Regardless of the merits of the data, that chart is a thing of beauty. NYT consistently has the coolest data presentations out there.

I'm a fan of a good visualization, but given the lack of data points on the axes, you have to go by their generic 'regions' (which I disagree with in general). What we are visualizing has been so abstracted out that even a 'happy swirl' may not mean what you think if it goes through the 'craptastic' region and turns south before it ever exits it.

Some visualizations are just paint by numbers formulae... a great visualization makes something beautiful out of data to make something apparent that may be hard to see from staring at a stack of numbers. I could make their visualization just by setting up a spirograph toy with a little variance, and it would be about as statistically significant as well.

Sorry, my inner stat brat is raging, I should shut up before I further embarrass meself!

Jobs always lag somewhat behind other indicators in terms of predicting a recovery in a recession though; until companies see an improving situation they tend to sit in 'safety mode' - its always a 'chicken and egg' scenario .... until companies see improvement they're reluctant to hire, until they hire people don't have the money to spend which means a recession is more likely etc.

As such while from a 'personal' perspective jobs are what matter - its GOOD that there are positive signs elsewhere as its these which will encourage companies to take risks, create jobs and hire people.

If enough large companies in each field start moving then their competition is compelled to act or look like they're being left behind - its the inverse of what we've seen in the last couple of years where every company has chased cost-cutting because others have.

I'm really worried about the jobs data. It was worse than expected last week and from my understanding, the stress tests only accounted for 11% unemployment. If we get to 10.5% or something, don't we start cutting eerily close to the margin of error on those? Do we see another bank or two become insolvent again? I know there are a lot of people pointing to signs of recovery but as long as people keep getting fired from their jobs, I just don't see it happening.

I guess the only good news about the high unemployment is that it'll keep the inflation hawks quiet for awhile.

My concern is that we are past the point where those other leading indicators occur that we start getting the jobs indicators coming in. As i mentioned back in January, I forecasted the upcoming bounce while all the financial gurus were in their depression streak (don't trust the media, they are so short term focused they are blind and no more intelligent than a loquacious parrot).

That bounce happened about where expected, and I've been waiting for the jobs to turn the corner... they are missing. Its understandable if they are a bit late, but I'm looking at a few looming problems and if they hit hard before businesses get their minds out of the gutter we could be looking at a real rough time before they naturally recover. With the level of government meddling, I'm afraid the natural mechanisms are being thrown off too much by the corruption possibilities.

People hire because its the best way to make a lot of money. If handout-o-nomics dominates though... without that incentive they might not do that first hiring round when they should, meanwhile the economy continues to decline, so the government greases the wheels even further... it continues until someone realizes it is absurd, but a lot of wasted time and money has passed in the interim.

Hmm ... should that be "People hire when it's the bet way ... ?

I mean, isn't there a distinction that we have to make there? And isn't it one that seems to be pretty relevant to our current situation?

Right now, seems to me that anyone holding excess inventory (and in some cases an inventory of anything more than 1 unit might be excess), the best way to make at least a little money is to hire no one & dispose of that existing inventory with as little cost of sales as possible. While making a little isn't as good as making a lot, it beats the hell out of losing any (or any more).

I guess what I'm getting at is that I don't see a surge in hiring being a smart play for any significant number of industries right now and I'm not really sure where making bad business decisions (which certainly played a role in getting us into this mess) is something that ought to be expected or even encouraged.

Yes, 'when' is the appropriate statement. It does not always make sense to hire people, and over expansion when it does not make sense can kill a company.

It also is a bad decision to continue to cut your company to the point where it cannot function. Yes, a lot of companies have crushing debt or other factors against them, unfortunately you cannot cut your way to a functional state in all cases. There is a level where it really is just a long lasting liquidation of the company on its way to bankruptcy. Sometimes expansion is the only way to escape a situation in the long term (particularly if you factor in debt, which is financed irregardless of how much resource and revenue chopping you go through, only a debt-free company can guarantee profitability by reduction down to zero).

I agree bad decisions have been the killer, but most of those decisions have been to focus extremely short term and obsessively follow trends over analyzing and controlling the situation. The bad decision is to follow a downward spiraling trend for too long, you might look like an idiot if you jump too soon, but you will be a certain idiot if you never jump at all (waiting until the recovery in a true capitalist economy means you are playing catchup against better positioned rivals that jumped).

