Archives for category: Job creation

It has taken me nearly six years but I have now arrived at the conclusion that this European Union (EU) and the Eurozone have proven to be real failures and that if one went down to brass tacks it would show that having this “Union” (sic) and the euro did not really make a positive difference; that the “whole shebang” should be scrapped, leaving only “pieces” (to be defined) to regroup  differently and basically  keep a “customs’ union”.

I have spent six years trying to understand and analize in as much depth as possible all this, written sinceApril 2011 – 2 000 post in my blog:“macrovolatility.com”, written in 2014 / 2015 two books in self-edition with Amazon with self-explanatory titles: “Why Obsolete Macro Governance Is Killing the World Economy” and “Growth through Structural Reforms” (With Leadership and Competence Great Opportunities Exist).

I am not agreeing anymore with what I had written many times in this blog, the last one on 06/25/2016 in my post: “Eurozone Governance Radical Change Needed to get to a “2 Speed” Area Organization“, it will not work either…(please refer to this by clicking on above link).

In fact the last drop was when reading several times these last days that Greece’s situation was still being discussed by all “the powers to be” – re The Guardian‘s 02/11 /2017 article:No crisis’ on Greece bailout deal, says eurozone chief”…!!!
All these European/Eurozone “top officials” are such great techno bureaucrats that reality has totally  escaped from their pseudo “thinking” (sic), in six years they have not been able to decide on Greece’s situation which only represents 1 to 2% of EU’s GDP!!!

In this blog I have written since at least 5 years that Greece should leave or be exited from the Eurozone for its own sake, it would now be quite rich with a low valued drachma hugely expanding tourism, the number one wealth item, instead it has cost the Eurozone a “fortune”, protected corrupt local politicians who refused to exercise the results of the June 2015 referendum where the bailout conditions were rejected by a majority of over 61% , with the “No” vote winning in all of Greece’s regions, the Greek people wanting Greece out of the hands of the totally incompetent Eurozone leaders, IMF, ECB and German Chancellor Merkel, the real Eurozone leader.Greece has 180% indebtedness vs GDP!!!

Greece is just the tip of the iceberg, add Italy (3rd Eurozone economy) with a huge debt (135% of GDP) and only 1% growth, Spain (4th Eurozone economy), probably the most competent and growing (3%!) mediterranean country, still hampered with huge unemployment, with banks not passing on ECB’s continued  flow of printed liquidity to credit facilities to the biggest employer, the SME/TPEs, its indebtedness as % of GDP having grown to be 100%.

France 2nd biggest Eurozone economy, with miserable 1.1% growth, huge unemployment, is under great political stress and  the Number one, by far, Eurozone economy, Germany (1.9% GDP growth and “only” 71% indebteness as % of GDP) continues with is parochial self-serving Eurozone policy, nobody in Brussels will interfere…

The Eurozone has been conceived as an erratic type of puzzle / potpourri of countries with totally different mentalities and ‘usus”, great differences in social-economic macrostructures, no real EU / Eurozone “Governance and with Germany having benefitted from the euro creation in 1999 onwards with a 20-30%  favorable euro/DM parity which has helped considerably to boost their economy to the detriment of the rest.

There is, finally no way all this will work (what, in reality?)

Let each country solve its own problems, they are all countries with a long history which will serve as the backbone, they need to adapt far more rapidly to all the past, present and future innovations in “technology” and its meteoric evolution, in other words the entire political class needs to change ASAP, let each nation’s government be responsible for their own situations and not anymore EU / Eurozone “Governances” (sic) which have no power and are Germany’s slaves.

Belatedly, as usual, European Union (EU)’s President warns against US President elect divisive tactics to the detriment of the EU’s stability.

US President elect decrees are mostly unacceptable to the civilized world and a (very bad) first in US’s “governmental” (sic) policies, especially the now nearly universally decried anti-immigration decree which this blog is denouncing for the fourth day in a row.

EU has not managed to construct a “working” political, social economic and not even even financial area (the latter beacuse of the erratic policies of ECB) because it has done mostly everything wrong from the beginning of the instauration of the Eurozone and has also accepted totally disparate membership of 28 member countries who do not ressemble each other in mentality and usus and were prone to be a fiasco, which it is, being unable to agree on practically any important topic and subjecting some nations to undue austerity instead of pushing for badly needed structural reforms .

In the 2000 posts I have written in my blog from April 2011 until October 2016 and my two books I have consistently proposed and described the change from the current EU “mammoth” to a radically new compact European Guidance Unit with a division between Northern countries and Southern ones who have nothing in common, with France somewhat in the middle, and due to huge past erroneous political expansion policies continuing with the inadequate integration of ex-satellite Communist countries which have created havoc with totally different remuneration, taxation and social protection “policies”.

I now, finally, feel that this renewed construction of Europe is also doomed and that it is preferable to go back to a customs’ union and abandon the euro, thus leaving each country to devise its own political and social economic systems, own deficit and indebteness ratios to GNP and be able to take its own eventual financial corrective actions.

If individual countries are having such a hard time governing themselves, blocs of countries will not be able to do their job plus a comprehensive “area” job with an umbrella as the euro which was devised far too early and totally unprepared with countries who had no harmony whatsoever in basic social economic policy structures.

The world has changed enormously and in a meteoric way technologically / innovationwise.

Governances need to adapt to these formidable changes which is very difficult for what seems to be a “lost political generation”.

Lets’count on and turn to the current young one who is in phase with these changes, it’s  a worthwhile bet I believe (as a “senior”…)

Please read below, under More,  NYT‘s 01/31/2017 article:”Trump Threatens Europe’s Stability, a Top Leader Warns”

Read the rest of this entry »

 

European “Non Governance” and tremendous and expensive Bureaucracy has done Nothing for Decades and needs to be Removed entirely, if not like Garcia Marquez said, it is: “An Announced Death”.

I only write sporadic posts here since it is useless to try to propose meaningful and significant changes….

I have been writing  on Football (Soccer) since October, 2015, more amusing, but only to some extent; due to all the problems related to now, Football’s “Governance”… – FIFA’ and its longstanding and huge Corruption, my blog being “footballgreatest.com”.

