US added 288,000 jobs in June...Unemployment down to 6.1% (from 6.3%)

[Spungo]

I'm aware of no definition of inflation that would label it as an increase in stock prices.

Serious? This took 5 seconds to google.
http://en.wikipedia.org/wiki/Asset_price_inflation

Regardless, it actually appears to be people chased out of bond markets who are chasing yield. Needless to say, sending the economy into a catastrophic depression hardly seems like a good tradeoff for decreasing stock prices.

Just wait a while. This bond bubble will eventually pop (as all bubbles do), so we get the fun of catastrophic depression and decreasing stock prices. It sucks if you're fully invested when it happens. It's like Christmas x 1000 if you have cash in hand to buy stocks at fire sale prices.

You weren't actually duped by that cherry picked nonsense, were you?

Feel free to refute any of it. Every metric you can think of looks terrible.
-More Americans finding jobs? Nope, see labor participation.
-Are the new jobs high quality? Nope, most jobs are part-time service industry like McDonalds and Walmart.
-Are companies investing in their businesses? Nope, capex is way down while dividends and share repurchases are at record highs. Companies are actually borrowing money to buy stock and pay dividends. This is what happens when interest rates are too low - people get crazy. I refer to this as financial strip mining.

 

[First]

Serious? This took 5 seconds to google.
http://en.wikipedia.org/wiki/Asset_price_inflation

Your link does nothing to disprove his point. Virtually no one in finance, economics or other related fields I imagine who uses the term inflation or who refers to inflation in any context would mean to be saying asset inflation. Your own Wiki has multiple issues due to the relative lack of information regarding said definition of inflation. Inflation is almost always talked about with regards to purchasing power, not asset inflation.

Just wait a while. This bond bubble will eventually pop (as all bubbles do), so we get the fun of catastrophic depression and decreasing stock prices. It sucks if you're fully invested when it happens. It's like Christmas x 1000 if you have cash in hand to buy stocks at fire sale prices.

Can we bump when you're wrong?

Feel free to refute any of it. Every metric you can think of looks terrible.
-More Americans finding jobs? Nope, see labor participation.

More Americans finding jobs is simple arithmetic; 9.3M private sector jobs have been created since the downturn. Nothing to brag about but certainly a real gain. Participation drop far preceded Obama and is very likely mostly a function of baby boomer retirement; unlikely it has to do with working-age persons simply dropping out because they're discouraged. There are certainly more discouraged and long-term unemployed workers than should exist, but it's not at crisis levels and it's been reduced by 1M over the last 12 months.

-Are the new jobs high quality? Nope, most jobs are part-time service industry like McDonalds and Walmart.

Nope. Link?

-Are companies investing in their businesses? Nope, capex is way down while dividends and share repurchases are at record highs. Companies are actually borrowing money to buy stock and pay dividends. This is what happens when interest rates are too low - people get crazy. I refer to this as financial strip mining.

P/E ratios are perfectly in line with fair value or frankly slightly undervalued given strong corporate earnings the last few years, most recently a few weeks ago. The fact that we're still adding as many jobs as we are given so much money on the sidelines from businesses cannot be interpreted as anything but a bullish sign for the economy. When their spending increases more (and it has over the past year, particularly among SMB's), that is nothing but good for output. The fact that businesses have been keeping more money on the sidelines should surprise no one given the uncertainty of the economic recovery due to a once-in-a-generation financial near-calamity.

 

[fskimospy]

Serious? This took 5 seconds to google.
http://en.wikipedia.org/wiki/Asset_price_inflation


Just wait a while. This bond bubble will eventually pop (as all bubbles do), so we get the fun of catastrophic depression and decreasing stock prices. It sucks if you're fully invested when it happens. It's like Christmas x 1000 if you have cash in hand to buy stocks at fire sale prices.


Feel free to refute any of it. Every metric you can think of looks terrible.
-More Americans finding jobs? Nope, see labor participation.
-Are the new jobs high quality? Nope, most jobs are part-time service industry like McDonalds and Walmart.
-Are companies investing in their businesses? Nope, capex is way down while dividends and share repurchases are at record highs. Companies are actually borrowing money to buy stock and pay dividends. This is what happens when interest rates are too low - people get crazy. I refer to this as financial strip mining.

I like how it took you five seconds to google a wrong definition. Haha

How long do we have to wait? You clowns have been predicting the same thing wrongly for sox years. Give me a timetable at least.

 

[Zorkorist]

Dude,

America is 17 trillion dollars in debt, some $80,000 per person, and you are thinking you are doing a good job?!

