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Sunday, May 5, 2013

Economic Stories of Relevance in Today's World -- May 5, 2013

Where Is The Recovery? A Higher Percentage Of Americans Had Jobs Three Years Ago - The Economic Collapse Blog - Michael - May 3, 2013 - If you think that the latest employment numbers are good news, you might want to look again.  In April 2013, 58.6 percent of all working age Americans had a job.  But three years ago, in April 2010, 58.7 percent of all working age Americans had a job.  Well, you may argue, that is not much of a difference.  And that is precisely my point.  The percentage of Americans that have a job fell like a rock during the last recession.  It dropped from about 63 percent all the way down to below 59 percent, and it has stayed below 59 percent for 44 months in a row.  So where is the recovery?  This is the first time in the post-World War II era that the employment-population ratio has not bounced back after the end of a recession.  So anyone that tells you that we are experiencing an employment recovery is lying to you.  Yes, the U.S. economy added 165,000 jobs last month.  But it takes nearly that many jobs just to keep up with population growth.  The truth is that we are just treading water.                      So why has the unemployment rate been going down?  Well, it is because the government has been pretending that millions upon millions of unemployed Americans "don't want jobs" anymore.  In fact, an astounding 9.5 million Americans have "left the workforce" since Barack Obama took office.                       Some in the mainstream media have started calling them "missing workers".  But whatever label you want to use, the reality of the matter is that they are really hurting.  They are part of the reason why food stamp enrollment has soared from 32 million to more than 47 million while Barack Obama has been in the White House.                       If you still believe that the employment market is getting better, just look at the following numbers.  The percentage of working age Americans with a job has been sitting at about the same level for four years in a row...
April 2008: 62.7 percent
April 2009: 59.8 percent
April 2010: 58.7 percent
April 2011: 58.4 percent
April 2012: 58.5 percent
April 2013: 58.6 percent
So why is everyone getting so excited over the latest numbers?  When you step back and look at what has happened to the employment-population ratio over the past decade it really is quite horrifying...
Employment-Population Ratio 2013



April's solid job growth favors women over men - AP through CBS MartketWatch - May 3, 2013 - It appears that April was a much better month for women than men in the job market, according to the government's latest employment report released Friday.                  The unemployment rate for adult women -- those 20 and older -- fell to 6.7 percent. That's down from 7 percent in March and the lowest since January 2009.                      Among white women, the unemployment rate dropped to 5.7 percent, compared with 6.1 percent the previous month.                     The drop in the jobless rate reflected a gain in employment, rather than people leaving the workforce. The workforce actually expanded, while the labor force participation rate — the share of working-age Americans who either have a job or are looking for one — held steady at a 34-year low of 63.3 percent.                       U.S. stock index futures jumped on the data, while yields on U.S. government debt rose. The dollar strengthened against the yen and the euro.                    "This shows the job market and the economy in general appear to be more resilient than investors had feared," said Joe Manimbo, a market analyst at Western Union Business Solutions in Washington.                  Still, some details of the report remained consistent with a slowdown in economic activity. Construction employment fell for the first time since May, while manufacturing payrolls were flat.



They Are Murdering Small Business: The Percentage Of Self-Employed Americans Is At A Record Low - The Economic Collapse Blog - Michael - May 2, 2013 - The percentage of Americans that are working for themselves has never been lower in the history of the United States.  Once upon a time, the United States was a paradise for entrepreneurs and small businesses, but now the control freak bureaucrats that dominate our society have created a system that absolutely eviscerates them.  This is very unfortunate, because by murdering small business, the bureaucrats are destroying the primary engine of job growth in this country.  One of the big reasons why there are not enough jobs in America today is because small business creation is way down.  As I mentioned yesterday, entrepreneurs and small businesses are being absolutely devastated by rules, regulations, red tape and by oppressive levels of taxation.  If anyone doubts that small business in the United States is dying, just look at the charts below.  Sadly, this is what the bureaucrats that run things want.  They don't want us to be independent of the system.  Instead, they are much more comfortable when as many of us as possible are heavily dependent on the system in one way or another.  If all of us have to go running to the government or to one of the big corporations for a job, then we are much easier to control.  But as the control freaks continue to construct their bureaucratic utopia, they are also killing off what once made the U.S. economy so great.                           The other day I came across the following two charts in an article by Charles Hugh Smith, and I was absolutely stunned by what I saw.  This first chart shows that the number of unincorporated self-employed Americans has dropped back to levels that we have not seen since the mid-1980s even though our population has increased by tens of millions of people since that time...





