So much for "sideways," jobless claims jump to 500k

[Cog]

Food stamp data doesn't show a thriving economy. When the number starts dropping a half million people a month instead of increasing by that amount, I'll start believing in a recovery.

http://www.fns.usda.gov/pd/34SNAPmonthly.htm

Aug 2011 45,837,824

[OilFinder2]

We still have ZIRP ... we still have annual deficits of $1.6 trillion (above and beyond Obozo's initial stimulus), which is 11% of GDP ... and this repeats year after year under Obimbo ... plus countless other Obozo programs, payroll tax breaks, food-stamps, yada yada ...

What if we had ZIRP and the unemployment rate got down to, say, 7%? Only an idiot would believe that still wasn't a recovery. Reagan got re-elected in a landslide with an unemployment rate having fallen that "low."

Reagan, Clinton and just about every president since Roosevelt has had tax breaks of one kind or another. According to this criteria of yours, there's basically *never* been a genuine recovery.

Food stamps have existed since the 60's, I believe. Once again, even Clinton's and Reagan's recoveries weren't legitimate according to this criteria.

BTW, according to this, 61% of Obama's stimulus money had been spent as of last December. By now they don't even bother tracking it any more - no doubt because there's so little of it left.

As I said, you're making up excuses for denying the recovery, simply because you don't like the guy in the White House. You're obsessed by politics and ideology.

[peripato]

Last quarter we had 2.5% GDP growth with ...

-- No QE. And Operation Twist had yet to be implemented.
-- Obama's stimulus money - which was passed all the way back in February of 2009 - was all but spent up. AFAIK it's *entirely* spent up, or darn close to it.

The largest contributors to GDP growth were purchases of services and business investment in equipment and software.

How the hell is that propped up by Obama? You're just so politically obsessed you're loathe to admit the economy might be recovering with him in office. So you make up excuses as to why the economy isn't recovering, and invoke Obama however you can.

We still have ZIRP ... we still have annual deficits of $1.6 trillion (above and beyond Obozo's initial stimulus), which is 11% of GDP ... and this repeats year after year under Obimbo ... plus countless other Obozo programs, payroll tax breaks, food-stamps, yada yada ...

Don't forget the POMO (Permanent Open Market Operations) which is working every other day in the market to support equity prices, which are really the only things the authorities can influence, apart from economic statistics. Imagine all you economic simpletons out there, what would be the result if the POMO effect was to disappear from the scene? We had a taste of this just a few short weeks ago when the market reached within a whisker of a technical bear market (down 20% peak to trough) before the Fed, having ended its last round of printing in July watched, scared shitless, as the markets lurched towards the precipice. Unable to stand it any longer they intervened to kill the dollar on the second trading day in October, stoking the markets with more funny money and orchestrating a 400 point rally in the DOW during the last 45 minutes of trading. What was the long-lasting result? Insta-rally party for the past month! Without this permanent influence by the Fed. the market would know no floor. Why? Because it's built on nothing, nothing!

[OilFinder2]

Oh - here goes the POMO conspiracy theory again.

Let's analyse this ...

First of all ... When stocks do well, bonds don't do well. And vice-versa. Hope there's no disagreement on that.

Second ... POMO operations mostly involve the Fed purchasing Treasuries (sometimes Agencies). When you've got an extra (and large) buyer of something, that's going to support the price. Hope there's no disagreement on that, either.

It follows from the Second -- if the Fed purchases some Treasuries on some given date ... Which leads to the First -- that is, the Fed is supporting the bond market by purchasing Treasuries ... then the stock market should go down, not up. Because, after all, when bonds do well (as they should on POMO days), stocks don't.

The conspiracy theory usually then goes that the Fed is buying Treasuries from banks or other institutions ("open market" operations) so that frees up cash these institutions can invest in the stock market. But if that were the case, we'd see both the bond *and* stock markets go up on POMO days. But, as anyone who follows the market knows, that almost never happens.

As for the dollar, anyone who follows the markets also knows that, when the bond market tanks, the dollar goes down, and vice-versa. So, the Fed's POMO operations, by buying Treasuries and supporting the bond market, should send the dollar up, not down.

Conspiracy theory debunked.

[peripato]

Oh - here goes the POMO conspiracy theory again.

Let's analyse this ...

First of all ... When stocks do well, bonds don't do well. And vice-versa. Hope there's no disagreement on that.

Second ... POMO operations mostly involve the Fed purchasing Treasuries (sometimes Agencies). When you've got an extra (and large) buyer of something, that's going to support the price. Hope there's no disagreement on that, either.

It follows from the Second -- if the Fed purchases some Treasuries on some given date ... Which leads to the First -- that is, the Fed is supporting the bond market by purchasing Treasuries ... then the stock market should go down, not up. Because, after all, when bonds do well (as they should on POMO days), stocks don't.

