage cannot find one.  That's it.  It's simple.  It is not intended to answer anything else.

Besides, the U-6 is almost consistently above the U-3 by the same amount anyway, a level effect.  In other words, if the BLS is making any type of mistake in their calculations of the unemployment rate, it is not a problem, so long as they are consistently doing so.  

Put yet another way, think of the reported unemployment rate as one of the many indices that measure the health of the economy.  And when you do, compare it to its previous value.  As a measure of the overall health of the overall economy, the value of the U-3 doesn't matter as much as its direction of change.

If you are unhappy with the measure, don't blame the BLS, Bush, Obama, etc.  Blame the media for not reporting the "true" measure (though my stance is that this figure doesn't need to be reported).

I don't disagree with you.

When I say faux report, I mean that is relied upon as some valid statement of what things really are, and they aren't.  It paints a distorted picture of reality.  You are correct, I do blame the media but I also blame both sides of the aisle on this.  It looks a lot more attractive to say the unemployment is 7% than 16%, so they push the lower number for their own fortunes.

What I find more than a little interesting is how all of a sudden the mention of the U-6 became out of vogue for the media around 2009....what a coincidence.