-John

 

[Zorkorist]

The police state is overwhelming, and freedoms, which America was founded apon are disappearing, if not disappeared.

-John

 

[Spungo]

Can we bump when you're wrong?

Please do. I also encourage everyone to invest their money right now. You think this economy is sustainable, I think it's a huge bond bubble, we can agree to disagree. I'll invest $1000 this week with the assumption that we're in a huge bond bubble. You invest $1000 in anything you want. If you're right about the market, you'll make money. If I'm right, I'll make money. We could both be right or both be wrong. Good luck everyone!

 

[fskimospy]

Please do. I also encourage everyone to invest their money right now. You think this economy is sustainable, I think it's a huge bond bubble, we can agree to disagree. I'll invest $1000 this week with the assumption that we're in a huge bond bubble. You invest $1000 in anything you want. If you're right about the market, you'll make money. If I'm right, I'll make money. We could both be right or both be wrong. Good luck everyone!

Sounds great! Please describe to us what you expect the bond markets to do over say, the next year. I'm interested to know if it is the exact same thing people have been wrongly predicting for the last half decade or so.

Regardless, here is your chance to make your predictions and we can check back on them to see! I think that bond yields will stay low until the economy improves. If you are willing to quantify your statements I'll quantify mine.

 

[fskimospy]

Feel free to refute any of it. Every metric you can think of looks terrible.

No problem!

-More Americans finding jobs? Nope, see labor participation.

More Americans finding jobs? Of course! Look at job growth.

-Are the new jobs high quality? Nope, most jobs are part-time service industry like McDonalds and Walmart.

Try again! The vast majority of new jobs that have been created since the recovery started have been full time, and part time workers as a percentage of workers has been steadily declining since 2009 or so.

-Are companies investing in their businesses? Nope, capex is way down while dividends and share repurchases are at record highs. Companies are actually borrowing money to buy stock and pay dividends. This is what happens when interest rates are too low - people get crazy. I refer to this as financial strip mining.

"Too low" as compared to what? What is the appropriate interest rate and why?

I hope this has helped refute some of that nonsense.

 

[First]

Please do. I also encourage everyone to invest their money right now. You think this economy is sustainable, I think it's a huge bond bubble, we can agree to disagree. I'll invest $1000 this week with the assumption that we're in a huge bond bubble. You invest $1000 in anything you want. If you're right about the market, you'll make money. If I'm right, I'll make money. We could both be right or both be wrong. Good luck everyone!

So you're investing $1000 in what again? I have lots of money in an aggressive equity fund and I'll keep it there until I think a dip is coming, at which point I'll diversify the fund with some bonds and commodities. Pretty simple stuff to maintain stable yield. Hopefully you're not insane enough to put your eggs into the bond basket long-term, as their prices are likely to crash and/or be volatile given the inevitable interest rate increases we're going to be seeing over the coming years. Maybe you can make money there, but I'd rather be in equities, which have always destroyed bond yield over the long-run, easily so since the 2008/9 crash.

 

[ElFenix]

i have this problem with my office manager. it's useless to have a conversation with her because she thinks statistics are all completely made up. that some statistician at the bureau of economic statistics is just fudging numbers. she also thinks polls are invalid because she's never been poaled.

 

[Attic]

Your office manager is mostly right. Certain quote comes to mind about statistics. Government numbers aren't fudged, they just carefully measure to a goal (moving) rather than measuring reality. We know government has continually redefined their measurements. Real debate about if its getting closer or further from reality, undeniable they are reporting more GDP than they would without the changes and less inflation than they would without the changes.

Inflation is the most obvious. With government the motive and the evidence of the numbers moving away from reality is easily identifiable to anyone who understands politics and has common sense.

Now we have idiots thinking the stock market isn't overvalued on a historical basis because they are using non-GAAP accounting vs previous GAAP reporting. Hopefully the sleight of hand is at least not hidden from these folks. The market is up because of the Fed put and it's historically highly overvalued when measured on equal terms to the past. The fed put answers the why about the overvaluations.

With government 2+2 is whatever they need it to be, for everyone else it's 4. This causes lots of problems for people who don't benefit from the way government is able to make believe. We're already seeing results as the middle class is decimated first by government saying off shoring was fine back in 80s and 90s and now government saying things again are not what they are in reality. We know government is excellent at being wrong about things and a longshot to be right if we are considering reality of outcomes. This isn't a difficult understanding, which indicates bias of those in denial.

 

[Spungo]

i have this problem with my office manager. it's useless to have a conversation with her because she thinks statistics are all completely made up. that some statistician at the bureau of economic statistics is just fudging numbers. she also thinks polls are invalid because she's never been poaled.