Each firm has its own situation of course, my belief though is the pessimistic trend is non-optimal strategy at this point. If it goes on too long because the actors are ignorant it is guaranteed to be sub-optimal, it will eventually crash the economy.

For some companies right now is the time to expand in order to make it rich during the recovery. I can guarantee you the banks have that philosophy, even though they are using our money to do it.

Pretty good sentence there. Does a decent job of summing up the status of a lot of companies IMO.

dola, my original point was also that the incentives to hire are being eroded by the massive bailouts. So companies are further deferring the 'when' to hire because they have an alternative method for keeping their company afloat. All well and good unless the demand for their company existing at all drops to nothing because massive unemployment takes its toll on interest for those stocks of inventory.

Here's a pretty interesting read on the behind the scenes action at AIG FP, widely regarded as the trigger for the subprime meltdown.

Michael Lewis on A.I.G. | vanityfair.com

Even more doom and gloom

http://econlog.econlib.org/archives/...s_recover.html

dola:

FWIW, I might be silly, but I have faith that we will recover. I just thought that I would pass that along since I have been posting pretty much nothing but links heralding the impending descent of the heavens.

For a good decade+, our economy was based on us buying and selling houses to each other using money that we borrowed from China. Turns out that was not sustainable. It also turns out that it kept us from investing in actual sustainable economic activity. Why would we, when the easy money was in housing and the financial products related to it?

Now that, much like Richard Gere, we have no place else to go, I imagine that we will start to do what America and Americans have done for the last 200 years--innovate and expand and create.

Here's hoping that someone does not bump this in 20 years to make fun of me.

Innovators will be held back by everyone stuffing their money into the established and government porked up losers. Got a new car company to revolutionize transportation? Sorry, you are bought out or bargain basement competetion from the new debt-free, full-asset, GM with government invested interest. Sure you built a car at a lower price and higher quality, but GM can sell its shit-mobile at half your price because they have inventory and no need for true profits.

Got a new idea that requires taking out a loan? Enjoy our beautiful new high interest rate loans from banks told to 'avoid risky behavior', so they jump the rates that startups pay, while making the same exotic garbage deals they have been all along for billions with 'safe partners' (like AIG). Just get stock funding? Wait until the well-established power-broker wants to short your stock after you have been open two years and are finally making money. Nothing says free money like a high stock price that can be cut in half the moment you spread even the slightest fear that a company could go under (which most speculative new companies are always in fear of going under, that is how new investments are).

I think the biggest thing standing in America's way is that we are sitting by watching as the big players are pounding capitalism into the ground.

I read that too. Lewis is really one of the best writers on society today. He has a unique ability to tell a complex situation as an easy-to-read story.

I think one of the interesting aspects that this article as well as Matt Taibbi have brought up lately is how tied in Goldman Sachs was. That there was a huge conflict of interest and that GS hedged their bets that the government would bailout AIG. When you figure who was head of Treasury (as well as other major financial positions), it seems like a massive conflict of interest.

Well, the grand experiment is about to begin for GM. Alot of us was saying that the automobile companies should go into bankruptcy reorg. Ford stayed solvent, Chrysler was sold to Fiat, but GM went. Some parts suppliers went bust also.

GM is expected out of bankruptcy on Friday. Their shareprice right now is less than $1. Not sure what it will be on Friday. They had their chance to get it right and wipe the slate clean. I'm rooting for them.

GM’s path to leave bankruptcy cleared - Autos- msnbc.com

Wow less than a dollar? That makes me want to buy a thousand shares and just see what happens. I figure they've got to eff up pretty bad to not succeed, at least in the short term, given the sweetheart restructuring.

The shares quoted are for the old GM, not the new company which will emerge from bankruptcy. The old GM will likely still trade on the pink sheets while they continue to liquidate it.

After reading the first part of that story, I have to think there's a good chance that he was the author of another piece on the same subject I read, I dunno, quite a few weeks ago. It was much shorter but gave some insight into the work being done by the folks who were around for the dismantling. Either it was his also or else the style is strikingly similar, but it had the same unraveling the strings method & ability.

Hmm, how many people are going to walk blindly into that mistake?

