Business Blogs

SSTF - Steve Goss’s Bombshell – What Could it Mean?

E-mail

( 0 Votes ) zero hedge - on a long enough timeline, the survival rate for everyone drops to zero >> 
I have written often on the status of SS. I also have some understanding of illegal aliens working in the US. I have sponsored four over the course of many years. I don’t hire them. But I pay many companies that do. The employers know they are illegal, but the workers have SS cards (fake) and so long as the PR taxes are collected no one seems to care.

These two interests of mine dovetail. SS has been collecting money from illegal aliens for years. They will keep the money they have collected and they will not pay out any benefits (except fraud) in the future. So this money is “free”. I have often wondered how big the numbers on this are. Now we know. The numbers are enormous. Without the Free Money coming in from illegal aliens SS would look much different than we "think"
it does.

The WaPo had an article on this today. They had hard numbers (sort of) in the article. I was absolutely stunned that the source of this information was Steve Goss, the chief actuary of the SSTF. Some thoughts/numbers:

-Steve Goss does not reveal information of this significance unless he has a political agenda of his own, or he was told to. I am of the opinion that it was the latter and the WaPo/Goss story was a way for the Administration to get the illegal alien issue spun in a different light. Because of high unemployment the illegal story is getting traction and anger is boiling. What is happening in Arizona is the tip of an anti-immigration movement that is brewing in America. This is not healthy for society. Police profiling is not the American way. Except in 2010.

-This information is...(Read Full Article)

 

Dylan Grice On Ignoring The Economists' Perpetuation Of The Illusion Of Control, And Instead Focusing On What We Do Know

E-mail

( 0 Votes ) zero hedge - on a long enough timeline, the survival rate for everyone drops to zero >> 
In his most recent Popular Delusions piece, SocGen's brilliant Dylan Grice once again rightfully demolishes the shamanic rituals of the "alternate universe" theory, better known as economics, ridicules economists for the hack priests of financial paganism they are, and concludes what may be the key principle of modern cynical thought: "Some have said that the key risk investors face today is of ‘policy error’. But isn’t that always the key risk? Financial history is one long series of ‘policy errors’ and while policy makers labour under the delusion that they know the unknowable it will remain so. All investors can do is try to see the funny side, and focus on things we can know." Incidentally, focusing on the funny side is precisely what Zero Hedge has been doing for just over a year and a half (much to the dismay of our ever growing detactors and critics).
Add some intelligence to the discourse, and one gets in 18 months more actual policy changes (Fed Audit, the end of Goldman Prop (a topic we were digging into long before Volcker was resurrected from the dead), banning Flash trading, inquiry into High Frequency Trading and daily market manipulation), more than others who in lengthy, rambling, somnolent, rants and essays have achieved in decades. Since mixing humor and "focusing on what we know" is all we know, we will continue doing it, until we succeed in terminally discrediting the most worthless voodoo "science" ever conceived by man - economics, and overturning its one most destructive construct - the central bank and the implicit central planning that goes side by side. But in the meantime, here is Dylan's most recent fusion of humor and scathing condemnation of the idiots who will gladly destroy the US economy in...(Read Full Article)

   

Unemployment Rate and Level of Education

E-mail

( 0 Votes ) Calculated Risk >> 
Another graph by request ...

Click on graph for larger image in new window.

This graph shows the unemployment rate by four levels of education (all groups are 25 years and older).

Note that the unemployment rate increased sharply for all four categories in 2008 and into 2009.

Unfortunately this data only goes back to 1992 and only includes one previous recession (the stock / tech bust in 2001). Clearly education matters with regards to the unemployment rate - but education didn't seem to matter as far as the recovery rate in unemployment following the 2001 recession. All four groups recovered slowly.

So far this year, the group with "less than a high school diploma" has recovered a little better than the more educated groups - although the unemployment rate increased for all four groups in August.

And here is
a graphic from the BLS based on 2009 data: Education pays ...

This shows the unemployment rate and the the median weekly earnings by eight levels level of education.

The higher the education, the lower the unemployment rate - and the higher that median weekly earnings. Of course that doesn't necessarily mean that "education pays", because there is also a cost (both the actual cost and the opportunity cost), but in general education probably does pay (besides it is fun to learn).

