Saturday, October 13, 2012

How The Rich Get Richer

How The Rich Get RicherThe 2 bears (of Quantitative Easing Explained fame) discuss how crony capitalist billionaires such as Warren Buffett have benefited from government bailouts and Fed monetary games at the expense of everyone else. Sure, they want their taxes placate the American public while they rob it.

Thursday, October 11, 2012

Jobs Report Statistically Impossible

Jobs Report Statistically Impossible
Not to beat a dead horse, but let's do a statistical analysis of that infamous September jobs report that Rick Santelli tore apart the other day in his epic on-air rant. The report showed initial unemployment claims of 339K. That's nearly 6--six--standard deviations away from the mean consensus estimate of 368K. For those unfamiliar with statistics, that's a lot. It's so much, in fact, that the probability of such a statistical anomaly occurring is well below 1%. (6 standard deviations is about as close as you can get to 0% without reaching it.)

Jobs Report Statistically Impossible - chart 1

If that didn't knock you over the head, there's more: The divergence between the reported ("headline") weekly numbers and the revised numbers keeps getting larger. As of the last report, the BLS has added 200K initial claims to its revisions. This would suggest that when the September jobs report is revised, several thousand initial claims will be added to the reported 339K.

Jobs Report Statistically Impossible - chart 2
But there's still more: The last time we saw such a large month-to-month drop in initial claims was February 2006, when layoffs were unusually low (because we were at the peak of the mortgage bubble economy) following typical seasonal layoffs in January.

Jobs Report Statistically Impossible - chart 3

Add all this together, and you get a September jobs report that's not a statistical improbability, but is a statistical impossibility.

Tuesday, October 9, 2012

Rick Santelli's Epic Rant On Jobs Report

Rick Santelli's Epic Rant On Jobs Report
CNBC's Rick Santelli made a name for himself in early 2009 when he called for a "Chicago Tea Party" in response to the Homeowners Affordability and Stability Plan. Because of that epic rant, Santelli is widely regarded as one of the founders of the Tea Party movement.

Today, Santelli went on a tear about the BLS's September jobs report:

Goldman Sachs Switches To Republicans

Goldman Sachs Switches To Republicans
The market wants Obama to win for the simple reason that it's been propped up by the Fed, and the current president, unlike Romney, hasn't mentioned nominating a new Fed president. Goldman Sachs, on the other hand, doesn't care if the market prospers or crashes as long as its high frequency trading machines get a cut of nearly every move the market makes. Goldman does, however, curry favor with the powers-that-be by donating to whomever it thinks will win elections.

78% of Goldman's contributions went to Democrats in 2008. 75% of its contributions have gone to Republicans this year. Interesting.

Goldman Sachs Switches To Republicans - chart

Monday, October 8, 2012

Low Interest Rates Force The Old To Work

Low Interest Rates Force The Old To WorkNot only did the Fed ruin many Baby Boomers' retirement plans in the late 2000's, but its continuous ZIRP (zero interest rate policy) over the last few years has forced many Baby Boomers who planned on retiring years ago to remain in the workforce, fighting people a fraction of their age for menial jobs (the only jobs available) when they should be enjoying their golden years. As you can see from the following chart, the inverse correlation between the 10 yr. Treasury yield and labor force participation of Americans 65 years or older is nearly perfect. Today, nearly 20% of people 65 years and older are still in the workforce. And why wouldn't they be? Almost all savings plans pay less than the rate of inflation. Retirees' nest eggs simply aren't safe from Helicopter Ben. So 1 and 5 senior citizens are working to get by. 40+ years in the workforce just isn't enough anymore. 50+ years won't be enough when my generation is ready to retire and we have to pay down the national debt incurred by the Baby Boom generation and the current entitlement state.

Low Interest Rates Force The Old To Work - chart

Congress Gets Wealthier During Econ Depression

Congress Gets Wealthier During Econ DepressionThe Washington Post recently reported that, while the median household income has fallen 8.2% since Obama has been in office, the wealthiest members of Congress--regardless of party affiliation--have become significantly wealthier during this economic depression:

Congress Gets Wealthier During Econ Depression - chart

I'm sure this has nothing to do with the steep increase in government spending and cronyism...

Congress Gets Wealthier During Econ Depression - chart 2