Photo – Prime Minister Matteo Renzi

Follows a translation made by me of Le Figaro’s Premium’s  01/22/2016 article on young and exceptionally “productive” Italian Prime Minister Mario Renzi declarations on Europe: “Fed up with Europe, Matteo Renzi denies arguing for the sake of politicking”.

I subscribe nearly completely to Renzi’s declarations, after having written 2000 posts and two books with self-explanatory titles: “Why Obsolete Macro Governance is Killing the World Economy (September 2014 -Amazon) and “Growth through Structural Reforms” (April 2015 – Amazon) on this subject since I created my blog in April 2011.

No serious and complete Structural Reforms were made (only “reformettes”), total real unemployment ( including under employment) is still huge, instead Indebtedness is astronomic thanks to totally erroneous accomodative (interest and quantitative wise) Central Banking “policies” (sic): ECB (plus FED, Bank of Japan, Bank of China, etc…), growth being far too slow and solely dependent on record low Oil prices (which are killing the oil related economy) and which will not last, the banking system is preparing is umptieth – Oil and Assets – bubble, the euro exchange rate is nearly at bottom and will not last, Migration problems are not tackled (Germany is totally wrong!), if this continues the UK will exit – “Anything Else” ? – Woody Allen‘s film.

Photo – Woody Allen in “Anything Else” – 2003

Quotes – My comments in italics – in the text

Budgetary flexibility, European investments, management of migrants, state aid, banking crises, EU funding for Turkey: the grievances accumulate between the Italian leader and Brussels.

Migration policies, review of the Dublin and Schengen agreements, state aid to banks in difficulty, flexibility of Public Accounts: the violent diatribe which set fire to the powder a week ago in the relations between Matteo Renzi and Jean-Claude Juncker has its origins in a variety of long-simmering grievances.

Paradox of a leader whose impeccable European credo gave his Democratic Party 8,000,000 votes in the elections of May 2014 in the Strasbourg Assembly, which now feels despised to the point of accusing the European Commission of “two weights, two measures”.

A reconciliation should profile his trip to Berlin on January 29, and then the arrival of Juncker in Rome. Inevitably, it will probably not be painless for Europe, nor especially for Italy.

The Italian prime minister denies being “an argumentative polemicist or politicking”: “Europe is in a crisis of identity, everything has failed. It must change. We have our proposals and our allies are not lacking. Brussels is not infallible, “he said. His Secretary of State for Europe Sandro Gozi adds: “Some in Brussels want to send the revision of institutions after 2019, with the future Commission. Such a long period is one that Europe cannot afford anymore. ”

The most heated debate concerns the € 3 billion promised by the EU (i.e. Germany – who continues to lead the Eurozone – My Comment) to Turkey for its help curb migration. Matteo Renzi threat to suspend the Italian contribution to this fund and asks that all aid to Turkey come from the regular budget of the Union.

On the pretext that Ankara would not give sufficient guarantees on its allocation to migrants. Massimo Franco, a columnist for the Corriere della Sera, “this negation by Renzi for a Turkey fund is being used to relegate Matteo Renzi in a corner and shows a European exasperation against him that he should not underestimate (in other words: “Renzi, shut up!”- my comment).

Disagreement still on the destination of the 40,000 migrants landed in Greece and Italy and that should have been distributed in the rest of Europe. The July 20915 agreements remained unfulfilled.

Italy also calls for an urgent revision of the Dublin agreement to regulate migratory flows. Dutch Prime Minister Mark Rutte, who chairs Europe for six months (who is implicitly agreeing with Germany, so far… ,my comment) the fund immediately approved the Turkish funds and request to accelerate the implementation “too slow” in its discretion, also to do so with the “registration centers” (“hotspots”) which collect the fingerprints of migrants to their landing.

Other sticking points: the public wants assurances that Italy finances its troubled banks, despite the threat of infringing Brussels procedures…. Or, the absence of the distribution of the European investment program that Matteo Renzi despairs of seeing happen.

And, above all, the ‘flexibility’ public accounts (0.2% of GDP) that Italy asks Brussels as a “due” to address the additional expenditure incurred by Italy to host 180,000 migrants the last year and probably as much this year (This is where I diverge, if all countries want subsidies for Migration problem solving, Brussels needs to create a Special “Migration”fund with Savings made in Brussels – an impossibility for “immobile” Brussels! – Needless to say – My Comment).

These debates have revealed a certain isolation of Italy on the European stage. None of the major leaders has added its voice to the protests Matteo Renzi. Commissioner Pierre Moscovici (a “clown” – my comment) considers “unfair” to criticize Juncker. And (even – contaminated…, my comment…) Italian Federica Mogherini, High Representative for Foreign and Common Security Policy, “Ms CFSP” has quietly sided with the President of the Commission (Juncker).

The accused (Renzi…), however, as some in Europe to speak up for the purpose of domestic policy, to cut the grass under the feet of the M5S and populist Northern League, seems reductive. In Parliament (Italian), government reforms are all adopted one after the other with a comfortable majority.

 

 

Happy New Year!

This is my first post since a “one post only” I issued on December 16, 2015: “Eurozone Dead due to No Governance, Immobilism and No Reforms”.

I had decided since October 2015 to interrupt writing daily posts since whatever I wrote – constructively – did not make a difference.I  Seeing that I was repeating myself constantly I wrote and published in self-edition (Amazon) two books whose titles are self-explanatory and resume the content of the 2000 posts I had issued since I started this blog in April, 2011: “Why Obsolete Macro Governance is Killing the World Economy” (September, 2014) , “Growth through Structural Reforms” (April 2015),  plus the beginning  (over 100 pages) of a third book:“Central Banks Impede Structural Reforms”, which was refused by well known classic (not self-edition) publishing companies because they felt it was not a classic text subject and labelled it “iconoclastic” (truth based on facts is seemingly considered as such…).