The conspiracy theory usually then goes that the Fed is buying Treasuries from banks or other institutions ("open market" operations) so that frees up cash these institutions can invest in the stock market. But if that were the case, we'd see both the bond *and* stock markets go up on POMO days. But, as anyone who follows the market knows, that almost never happens.

As for the dollar, anyone who follows the markets also knows that, when the bond market tanks, the dollar goes down, and vice-versa. So, the Fed's POMO operations, by buying Treasuries and supporting the bond market, should send the dollar up, not down.

Conspiracy theory debunked.

So where did you get that definition of POMO from Oily? The Ministry of Information?

It's an open secret that POMOs are the Fed's way of creating additional bank reserves to finance asset purchases and loans for its Primary Dealers, namely Goldman Sachs, Morgan Stanley and JP Morgan.

Now, this from an elucidating article printed in Business Insider, hardly what you would call a radical source of economic information, last October, where the author of a study on POMO and its effects, was disturbed to find the following;

I’ll be honest with the reader. When I ran this data I was really hoping that I would find evidence showing that the POMO’s have no impact on market direction. The conclusion is unsettling for obvious reasons. And while this might be nothing more than a case of datamining the evidence is convincing that the Federal Reserve is helping to boost equity prices without creating an equally positive change in SUSTAINABLE economic growth. I’m not a conspiracy theorist, but when I’ve got the Manager of the System Open Market Account for the Federal Open Market Committee telling me that he wants to keep “prices higher than they otherwise would be” combined with this evidence it makes it very hard to believe that the Fed isn’t attempting to outdo Bernie Madoff.

[OilFinder2]

Bold prediction time!

Initial unemployment claims will bottom out around 330-350K in February, maybe March, then will go up to around 400K by July or August where they will plateau for most of the rest of the year. They might edge down again late in November or December, but probably not by as much as they're going down now.

Let's see if I'm right!

[Daniel_Plainview]

US Weekly Jobless Claims Skyrocket by 24,000 to 399,000

UNEMPLOYMENT INSURANCE WEEKLY CLAIMS REPORT

SEASONALLY ADJUSTED DATA

In the week ending January 7, the advance figure for seasonally adjusted initial claims was 399,000, an increase of 24,000 from the previous week's revised figure of 375,000. The 4-week moving average was 381,750, an increase of 7,750 from the previous week's revised average of 374,000.

The advance seasonally adjusted insured unemployment rate was 2.9 percent for the week ending December 31, unchanged from the prior week's revised rate.

The advance number for seasonally adjusted insured unemployment during the week ending December 31, was 3,628,000, an increase of 19,000 from the preceding week's revised level of 3,609,000. The 4-week moving average was 3,605,000, unchanged from the preceding week's revised average.



UNADJUSTED DATA

The advance number of actual initial claims under state programs, unadjusted, totaled 642,381 in the week ending January 7, an increase of 102,314 from the previous week. There were 773,499 initial claims in the comparable week in 2011.

The advance unadjusted insured unemployment rate was 3.3 percent during the week ending December 31, an increase of 0.3 percentage point from the prior week's unrevised rate. The advance unadjusted number for persons claiming UI benefits in state programs totaled 4,139,988, an increase of 360,884 from the preceding week. A year earlier, the rate was 3.8 percent and the volume was 4,790,155.

The total number of people claiming benefits in all programs for the week ending December 24 was 7,333,213, an increase of 111,010 from the previous week.

[OilFinder2]

The only legitimate way to compare non-seasonally adjusted numbers is to compare them to the corresponding month or week from the previous year(s). And when we do that for this week's initial claims number, here's what we get:

Jobless Claims Non Seasonally Adjusted

Today's release of weekly initial jobless claims came in at a seasonally adjusted 399K, which was more than the expected 375K and the highest level seen since the end of November. In recent weeks, there has been a lot of attention (or at least more than usual) placed on the non-seasonally adjusted (NSA) readings. This morning was no different as some are pointing to the 102K increase and calling it an alarming signal.

So how worried should we be about it? As of now, not much. The chart below shows weekly initial jobless claims on a NSA basis. Even after this week's reportedly big jump, for the first week of January (red dots), initial claims have not been this low since January 2008. Additionally, compared to recent years, this week's increase of 102K is actually a lot less than the prior three years where NSA claims rose by between 175K and 225K.

[Pops]

Looks like you 2 are starting to post some of the same stuff in different threads, lets not.

[OilFinder2]

^
Not me. I didn't post that anywhere else.

[Pops]

you sound like a kid.

You posted the 500mbd shale oil story in 3 different threads. Cross-posting is a specific no-no.

You guys are tiring.

[OilFinder2]

Sorry. I thought you were referring to this specific thread.

[Daniel_Plainview]

Cross-posting is a specific no-no.

Oops ... didn't know.