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Thursday, June 07, 2012

It's A Milestone of Sorts

Today's initial claims report shows that continuing claims are beginning to creep up. This is far more relevant than the headline claims, which weren't good anyway at 377K, with last week being revised up to 389K. Four week moving average at 377,750.

Right now I am sure that we are in a skipping recession, not a true recession. However we may be right on the line for a real one. Continuing claims have far more to do with job creation trends than job losses, and I think job creation is slowing very rapidly.

The Euro trauma is probably the best thing for the US economy; lower prices are clearly needed to prevent falling through the floor.

As Mark says, going into a recession with 8% unemployment is an unpleasant prospect. China and India are making easing moves, but this is going to be close if we manage to stagger through.


Right now I am sure that we are in a skipping recession, not a true recession.

For what it is worth, I'm predicting on or before October 2014. Sigh.
As Mark says, going into a recession with 8% unemployment is an unpleasant prospect.

If my prediction is even remotely accurate, I wonder how much lower the unemployment rate will be (if any) when it hits.

It is a very unpleasant prospect. :(
You know employment is bad when the presidential challenger optimism is only willing to offer us more of the same.
It's like an endless series of gates. Make it through this year, and we have to figure what to do about taxes next year. If we raise taxes substantially, it certainly seems as if we will go back into a downturn.

But if we don't raise taxes next year pretty substantially, the deficit will be so high that in a few years we hit the wall anyway.

The best course is some gradualism, which implies a long period of slow growth, such that the need to restructure becomes ever more apparent.

If oil prices had stayed up, we'd be in a recession this year. If they go back up, I think we slide into an outright recession.

In a lot of ways, there's a certain amount of pain, and all you can do is move the pain around. If you make a mistake, you grow the pain pot.

If it weren't for retirements, we'd still be almost at 10% unemployment. Frightening.

It's like an endless series of gates.

Musical Tribute
"At the narrow passage, there is no brother and no friend."-Bedouin proverb

WV: sheror. Sheer terror, or shhh ... error?
I don't think it's so bad.

Reform income taxes to flatter and lower rates with few loopholes. Either keep cap-gains and dividend rates low, or eliminate business taxes so we can tax cap-gains and dividends at personal rates. That'll increase revenue without depressing economic activity.

Reign in the EPA, maybe eliminate the minimum wage to get young people back in the labor market.

Then drill, baby, drill.

Wouldn't just doing these few things would give us some breathing room (and, perhaps more importantly some confidence)? Of course, something has to be done about health care, Medicare in particular. And Social Security has to be capped somehow. Doing those things equitably and without accidentally killing people is going to be a real hat trick.

WV: "75 healent". Retirement age healing. Mycroft is back!
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