Updates from July, 2012 Toggle Comment Threads | Keyboard Shortcuts

  • Phi Asset Managers 9:32 am on July 20, 2012 Permalink | Reply  

    Study indicates: Hire Young People. Period. 

  • Phi Asset Managers 9:32 am on July 20, 2012 Permalink | Reply  

    Private sector job recovery stronger than that of early 2000 and at par with that of early 90s 

    Job Market Monitor

    The U.S. economy is working its way back from the Great Recession. One indication has been that unemployment insurance claims have steadily fallen since September and they are now at the same level as in March of 2008. Additionally, layoffs are at the same level as in 2006. We also recently learned that the ratio of job seekers to job openings fell to 3.5 in May, continuing its downward trend and reaching nearly the same level as in November 2008. This recovery, like all recoveries, has seen its ebbs and flows, but the trajectory continues to demonstrate a steady path of growth and resilience.

    For example, this economic recovery far surpasses the recovery of the early 2000s in terms of private sector job growth and is at par with the recovery of the early 90s. We have seen 4.4 million private sector jobs added to the economy in the last…

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  • Phi Asset Managers 12:11 pm on July 19, 2012 Permalink | Reply  

    Merkel wins Spain bank bailout vote with large majority 

    Financial Post | Business

    BERLIN – German Chancellor Angela Merkel easily won a parliamentary vote on a eurozone rescue package for Spanish banks on Thursday despite growing unease in her centre-right coalition about the rising cost of Europe’s debt crisis for German taxpayers.

    Merkel, who won broad opposition support, managed to secure a simple majority from her own coalition in the Bundestag lower house of parliament, whose members were recalled to rainy Berlin from their summer recess for this one-day session.

    With each vote on the eurozone’s debt crisis, concern about Germany’s creeping liabilities has hardened, prompting a growing number of coalition lawmakers to rebel in recent decisions and cramping the government’s room for maneuver in European policy.

    The Bundestag backed the bailout by 473 votes, while 97 voted against, including 22 from Merkel’s coalition — fewer than the 26 coalition deputies who rebelled in a more far-reaching vote on the eurozone’s permanent rescue…

    View original post 692 more words

  • Phi Asset Managers 11:39 am on July 19, 2012 Permalink | Reply  

    Working harder, earning less 

  • Phi Asset Managers 10:00 am on October 11, 2011 Permalink | Reply

    OWS, Oh Wall Street is now small enough to fail! 

    Millions of unemployed Americans are waiting for Congress to do something other than trade barbs over their job creation plans.

    If lawmakers don’t act soon, the jobless see their unemployment checks start to disappear come January.

    More than 6 million Americans are set to lose federal unemployment benefits in 2012, with 1.8 million running out in January alone, according to new figures from the National Employment Law Project.

    Since January 2008, the securities industry in New York has seen 22,000 jobs evaporate. If Mr. DiNapoli’s prediction of 10,000 more jobs losses between August 2011 and year-end 2012 comes true, that would represent a decline of 17%. About 4,100 jobs have been eliminated since April, and deeper cuts are widely seen as inevitable given a recent flurry of corporate expense-trimming announcements.

  • Phi Asset Managers 9:19 am on October 7, 2011 Permalink | Reply
    Tags: , , , Wages   

    Trends With Few Wins 

    There are fewer payroll jobs in the United States right now than there were back in 2000 even though we have added 30 million extra people to the population since then.
    Back in 1969, 95 percent of all men between the ages of 25 and 54 had a job. In July, only 81.2 percent of men in that age group had a job.
    Only 55.3% of all Americans between the ages of 18 and 29 were employed last year. That was the lowest level that we have seen since World War II.
    The economic downturn has been particularly tough on men. According to Census data, men are twice as likely to live with their parents as women are.
    According to one recent survey, only 14 percent of all Americans that are 28 or 29 years old are optimistic about their financial futures.
    According to one study, between 1969 and 2009 the median wages earned by American men between the ages of 30 and 50 dropped by 27 percent after you account for inflation.
    U.S. home values have fallen approximately 6 trillion dollars since the housing crisis first began

  • Phi Asset Managers 10:13 am on October 6, 2011 Permalink | Reply

    30 years from now 

    Derek Kravitz, AP Real Estate Writer, On Thursday October 6, 2011, 11:09 am

    WASHINGTON (AP) — The average rate on the 30-year fixed mortgage this week fell below 4 percent for the first time ever, to 3.94 percent.