I therefore opted to create a new blog in October, 2015 with a lighter subject :“footballgreatest.com” , where am writing about soccer, the tag line being: “The blog that welcomes all fans who have a passion for writing about football”, but even in this universal Sports’ area I encountered the same (and highly corrupt) Governance problems than those I had been writing about in my macrovolatility.com blog:The huge FIFA Mess!, I might start writing fairy stories (non violent ones…)

Coming back to my today’s post content and in line with content of my non published book (“Central Banks Impede Structural Growth”) I am referring to declarations made by the former Dallas FED governor Robert Fisher who admits We front loaded a tremendous market rally to create a wealth effectThe Federal Reserve is a giant weapon that has no ammunition left.

I am quoting  the text of his declarations and preceding Quotes with my own – short – Comments

My Comments

As I have been writing in my posts since practically the beginning (nearly 5 years ago) I think that Central Banks worldwide (mainly Eurozone’s ECB, Japan’s Central Bank, China’s dominated by Government Central Bank, etc…), following the (bad) example of the US FED have taken over setting social- economic policy at least for the last decade, longer in effect….

This has included ineffective moves to fight unemployment (which is not their domain), publishing only classic unemployment and not referring to / emphasizing the very damaging under employment situation now even bigger than classic unemployment.

All this instead of trying to regulate the banking system and make it more performing for smaller corporations who are the biggest employer in any advanced country, and control non existing inflation, well let us say badly informed inflation where oil pricing – as one big item among others – should be separated from consumption goods which actually do show inflation.

The current end result is known by those who accept looking at facts (real macro data): slow growth (in general), big under employment (in general) with highly and artificially (through Central Banks ‘ “motivational liquidity enforcing moves”) growing markets which might create another bubble, and last but not least backing even higher indebtedness, all this helping (mostly) inefficient Governance around the world to avoid making the badly needed Social-Economic Structural Reforms.

A very good “example” (sic) is given by the Eurozone (non) Governance which is not able to produce more significant, and necessary, growth (only 1.5% in 2015 – thanks to Germany and Spain) having had the benefit of exterior factors such as oil prices (Brent at 36 USD currently), a very low (again since the euro creation) euro exchange rate vs the USD of (currently) 1.08, and no interest rate charged by ECB (negative rates if banks park funds with ECB…).

Nothing has changed in the last three months, matters got worse with migration out of Syria, large terrorism attacks in Europe, also in US coupled with US made violence due to free guns’ sales, China’s to be expected economic’s decline, etc…

Nothing will change until Governance world wide changes its bureaucratic and “politicking”approach to a realistic one, immodestly please refer to my books with concrete and I believe, constructive “proposals”, basically meaning that Social Economic Structural Reforms Need to be Fully implemented.

Quotes a video was made with Fischer‘s declarations:

Fischer: What the Fed did, and I was part of that group, we frontloaded  a tremendous market rally starting in march of 2009. It was sort of a reverse Wimpy factor. Give me two hamburgers today for one tomorrow. We had a tremendous rally and I think there’s a great digestive period that’s likely to take place now. And it may continue. Once again, we frontloaded, at the federal reserve, an enormous rally in order to accomplish a wealth effect. I would not blame this [the 2016 selloff] on China. We are always looking for excuses. China is going through a transition that will take a while to correct itself. But what’s news there? There’s no news there.”

“Box”: I guess the question Richard is: How ugly will it get? If you do see this big unwind of Fed Policy which fueled a 6 and one-half year bull market, what does it look like on the way down?

Fisher: “Well, I was warning my colleagues, if we have a 10-20% correction at some point. … These markets are heavily priced. They are trading at 19 and a half time earnings without having top line growth you would like to have. We are late in the cycle. These are richly priced. They are not cheap. …. I could see a significant downside. I could also see a flat market for quite some time, digesting that enormous return the Fed engineered for six years.”

“Box”: Richard, this digestive period, does it usher in an era where assets can’t perform in the absence of accommodation?

Fisher: Well, first of all, I don’t think there can be much more accommodation. The Federal Reserve is a giant weapon that has no ammunition left. What I do worry about is: It was the Fed, the Fed, the Fed, the Fed for half of my tenure there, which is a decade. Everybody was looking for the Fed to float all boats. In my opinion, they got lazy. Now we go back to fundamental analysis, the kind of work that used to be done, analyzing whether or not a company truly on its own, going to grow its bottom line and be priced accordingly, not expect the Fed tide to lift all boats. When the tide recedes we’re going to see who’s wearing a bathing suit and who’s not. We are beginning to see that. You saw that in junk last year. You also saw it even in the midcaps, and the S&P stripped of its dividends. The only asset that really returned anything last year, again if you take away dividends, believe it or not, was cash at 0.1%. That’s a very unusual circumstance.

“Box”: Richard. This has been an absolutely extraordinary interview. For you to come on here and say “I was one of the central bankers who engineered the frontloading of the banks, we did it to create a wealth effect” and then you go on and tell us, with a big smile on your face that we are overpriced, which is the word that you used, and there would be some digestive problems,  are you going to take the rap if there is a serious correction in this market? Will you equally come on and say “I’m really sorry we overinflated the market”, which is a logical conclusion from what you’ve said so far in this interview.

Fisher: First of all I wouldn’t say that. I voted against QE3. But there’s a reason for doing this. Let’s be fair to the central banks. We had a horrible crisis. We had to pull it out. All of us unanimously supported that initial move under Ben Bernanke. But in my opinion we went  one step too far, which is QE3. By March 2009 we had already bought a trillion dollars of securities and the market turned that week. To me, personally, as a member of the FOMC, that was sufficient. We had launched a rocket.  And yet we piled on with QE3, but the majority understandably worried we might slide backwards. I think you have to be careful here and frank about what drove the markets. Look at all the interviews over the last many years since we started the QE program. It was the Fed, the Fed, the Fed, the European central bank, the Japanese central bank, and what are the Chinese doing?  All quantitative easing driven by central bank activity. That’s not the way markets should be working.  They should be working on their own animal spirits, but they were juiced up by the central banks, including the federal reserve,  even as some of us would not support QE3.

 

 

 

“Here we go again”…, like the song, I am referring to the latest example of political inadequacy (to use polite wording): the French “regional” (new) elections.

