January 9, 2010|Posted By Adam Sharp
Looks like the goods-govt job ratio peaked around 3:1 in the 30′s-40′s. Now there are far more government jobs than goods-producing ones. Pretty damn shocking.
It should be obvious to anyone with a pulse that an economy based on government jobs, deficit spending, zombie banks, moral hazard, and cheap imports is not sustainable.
I had a friend who worked at the Dept of Labor. The agency’s ironic name was a running joke. Apparently people spent most of their time surfing the net, even running Ebay businesses out of their cubes. That’s what happens in low-accountability work environments. And it’s why government spending is always less efficient than the private sector.
These low or zero-accountability jobs are taking over our economy, and it’s not just government. We’re removing accountability and responsibility from all sorts of industries — especially banks, autos, and real estate.
But this support really only goes to the politically connected. Businesses who don’t donate generously to their local reps can drop dead. Welcome to the Kleptocracy.
I’m taking advantage of this “recovery” to prepare for the inevitable funding crisis ahead.
Chart via Tim Iacono, who runs a great blog.
January 4, 2010|Posted By Adam Sharp
Telling chart by Jesse, showing the returns of various asset classes, 01/01/2000 – 12/31/2009. Note – If you factored in the 25% price inflation since 2000, it’d be even uglier (official CPI inflation # via BLS’ CPI tool).
How bout that Nasdaq 100? Kinda shocking from this vantage point. Down 49% in 10 years (excluding dividends, which wouldn’t improve the situation much for these low-yielders. Especially if you take inflation into account). Ugly all around, minus hard assets.
It’d be interesting to see an energy/oil stocks index included in the mix. I’ll put it on the to-do list.
In another 10 years, I suspect we’ll all be looking back on this period with 2020 hindsight. Har har… ha. Saw that on Reddit today, couldn’t resist.
December 29, 2009|Posted By Adam Sharp
From The Economist:
If The world appears to have escaped relatively unscathed by social unrest in 2009, despite suffering the worst recession since the 1930s, it might just prove the lull before the storm. Despite a tentative global recovery, for many people around the world economic and social conditions will continue to deteriorate in 2010. An estimated 60m people worldwide will lose their jobs. Poverty rates will continue to rise, with 200m people at risk of joining the ranks of those living on less than $2 a day. But poverty alone does not spark unrest—exaggerated income inequalities, poor governance, lack of social provision and ethnic tensions are all elements of the brew that foments unrest.
Found this via Michael Panzner, author of When Giants Fall. Mike thinks that the map should show a bit more brown, specifically between Canada and Mexico. Regardless, it’s shocking how much risk the analysis shows.
Related: Interview with Mike Panzner
December 14, 2009|Posted By Adam Sharp
These two charts, via ContraryInvestor.com (subscription), show another side of the jobs equation. The first shows overall labor participation. The last 10 years have not been kind, and declines in the overall % of employed Americans have accelerated. Just wait till the baby boomers all retire on Social-Security and Medicare.
The historical data is interesting, especially the big jump during the 1960′s-80′s. Presumably this is due to the shift from one-worker to two-worker households, as more women entered the workplace.
The second chart shows the # of weeks the average person has been unemployed. Not pretty, as you can see. Eventually many of these people become discouraged, and are no longer counted as unemployed, as they are not “actively” looking for work.
So while November’s “surprise upside” #s were less-bad, the employment situation is still ugly. And much of November’s relative rosiness was due to seasonal adjustments and temporary Holiday jobs.
Buckle up and be ready for a double-dip. It seems inevitable, to me at least. The real test comes if/when the Fed stops buying Freddie/Fannie debt Spring 2010, as they currently plan to.
I’m convinced the programs will be extended once it becomes clear just how dependent this “recovery” is on government printing. Once they announce the “unforseen” need for continued bailouts and printing, inflation expectations will rise.
My guess is that Bernanke/Geithner, et al, will feign shock when things turn south as the current programs expire. But do they seriously expect the real markets to be take over after ending a $1.25 trillion MBS crack-binge?
