Jump to content
House Price Crash Forum
Sign in to follow this  
The Masked Tulip

Us Unemployment Rate Rose To 7.6 Per Cent In May Easing Fears Of Fed Tightening And Boosting Stocks Again

Recommended Posts

Stocks rose because of a sense of relief that the Fed will not feel able to withdraw its stimulus from the economy any sooner than expected. That was the real worry. The magic juice of money printing might stop and that would trash the stock market.

How long can this lunacy last? Experts say the Fed will need to see 200,000 jobs created for at least four months before it will cut back on its $85 billion a month in bond purchases, perhaps then ceasing to be the largest buyer by far of US treasuries.

Can an economy really recover by printing money? The Fed thinks yes provided enough is printed. In the past central banks that have believed that have always wound up with hyperinflation down the road, that is to say when the can could finally be kicked no further down it.

http://www.arabianmoney.net/us-stocks/2013/06/07/us-unemployment-rate-rose-to-7-6-per-cent-in-may-easing-fears-of-fed-tightening-and-boosting-stocks-again/

Share this post


Link to post
Share on other sites
Mon Aug 5, 2013 9:18pm EDT

(Reuters) - So many workers have left the job market in recent years that the decline in the official unemployment rate to 7.4 percent last month may understate the extent of weakness in employment prospects.

.... Combined with low inflation, a more aggressive Fed might actually see depressed rates of participation in the job market as an impetus for further monetary easing, particularly if they think more working-age Americans have simply given up looking for work after repeated rejections.

.... Harm Bandholz, economist at UniCredit, assesses rather alarmingly that, if it were not for the decline in labor force participation since the start of the recession, the unemployment rate would currently be well above the crisis peak of 10 percent hit in October 2009, perhaps above 11 percent.

Apparently this shadow unemployment (not sure what they're living on - savings/assets?) factor is seen by some as a good excuse for even more easing/QE ect.

http://www.reuters.c...E97413G20130806

My own view is aligned with this. Business not knowing what policy-makers will do, or not do, with all their heavy intervention, and warnings of tapering sometime in the future, with many businesses uncertain how that will affect their client base.

Those with the capacity to hire American workers―small businesses as well as large, publicly traded or private―are immobilized. Not because they lack entrepreneurial zeal or do not wish to grow; not because they can't access cheap and available credit. Rather, they simply cannot budget or manage for the uncertainty of fiscal and regulatory policy.

In an environment where they are already uncertain of potential growth in demand for their goods and services and have yet to see a significant pickup in top-line revenue, there is palpable angst surrounding the cost of doing business. According to my business contacts, the opera buffa of the debt ceiling negotiations compounded this uncertainty, leaving business decision makers frozen in their tracks.

Share this post


Link to post
Share on other sites

Apparently this shadow unemployment (not sure what they're living on - savings/assets?) factor is seen by some as a good excuse for even more easing/QE ect.

http://www.reuters.c...E97413G20130806

My own view is aligned with this. Business not knowing what policy-makers will do, or not do, with all their heavy intervention, and warnings of tapering sometime in the future, with many businesses uncertain how that will affect their client base.

That sums things up nicely. Bernanke doesn't know what he's doing and no-one else does either.

Share this post


Link to post
Share on other sites

Everything is **** backwards - bad news boosting stocks, good news dampening them. The new paradigm.

There's no market for anything any more, just a Ponzi game run by the central banks. Price discovery is redundant. Positioning yourself for when the welfare teat gets withdrawn is what matters most.

Share this post


Link to post
Share on other sites

Tightening??

Even without QE it would still be highly accomodative.

Bernanke's been very clear on this - he's set thresholds and it's data dependent. So they may taper or they may continue or possibly even increase QE.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 238 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.