But this, for the time being, “one-time”post will not restrict itself to France nor its elections, but use them as a sort of “case study” object.

The first tour of French regional elections on Sunday – 12/06/2015 – showed an even higher than expected triumph (it is the right word) of the  traditionally called extreme right party, the “Front National”.

I watched the news on TV at 8 pm European time, for about a quarter of an hour, and decided that I had seen enough. After trying to provide the closest possible estimate it turned out that “Front National” ( FN) was the first party in France with over 27% of voices (later increased to 30%?) – (abstention was a 48.7% high!).

When the “discussion session” started with representatives of the 6 most voted parties, where the first three ones had come close, at 8 pm, to 80% of total “net of abstention (which is the first “party” in France”) votes, the old themes were used again.

The first ones “allowed” to speak were the biggest losers, the Government party (Socialists as they call them), then the other loser – the now called “Republicans”.

The basic “slogan” was that the FN had to be destroyed since it was a danger for France and then the classic solution came – how to avoid that FN gets to “govern” 3 regions out of 13, two of them being second and third largest ones in France, by uniting votes by fusion or some other political gimmick.

Finally, the FN representative, the “bad guy” was given a few minutes…

I should not even talk about elections in a country where I have been a “guest” for some 40 years, on and off (I was born in England), I do so because I love this country and have seen it lose ground for 30-40 years.

This blog (created in April 2011 – 2000 posts to date), plus having written two books: “Why Obsolete Macro Governance is Killing the World Economy” and subsequently:” Growth through Structural Reforms”, has been mute for several months, since I got fed up writing about the same “old themes” and writing about concrete alternatives: obsolete governance, dominant central banks taking over setting economic / financial policy, absence of real and complete social-economic structural reforms, etc…

All I want to “say” now, is, that to “ignore” 27 -30% of an electorate is offensive to all those people, who, for one reason or another, voted for it, we are supposed to be a democracy!

Is it really a vote coming out of “Anger”(?), and, if so, against Whom: The French Governance, the European (non) Governance, Migration, Others???

If so, it is an anger that comes from afar.This anger started in earnest under François Mitterrand (1984, first electoral success of FN), has grown under Jacques Chirac and Lionel Jospin, first declined and then grew even more under Nicolas Sarkozy, but Francois Hollande will hold before history the sad privilege of it having detonated it even further.

What has been achieved to improve the situation in France (and in Europe, mainly Eurozone)? Very little, if any.

Because to “combat” anger is a “mirage” and not exactly “constructive”, whereas a motivational and realistic  – implemented – social-economic policy can do miracles.

In order to obtain you have to give (“donnant, donnant”). Not done – This is why “political” Europe is a fiasco, there is no “social-economic” Europe, and there is not even a “financial” Europe (true – ECB ? – the “creative” (sic) Eurozone central bank).

No wonder that “the people” do not vote massively, they are lost, there is no credible (Local – National / European) governance any more and this has lasted too long.

Europe must return to its foundations: ensure that the European identity is not “sold out” and aggressed by terrorism which in the meantime has infiltrated European nations also, this meaning that the regal functions of Defense, Justice, Migration, “Intelligence” (without becoming”Big Brother”) should be kept in a Central European Unit.

Since, obviously, there has not been and there will not exist a “give and take” approach, each European country will do better by assuming their own responsibilities in terms of social-economic policy setting (job creation – by truly fighting unemployment – “official” plus underemployment improvement) and required complementary financing policies, not allowing financial policies to come before setting social- economic guidelines.

Since tradition, history and mentalities diverge greatly from each country to another, each nation should also assume responsibility for setting – affordable – Education, Health and Social Protection, Cultural policies.

But, from what I very briefly saw on TV yesterday, the “old themes” prevail once more and we are going nowhere…

Reason to make out of this one-time post an intermediary one, hoping that some time in the future a great political figure appears to start getting to the “origin of evil”, which is not difficult to assess, but very difficult to improve without the political “will” to do so.

 

 

NYT‘s 10/02/2015 Article: “Grim Jobs Report Is Likely to Delay a Move by the Fed on Rates”, which I will quote – as reference for “numbers” – entirely under “More” at the end of this post. 

The job creation situation in the US is totally insufficient, proving that the world situation  – China and Europe mainly – affects the US social-economic situation.

FED’s actions have proven over time that solely monetary solutions have not helped to improve the social-economic situation in the US, and I will add that not reporting Under Employment is fallacious and clearly shows that the FED’s Real  primary “mission” (sic) is to Boost Markets  – which is becoming increasingly difficult, as this blog has been commenting for years.

I will make my own comments, which, unfortunately do not vary month by month.

My Comments

The total nonfarm payroll employment increased by 142 000 in September 2015, which is way below expectations (190 000), with both July and August 2015 revised downwards which gives an average of 167 000 jobs created in the last 3 months compared to 260 000 in total year 2014. 

Thus far in 2015, job growth has averaged 198 000 per month, compared with an average monthly gain of 260 000 in 2014 – which is 24% Lower!

The “officially published” unemployment rate was unchanged at 5.1% – to which another 4.9% (same size!) for Under Employment needs to be added to allow for a comprehensive understanding of the Jobs’situation in the US. 

Breakdown of Real Total Unemployment in the US (BLS data)

As % of Civilian Labor Force

                                                                          Sept  July   Aug. Sept.

                                                                          2014  2015  2015 2015

U-3 – Total “Officially” Unemployed            5.7      5.3      5.1     5.1

U-6 – Total Unemployed Plus:

           All persons marginally attached 

           to Labor Force, Plus employed

           Part-Time – economic reasons            11.3   10.4   10.3   10.0

Under Employed

Difference U-6 vs U-3                                        5.6      5.1     5.2      4.9

BLS reportsQuote:

Job gains occurred in health care and information, while mining employment fell.

Household Survey Data

In September, the unemployment rate held at 5.1 percent, and the number of unemployed persons (7.9 million) changed little.

The civilian labor force participation rate declined to 62.4 percent in September; the rate had been 62.6 percent for the prior 3 months.

