Rolling US Economy Into The Shitbin Thread

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https://www.washingtonpost.com/business/2020/06/05/may-2020-jobs-report-misclassification-error/

When the U.S. government’s official jobs report for May came out on Friday, it included a note at the bottom saying there had been a major “error” indicating that the unemployment rate likely should be higher than the widely reported 13.3 percent rate.

The special note said that if this “misclassification error” had not occurred, the “overall unemployment rate would have been about 3 percentage points higher than reported,” meaning the unemployment rate would be about 16.3 percent for May.

j., Saturday, 6 June 2020 04:44 (three months ago) link

My wife works in labor and employment and she has seen a lot of employers furloughing employees over the last two months. A lot of these employees won't end up being recalled.

Also, employers who received PPP loans were required to maintain certain payroll for two months as a condition to getting the loans forgiven. I would anticipate further layoffs when this period is over and employers are no longer required to maintain payroll.

Night of the Living Crustheads (PBKR), Saturday, 6 June 2020 12:09 (three months ago) link

Yeah friends of mine who are currently unemployed or furloughed are balking at mgmt who are poking around reopening offices. No one feels safe yet

Its big ball chunky time (Jimmy The Mod Awaits The Return Of His Beloved), Saturday, 6 June 2020 14:25 (three months ago) link

Lately I've felt like the guy on the airplane who is the only one who can see the monster on the wing. The economy, despite a bounce-back effect in some data and a stock market recovery, is suffering a profound collapse of demand.

Don't lose the thread.https://t.co/8KXXL4SZHx

— Neil Irwin (@Neil_Irwin) June 6, 2020

𝔠𝔞𝔢𝔨 (caek), Saturday, 6 June 2020 16:55 (three months ago) link

my economy means i don't read shit in the ny times anymore

crystal-brained yogahead (map), Saturday, 6 June 2020 17:03 (three months ago) link

When the U.S. government’s official jobs report for May came out on Friday, it included a note at the bottom saying there had been a major “error” indicating that the unemployment rate likely should be higher than the widely reported 13.3 percent rate.
The special note said that if this “misclassification error” had not occurred, the “overall unemployment rate would have been about 3 percentage points higher than reported,” meaning the unemployment rate would be about 16.3 percent for May.

― j., Saturday, June 6, 2020 12:44 AM (twelve hours ago) bookmarkflaglink

these errors exist every month; if you include errors from both months the decline in unemployment is actually larger

flopson, Saturday, 6 June 2020 17:07 (three months ago) link

Two things to note about unemployment misclassification in today's jobs report:

1. If misclassified absent workers had been counted as unemployed as intended, U3 would have been +3pp higher.

2. But this error was +4.8pp last month.

So official U3 understated the M-M decline.

— Ernie Tedeschi (@ernietedeschi) June 5, 2020

flopson, Saturday, 6 June 2020 17:08 (three months ago) link

Also, employers who received PPP loans were required to maintain certain payroll for two months as a condition to getting the loans forgiven. I would anticipate further layoffs when this period is over and employers are no longer required to maintain payroll.

there is a current bill heading to the President that would extend the duration of the PPP loan forgiveness period -- (from 8 weeks to 24 weeks, i think). It's also creating this weird system where there are people on unemployment who don't want to go back to jobs that could still just be temporary because the unemployment benefits are more stable, meanwhile employers need workers in order to qualify for loan forgiveness, so there is some weird hiring going on. I am in this facebook group for accountants where people are posting that business owners w/PPP loans are asking them if they could hire their children as employees, like 9 year olds, like "will this violate child labor laws" age kids.

sarahell, Sunday, 7 June 2020 18:03 (three months ago) link

a current bill heading to the President

sorry not to know already, but do you know if this is yet to pass the Senate, or now in conference committee, or ready for its final vote, or now voted on and awaiting signature?

A is for (Aimless), Sunday, 7 June 2020 18:45 (three months ago) link

interesting if true

WASHINGTON (AP) — The U.S. economy entered a recession in February, a group of economists declared Monday, ending the longest expansion on record.