The government openly admits to making it up. This is why they keep revising numbers. The trend over the last few years has been to release an initially good number then revise it down. Example: they'll say GDP went up 2%. Then they revise it down to 1.5%. Then they drop it to 1%. Eventually you need to ask where these numbers are coming from. How can someone count something and get a different number every time? Simple answer: they're making it up. They're not actually counting anything.

So you're investing $1000 in what again?

The way to bet against a bond bubble is to buy physical assets, so I'm investing in things related to physical assets like oil, precious metals, and water. Right now I'm trying to buy Foraco Drilling (FAR.TO) at $0.45/share. I don't know if it will actually hit that price, but hopefully it will.
My investments have done very well this year. I started buying gold mining companies back in November and December, and I sold when they started hitting the upper bollinger bands. I'm up about 30% YTD and I'm mostly in cash right now.

 

[fskimospy]

Your office manager is mostly right. Certain quote comes to mind about statistics. Government numbers aren't fudged, they just carefully measure to a goal (moving) rather than measuring reality. We know government has continually redefined their measurements. Real debate about if its getting closer or further from reality, undeniable they are reporting more GDP than they would without the changes and less inflation than they would without the changes.

Inflation is the most obvious. With government the motive and the evidence of the numbers moving away from reality is easily identifiable to anyone who understands politics and has common sense.

Now we have idiots thinking the stock market isn't overvalued on a historical basis because they are using non-GAAP accounting vs previous GAAP reporting. Hopefully the sleight of hand is at least not hidden from these folks. The market is up because of the Fed put and it's historically highly overvalued when measured on equal terms to the past. The fed put answers the why about the overvaluations.

With government 2+2 is whatever they need it to be, for everyone else it's 4. This causes lots of problems for people who don't benefit from the way government is able to make believe. We're already seeing results as the middle class is decimated first by government saying off shoring was fine back in 80s and 90s and now government saying things again are not what they are in reality. We know government is excellent at being wrong about things and a longshot to be right if we are considering reality of outcomes. This isn't a difficult understanding, which indicates bias of those in denial.

We have gone over this many times. Inflation is transparently calculated and aligns well with third party metrics. I guess it's just an article of faith among you guys that it's all a terrible lie?

 

[glenn1]

We have gone over this many times. Inflation is transparently calculated and aligns well with third party metrics. I guess it's just an article of faith among you guys that it's all a terrible lie?

I think he and others would prefer methodologies remain static over time to allow for "easier comparisons" even if it means obvious enhancements aren't made. Better we continue using worse quality stats than have to do slight adjustments to prior stats to bring them in line with the improved methodology.

 

[Spungo]

No problem!

More Americans finding jobs? Of course! Look at job growth.

Do you have a source for this? My source is the Federal Reserve:

Try again! The vast majority of new jobs that have been created since the recovery started have been full time, and part time workers as a percentage of workers has been steadily declining since 2009 or so.

Source?

"Too low" as compared to what? What is the appropriate interest rate and why?

Interest rates are supposed to be set by the market. The interest rate is extremely important because it tells the market how abundant capital is at any given time. During a severe recession, capital is in short supply, so the interest rates should be very high. This has the effect of driving inefficient companies like GM out of the business so they can be replaced by more efficient companies like Toyota. When the fed is holding down interest rates, the low interest rate signals to the market there is a huge surplus of capital, which is completely wrong. As a result, our economy becomes less efficient instead of more efficient.

It's best explained by looking at net issuance of junk bonds and PIK bonds. Right now junk bonds are paying anywhere from 5% to 10%. This is absolutely absurd because the expected default rate on junk bonds is over 5%. Who are the people buying these junk bonds? Retail investors and pension funds. Why? Because the stupid jackass fed is holding down interest rates, giving a false sense of capital surplus, and that false surplus flows into garbage businesses like Twitter and Yelp, two companies valued at several billion dollars even though they have no earnings. The economy gets progressively worse as capital is misallocated year after year, decade after decade.

 

[fskimospy]

Do you have a source for this? My source is the Federal Reserve:

You don't understand what your source is saying then. Labor force participation rate is not the same thing as the number of people with jobs. (The unemployed are counted in it as well). If you look at the simple sum total of people in America with jobs since the start of Obama's presidency there are more now than then. That's even when counting the first few months of his presidency against him, which most reasonable people would consider unfair.

Wait! You might say. The population of America had increased! Of course more people should be employed! We should instead look at employment/population ratio! (That has basically been flat in recent years). The problem with that of course is that we know our population demographics are shifting so a greater percentage of people are retired. We should expect that number to decline naturally. If it is staying flat amid those pressures that's a good thing.