Over the year, the unemployment rate and the number of unemployed persons were down by 0.8 percentage point and 1.3 million, respectively.

The number of persons unemployed for less than 5 weeks increased by 268,000 to 2.4 million in September, partially offsetting a decline in August.

The number of long-term unemployed (those – 2 – jobless for 27 weeks or more) was little changed at 2.1 million in September and accounted for 26.6 percent of the unemployed.

The employment-population ratio edged down to 59.2 percent in September, after showing little movement for the first 8 months of the year.

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) declined by 447,000 to 6.0 million in September. These individuals, who would have preferred full-time employment, were working part time because their hours had been cut back or because they were unable to find a full-time job.

Over the past 12 months, the number of persons employed part time for economic reasons declined by 1.0 million.

In September, 1.9 million persons were marginally attached to the labor force, down by 305,000 from a year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.

Among the marginally attached, there were 635,000 discouraged workers in September, little changed from a year earlier. (The data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them.

The remaining 1.3 million persons marginally attached to the labor force in September had not searched for work for reasons such as school attendance or family responsibilities.

The average workweek for all employees on private nonfarm payrolls declined by 0.1 hour to 34.5 hours in September.

In September, average hourly earnings for all employees on private nonfarm payrolls, at $25.09, changed little (-1 cent), following a 9-cent gain in August. Hourly earnings have risen by 2.2 percent over the year. 

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US  Real Total Unemployment – including Under Employment (5.2% of working population) – is Still  a High 10.3% of US nonfarm civilian working population.

But Markets consider this labor situation as being “too good” (they ignore under employment…) and fear that the FED will increase rates and this has brought a huge fall in European markets which near closing time were – Euro Stoxx 50 – over 2% down, the US markets being 1.5% down, all this clearly showing the total lack of realistic social-economic analysis  and the macrovolatility which has been dominant for many years now!

Next are the “facts” which definitely do not show a “rosy” situation.

  • More than one in four of the real total unemployed – over two million people – have been looking for work for six months or more.
  • A Million more people work part-time – and this category is increasing – than before this great and “new” Crisis – but want to be employed full-time
  • Nearly 94 million people over age of 16 are outside the workforce — a record high.
  • One in seven Americans – 14% of total – still lives in poverty.

NYT‘s 09/04/2015 article: “U.S. Economy Added 173,000 Jobs in August; Unemployment Rate Fell”, will be quoted and preceded by my own comments.

My Comments

Total nonfarm payroll employment increased by 173 000 in August 2015 which is lower than 190 000 expected, the officially” published un employment rate edged down to 5.1 percent, whereas, as usual, Under Employment – at 5.2% (similar size than “official” unemployment of 5.1%) was, as usual (“politicking”…), not stressed,  … But total real US unemployment continues being over 10% of working population which is high.

Referring to A-15 August table by BLS, it clearly shows the following ratios to nonfarm civilian population in the US:

                                              Aug. 2014  July 2015   Aug. 2015

Totally Unemployed            6.3%            5.3%            5.1%

Under Employed                  5.7%            5.1%            5.2%

Total Real Unemployed     12.0%          10.4%          10.3%

Under employment accordingly represents  50.5% of Total Unemployed and Part-Time Employed represents a large portion of this “officially ignored” huge category, where all the real unemployments problems reside

Job gains occurred in health care and social assistance and in financial activities. Manufacturing and mining lost jobs. Household Survey Data BLS reported today:

In August, the civilian labor force participation rate was (a near record high) 62.6 percent for the third consecutive month.

The number of persons unemployed for less than 5 weeks decreased by 393,000 to 2.1 million in August.

The number of long-term unemployed (those jobless for 27 weeks or more) held at 2.2 million.

Over the past 12 months, the number of long-term unemployed is down by 779,000.

The employment-population ratio, at 59.4 percent, was about unchanged in August and has shown little movement thus far this year.  

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was little changed in August at 6.5 million. These individuals, who would have preferred full-time employment, were working part time because their hours had been cut back or because they were unable to find a full-time job.

In August, 1.8 million persons were marginally attached to the labor force, down by 329,000 from a year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.

Among the marginally attached, there were 624,000 discouraged workers in August, down by 151,000 from a year earlier. (The data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them.

The remaining 1.2 million persons marginally attached to the labor force in August had not searched for work for reasons such as school attendance or family responsibilities.  

The average workweek for all employees on private nonfarm payrolls edged up by 0.1 hour to 34.6 hours in August.)

In August, average hourly earnings for all employees on private nonfarm payrolls rose by 8 cents to $25.09, following a 6-cent gain in July. Hourly earnings have risen by 2.2 percent over the year.

Revisions showed employment gains in June and July combined of 44,000 more than previously reported. Over the past 3 months, job gains have averaged 221,000 per month.

Quotes – NYT’s 09/04/2015 article: “U.S. Economy Added 173,000 Jobs in August; Unemployment Rate Fell”

The American economy added 173,000 jobs in August, a bit less than expected, making it less likely that the Federal Reserve will feel comfortable enough to make its long-awaited move to raise interest rates when policy makers meet this month.

The report from the Labor Department on Friday was the most eagerly anticipated economic release by the federal government in years, mainly because it represents the last major piece of data the central bank will have on hand before its meeting on Sept. 16 and 17.

Hiring in August was lower than expected. But the unemployment rate fell to 5.1 percent, from 5.3 percent, the lowest since early 2008. Hourly earnings rose more than expected, an improvement from July’s data.

In addition, the Labor Department revised the estimated increase in jobs in July by 30,000.

Federal Reserve officials have repeatedly signaled they plan to soon raise interest rates from near zero, where they have been since the depths of financial crisis in late 2008.

But the exact timing of the decision has become an obsession for traders and investors on Wall Street, and something of a parlor game for economists and other armchair strategists, albeit one with billions of dollars at stake.

While the initial rate increase will be small — probably a quarter of a percentage point — it looms large psychologically for the markets because it will be the first increase in short-term rates by the Fed since June 2006.