Factory Orders in U.S. Decreased More Than Forecast in March - Bloomberg - Lorraine Woellert - May 3, 2013 -  Orders placed with U.S. factories fell more than forecast in March as a cooling economy slowed demand for metals, mining equipment and military goods.                        The 4 percent drop in bookings was the biggest since August and followed a revised 1.9 percent gain the prior month that was smaller than previously estimated, the Commerce Department reported today in Washington. The median forecast of 58 economists in a Bloomberg survey predicted orders would fall by 2.9 percent.                           Companies are feeling the effects of slowing growth in Europe, Asia and the U.S., where higher taxes and across-the- board federal budget cuts, known as sequestration, have restrained consumer spending. Orders could pick up as manufacturers prepare for improved demand expected in the second half of the year as employment strengthens.


IRS to Spy on Our Shopping Records, Travel, Social Interactions, Health Records and Files from Other Government Investigators
- Washington's Blog - May 2, 2013 - We noted in March that all U.S. intelligence agencies – including the CIA and NSA – are going to spy on Americans’ finances.                       The IRS is joining the fun.                     U.S. News and World Report notes today:                       Starting this year, the IRS tools will be able to track all credit card transactions, for starters. The agency has also instructed agents on using online sources such as social media and e-commerce sites including eBay, as well as the rich data generated by mobile devices. In one controversial disclosure in April, the ACLU showed documents in which the IRS general counsel said the agency could look at emails without warrants, but the IRS has said it will not use this power.                          While the agency has declined to give details about what third-party personal data it will use in robo-audits and data mining, it has told government and industry groups that its computers are capable of scanning multiple networks at the same time to collect “matching” comprehensive profiles for every taxpayer in America. Such profiles will likely include shopping records, travel, social interactions and information not available to the public, such as health records and files from other government investigators, according to IRS documents...


Money Manager Pento: Fed Needs to 'Stop QE Right Now' - Newsmax MoneyNews - Dan Weil - May 2, 2013 - The Treasury market's 32-year rally has turned into a bubble that's going to pop with a bang, says Michael Pento, president of Pento Portfolio Strategies.                       "It's the most overpriced, oversupplied and over-owned market in the history of American economics," he tells Yahoo.                        The proof is in the statistics, Pento says. Treasury yields stand 550 basis points below their 40-year average, almost $120 billion flowed into bond funds from 2008 to 2012, and Treasury issuance has soared 140 percent since the end of 2007.                         The Federal Reserve's massive easing program is a big part of the problem, Pento says. "The Fed should stop QE [quantitative easing] now," he states. "It's creating a huge interest rate vacuum," as it's essentially the sole buyer of Treasurys.                        When the Fed finally decides to end QE and then unwinds what will be a $4 trillion balance sheet, as a bond market investor "do you think I'm going to be a buyer in front of that or a seller?" Pento asks rhetorically.


Study: Money Does Buy Happiness - Newsmax Moneynews - Dan Weil - May 2, 2013 - A new study from University of Michigan economists Justin Wolfers and Betsey Stevenson shows that the wealthier people are, the happier they are, whether they are rich or poor.                  The duo looked at statistics from more than 150 countries. Sources ranged from the World Bank to the Gallup World Poll. The study will be published in the May 2013 American Economic Review, Papers and Proceedings.                  Unlike some previous studies, Wolfers and Stevenson found there isn't a threshold where more wealth no longer creates more happiness.                        "Even America's millionaires don't think of themselves as rich," writes Fortune's Nin Hai-Tseng. "So are they any less happy than poorer folks scraping by earning minimum wage? Not exactly."                           The ultra-wealthy just need more money to make them happy, according to Wolfers and Stevenson.                         The study found that no millionaires are unhappy.                  Hai-Tseng distinguishes between day-to-day happiness and overall, "life assessment" happiness.                                The latter is what Wolfers and Stevenson focused on, finding that fulfillment keeps climbing and climbing as long as income is rising.



