Big Hole

People have been throwing around numbers in the millions and billions and trillions since the crisis started. Over time, the data deluge has turned into a flood, and, occasionally, it is even hard for someone like me -- who has been tracking and analyzing this stuff for a while -- to get a grip on what it all means.

Maybe that's the strategy: overwhelm the masses with endless zeroes and hope they either zone out or lose sight of the fact that those numbers represent decades of poor decisions, misguided policies, and illegal acts.

That said, sometimes all it takes to get to the bottom of some of those numbers is to recast the data in graphical form -- because, like they say, "a picture is worth a thousand words." In "The Jobs Gap," the Washington Independent highlights research from one think tank that does just that, and what it says about the state of the employment market is pretty striking:

In light of last week’s dismal September jobs report, Heidi Shierholz, of the Economic Policy Institute, updates her estimates of how many jobs the United States needs to create to get back to where it was, employment-wise, when the recession started.

The labor market remains an estimated 8.1 million payroll jobs below where it was at the start of the recession in December 2007. This number includes both the 7.8 million jobs lost in the payroll data as currently published plus the announced preliminary benchmark revision of -366,000 jobs to last March’s employment level. And even this number understates the size of the gap in the labor market by failing to take into account the fact that simply to keep up with the growth in the working-age population, the labor market should have added around 3.4 million jobs since December 2007. This means the labor market is now roughly 11.5 million jobs below the level needed to restore the pre-recession unemployment rate (5.0 percent in December 2007).

In graphic terms:

 

That begs the question: How will the economy get there? And leads to the worrying answer: It won’t, at least not anytime soon. Government spending — the kind that might, say, hire hundreds of thousands of construction workers — is out of the question. And that means private businesses will chip away at unemployment when the economy picks up a bit more, adding workers slowly, very slowly.

Comments

[emma]

A high ranking bank employee who spilled the beans in early OCT, scary stuff => http://www.forecastfortomorrow.com/files/bank_insider_US-Collapse.pdf

[roger]

Is the glass half full,or,half empty.
Are we short of 11 million jobs, or,
do we have a surplus of 11 million people.
Now if I was a CEO, I'd say: hooray, finally
we have lots of cheap labor. If I was unemployed
with hungry kids at home,I'd say: bring out the
pitch forks, if I was an economist from the
Austrian school, I'd say: not to worry,the market
is a great equalizer,if a socialist: I'd say:
socialize production and share the goodies,if I
was a fascist,I'd say: discipline,order and more
discipline,an American politician: I'd promise them
everything without being to specific.
If I was Hegel,I'd say: the truth is the whole,and
the intelligent design is doing it's thing,Amen.

[Greg F]

Hey Roger - As a businessman, I'd like to have the 11 million additional potential customers to help fill my glass.

[There's a BIG GAPin someone's balance sheet]

"At the Root of the Crisis We Find the Largest Financial Swindle in World History", Where "Counterfeit" Mortgages Were "Laundered" by the Banks

Indeed, Galbraith just gave a must-watch half hour speech where he points out:

* "At the root of the crisis we find the largest financial swindle in world history."
* The fraud originated in the mortgage market of the United States.
* The houses were over-appraised, and the banks only hired appraisers who were willing to do that. Galbraith rhetorically asks: "For what conceivable reason would a lender accept an inflated appraisal for a house against which it was going to make a loan?"
* The language used in the mortgage industry is very telling: "liar's loans", "ninja loans" (where the borrowers had no assets and no income), "neutron loans" (where it would destroy the people but leave the buildings), and "toxic waste"
* The mortgages in the millions were counterfeits, not mortgages. They were "laundered" ... the dirty paper was converted into clean paper. Securitization was used to convert the worthless paper from triple D minus junk to triple A. The commercial banks were the "fences", they took the laundered paper and sold it on to the legitimate market. The "marks" were the pension funds, or any investing entity which trusted triple A rating or investment banks.
* The police left the beat.
* If the counterfeit is big enough, the whole system collapses, because you can't tell what's real from what's counterfeit and so confidence collapses.
* The failure to face the problem of fraud constitutes a huge barrier in the path of economic recovery. The banking system can't be restored until it is taken apart, cleaned up and rebuilt in a transparent and honest manner.
* We should make the Department of Justice uncomfortable to ignore these frauds. Because if we don't have fair and honest and functioning financial system, we won't get out of this crisis.

http://tinyurl.com/2769prt

[What about the income gap caused by fed]

The Fed's Zero Rate Policy is Destroying America
October 12, 2010

Last week The IRA traveled to Washington D.C. to participate in the latest event sponsored by our friend Alex Pollock at American Enterprise Institute, "Living in the Post-Bubble World: What's Next?" We received a great deal of media buzz before and after the event, but the most poignant comment came in this unexpected and very disturbing letter from Dianna in Rockford, IL:

"I have no way of knowing if this message will ever actually reach you. Nevertheless, I want to extend a most sincere message of appreciation for one of the comments you made during recent participation in an American Enterprise Institute symposium. You are the only financial guru /analyst whom I have heard make any reference to the devastating impact of extraordinary quantitative easing on "grandma" and her carefully laid financial plans. Many middle class retirees have no generous government or corporate pension. We have had to plan and save prudently for retirement. Now, as we watch returns on CD's plunge from an average 5% to an anemic 1.5%, we also experience a plunge from a comfortable retirement into a state of severe "penny-pinching". You were correct...not only do we have to cut back on gifts for the grandchildren, we are also drastically curtailing many discretionary purchases, travel to spend time with family and so forth. I have heard NO other analyst speak to this impact on responsible retirees who thought they had done all the right things to prepare for the "golden years". It just felt good to realize that there is at least one individual who has given any consideration to this fallout from "Fed" policies."

http://us1.institutionalriskanalytics.c ... RAMain.asp

[sharonsj]

The tinyurl takes one to Zero Hedge, which reprinted the essay from Washington's Blog.

In any case, we know it's one big fraud but our government continues to lie about
it. Sorry, but a happy face in the media can't cover up what we see once we walk out the door. I'm still waiting for the Justice Dept to get these guys or for the revolution to begin.

[MontHigh]

Ratios are the most useful thing I find to make sense of all those zeros. Knowing that employment as a fraction of the overall population has shrunk from its in peak in 2007 of X to its current low value of Y seems a lot more informative than know that we need 11.5 million jobs.

[roger]

@ Greg F.
ha ha... in between two extremes,
many shades of gray will fit.

[kevinearick]

On Big Hole Theses

My “thesis” is: the US Navy does not have the best talent.

So, less than half of the US population is working, with many workers and the vast majority of non-workers collecting a social check, directly or indirectly, and most of those working are employed in make-work service jobs, all relying upon the Fed and the Navy to steal the necessary funds, by the soft power of a reserve currency or the hard power of a nuclear warhead, within an imperial nation/state system designed to physically imprison the global majority, for exploitation by the financially mobile minority, relying upon a global information system that systematically collects every conceivable piece of information about individuals, so they may be herded into computer databases for the law, which employs one atrocious outlier behavior, on the far end of the spectrum, to justify increasing limitations on individual liberty, at the direction of Congress, which is fed by the old families controlling the multinationals, that are rapidly liquidating their vested investment, goodwill, to maintain control over out-of-control replication, created by their control systems.

Empires are built by the best navy, which is primarily an incubator for more effective families, at the tip of the spear, which creates a growing, self-reinforcing ripple, which expands in cycles, at the cost of density. Talent is diluted with increasing population until success is measured with demographic acceleration ponzi economies under control, all the navigators are crowded out by talking paper-pushers, and corporate sclerosis takes hold, during which time the next navy is incubating.

The microeconomic symptoms are like a circular conveyor belt, with 9 sets of rollers and 9 operators. First, one operator takes a screw driver to the rollers, knocking the belt off track, and gets the other 8 to pay for the repair, effectively installing a gate. One person on each side watches and then replicates the behavior, until 8 people with gates can’t agree to keep the economic conveyor running for more than 5 minutes a day, and the product coming off the belt resembles the process. Meanwhile, the ninth person went out and started building a new conveyor system, as soon as the first gate went up, leaving the other 8 to go bankrupt, competing for control over last generation production.

We can expect top-level bureaucrats, who get paid to swim in sewage, to employ sex and coke parties as the filter to employment, but when that behavior reaches the operational captain level, it’s time to make wholesale changes. All the pressure is building against the operational officers that implemented the Global Imperative, under the direction of the university consultants, paid through the multinationals, to replicate liquidation globally.

Top flight individuals are not going to work for an organization that systematically destroys the next generation to feed the current generation with non-productive assets, to the end of nothing but its own growth. That trillion dollar budget measures stupidity, on the tail end of the distribution, efficiency, not effectiveness, at the peak. Of course the attenuated dc bus producing high frequency, low amplitude control systems fails to see the low frequency, high amplitude, resonant wave, right up until the funnel forms, on big wave day, when it is far too late for an organization to learn how to surf, with the universe as the adjudicator.

We have just begun the second stage of funnel formation. Expect the third ghost…

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Tuesday, October 12, 2010
Who Owns My Mortgage Note...Demand To KNow

http://www.goldmansachs666.com/2010/10/who-owns-my-mortgage-notedemand-to-know.html