— Kyle Griffin (@kylegriffin1) June 8, 2020

𝔠𝔞𝔢𝔨 (caek), Monday, 8 June 2020 17:47 (three months ago) link

🧐

Li'l Brexit (Tracer Hand), Monday, 8 June 2020 19:43 (three months ago) link

https://i.imgur.com/qqP5V8n.png

Nhex, Monday, 8 June 2020 20:18 (three months ago) link

ehehehe

all cats are beautiful (silby), Monday, 8 June 2020 20:20 (three months ago) link

@flopson i have a biomed hedge fund friend who is MMT-curious and asked for a reasonable/intelligent book to read on the topic and i didn't know what was good but thought you might can you recommend anything?

Mordy, Tuesday, 9 June 2020 14:53 (three months ago) link

https://stephaniekelton.com/book/

"the deficit myth" just came out today!

methinks dababy doth bop shit too much (m bison), Tuesday, 9 June 2020 15:08 (three months ago) link

Does MMT depend on us being a global empire? Because that seems to be a big component of why we can carry our deficits.

longtime caller, first time listener (man alive), Tuesday, 9 June 2020 16:37 (three months ago) link

seems probable that MMT works so long as you're the global currency of choice

methinks dababy doth bop shit too much (m bison), Tuesday, 9 June 2020 16:39 (three months ago) link

Kelton was a guest on Chris Hayes' podcast fairly recently. very worthwhile discussion, esp. if you don't want to read an entire book about the subject.

Evans on Hammond (evol j), Tuesday, 9 June 2020 17:05 (three months ago) link

Doesn't being the global currency of choice basically depend on having a ton of aircraft carriers and ICMBs xp?

longtime caller, first time listener (man alive), Tuesday, 9 June 2020 18:01 (three months ago) link

ya

methinks dababy doth bop shit too much (m bison), Tuesday, 9 June 2020 18:06 (three months ago) link

@flopson i have a biomed hedge fund friend who is MMT-curious and asked for a reasonable/intelligent book to read on the topic and i didn't know what was good but thought you might can you recommend anything?

― Mordy, Tuesday, June 9, 2020 10:53 AM (three hours ago) bookmarkflaglink

i dont recommend reading a book about MMT as i consider it largely a scam and a distraction from actually good arguments for deficit spending or debt monetization, and harmful in its anti-welfare state tendencies. i have never read a book on it, i have only read 10,000 posts. based on the reviews i’ve read so far of kelton’s book, it seems like it contains some howlers. but reading it alongside critiques would probably be good. it’s almost certainly less boring than Moser’s textbook, and she’s a good writer.

in general MMT is either (1) trivial but pretends it is radical (pretending its description of consolidated fed-treasury differs from rest of monetary economics), (2) wrong (contains a lot of weird arguments anti-welfare spending and pro-job guarantees on the basis the former is inflationary), (3) right for the wrong reasons (MMT implicitly assumes permanent demand deficiency rather than demonstrating it)

i realize i avoid getting into the nitty gritty in these threads, that’s because (1) when im on here im procrastinating doing my own nitty gritty economics research (2) getting into the morass of accounting details is how they getcha. however im teaching some friends of mine macroeconomics in a slack channel rn, will post some stuff when i get to monetary/MMT/japan. i promise you it will be super boring and disappointing :)

I don’t remember if i posted this last time but this conversation between a mainstream monetary guy and an MMT guy shows how little daylight there is and how dull the differences are http://andolfatto.blogspot.com/2019/09/a-conversation-with-eric-tymoigne-on.html?m=1

flopson, Tuesday, 9 June 2020 18:23 (three months ago) link

https://www.theatlantic.com/magazine/archive/2020/07/coronavirus-banks-collapse/612247/

The reforms were well intentioned, but, as we’ll see, they haven’t kept the banks from falling back into old, bad habits. After the housing crisis, subprime CDOs naturally fell out of favor. Demand shifted to a similar—and similarly risky—instrument, one that even has a similar name: the CLO, or collateralized loan obligation. A CLO walks and talks like a CDO, but in place of loans made to home buyers are loans made to businesses—specifically, troubled businesses. CLOs bundle together so-called leveraged loans, the subprime mortgages of the corporate world. These are loans made to companies that have maxed out their borrowing and can no longer sell bonds directly to investors or qualify for a traditional bank loan. There are more than $1 trillion worth of leveraged loans currently outstanding. The majority are held in CLOs.

j., Wednesday, 10 June 2020 15:46 (three months ago) link

stonks

mookieproof, Thursday, 11 June 2020 17:01 (three months ago) link

more like stanks, amirite?