Enough to keep it above zero apparently. :)

So GM emerges from bankruptcy and the lead of the wire service story catches my eye

... with ambitions of making money and building cars people are eager to buy.

I'm just having a tough time figuring out how they're going to make money selling cars at a price of $0 and that have no cost to run, apparently fueled only by happy thoughts.

Or is there some other type of car that people are "eager to buy" that I haven't heard about yet?

I'm not so much knocking GM here as I am the bad writing I guess, I just honestly don't know of anything that anyone is "eager to buy" at this point.

Here you go: Consumers' Favorites Vehicle Survey

Having favorites is different from "eager to buy".

I've got lots of favorites -- from music to movies to houses to cars to steaks -- but I'm not "eager to buy" any of them.

edit to add: I'm certainly eager to be able to afford them again, just not eager to buy them when there's more pressing needs competing for the same dollar.

I'm a little dissapointed that GM didn't go bankrupt and new and better options (rather than "New GM") didn't come to light. Where the fuck is Tucker, a man and his dream???

I know, I was deliberately trying to annoy you. :D

Anyway, I see that Dutch is reading the thread, so he can probably concur with you on the semantics.

Edit: this reply directed at JiMGA, not Dutch.

Whew, missed a close one thanks to you guys.

Beware GM Equity - The Faber Report - CNBC.com

Can we please get to work on financial regulations? These mothfuckers can't learn.

Dude if the stock market wouldnt have had it's rally (bear market or otherwise) they would be soooo fucked right now. (along with many others)

Ah, but they have learned...how to get rich taking unecessary risk and getting taxpayer money if it fails.

Doesnt matter when you're gambling with somebody else's money.

Actually, want to see the scarier one:

Terms of Service

The story just broke last week that Morgan Stanley is going to try and take some junk CDOs and turn them back into AAA rated bonds. It's the same #$^@ that got us here!

SI

Gotta have AAA rated junk, how else do you think you can swindle pension funds, 401k, and massive pools of 'safe money'?

The abuse is atrocious, and abuse is the name of the game, that is why I think discussion of a recovery is highly likely to end up as nonsense. Why play the difficult game of capitalism when outright theft is so damn easy?

We do not need mish-mashed 'securities' of any sort. You want to load up a system with an odd risk profile, make a damn portfolio with similar loads of AAA and junk. The only reason to securitize shit is so you can SELL it with false advertising to dead money, i.e. anyone who buys a fund. We don't need shit factories, honestly, just invest in some fucking real stuff for once. Idiots thriving off the 'there is always another sucker' concept, encouraged by an inept government and apathetic populace of sheep.

Hell, maybe we should just gut most of the financial industry, its sickening.

They are going to screw up the country so bad that I'll finally get super rich and won't be able to enjoy it because the next day the country will probably collapse.

Sounds like a damn good idea right about now. It's pretty clear this week between this story and Goldman Sachs that no one has learned a fucking thing from this whole mess except that theft is good and easy. I've been for all sorts of new "draconian" legislation since this whole mess started and I haven't seen word one. But, maybe it's just time to burn the whole damn house down and start over.

SI

This is my concern with the finance sector...and the elected legislators. I really think that all of these people are seriously out of touch with the general populace, as well as the seriousness of our financial issues.

Which is why the failure to even read the "stimulus" package just galled me more than the inevitable lack of "stimulus" it's provided. I'm not going to debate whether any of it was good policy (naturally some likely is, some likely isn't...most is likely unecessary IMO). But I would take issue with the deceptive nature of it being passed through as dire and could not wait 1 week to review.

This may belong in the Obama thread...but I have to say that while I was not for Obama in the last election based on perceived policy direction...I have been thoroughly disappointed in the way he has conducted governance more similar to the exact counterpoints he railed against. I doubt it was his idea to load up the "stimulus" bill with "non-stimulative" policy and then have everybody vote on a 1000 page plus document the same day it gets finished...but similar to Bush...he allowed his cronies in the senate to do it.

That's a new one. :D

We've talked a little about executive pay and this graph helps show how salaries rise regardless of profits.



This is from the WSJ story:

Good news. I can tell the grandkids that I survived the Great Recession.

Recession eased in second quarter, data show - Stocks & economy- msnbc.com

I don't know, I find that article more depressing than anything.