Many Wall Streeters credit historically low interest rates and loose monetary policy for helping lift stock prices to near highs, triggering fears that the inevitable tightening could put an end to the long post-recession bull market.

Some experts have been predicting a rate increase when the Fed meets in two weeks.

But another school of thought contends the Fed will wait until its last gathering of the year, in December, especially in light of the recent stock market sell-offs on bourses around the world.

Officials said at the last Fed meeting, in July, that they wanted to see “some further improvement” in labor markets. Stanley Fischer, the Fed’s vice chairman, said Saturday that the Fed was awaiting the results of the August survey to make that judgment.

Inflation remains sluggish, and a number of officials have expressed concern about the volatility of financial markets. They have said the central bank is unlikely to move until it can judge the reasons for the turmoil and assess the damage.

Eric Rosengren, president of the Federal Reserve Bank of Boston, said Tuesday that signs of a weaker global economy raised new doubts about the Fed’s expectation that domestic job growth would continue to be fast enough to drive up inflation.

The wordlwide social-economic situation, now strongly impacted by to be expected China’s negative evolution, is alarming if monetary measures continue being considered as key measures to obtain a recovery worldwide instead of, finally, implementing social-economic structural reforms – wordlwide

Please refer to my two latest posts with self-explanatory titles: 09/01/2015 : “Central Banking “Policies” Fail Consistently – See Why”, 09/02/2015: “China – US – Europe – Japan et al need social-economic restructuring – Globalisation has shown its limitations”, which try to explain why world wide growth stagnation is an “option” if no structural mesures are, finally, taken, abandoning solely monetary measures which have shown their level of incompetence.

I am referring to an article published on 09/01/2015 by Le Figaro Premium on a interview with well known Nobel Prize economist Joseph Stiglitz: “How can European leaders they glorify stagnation?”, which I will quote and precede with my own short comments.

My Comments

I respectfully disagree with economist Stiglitz on the principal measures he prioritizes.

He is still referring to monetary measures as “the solution” and does not recognize that Central Banking’s QE s and other liquidity expansion vehicles have killed the implementation of unpopular structural reforms, something that I have repeated at nauseum in my blog and written and published two books about: “Why Obsolete Macro Governance is Killing the World Economy” (Amazon – September 2014) and “Growth through Structural Reforms” (Amazon – April 2015).

Stiglitz is still referring to Greece, when the solution is easy: Exit it, it is a time and money loser and and will strengthen extremist parties in Europe due to all the mess the European Union and Commission and the Troika (EU/ECB/IMF) have (and continue), created during 8 months of sterile “negotiations”.

The EuropeanUnion and European Commission are obsolete techno bureaucratic “politicking” mammoths of 35 000 employees which decide on nothing and abide to Germany – de facto Eurozone leader

His criticism of Germany as an individual country is greatly unfounded, since this country had implemented most of the badly required  structural reforms in the early 2000s which allowed Germany to have a positive evolution.

What Germany has to be critized for is their rigidity, disciplinarian and constitutional attitudes which they want to impose on the rest of the Eurozone not wanting to understand that what  works well for Germany does not for the Southern countries and inefficient France, this being caused by the total absence of any real “governance” in Europe.

Quotes I translated this article – colored lettering is mine  

INTERVIEW – For the Nobel Prize in economics, austerity packages imposed within the EU block any return to growth.

Joseph Stiglitz, Nobel Prize in Economics in 2001 for his work on asymmetric information, published Wednesday in a French compilation of his writings about the growing inequality of American society in a book entitled “The Great Divide” (editions The links that release).

Professor at Columbia University (New York), 72 years old, the former chief economist of the World Bank and advisor to US President Bill Clinton, said that the American dream is dead and regrets that the revival orchestrated by President Barack Obama has especially favored banks, who were responsible for major wrongdoings in the subprime crisis (poisoned mortgages).

He worries about stagnation in Europe, which according to him was maintained by overly cautious leaders when they should, he said, have stopped the austerity measures that undermine the foundations of the eurozone and prime the pump of growth.

LE FIGARO. – In what state do you find the European economy?

Joseph Stiglitz. – France and Europe in general, have not had good results in recent years. Per capita income fell below its level before the crisis. Even the most successful economies, like Germany, have recorded anemic growth. If it were not for the crisis, Germany would have been rated D by everyone. And the lost half-decade could become an entire decade, given the economic situation.

Le Figaro – Which brings us to the question: why?

Joseph Stiglitz

The cause of the anemic growth throughout Europe is due to the current austerity cures. A sluggish economy results in low tax revenue, which under the Maastricht criteria, results in capital costs and tax increases, which in turn weaken the economy even more. This is mainly due to the stiffness of the corset imposed since the establishment of the eurozone. It maintains a form of permanent instability in denying States the adjustment tools to economic shocks, as once the gold standard imposed on the US Central Bank during the Great Depression. This explains why Europe has suffered from low growth in the last five years, and lets me fear that stagnation or near stagnation, will continue.

Le Figaro – What reforms should we lead?

Joseph Stiglitz
One in particular seems to me more urgent. European leaders overwhelmingly recognize the problem of the lack of Federation of banks in the European Union. Consequently, when the crisis occurred in 2008, money has fled the Spanish banks and those of other countries most at risk, to take refuge in Germany. We need to stop this hemorrhage by setting up a common supervision of the banking system within the EU, and a mechanism for resolving problems of capital flight. We must expand the mandate of the European Central Bank (ECB), so that it is more focused, not only on inflation but also on employment and growth. It is urgent to move the cursor.

Some countries like Greece can obviously no longer borrow on the markets but that is precisely where Europe can act. It was a very good move  to create solidarity funds for new entrants (note: during the recent enlargement phases). It needs to create stabilization funds for convalescent countries. Europeans should use more aggressively the European Investment Bank (EIB) to invest in countries in crisis. They must set up a loan fund recognizing that the banking system was devastated, facilitaing credit to SMEs in the countries in crisis.

“European leaders are careful not to upset the straitjacket of the eurozone”

Le Figaro – Do you see the light at the end of the tunnel?