And for Saturday readers, here are the employment posts yesterday (with many graphs):

August Employment Report: 60K Jobs ex-Census, 9.6% Unemployment Rate

Employment-Population Ratio, Part Time Workers, Unemployed over 26 Weeks

Employment Diffusion Indices
...(Read Full Article)

   

How Illegal Immigrants are Helping Social Security

E-mail

( 0 Votes ) Economist's View >> 
Illegal immigrants are helping to finance your retirement: The contributions by unauthorized immigrants to Social Security ... are much larger than previously known... Stephen C. Goss, the chief actuary of the Social Security Administration and someone who enjoys bipartisan support...

   

The Fed Can Help, and Should Help, but Fiscal Policy Can Do Even More

E-mail

( 0 Votes ) Economist's View >> 
The Fed has been under considerable pressure recently by those, me among them, who believe the Fed should use quantitative easing to lower long-term interest rates. However, a temporary investment tax credit can provide the same incentives for business investment...

   

A 7 Million Increase In US Population Results In A Labor Force... Decline? Why The US Has Really Lost 11.2 Million Jobs This Recession

E-mail

( 0 Votes ) zero hedge - on a long enough timeline, the survival rate for everyone drops to zero >> 
One of the most peculiar observations of this depression started in December 2007 is that while the total US population has increased by 6.8 million from 303.3 million to just over 310 million in July 2010, over the same 32 month period, the civilian labor force has declined from 153.9 million to 153.6 million. This makes zero sense, as all those aging into working age, or immigrating into the US need to find some job or some other paid activity (either legally or illegally). But let's assume that due to discouragement with economic conditions people simply refuse to look for jobs. The reality is that eventually all those people will come storming into the job market, once the economy recovers sufficiently. Which is why we make an estimate of what the "fair value" of the civilian labor pool is based on the historical average participation rate of 50.4%
(as a percentage of total population). Backing into the cumulative population growth by this estimate, means that as of July 2010, the labor force has really grown by 3.4 million, once the one-time adjustment of a "recession" is eliminated (and after all that's what all modern economist claim right - that recessions are merely one-time blips on the road to perpetual Keynesian growth). In other words, the cumulative differential between the labor force as reported, and as calculated has hit an all time record of 3.7 million: this is a number that has to be added to the 7.6 million directly tabulated unemployed to get a sense of just how many jobs have been lost assuming a reversion to the mean for the US economy. In other words, after eliminating the statistical voodoo of the BEA and the Census Bureau, the US has lost just over 11.2 million jobs since...(Read Full Article)

   

Stiglitz and Bilmes: The True Cost of the Iraq War

E-mail

( 0 Votes ) Economist's View >> 
Joseph Stiglitz and Linda Bilmes: The true cost of the Iraq war: $3 trillion and beyond, by Joseph E. Stiglitz and Linda J. Bilmes, Commentary, Washington Post: Writing in these pages in early 2008, we put the total cost to...

   

Snapshots of the Employment Situation, August 2010

E-mail

( 0 Votes ) Econbrowser >> 
I thought I'd add a few observations on the latest employment report (other reports here: [NYT], [WSJ RTE/Izzo] [CR], [Economist's View]). First, by an alternate measure, employment is improving more rapidly than the standard nonfarm employment (NFP) measure. Second, the alternate measure increased faster than nonfarm payroll employment over the period of temporary Census hiring. Third, aggregate hours worked in the private sector continues to rise faster than private sector employment. Fourth, the NFP growth consistent with zero GDP growth is lower in the last decade, versus previous decades, even while the elasticity of NFP growth with respect to GDP growth has risen. The Standard and Nonstandard Time Series Figure 1 illustrates nonfarm payroll employment, and the same series excluding temporary Census workers.
Figure 1: Nonfarm payroll employment (blue line), NFP excluding temporary Census workers (red line), and civilian employment series adjusted to conform to NFP concept
(green line), all seasonally adjusted. Gray shaded area indicates recession, assuming trough at 2009Q2. Source: BLS via FRED, NBER and authors calculations. As described in earlier posts [1] [2], the adjusted civilian employment series is constructed to conform to the nonfarm payroll series concept, but based on data from the household survey. One characteristic of this research series is that it has higher variability, measured as the standard deviation of the first log difference, than the nonfarm payroll series, so one might want to downweight its importance relative to the NFP measure. Interestingly, the adjusted civilian employment series shows a bigger jump than the NFP series. The elasticity of adjusted civilian growth with respect to nonfarm payroll employment growth over the 2009M12-10M08 period is 1.3. Over the entire 2005M01-10M08 period, the elasticity is 0.88. It could be that the extra spending associated with the extra Census workers induced greater employment...(Read Full Article)