A made up statistic that is losing touch with reality (the GDP) shrank, but yay it shrank less than estimated (well what they estimated, lets not get into my estimate).

Later on they go on to say how it may take five to six years for a recovery in the labor market, because of it being a financial crisis and all... which to me screams stagflation. That is, the cost of everything is going up, but wages are screwed because companies can hold the threat of 'the economy' over everything.

Obama-style economic turnaround, bitches!

247,000 Jobs Lost in July; Rate Falls Slightly to 9.4% - NYTimes.com

:p

Nope. I'm not impressed with unemployment as a statistic anymore at this point in the economic cycle (and really in general for the most part). At this point it's likely just dropping because more and more people are dropping off the roles at the "still unemployed" end rather than in the "found jobs" end. I want to see a list of new hires, or jobs created, or whatever you want to call it, rather than an unemployment list where you stop being counted as unemployed after however-many months on the list and all.

Only when we start creating jobs and filling positions and putting people back to work will I start to think that maybe things are easing a little.

More stat-magic, ignore it.

Think of the economy as a giant machine. It has millions of parts.

You start wanting to cut costs on the machine, so you start taking away parts. However, there is a minimal number of parts required to keep the machine functioning at all.

What we are seeing is that, indeed, as you cut the hell out of that machine that eventually you run out of shit to cut. Eventually if there is anyone with half a brain in the economy, they realize that there is a void out there of lost productivity, and if they build up their personal machine they can grab up more market than expenses. Leading to my belief of 'eventually people get tired of sucking and they start hiring again'.

The problem is there is no guarantee that someone, or enough someones, have brains enough to realize it is possible to make money and start a net employment rebound. The capacity for stupidity, especially in leadership positions, is astounding.

As unemployment keeps growing the void becomes more obvious, so it is more likely for someone to try and fill it.... but I'd rather we not wait until the machine chokes up before rebuilding it.

Ha! Not a chance!

The political game machine lives and breathes on the angled stats culled from the mountains of data collected from the eggheads (sorry QS).

If the other side wants to say "OMG, unemployment over 9%! Armageddon!!!" then I'm sure as hell going to say "OMG, unemployment down 0.1%! Ponies and Unicorns!!!"

Seriously, take all of your reasoned approach and conclusions to economic data back to the economics thread where everyone can... wait... this isn't the "Obama" political thread?

Shit, my bad. As you were. :D :p :popcorn:

Or in other words, "Mission Accomplished!"

Boo-Yah!

Or we could listen to Nate Silver: FiveThirtyEight: Politics Done Right: Economic Headlines You Won't See on The Drudge Report

All right, let me try to make the point even more annoying.

The limit of jobs you can cut converges to zero as the number of total jobs approaches zero, if there are no jobs leftover, your rate of decline is zero, yippee, but... you are still FUCKED because you have no jobs!

So an increase of unemployment by 1%, say 200,000 jobs, after we already have LOST millions of jobs, does not impress me one fucking bit. We increase employment by 1%, say gain 200,000 jobs, then you can take credit for having done something. Right now Obama = fail, sorry if it offends your politics (I voted for him and hope he succeeds btw).

OK, I feel I need to apologize, SportsDino. I might not have been clear enough in that three of my last four posts (all besides the Nate Silver one) were me being silly.

Because it's Friday. And I've consumed an enormous amount of caffeine.

I promise to treat your good posts with the proper amount of respect again on Monday. :D

Get ready for another round of foreclosures! From the San Francison Chronicle(through CalculatedRisk)

Oh, I think next year will be the other V in the W, but Ive been wrong about this rally thus far in everything from Home sales to car sales, so WTF do I know.

No reason to make wild guesses about what the market will do. Being long with your eyes open is about the safest state to be in right now, it has been since March. Since early-March if you did nothing more clever than say the DOW is going to go up, you would have made 40% since then. If you sell on spikes and reload like I do, and have lucky timing you can make more (or make less), but its rough to constantly try and buck the trend.

Unfortunately, we are in a spot where stocks can do okay while the overall economy still stagnates. They are more an indicator of what can happen rather than a sign of what will happen.

I was wondering when you would pop up again. Don't see posts that often now that the economy has slowed into a state of "blah"

SI