Joseph Stiglitz
Honestly, I cannot distinguish it. The damages induced by the crisis are durable because the money that fled Spain and other countries most deeply affected and permanently damaged their banking systems. Even more than austerity in public spending, the contraction of lending to SMEs has had devastating effects on economic performance. What bothers me even more, is that European leaders seem to be satisfied with this virtual stagnation and are careful not to upset the straitjacket of the eurozone. A prime example: when the German Minister of Finance Wolfgang Schäuble came to Columbia University (last April 15), he acknowledged that he would have to get used to this new form of anemic growth as a new standard. As if one could glorify stagnation!

Le Figaro – You called to rush to the aid of Athens, by erasing the 312 billion euros of Greek debt. Has the Greek crisis been mismanaged?

Joseph Stiglitz
I’m not privy to but it seems that the German authorities have played a role in maintaining the status quo. But things are very clear: forecasts made by the experts for the “Greek model” have been calamitous. They said that austerity will cause some decline but restore confidence so quickly that there would be a return to growth. Normally, their  predictions invariably failing, year after year, you could have expected thta they would be conduct a review of this model. But no! Nothing of the sort happened and the Troika is held in hits certainty that the benefits would eventually end up manifesting it in English called “double down.”

Yet I observed some consensus on the fact that the Greek debt must be cleared. Just because the Greeks could never pay. The austerity program imposed on Greece is such that the GDP will continue to decline, the economic depression increase, which will require restructuring of their debt even more. The German position is frankly inconsistent. They want the IMF to be an integral part of the solution but the IMF will not wet himself without a prior restructuring of debt of any unsustainably. We will have what Berlin allows. Schäuble is not an economist. I hope someone in his entourage will eventually explain all this, but it would seem, alas, that it is not for tomorrow.

Revised US Growth of 3.7% for the 2015 2nd Qtr puts the US largely in the lead of all “developed” countries, and starts closing the gap with China, whose GDP development is practically impossible to forecast with all the published and not published uncertainties and risks.

NYT‘s 08/27/2015 article: As Economies Gasp Globally, U.S. Growth Quickens”, which I will quote and precede with my own short comments.

My Comments

With revised “numbers” (*) showing, now, US growth being twice as fast as Europe and three to four times as fast as Japan, for a “developed” economy, this is about as fast as it can grow in view of worldwide deteriorating growth, mainly in China.

(*) The 2015  2nd Qtr revision is huge, it goes from 2.3% to 3.7%, a 60% increase (!), and if “correct”(?), shows incapacity in handling data.

The statement that US Unemployment is decreasing and showing it “was on the mend”, is a biased “analysis”( big word) because, as usual (politicking), it does not take into accont “under employment” of 5.1% which is close to being the same size than “officially published” unemployment of 5.3% making total real US Unemploment 10.4% of nlon farm civilianworking population in July 205, which remains high (Eurozone’s being over double US “real” unemployment!).

Quotes

Not long ago, the United States was considered the tortoise of the world economy, at least in comparison to emerging powers like China and Brazil.

Lately, however, slow but steady seems to be winning the race. The American economy continues to chug along, while the onetime hares in Asia, South America and elsewhere are flagging.

The latest evidence of this shift came on Thursday, as the Commerce Department revised sharply upward its estimate of economic growth in the second quarter to a healthy annual pace of 3.7 percent, from an initial estimate of 2.3 percent. At the same time, the Labor Department, in reporting another drop in weekly unemployment claims, provided further evidence that the job market was on the mend.

Stocks on Wall Street jumped by nearly 2.5 percent on Thursday, following a broader 4 percent rebound on Wednesday. Oil prices also rallied by almost 10 percent to settle above $40 a barrel after sinking to postrecession lows earlier in the week.
William C. Dudley, the influential president of the Federal Reserve Bank of New York, said the case for a September hike had become “less compelling.”Market Turmoil Prompts New Speculation on the Fed’s TimetableAUG. 26, 2015
Source: Bureau of Labor StatisticsJob Growth Steady in July, Possibly Easing Path for Fed ActionAUG. 7, 2015.
“The United States relies more than any other developed economy on demand within our own borders,” said Carl R. Tannenbaum, chief economist at Northern Trust in Chicago. “While the focus in the past three weeks has been on international instability, this should position us to withstand the consequences of recent market volatility.”

Annual rate of change in the gross domestic product, based on quarterly figures adjusted for inflation and seasonal fluctuations.

With markets remaining on edge, investors are already turning their attention to coming data about the economy’s course, which will help determine whether the Federal Reserve will make its long-awaited move to raise interest rates in September or wait until later meetings.

Moreover, the impact of the recent plunge in stock prices on the broader economy will not be known for some time. Growth data for the current quarter will be released in late October. And the cutoff date for data for the Labor Department’s report on hiring and unemployment in August, due next Friday, was earlier this month, before the stock market correction took hold.

Still, far from the anxious trading desks in New York, many American executives in the business trenches report that growth has not wavered in recent months, and has even picked up in some cases.

“We have returned to prerecession levels, and we expect volume for the entire year to be above where it was back then,” said Jon Slangerup, chief executive of the Port of Long Beach in California, the country’s second-largest port. “There is tremendous consumer demand here, and we’re seeing a real surge in volumes.”

Much of what stevedores in Long Beach and other ports are hauling are consumer goods like electronics and apparel being imported into the United States, but the economic situation in the countries that produce those products is not nearly as cheerful.

Chinese output certainly is not shrinking, but the pace of expansion in what is now the world’s second-largest economy is clearly cooling down. And that is sending shivers through emerging markets in South America and Asia as well as in more developed economies like Australia, as China’s seemingly limitless appetite for iron ore, bauxite for aluminum and other commodities slows down.

Japan has faltered once again, and European economies have been in and out of recession in recent years.

While the German economy remains healthy and unemployment is relatively low there, Germany’s dependence on exports makes it more vulnerable in the face of weakening demand from China and its neighbors on the Continent.

As a result, companies from other countries are showing greater interest in acquisitions in the United States to increase their exposure to the faster-growing North American market.