Life is a banquet and my invitation was lost in the mail (j.lu), Thursday, 11 June 2020 17:04 (three months ago) link

to what extent is the massive fed preemptive action currently underway reducing/not reducing the risk from that?

longtime caller, first time listener (man alive), Thursday, 11 June 2020 17:14 (three months ago) link

lol at all of this

last week: stocks rise 5% on covid optimism!!!

*5 days pass, in which absolutely nothing happens that was not already widely expected*

stocks fall 5% on glum covid outlook!!!

our god is a might god (Karl Malone), Thursday, 11 June 2020 17:23 (three months ago) link

supposedly the huge gains of the last couple months were predicated on the fed taking strong action and giving investors confidence that the world would not explode

which always seemed like bullshit to me. i don't think it's a coordinated effort or anything, but the last few weeks have just seemed like willingly suspending disbelief to pump the market back in and squeeze the last juices out of it before manufacturing slowdowns and a collapsing real estate market become so obvious that even investors have to acknowledge it.

our god is a might god (Karl Malone), Thursday, 11 June 2020 17:26 (three months ago) link

to what extent is the massive fed preemptive action currently underway reducing/not reducing the risk from that?

― longtime caller, first time listener (man alive), Thursday, June 11, 2020 10:14 AM (eighteen minutes ago)

idk, but if you read the regulations/descriptions of the PPP program, it says that the loans can be resold on the secondary market ... so, if I was a cartoonish pessimist, I would suggest that the next "sub-prime" crisis will be risky PPP loans ... they have now reduced the portion of the loan that has to be used for payroll from 75% to 60% and given people/businesses 24 weeks to qualify for forgiveness as opposed to the original 8 weeks.

sarahell, Thursday, 11 June 2020 17:38 (three months ago) link

(2) getting into the morass of accounting details is how they getcha

ooooooooh!!!! do tell!

sarahell, Thursday, 11 June 2020 17:39 (three months ago) link

use of "stonks" really peaking this past month.

Yerac, Thursday, 11 June 2020 17:40 (three months ago) link

xp -- wait really? Why the fuck would anyone buy a loan that is meant to be forgiven?

longtime caller, first time listener (man alive), Thursday, 11 June 2020 17:41 (three months ago) link

how much truth is there in the apocalyptic "soon people will have to pay all their back rent/mortgage payments and everything will crash and burn" articles that are coming out now?

sarahell, Thursday, 11 June 2020 17:42 (three months ago) link

xp -- wait really? Why the fuck would anyone buy a loan that is meant to be forgiven?

idk? it's there in the text of the law though. Maybe not all the loans are intended to be forgiven? I am guessing that at minimum, it is a way for banks to free up more capital in the short-term to do more lending?

sarahell, Thursday, 11 June 2020 17:44 (three months ago) link

perhaps they will be unforgiven?

voltmeter said i had potential (Sufjan Grafton), Thursday, 11 June 2020 18:13 (three months ago) link

i really hope these redditors/robinhood first time account people that I have read so much about the past month don't lose their shirt.

Yerac, Thursday, 11 June 2020 18:18 (three months ago) link

supposedly the huge gains of the last couple months were predicated on the fed taking strong action and giving investors confidence that the world would not explode

which always seemed like bullshit to me. i don't think it's a coordinated effort or anything, but the last few weeks have just seemed like willingly suspending disbelief to pump the market back in and squeeze the last juices out of it before manufacturing slowdowns and a collapsing real estate market become so obvious that even investors have to acknowledge it.