So yeah. Like I said. Wrong.

Source?

Interesting how you took only a brief period in 2013 (or more clearly the dishonest author of that chart did). Let's look at the whole picture:

That blue line is the number of full time jobs. So, you were saying?

Interest rates are supposed to be set by the market. The interest rate is extremely important because it tells the market how abundant capital is at any given time. During a severe recession, capital is in short supply, so the interest rates should be very high. This has the effect of driving inefficient companies like GM out of the business so they can be replaced by more efficient companies like Toyota. When the fed is holding down interest rates, the low interest rate signals to the market there is a huge surplus of capital, which is completely wrong. As a result, our economy becomes less efficient instead of more efficient.

It's best explained by looking at net issuance of junk bonds and PIK bonds. Right now junk bonds are paying anywhere from 5% to 10%. This is absolutely absurd because the expected default rate on junk bonds is over 5%. Who are the people buying these junk bonds? Retail investors and pension funds. Why? Because the stupid jackass fed is holding down interest rates, giving a false sense of capital surplus, and that false surplus flows into garbage businesses like Twitter and Yelp, two companies valued at several billion dollars even though they have no earnings. The economy gets progressively worse as capital is misallocated year after year, decade after decade.

Interest rates are not set by the market and your argument is circular.

 

[First]

I think he and others would prefer methodologies remain static over time to allow for "easier comparisons" even if it means obvious enhancements aren't made. Better we continue using worse quality stats than have to do slight adjustments to prior stats to bring them in line with the improved methodology.

Joking or serious? You'd rather have shittier stats than do more due diligence? Fo realz?

 

[piasabird]

Just because unemployment figures drop, that does not mean the number of unemployed decreased. There are serious flaws in the reporting of the unemployed. If you did not look for work in 5 weeks, then you don't count.

 

[fskimospy]

Just because unemployment figures drop, that does not mean the number of unemployed decreased. There are serious flaws in the reporting of the unemployed. If you did not look for work in 5 weeks, then you don't count.

This is incorrect. Here are the various definitions of unemployment, published each month by BLS:

BLS, U1-U6

U-1 Persons unemployed 15 weeks or longer, as a percent of the civilian labor force.

U-2 Job losers and persons who completed temporary jobs, as a percent of the civilian labor force.

U-3 Total unemployed, as a percent of the civilian labor force (official unemployment rate).

U-4 Total unemployed plus discouraged workers, as a percent of the civilian labor force plus discouraged workers.

U-5 Total unemployed, plus discouraged workers, plus all other persons marginally attached to the labor force, as a percent of the civilian labor force plus all persons marginally attached to the labor force.

U-6 Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force.

 

[dmcowen674]

Just because unemployment figures drop, that does not mean the number of unemployed decreased. There are serious flaws in the reporting of the unemployed. If you did not look for work in 5 weeks, then you don't count.

It's OK. Americans don't deserve to be counted.

They don't care so what difference does it make?

 

[glenn1]

Joking or serious? You'd rather have shittier stats than do more due diligence? Fo realz?

I'm saying that is what their opinion is. Such as if we calculated unemployment or inflation one way in the 1920s we should still be using that methodology else the obvious conclusion is that the government is trying to "obscure the true numbers."

 

[shady28]

You don't understand what your source is saying then. Labor force participation rate is not the same thing as the number of people with jobs. (The unemployed are counted in it as well). If you look at the simple sum total of people in America with jobs since the start of Obama's presidency there are more now than then. That's even when counting the first few months of his presidency against him, which most reasonable people would consider unfair.

Wait! You might say. The population of America had increased! Of course more people should be employed! We should instead look at employment/population ratio! (That has basically been flat in recent years). The problem with that of course is that we know our population demographics are shifting so a greater percentage of people are retired. We should expect that number to decline naturally. If it is staying flat amid those pressures that's a good thing.

So yeah. Like I said. Wrong.



Interesting how you took only a brief period in 2013 (or more clearly the dishonest author of that chart did). Let's look at the whole picture:

That blue line is the number of full time jobs. So, you were saying?



Interest rates are not set by the market and your argument is circular.

Even using your data source which is FRED, the total number of new jobs added (nonfarm part time + full time) since 2008 is only about 400,000.

That's not much for 7+ years when we normally have ~ 0.5 to 1% per year job growth (or about 1 million per year).

Participation rates show there is a problem that is not showing up in unemployment numbers. A major part of that is disability.

Disability is the new long-term unemployment.