   

New Job Opportunity - Spitting at the Moon

E-mail

( 0 Votes ) Mish's Global Economic Trend Analysis >> 
In multiple posts Paul Krugman is saying "I told you so". For example, please consider Nobody Could Have PredictedPictures support the view that stimulus worked as long as it lasted, boosting the economy — which is the same conclusion Adam Posen drew from Japan’s experience in the 1990s: Fiscal policy works when it is tried.

But the stimulus wasn’t nearly big enough to restore full employment — as I warned from the beginning. And it was set up to fade out in the second half of 2010.

So what was supposed to happen? The invisible cavalry were supposed to ride to the rescue.

I never understood why the Obama administration thought this would happen so soon; history tells us that the effects of a financial crisis on private spending are normally protracted. And sure enough, the cavalry has not arrived.Stimulus and Full Employment
/>
The idea we can stimulate the economy to full employment is about as silly as silly gets. Krugman wanted double the stimulus we got. Well, we got zero benefit unemployment-wise from the stimulus and in my book infinity times zero is still zero.

Yes, unemployment fell from 10.1% to 9.5% but all of that decrease, if not more than all of that decrease, was a result of a falling participation rate. The bottom line is neither the Fed increasing its balance sheet by $trillions nor a $1.4 trillion deficit did a thing to lower unemployment.

Of course the Keynesian clowns will holler things would have been worse in the absence of stimulus. Really?! Would banks be lending more? Would small businesses be hiring?

Full Employment Made Easy

Krugman wants full employment. I suppose the government could easily employ everyone who does not have a job....(Read Full Article)

   

Guest Post: Commodity ETFs - Diversification Or Beta Generators

E-mail

( 0 Votes ) zero hedge - on a long enough timeline, the survival rate for everyone drops to zero >> 
Submitted by JMMore on Center Bets:  Commodity ETFs as Diversification  

   

Obama Must Create 230,000 Jobs A Month Until The End Of His Second Term For Return To Breakeven - Charting The New "7 Year Itch" Normal

E-mail

( 0 Votes ) zero hedge - on a long enough timeline, the survival rate for everyone drops to zero >> 
Recently there has been a surge in cherry picked employment charts highlighting that the Obama administration has done a great job in rescuing the economy. The premise goes: after dropping to as much as 700K+ jobs lost per month, the administration has managed to pull off a miraculous recovery and now we are riding on a wave of 8 consecutive "private jobs" beats in a row. This argument is so shallow we won't even bother with it. Perhaps the "economists" who espouse this theory will be so kind in their next iteration of their charts to overlay the monthly US debt issuance side by side with the jobs number. Because you see if you drown the economy in unrepayable debt, while using transfer payments to fund the digging of trenches by every man, woman and child who makes up the labor pool, then yes - you may
get 0%, or even negative, unemployment overnight. Will it bankrupt the country (even faster)? Why, of course. But whoever said those who discuss politics subjectively ever care about the long-term implications of reality. So in the vein of sharing pretty charts, here is one: we show job losses since the beginning of the Recession (excluding for the impact of census hiring), juxtaposed to the natural growth rate of the Labor Pool (and not the artificial one, which according to the BLS is the same now as it was a year ago). We discover that i) 7.6 Million absolute jobs have been lost since the beginning of the Recession; ii) that a record 10.5 Million jobs (and you won't find this statistic anywhere), have been lost when factoring in for the natural growth of the Labor Pool of 90-100K a month (we use the lower estimate, which also happens to be...(Read Full Article)

   

More Articles...

Page 1 of 42

Basic authentication is not supported