Last month, for example, the Würth Group of Germany acquired Northern Safety & Industrial, based in Utica, N.Y., a maker of protective equipment like safety glasses, gloves and hard hats for industrial customers.

“We are their entree into the safety market in the U.S.,” said Neil Sexton, president of Northern Safety & Industrial. “I wouldn’t call the overall business climate here high-flying, but it is very solid.” Most of the company’s $200 million in sales last year came from North America, and nearly all of its 500 employees are based in the United States.

“Würth has a big target on the U.S. for growth,” Mr. Sexton added. “There are headwinds here from the energy sector, but there has been great strength in the chemical industry, and construction has also been a real bright spot.”

Much of the jump in overall economic activity during the second quarter, from an initial estimate of a 2.3 percent growth rate, came from strong spending by businesses looking to expand factories, buildings and other physical structures.

Other tailwinds included a better trade picture, as net exports improved, and increased government spending, especially at the state and local levels.

Companies also added to their stockpiles of goods, which could weigh on growth in the months ahead. Real private inventories increased at a $121.1 billion pace in the second quarter, adding a little more than 0.2 percentage points to overall economic activity.

In a separate report on Thursday, the Labor Department said initial claims for unemployment benefits fell by 6,000 last week, to 271,000 — a level that suggests the labor market remains on a solid footing.

When the Labor Department reports the latest figures for hiring and the unemployment next Friday, Wall Street is looking for a gain of about 200,000 jobs and expects the unemployment rate to remain flat at 5.3 percent. Normally, that might be enough to nudge the Fed into action, but the plunge in overseas markets and the correction on Wall Street has blurred that timeline. Many experts now expect policy makers to wait until December.

The uncertainty over the central bank’s course has prompted investors and economists to put each new data point under a microscope.

Yet for all the zigs and zags of economic data over the last couple of years, the underlying growth rate has not deviated much from about 2.5 to 3 percent annually, according to Nariman Behravesh, chief economist at IHS, a private research and forecasting firm.

“Historically, this is a modest growth rate,” he said, explaining that the American economy now faces what he termed “speed limits,” including the retirement of the baby boomers, slower population growth and weak productivity gains recently.

“Would we like to see faster growth? Of course,” said Mr. Behravesh. “But we’re growing twice as fast as Europe and three to four times as fast as Japan. For a mature economy, this is about as fast as we can grow, and it’s something we can feel good about.”

While Governments allow themselves to be convinced (?) that Monetary Measures are the “Sole Solution” (sic) with Huge QEs by Central Banks with zero to negative interest rates, no Progress will be made Social-Economically.

Real Total Unemployment (including Under Employment) will continue being (very) high and even increasing, and Indebtedness will continue soaring and exceeding GDP value, while Stock Exchanges have been growing strepitously because Central Banking has been Boosting them.

Now, with the huge fall of Commodities and China’s starting downfall, Markets are having a hard time continue being Bullish, the downward movements started.

Since August 16 I have written following four posts – where the US is the major country (world leader) doing least worse:

1. “Growth in US Est. 2.5-3.0 % 2015 Annual with Cont. High Real Unemployment at 10.4% and China situation” (08/16/2015).

2. “Eurozone Growth rate – 0.3% 2nd Qtr. 2015 – Totally Insufficient Social-Economically” (08/16/2015).

3. “China’s Economic Model is now showing its Limitations / Need for Structural Reforms” (08/17/2015).

4. “Japan – as Eurozone – contracted its GDP in 2nd Qtr 2015 – See Why” (08/17/2015).

Practically no comments received (a lot of spam)!

Why?

Because most of you are fed up with all the “bad news” and when you look at news in TV you see the terrible and getting worse migration problem, decapitations, natural catastrophes – and some tiny comment on some lost village trying to “do” something to keep it on the map…

But, unfortunately there are no positive news, beacuse most top politicians (Presidents, Prime Ministers et al), continue “politicking” and not telling even part of the “social-economic” truth to the population, and get clobbered by opposition, which offers no credible solutions either.

I have made my “contribution”, but it has only been very repetitive, with no real positive measures taken by macro “authorities”.

Over 4 years, starting with this blog – macrovolatility.com – in April 2011, writing (self-edition with Amazon) two books, with self-explanatory titles: “Why Obsolete Macro Governance is Killing the World Economy” (published – September 2014) and “Growth through Structural Reforms” (published – April 2015), both books including concrete proposals for improvement,  not theoretical analysis, since my experience is in international business management (hands on) and not as an economist…(where I have kept up to date with all kinds of theories).

But my sales have been very poor, for two reasons basically:

– I am not a (well) known writer in (classic) economics, which is normal, I worked with large international corporations – “in situ” –  in 3 Continents and 7 countries, and as an entrepreneur in the second part of my career, and did not write books (no time…)

– I write “readable”/ concrete books, with no elaborate jargon and no theories, so they are no “class room” material, and are viewed somehow as “iconoclastic” (which they are not, since there practically are no “icons” left to be put down…).

Fortunately I write for my pleasure and thank God do not have to make an income with it!

But, the pleasures has been weaning thinner and thinner, nothing positive and productive is happening macro wise, only monetary measures are taken and have proven not to be adequate to deal with this huge crisis, which is a “new one” and therefore does not allow to go back to obsolete solutions like Keynesiasism.

Central Banking has taken over as the dominant extra official governement force, I was starting my third book : “Structural Reforms impeded by Central Banking”, decided not to publish in self-edition, but present it to “normal” well known publishers,which I did and got the same encapsulated answers. I cite one:”

“Thanks for your email and apologies for my delayed follow up to your previous email with the proposal and sample material. There is no doubt that your book is on an important topic but having read through the first chapter I am afraid that I have to conclude that the execution is not in a “scholarly” manner that would be accepted by peer reviewers – the book would need to engage with other academic work (books and journal articles) and be fully referenced. I outlined in my first email that XXXXXXX  is an academic press so this scholarly style is a prerequisite for publication. It may be that there is a broader, general reader audience for your book but that group does not form part of XXXXXX’s core audience.”

This is the way that the cookie crumbles…