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The US economy looks like it's getting even stronger
Topic Started: 3 Sep 2015, 02:34 AM (4,536 Views)
Mike
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The Whole Truth
5 Sep 2015, 06:29 PM
The stockmarket is the true indicator of a strength of an economy. They US market is telling us that businesses are overvalued, hence things are not well in business, hence the economy is weaker than it was even 6 montjs ago. Mike is an idiot, the job numbers are manipulated and mean nothing.


http://www.marketwatch.com/story/fed-weighs-global-gloom-vs-rosier-us-economy-as-key-rate-decision-looms-2015-09-06


Quote:
 
Still, the waiting period gives central bankers extra time to see if investors in global stock markets take a chill pill. Although big ups and downs in stocks have little historical relationship with the economy’s health, the Fed probably would prefer to wait if investors remain on edge.



Just to highlight how wrong this statement is. Who is the idiot now :wak:
Edited by Mike, 7 Sep 2015, 12:04 PM.
http://mike-globaleconomy.blogspot.com.au/
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Mike
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US job ads surge, but hirings slip - why?


US companies are advertising a lot more jobs. But when it comes to filling them, many remain cautious.

JOB openings soared eight per cent to 5.75 million in July, the most since records began in 2000, the Labor Department says.
Meanwhile, total hiring slipped to just below five million, from nearly 5.2 million in June. The figure suggests that many businesses are having trouble finding people with the skills they need.

How quickly businesses fill their open jobs can have a big impact on hiring and wages.
If companies decide to offer higher pay to attract more applicants, that would provide a much-needed boost to wages. If instead they simply take more time sifting through applications to find an ideal candidate, that would slow overall job gains.

Some economists say that a mismatch between the skills of many of the unemployed and the skills needed by expanding companies is a big reason that openings are rising more quickly than actual hiring. Openings are up 22 per cent over the past year, while hiring has declined. For example, construction workers who lost jobs in the housing bust may not have transitioned to fields where jobs are plentiful, such as health care.
"The data ... now signal unambiguously that the labour market is unable to supply the people companies need," Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote in a note to clients.

"Usually, that means wages will accelerate, though the evidence for that now is mixed."
In the past 12 months, average hourly pay has increased just 2.2 per cent, up from a 2.0 per cent pace in July. But that is below the 3.5 to 4.0 per cent that is typical in a healthy economy.

Other economists say that the so-called "skills mismatch" is exaggerated. They argue that if businesses can't find the workers they need, then wages would rise more quickly. And if they were truly desperate, employers should be willing to perform more training of new hires, these economists say.
The figures come after last Friday's jobs report pointed to steady, if modest, hiring. Employers added 173,000 jobs in August, the fewest in five months, though job gains in June and July were revised higher.

The Friday jobs data are a net total: Jobs gained minus jobs lost. The data reported in the Job Openings and Labor Turnover survey represent total hiring, as well as quits and layoffs. Net job gains can increase if layoffs or quits fall, even if gross hiring remains flat.

Job openings have soared particularly high in professional services, a category that includes highly-skilled jobs in fields such as information technology, engineering and accounting. Available jobs in that category jumped 122,000 in July to 1.3 million. They've soared 46 per cent in the past 12 months, a huge gain.

Tom Gimbel, chief executive of the LaSalle Network, a Chicago-based recruiting firm, says that many of his clients are struggling to fill technology jobs in specialties such as data analytics, social media marketing and cybersecurity.
"There are more jobs available, but they are in such unique positions that didn't exist five to 10 years ago," he said. "The supply hasn't caught up to the demand yet."

Still, the fact that employers are willing to advertise so many jobs suggests they are confident the economy will grow strongly enough to generate greater demand for their goods and services.

The number of available jobs also rose in lower-paid areas such as retail, hotels and restaurants.
More openings could contribute to a decision by the Federal Reserve next week to raise interest rates for the first time in nine years. The Fed has held the short-term rate it controls at nearly zero in an effort to encourage more borrowing and spending.

But other data from the job openings report could point in the other direction. The number of people who quit their jobs remained stuck at 2.7 million. More quitting would be a good thing because most people quit to take new jobs, usually at higher pay.
Fed chair Janet Yellen has indicated that she closely follows the openings, hiring and quits data.


http://www.heraldsun.com.au/business/breaking-news/us-job-ads-surge-but-hirings-slip-why/story-fni0xqe4-1227520668618
http://mike-globaleconomy.blogspot.com.au/
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GloomBoomDoom
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http://www.zerohedge.com/news/2015-09-10/us-recession-looms-wholesale-sales-tumble-more-inventories
MSE
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Mike
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The U.S. Economy Is Just Starting to Tap Into a Big Source of Dry Powder

Acceleration in housing is inevitable.

There's a big reason to believe that the U.S. economy will be able to withstand the start of the Fed tightening cycle: There's still plenty of pent up activity in the housing sector. And it's hard to see the U.S. economy running out of steam with this much upside left in residential investment, according to some economists and analysts.

Going back to the 1940s, the U.S. central bank has never embarked upon a tightening phase with housing having so much room to run to the upside.