U.S. Homeownership Rate Falls to Lowest Since 1995 - Bloomberg - Prashant Gopal & John Gittelsohn - Apr 30, 2013 - The U.S. homeownership rate fell to the lowest in almost 18 years, reflecting rising demand for rentals and investor purchases in the housing market.                    The share of Americans who own their homes was 65 percent in the first quarter, down from 65.4 percent a year earlier and the lowest level since the third quarter of 1995, the Census Bureau reported today. The vacancy rate for rented homes dropped to 8.6 percent from 8.8 percent a year earlier, while vacancies for owner-occupied houses fell to 2.1 percent from 2.2 percent.                      Investors are buying single-family homes and renting them out to capitalize on demand among families unable to qualify for a mortgage. Their purchases, many made with cash, are helping to support the housing recovery and pushing up prices. Home values in 20 cities increased 9.3 percent in February from a year earlier, the most since May 2006, according to the S&P/Case- Shiller (SPCS20Y%) index released today.


Rat Meat Sold as Lamb Highlights Fear in China - New York Times - CHRIS BUCKLEY - May 3, 2013 - Even for China’s scandal-numbed diners, inured to endless outrages about food hazards, news that the lamb simmering in the pot may actually be rat tested new depths of disgust.                   In an announcement intended to show that the government is serious about improving food safety, the Ministry of Public Security said on Thursday that the police had caught a gang of traders in eastern China who bought rat, fox and mink flesh and sold it as mutton. But that and other cases of meat smuggling, faking and adulteration featured in Chinese newspapers and Web sites on Friday were unlikely to instill confidence in consumers already queasy over many reports about meat, fruit and vegetables laden with disease, toxins, banned dyes and preservatives.                          Sixty-three people were arrested and accused of “buying fox, mink and rat and other meat products that had not undergone inspection,” which they doused in gelatin, red pigment and nitrates, and sold as mutton in Shanghai and adjacent Jiangsu Province for about $1.6 million, according to the ministry’s statement. The report, posted on the Internet, did not explain how exactly the traders acquired the rats and other creatures.                             “How many rats does it take to put together a sheep?” said one typically baffled and angry user of Sina Weibo, China’s Twitter-like microblog service that often acts as a forum for public venting. “Is it cheaper to raise rats than sheep?



Where’s My Ghost Money?- New York Times - QAIS AKBAR OMAR - May 4, 2013 - I WAS very excited to read, last week, about the “ghost money” that the C.I.A. is paying to the president of my country, Hamid Karzai. I’d like to know: would it be possible for the C.I.A. to give me some, too?                      We do not know what President Karzai has done with this cash that arrives each month in suitcases and plastic shopping bags. Not even the C.I.A. — which every Afghan believes knows everything — can say.                  But I will tell you exactly what I will do with mine: I will do the things we thought the Americans were going to help us do when they came to Afghanistan nearly 12 years ago.                              First, I will use some of it to dig deep wells in all our villages and create modern water systems in all our cities. Fewer than a third of Afghans living in rural areas have access to clean drinking water. In one village I know in Balkh Province in the north, the people must walk more than a mile to reach the nearest well, and its water is salty. They rely on infrequent rain for drinking water and use it sparingly. They asked me to help them get a new well that is nearer and deeper. Now, with my ghost money, I can.                       Even in Kabul — where I lived until nine months ago when I came to study in the United States — most people still get their water from wells. Afghan children must carry heavy buckets of water from the wells to their homes several times each day. I did this for years. On the bright side, in Afghanistan, we do not have the problem of childhood obesity.                           I will use another part of my ghost money to build sewers. Afghans, like Americans, use toilets every day. But what we leave in our toilets either stays in an open pit or is flushed into open drains in the streets. The mosquitoes are happy with this situation, but the children they bite are not.



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