    For those who can qualify, it’s an extraordinary opportunity to buy or refinance. And mortgage rates could fall even further now that the Federal Reserve plans to reshuffle its portfolio of securities to try and lower long-term rates.

    On Thursday, Freddie Mac said the average rate on a 30-year fixed mortgage dropped from 4.01 percent last week, the previous low. The average rate on a 15-year fixed loan, a popular refinancing option, dipped to 3.26 percent, also a record.

  • Phi Asset Managers 12:49 pm on September 28, 2011 Permalink | Reply

    More Room For Boom! 

    Ben Baden, On Wednesday September 28, 2011, 9:48 am EDT

    Next week, the Labor Department will release its much-anticipated monthly jobs report. Last month, the economy added exactly zero jobs overall, and 14 million Americans still remain unemployed. Economists expect September’s numbers to be a slight improvement, but not enough to make a noticeable dent in the unemployment rate. In the meantime, here are 15 statistics about the jobs market that put the jobs crisis in perspective:

    1. 9.1 percent. Today’s unemployment rate is the highest it has been since 1982.

    2. 131.2 million. The total number of jobs held by Americans in August. In January 2000, total nonfarm employment stood at 130.8 million. That means that over the past decade or so, less than 400,000 jobs have been added overall. At the same time, the eligible work-age population (those older than age 16, who are not in the military or prison) has grown by 28 million.

    3. 58 percent. That’s the number of workers currently employed as a percentage of the work-age population. In December 2007, it was 63 percent. “Particularly in an economy where multiple-earner households are an important element, that drop of about 5 percentage points equates to several million people who want jobs, who would like to have jobs, but for whom there are no jobs available,” says Patrick O’Keefe, director of economic research at accounting firm J.H. Cohn and former deputy assistant secretary in the U.S. Department of Labor.

    4. 11.5 million. Currently, there are 11.5 million fewer job holders than there were in 2007 before the recession began. “That’s the true depth of our jobs deficit,” O’Keefe says.

    5. 6 million. That’s how many workers have been out of work for at least six months and have looked for a job within the last 30 days. They are called the “long-term unemployed.” This group accounts for 42 percent of the total number of unemployed. “That’s the most striking statistic,” says Stacey Schreft, director of investment strategy for the Mutual Fund Store, an investment firm in Overland Park, Kan. “Even though we have unemployment rates that were comparable to the ’81-’83 recession, we didn’t have long-term unemployment anywhere close to this.”

    6. 40 months. The average duration of unemployment is more than three years.

    7. 16.7 percent. The unemployment crisis has affected races differently. This is the unemployment rate for blacks. Compare that with 11.3 percent for Hispanics and 8 percent for whites.

    8. 25.4 percent. Young people have also been hard-hit. About a quarter of teenagers are unemployed. In comparison, the unemployment rate for adult men is 8 percent, and for adult women, it’s 8.9 percent.

    9. 250,000 to 300,000. That’s the estimated number of jobs many economists say the economy needs to add monthly to begin to push down the unemployment rate over the long term. Since the so-called “jobs recovery” began in March 2010, the first month the private sector added jobs since the recession, an average of 105,000 jobs have been added per month, well below the number needed to see a significant impact on the jobless rate. O’Keefe estimates that the economy needs to add about 175,000 jobs per month just to maintain the employment rate. “If we’re not adding about 175,000 jobs per month, our employable population is losing ground. Whether they’re unemployed or discouraged job seekers, they’re not getting work,” he says.