This chart shows residential investment's share of nominal gross domestic product, with the start of the previous six rate hike cycles denoted with a circle.


The severity of the housing bust prompted activity in this sector to stay at depressed levels, even with the Great Recession getting farther away in the rear view mirror.

Residential investment accounts for 3.34 percent of nominal gross domestic product, as of Q2 2015, well below its long-run average of 4.56 percent, as Macquarie analyst David Doyle has observed. The Fed has not initiated a series of rate hikes at a time when residential investment's share of gross domestic product is more than one standard deviation below its long-run average since at least 1970.

"Business cycle expansions are likely when residential investment is low as a share of GDP," wrote Doyle. "Recessions typically only transpire when residential investment becomes elevated as a share of GDP."

While there is plenty of upside for construction activity, the availability of workers to carry this out is more suspect.


Neil Dutta, head of U.S. economics at Renaissance Macro Research in New York, noted that the relative strength of the labor and housing market makes for quite an abnormal dynamic.

"What is interesting about this is that the housing market is accelerating at a time when the labor market is near full employment," he said.

He suggested that any shortage of construction workers could be remedied by displaced mining employees and higher wages to attract additional labor.

The unemployment rate, which dipped to 5.1 percent in August, has rapidly converged upon the Federal Reserve's estimates for the non-accelerating inflation rate of unemployment, which is a range of 5 percent to 5.2 percent. That is, monetary policymakers think that 5 percent is the lowest the unemployment rate can get before inflationary pressures start to arise.

Labor slack has been eliminated at a rapid pace, though broader measures of the health of the jobs market suggest work remains to be done.


On a recent interview on BloombergTV, New River Investment portfolio manager Conor Sen indicated that the U.S. single-family housing market would enjoy a strong secular tailwind over the next 10 to 15 years as millennials formed households and shifted from renting to owning homes.

Sen separately observed that single-family housing starts, as a share of the prime age population (25 to 54 years old), remain at very subdued levels. If single-family starts normalize to 1.25 million, more than 250,000 workers would be needed to erect them, assuming that the ratio between starts and residential construction jobs reverts to what it has averaged since the start of 1985.

Dutta concurred with the demographic support for construction activity, pointing out that children born in the 1980s, when the birth rate was climbing, will make up the next batch of first-time homebuyers. He also noted that cyclical forces, such as easing lending standards and rising homebuilder confidence, buoy the outlook for the sector.

"Bad things do not happen to America when housing is moving up and to the right while Americans are finding jobs," said Dutta.


http://www.bloomberg.com/news/articles/2015-09-10/the-u-s-economy-is-just-starting-to-tap-into-a-big-source-of-dry-powder
http://mike-globaleconomy.blogspot.com.au/
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The whole debt housing bubble was the cause of the gfc. Economies work better when housing prices are cheaper. The MOMENT housing becomes more expensive is the moment less money will be spent elsewhere throughout the economy.

If things are so great, why are house prices the same as a decade ago, despite rates being at zero for seven years now and the population rising by 25 million over the last decade?

The fact is, the US is a mere shadow of its once former glory, and will NEVER be what it once was. Not. even .close.

The other dose of reality is, US rates have not risen in nine years. If rates were to rise from here, it would only restrict the amounts of money people can currently borrow, meaning they will have less to spend on a house than they do now should rates rise from here.

Personally I cant see rates rising anytime soon. But I never saw the recent out of cycle rate rise for investors here only a month or so ago by our major lenders, or them upping the required deposit to 20% only recently also. The recent weakness of the chinese dollar also puts the US on the backfoot come exports and export related jobs. The upside here being that imports will be cheaper, but the adverse downside again is that cheaper overseas products puts more US jobs at risk.

Like ghost cities in china and all the overbuilding in china, they have also made, and or copied just about every product on the planet. They have basically made more shit than the world actually needs, pushing prices lower and lower. In supercheap autos it cost about $10-$15 dollars for a single smd led light bulb. The same bulbs can be purchased on ebay australia from china, the price for 10 was $9.76 delivered to my door from china. They copy almost every mechanical part for my 49 year old car, and sell it for a fraction of the price of the US or here. I have also noticed India is now doing the same, copying many parts, some with the exact same names they are copying from and are cheaper again than chinese copies. The quality also 'looks' better than the chinese ones, mainly because the indian parts look to be metal and chrome rather than mainly plastic like the chinese product. This puts pressure on chinese wages, which are already at threat from themselves for making more products than anybody needs. Now the Indians are helping out too.

Just a race to the bottom on prices, with western jobs being the main victim. The bottom line is WE cannot compete with THEM.

India is basically the last of the food chain on the destruction of western wages unless we can exploit an even poorer country like Zimbabwe.

Like the overbuilding of units, they are all overbuilding parts and products than nobody will need because there are too many. The old supply and demand will just see prices fall. Chinese will need to cut prices further in an effort to achiveve a sale on these products. They are already making sfa profit. How much could we possibly make, let alone compete.