― our god is a might god (Karl Malone), Thursday, June 11, 2020 10:26 AM (forty-eight minutes ago) bookmarkflaglink

it's impossible to know if this pullback will start the end-of-february-esque retest of lows or will start the end-of-april-esque retest of some highs.

voltmeter said i had potential (Sufjan Grafton), Thursday, 11 June 2020 18:18 (three months ago) link

i really hope these redditors/robinhood first time account people that I have read so much about the past month don't lose their shirt.

― Yerac, Thursday, June 11, 2020 1:18 PM (nineteen minutes ago) bookmarkflaglink

I was just reflecting on what a terrible feature of our system it is that people feel like they need to wait around for others' pain in order to get on the american dream latter - specifically in response to a reddit post that was hoping for widespread foreclosures so he could buy a house, a horrible sentiment yet sort of understandable.

longtime caller, first time listener (man alive), Thursday, 11 June 2020 18:38 (three months ago) link

And then on top of that, the system throws a lot of headfakes at you

longtime caller, first time listener (man alive), Thursday, 11 June 2020 18:38 (three months ago) link

because in america someone has to lose in order for you to feel like you can gain.

Yerac, Thursday, 11 June 2020 18:39 (three months ago) link

*american dream ladder

longtime caller, first time listener (man alive), Thursday, 11 June 2020 18:41 (three months ago) link

go, shitbin, go

stocks rise 5% on covid optimism!!!
*5 days pass, in which absolutely nothing happens that was not already widely expected*
stocks fall 5% on glum covid outlook!!!

it's not even as compelling as mass psychosis

brooklyn suicide cult (Dr Morbius), Thursday, 11 June 2020 19:16 (three months ago) link

The state police said it will be an 8 hour wait from the back of the line to speak to a state employee about unemployment. pic.twitter.com/plGONcpS6n

— Daniel Desrochers (@drdesrochers) June 17, 2020

𝔠𝔞𝔢𝔨 (caek), Wednesday, 17 June 2020 17:16 (three months ago) link

Trump country.

Li'l Brexit (Tracer Hand), Wednesday, 17 June 2020 17:28 (three months ago) link

stocks up on reports that unemployment line is now less than 16 hours long

Karl Malone, Wednesday, 17 June 2020 18:03 (three months ago) link

jeez, what state is that?

Fuck the NRA (ulysses), Wednesday, 17 June 2020 19:15 (three months ago) link

i think kentucky (the tweeter lists kentucky.com as his website and reports for the lexington herald leader)

Karl Malone, Wednesday, 17 June 2020 19:16 (three months ago) link

oh yeah. they've been dismantling their unemployment system for a decade iirc.

Fuck the NRA (ulysses), Wednesday, 17 June 2020 19:27 (three months ago) link

a sad coda to that unemployment line in Frankfort, KY yesterday:

Hundreds of Kentucky residents waited in line for as long as 10 hours outside a makeshift unemployment office at the State Capitol in Frankfort on Wednesday in hopes of getting paid for claims that, for some, dated back as far as March.

But in the end, a handful who had stood in line all day were turned away, prompting despair and anger, the Lexington Herald-Leader reports.

“Maybe, maybe 25 people left to be seen and they turn us away,” resident Deborah McLaughlin told the paper.

Hundreds more who arrived after the line was cut off were turned away, as well. The state’s computer system shuts down at 7 p.m. and cannot further process claims, officials told those in line.

sorry everyone, but you know computers. they don't work after 7 pm, gotta shut them down.

time is running out to pitch in $5 (Karl Malone), Thursday, 18 June 2020 23:38 (three months ago) link

Yes, I am concerned the longer this goes on, the more losses banks will face. Large banks have more capital than they had before the 08 crisis, but not enough. 1/2

— Neel Kashkari (@neelkashkari) June 19, 2020

Dirty Epic H. (Eric H.), Friday, 19 June 2020 20:20 (three months ago) link

They should stop paying dividends and raise capital to increase their resiliency. They can essentially inoculate themselves from COVID and should do so now. 2/2

— Neel Kashkari (@neelkashkari) June 19, 2020

Dirty Epic H. (Eric H.), Friday, 19 June 2020 20:20 (three months ago) link


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