    10. 2.6 million. That’s the number of people who are considered marginally attached to the labor force, up 200,000 from a year earlier. According to the Labor Department: “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 four weeks preceding the survey.”

    11. 977,000. Of that 2.6 million, almost a million are considered “discouraged workers,” unemployed individuals who have given up looking for work. Once the economy begins to add jobs at a more robust pace, the unemployment rate may actually rise because discouraged workers will once again begin to look for jobs. “If we really got substantial job growth around 200,000 to 300,000 jobs a month, which is what we need for a healthy jobs growth that can deal with new entrances to the labor market and start putting people back to work … then people start to become more optimistic and some of the discouraged workers begin to look for work,” says Schreft, who is also a former economist and vice president at the Kansas City Federal Reserve. “They’re not counted right now in the 9.1 percent unemployment rate, but they would then become ‘unemployed’ because they would be people who are actively looking for work.”

    12. 9.6 percent. Who says college isn’t worth it? The unemployment rate for those whose highest level of education is high school stands at 9.6 percent. For those with a bachelor’s degree or higher, the rate is only 4.3 percent.

    13. 8.6 to 8.9 percent. That’s where the Federal Reserve expects the unemployment rate to be at the end of this year. Many private economists have offered much more dire predictions. For instance, Goldman Sachs expects unemployment to still hover near 9 percent at the end of 2012.

    14. 18.5 percent. Earlier this month, Gallup found that 18.5 percent of the total workforce remains underemployed, meaning they’re unemployed or working part-time but they want to work full-time. That level is basically unchanged from a year ago. “Focusing merely on unemployment instead of underemployment tends to ignore the hardship facing the millions of Americans forced to work part time,” says Dennis Jacobe, chief economist at Gallup in a recent news release. The underemployment number is even higher for certain subgroups, including those ages 18 to 29 (28.9 percent), those who have not attended college (23.1 percent), and among blacks (27.8 percent), according to Gallup.

    15. $49,445. Recently, the Census Bureau announced that real median household income fell to $49,445 in 2010, the lowest number since 1997 after adjusting for inflation. “We have fewer workers working fewer hours at lower wages in an inflation-adjusted sense,” O’Keefe says.

  • Phi Asset Managers 9:34 am on September 27, 2011 Permalink | Reply

    Getting Hardly Any Jobs 

    “jobs hard to get” category which printed at 50, up from 48.5 in August, and is now the highest number since 1983!

  • Phi Asset Managers 5:47 pm on September 19, 2011 Permalink | Reply

    College Grads 

    Submitted by Chris Moorman, a 24 year old member of “Generation Neutral”

    The Folly of Misspent Optimism: Generation Neutral

    America for the past century has been nearly synonymous with progress. A model based upon constant growth, the American style system of capitalism, built upon the dual building blocks property rights and nearly unlimited economic freedom, has allowed free movement of capital, talent and vision to produce the wealthiest country that the world has ever seen. This has not been without its hiccoughs and imbalances, but on the aggregate, the American system of ever rising prosperity has brought with it a rising standard of living for all parties in the post WWII era. The American birthright has been a promise of a hold on the ladder, and a better life for each subsequent generation.

    This economic juggernaut used the free movement of capital to allow risk takers to borrow at the present to take advantage of the growth of the future. This system has withstood many shocks; the unilateral pullout of the Bretton Woods gold standard by Nixon, the subsequent stagflationary environment of the late 1970s and early 80s, to the fall of the communism leaving American style capitalism as the unrivaled economic system in the world. American exceptionalism was not so much an opinion as an accepted fact.

    This was the promise that Generation Neutral predicated its approach to maturity upon. Demographic headwinds stood in our way for sure. The baby boomers and the entitlement economics they had been promised began to seem underfunded at the present which meant declining standards of living in the future. An over-levered system of government subsidized housing found that the hangover left in the wake of the Internet boom and the new diplomatic order put forth after 9/11 would squeeze those on the margins past their breaking point. Government intervention which would have been unthinkable even a generation ago now seemed like the only thing holding our system from the edge of the abyss.