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John Frum
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John Frum
6 Sep 2015, 10:45 AM

really? To me the provision of a lower trading range for the Yuan by the CCP signals a concert move to cut down on capital flight. They'll be knocking on Canberra's door as we speak.
Jibbering jam jars batman, our man Frum's crystal ball's only gone scootering down the lane for another strike!

From the AFR today:

Quote:
 

Chinese retreat from Australian property as capital controls bite

Chinese purchases of Australian property have dropped significantly in the past month, according to agents, as buyers struggle to shift money out of the country following Beijing's move to tighten capital controls.

One Chinese agent said the latest efforts by the central government to avoid large capital outflows were having a "significant impact" on his business.

"It has affected 70 to 80 per cent of current transactions and some have already been suspended," said the agent who asked not to be named.

The tighter foreign exchange rules are also set to impact the federal government's relaunched Significant Investor Visa (SIV), which provides fast-tracked residency for those investing at least $5 million into Australia.
Edited by John Frum, 14 Sep 2015, 09:50 PM.
"It were not best that we should all think alike; it is difference of opinion that makes horse races." - Mark Twain on why he avoids discussing house prices over at MacroBusiness.
"Buy land, they're not making any more of it." - Georgist Land Tax proponent Mark Twain laughing in his grave at humourless idiots like skamy that continually use this quip to justify housing bubbles.
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John Frum
14 Sep 2015, 06:57 PM
Jibbering jams jars batman, our man Frum's crystal ball's only gone scootering down the lane for another strike!

From the AFR today:

Well done John...

Just to be clear, is this chinese agent in the article based in Australia or China ?

His claim of 70 to 80% of transactions ?????
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John Frum
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14 Sep 2015, 07:21 PM
Well done John...

Thank you stranger, always happy to spread the righteous gospel of the cargo cult.

Quote:
 
Just to be clear, is this chinese agent in the article based in Australia or China ?


No, Australian based. It will be someone like this:

http://www.dailytelegraph.com.au/news/opinion/chinas-200-million-property-agent-reveals-next-sydney-suburbs-to-excite-mega-rich-migrants/story-fnniow7v-1227281818970

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His claim of 70 to 80% of transactions ?????


I wouldn't be surprised - it's strikingly obvious now that China is not going to debase its currency without ensuring that it simultaneously cracks down on any money trying to make its way into foreign property markets.
"It were not best that we should all think alike; it is difference of opinion that makes horse races." - Mark Twain on why he avoids discussing house prices over at MacroBusiness.
"Buy land, they're not making any more of it." - Georgist Land Tax proponent Mark Twain laughing in his grave at humourless idiots like skamy that continually use this quip to justify housing bubbles.
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createdby
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John Frum
14 Sep 2015, 06:57 PM
Jibbering jams jars batman, our man Frum's crystal ball's only gone scootering down the lane for another strike!

From the AFR today:

When you consider China has 3.5 million millionaires, it's easy to erode those 3.5 trillion in FX reserves.

Let's say half of those millionaires, or even less than a third, want to escape the shithole and each has a million each, that's already a trillion dollars.

1,000,000 Chinese millionaires wanting to leave
x
US$1,000,000 per Chinese millionaire
= 1 US trillion dollars the amount of FX that will be pulled out reserves/converted from Yuan
Edited by createdby, 14 Sep 2015, 09:46 PM.
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John Frum
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createdby
14 Sep 2015, 09:38 PM
When you consider China has 3.5 million millionaires, it's easy to erode those 3.5 trillion in FX reserves.

Let's say half of those millionaires, or even less than a third, want to escape the shithole and each has a million each, that's already a trillion dollars.

When you consider their currency, stock and housing markets are all heading south I'd say that number is now under 3 million in USD terms. But hey, we're hand waving here so carry on

Quote:
 
= 1 US trillion dollars the amount of FX that will be pulled out reserves/converted from Yuan


Not sure what you're driving at here? FX reserves are held by central banks, not individuals.

If you're implying that the Chinese central bank will happily burn through a third of its reserves to accommodate a millionaire exodus you need to read the article again.

The maximum amount of cash that an individual in China can move out is US$50k, so for one of these millionaires looking to park their life savings into an average looking AUD$1.6M dog box around the Ryde area of Sydney they'll need to get a dozen of their mates to push out $50k each in their name to an Australian bank account.

Unfortunately for them these sorts of scams are now setting off alarm bells in CCP central, as the article clearly states:

Quote:
 
banks are now tracking the source of funds for overseas bank accounts that have received more than US$200,000 within 90 days, according to the bank manager, who works in Shanghai for one of the major state-owned banks.

And remember, while there might be a lot more money that can escape China, there are also a lot more public servants paging though excel spreadsheets for accounting anomalies too.
Edited by John Frum, 14 Sep 2015, 10:33 PM.
"It were not best that we should all think alike; it is difference of opinion that makes horse races." - Mark Twain on why he avoids discussing house prices over at MacroBusiness.
"Buy land, they're not making any more of it." - Georgist Land Tax proponent Mark Twain laughing in his grave at humourless idiots like skamy that continually use this quip to justify housing bubbles.
Profile "REPLY WITH QUOTE" Go to top
 
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