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2023-12-08 09:26 by Karl Denninger
in Employment , 293 references
[Comments enabled]  


The monthly vomit comet is out with their report...

Total nonfarm payroll employment increased by 199,000 in November, and the unemployment rate edged down to 3.7 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in health care and government. Employment also increased in manufacturing, reflecting the return of workers from a strike. Employment in retail trade declined.

Edged.  Yeah, ok, two ticks is actually a material move, but who's counting.

Here's a nasty piece of work from the first couple of pages:

In November, health care added 77,000 jobs, above the average monthly gain of 54,000 over the prior 12 months. Over the month, job gains continued in ambulatory health care services (+36,000), hospitals (+24,000), and nursing and residential care facilities (+17,000).

How many of those were, oh.... nurses?

You're really trying to tell me that out of the 650,000 (roughly) adds in this sector over the last 12 months, when incidentally the change in the population is about +3 million, means that we need one person in the medical system for every 4.5 humans?

How much time do you spend in a doctor's office or hospital?  How do this sort of thing make any sense at all?  If you want to know why our economy is headed straight to hell look right here and you'll find the reason: Yes, some of this keeps you able to perform work and all of it, of course, goes into GDP but that's like arguing that a hurricane is good when it ruins your town because "look at all those jobs and GDP to put all the houses back together!"  Uh, yeah..... no.

Manufacturing employment gained basically only from the returning strikers at the UAW.  In fact, ex that there was a couple of thousand lost in manufacturing generally -- you know, actually making things that advance the general good of the population?  Yeah, that.

One little bit of good news is that the workweek was up one tick.  This is an often-undersold stat but it shouldn't be; every tick there is about 600,000 jobs, so it really does have a big impact.

And, of course as is the BLS' tradition, last month was revised down by 35,000.  Go figure.

One not-so-good trend is that people with Bachelor's degrees and higher are dying or winding up in a nursing home (e.g. out of the labor force entirely); that was about 150,000 last month.  Despite that, which you would think would mean better outcomes (money) and the employment:population ratio would rise, the opposite in the latter happened -- we were down a tick.  Few people who want a job with a degree are not working (only 2% unemployed) which begs plenty of questions, doesn't it?

In the "how's the paycheck?" division private education and health was down on the month marginally; everyone else got a few extra pennies.  I doubt it will cover the increased cost of living, which certainly isn't up only a few pennies.

Summary?  Neither terrible or great, and the market appears to agree with, after all the gyrations back and forth on the release, it settling more or less back to where it was just before the numbers came out.

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A nice piece from the cute artist for the Christmas can be at your door -- for you or yours!


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2023-12-05 10:24 by Karl Denninger
in Interviews , 172 references
[Comments enabled]  

Yet another excellent segment with Dennis Tubbergen from RLA.

Here's from their lede on the segment:

The yield curve has been inverted for over a year, which is unusual and suggests a recession is likely on the horizon. Our guest this week, Karl Denninger, discusses with your host, Dennis Tubbergen, the inverted yield curve and its implications for the economy, along with other economic indicators, such as retail sales and housing sales, which suggest that the economy is already in a recession. Denninger warns of the potential consequences of the US government's high levels of debt and the need to refinance that debt at higher interest rates. He predicts that this could lead to higher borrowing costs across the economy and a significant drawdown in stock markets.

Come check it out and enjoy!

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2023-12-04 09:13 by Karl Denninger
in International , 247 references
[Comments enabled]  

...the United States looked at matters of "territorial dispute" the same way a dictatorship does!

CARACAS/GEORGETOWN, Dec 3 (Reuters) - Voters in Venezuela rejected the International Court of Justice's (ICJ) jurisdiction over the country's territorial dispute with Guyana and backed the creation of a new state in the potential oil-rich Esequibo region in a Sunday referendum.

Now whether said "election" was in fact an election (and not a rigged bunch pile of garbage) I do not know, but that Maduro actually put the question to the people is..... extraordinary.

Of course the alleged "International Court of Justice" sees things different but then again others usually do.  It is a fact, however, that territorial disputes are, historically-speaking, resolved by the use of force.

But what you don't usually see is a government putting the question on going to war to its actual citizens.

The media believes, of course, this is a "rhetorical" question and of little or no validity, and perhaps it is.

But that it got asked is meaningful, even in a place like Venezuela.

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2023-12-02 09:17 by Karl Denninger
in Market Musings , 725 references
[Comments enabled]  

The last few days have been interesting.

Powell allegedly was expected to make people believe "rate cuts" are coming.  Indeed, some of the callers on the various media channels are now claiming six rate cuts will come next year.

I'll take the under on that: No they won't because the only way that can happen is if Congress balances the budget, which it has shown zero inclination to do.

I don't expect there will be any "rate cuts" next year; if anything short rates are going higher, not lower.  Why?  Because until Congress cuts it out the only other alternative is that the roughly 8% inflation created by Congressional deficit spending, none of which has any source of absorption anymore outside the country (the slacking of trade growth and US/EU sanctions imposition due to the Ukraine mess destroyed that and it isn't coming back) is going to show up in inflation and that means real rates are still negative.

A 5% interest rate in an 8% inflation economy is a real rate of -3%.  Period.  That is, not a thing has changed in terms of the actual tenor of borrowing rates despite the fact that Americans in general are getting screwed and that cannot change until real borrowing rates are positive.  Therefore either Congress has to cut it out or rates have to go higher -- period.

I remind you that simply on the math the only place Congress can cut it out is to fix CMS -- Medicare and Medicaid.  No, that doesn't mean "cutting" either per-se; it means getting rid of the grift, fraud and similar that lace our medical system top-to-bottom.  I've written literal tomes on this over the last 15 years; the "seminal piece" if you just want it in one dose (ok, two, because there's a follow-up implementation article that is linked off the first) you can find it here.  Beware, its not light reading.

Resolving this would be an economic earthquake, but at this point that's not avoidable.  The lobbying interests and political ads it would generate would be wildly misleading or even outright false -- and imply if not state that any politician doing it was intending to literally throw Granny off a cliff.  If you're older than 30 or so you've seen those ads as an adult; they featured prominently until Obama came in and basically underwrote the entire medical and pharma industry at the federal level, but did nothing about the grifting, extortionate pricing and schemes, despite there being 100+ year old felony federal law on the books (not fines, prison terms) available and applicable, as the Supreme Court has previously ruled -- twice (Royal Drug and Maricopa County.)

So here we are with a locked housing market that will almost-certainly disruptively unlock as forced sales eventually do happen, and when they do they wind up nailing appraisals of everything else in the immediate area which then makes HELOCs and refis impossible, even under duress (since you then are "upside down") and that, in turn sets off the cascade.

All the Happy Feet dancing in the world won't do a thing to prevent this, and there isn't realistically a way out of the box other than for prices to come down, dramatically so, in the places where they've gone up the most: Housing, medical care and personal transportation, which in turn will flow through to insurance of various sorts.

That of course means the "E" part of P/E will also go down, which you would expect will lead to "P" (stock prices) coming down too, and since stock prices are a leveraged multiple of earnings that's not going to be a "small" decline either.

I know, I know, its an election year and they will keep the plates in the air -- so it is claimed.

Just ask yourself this: Was 2000 -- or 2008 -- an election year?

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