    We avoided the abyss after the post-Lehman collapse of 2008. Purportedly rational players in the government arena used every tool at their disposal and designed new tools on the fly to keep the system from stalling out. Business cycle boom and bust is inherent in a free movement system such as ours, and we’d dealt with it before. Once the growth engine started running near its historical averages, the economy would rebound and the train would get back on the tracks. Life would return to normal and Generation Neutral would outgrow its debts fast enough to promise our children that life would still be better for them than it was for us. At least, this is what we’d planned on.

    So we continued to pile on the debt, spending today so that our future earnings would allow us the lifestyle we’d always hoped for. College tuition rose at unthinkable rates when compared to CPI and other inflation measures, aided by a system of government backstops and a “no-way out clause” which took away the mechanism of bankruptcy in order to absolve the insolvent of an impossible to pay debt. Still we borrowed. Ivy league educations cost on the order of $120-150K, while even the “affordable” state school educations hovered above 60k for 4 years. We told ourselves that this was an investment in our future, that when the growth engine restarted, we’d be on the forefront of the new boom.

    After 2008, it appeared that the growth engine was taking longer to prime than anyone had planned. Ivy League graduates, with crushing amounts of college loans, were forced to take jobs as baristas and retail workers; careers far below those promised by the glossy recruitment packets we’d gotten in high school. Some risk takers in my generation doubled down, and headed off to graduate school to “wait out” the recession as opposed to taking jobs which seemed beneath our level of expertise and education.

    Increasingly, these “investments” are looking like consumption periods for which the bill will come monthly for 15-20 years. Those who doubled down on their bets with grad school, found that in addition to undergrad debt, the average 75-100k of law school debt looked nearly insurmountable when compared to starting salaries in the 50-70K range. A law school graduate with $150k (a number which errs on the conservative side if any) in combined undergrad and law school debt 6% at is now looking at nearly $1300/month in loan repayments over a 15 year period. This is comparable to the payment on a 30 year mortgage on a $250,000 (slightly above the 2010 median home price) house at 5%. If the baby boomers are planning on my generation bailing out their underwater homes, they’d better find another plan.

    Currently, a college grad making $75,000 (well above the median for the graduates of the downturn (2007-2010)) in Manhattan contributing nothing to pre-tax retirement brings home a little over $4,000 monthly. When this is stacked up against an average monthly rent of $1350, and a student loan repayment of $1300, this makes for a mere $1350 in disposable income. This makes it quite difficult to save the necessary funds for a downpayment on a house, and even makes it difficult to build a solid safety net of savings.

    The real issues of my generation have unfortunately been glossed over. There have been the occasional articles chronicling how lifetime earnings are adversely affected for those who come out of school into a recession, but this downturn has already had a duration above and beyond the norm, and at present doesn’t appear to be ending any time in the near term. Meanwhile, the bills are stacking up, and even those of us who are working from Generation Neutral are starting to be concerned that the debts we signed on for at 18 will live to haunt us well longer than our worst projections. There is beginning to be a certain resigned malaise hanging over us, and as capitalism is a system predicated on growth and a healthy amount of optimism in the future, this is yet another headwind to our economic and even psychological well being.

    Other than the turnout brought upon by the “Hope and Change” campaign of President Obama, Generation Neutral has found itself strangely ambivalent about the political discourse, even as the bills are continuing to migrate from our parents’ generation to our own. A conversation about the national debt usually ends with the trite phrase “I don’t really care about politics” while the political decisions of today affect our economic future at an ever increasing rate compared to our parents and grandparents.

    I’ve yet to figure out what will break our apathy, as our misspent optimism still keeps us believing, however fleetingly, that this too shall pass. The day that we collectively realize that better days aren’t coming could well be too late, but the debts amassed during our optimistic youth will still continue to knock on our door. If our generation doesn’t have it better than our parents’, I wonder what the narrative we tell our children will sound like.

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