Why Obamanomics is working

#26
#26
ok. So unemployment is 25% higher than his prediction if he didn't get his stimulus bill. That is what we are calling "working?" Damn. Hate to see what happens if it doesn't work.
 
#27
#27
droski said:
the stock market rally has 100% to do with the trillions of free money the fed has been pumping into the market. with unemployment still at 10% me thinks you can't say obamamonics is working.
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1. Money supply increases are at their lowest levels since 1995. Although the monetary base is very large right now, according to Robert McTeer (Dallas Fed Chair):

It will no doubt come as a surprise to many that money growth has been moderate since its initial explosion at the end of 2008 (see chart above). That’s because they hear so much about the expansion of the Fed’s balance sheet, which would normally imply an expansion of bank reserves and money. Fed assets have more than doubled with virtually all the increase taking place in late 2008. The asset expansion has produced a sharp rise in bank reserves, and hence the monetary base, which is composed of bank reserves and currency outside the banking system.

However, banks have not used those reserves to expand loans and investments at a rate large enough to produce rapid money expansion. Instead, banks have accumulated reserves far in excess of the amount required to back their deposit liabilities. This accumulation of “excess reserves” is no doubt the result of banker uncertainty and fear about their viability during the period of crisis. In particular, banks are remaining more liquid than regulations require to protect their remaining capital. Virtually all of the expansion in the Fed’s assets are matched by an expansion of excess reserves—excess from a regulatory standpoint, but obviously not excess to the bankers themselves since they are holding them voluntarily.
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Forbes
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Data source

2. In addition, although unemployment is still at 9.7%, the four-week moving average for jobless claims fell to its lowest level last week (543,750) since September 13, 2008, and has now fallen by 175,500 from the peak last April of 643,000. Even Larry Kudlow points out that the significance of these numbers is hard to deny. According to Kudlow:

Sometimes you have to take your political lenses out and look at the actual economic statistics in order to gauge whether we’re on the road to recovery or not. Without getting personal, I’m watching many of my friends on certain cable stations attempt to trash the March employment numbers released last Friday. Don’t do it, folks. The numbers were solid.

In fact, while everyone keeps saying that small businesses are getting killed from taxes and regulations out of Washington, the reality is that the Labor Department’s household survey has produced 1.1 million new jobs in the first quarter of 2010, or 371,000 per month. If that continues, the unemployment rate will be dropping significantly.

Additionally, the corporate payroll number increased by 224,000 — not 162,000 — with the prior two months being revised up by 62,000. And if you take out the 48,000 temporary census-worker jobs, it turns out that government employment actually declined in March.

What’s my point? Credibility. Conservative credibility.
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#28
#28
allvol123 said:
ok. So unemployment is 25% higher than his prediction if he didn't get his stimulus bill. That is what we are calling "working?" Damn. Hate to see what happens if it doesn't work.
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Tell that to the people whose jobs were saved via the stimulus bill. Just because it doesn't help you directly, doesn't mean it didn't work.
 
#30
#30
thekicker3 said:
Tell that to the people whose jobs were saved via the stimulus bill. Just because it doesn't help you directly, doesn't mean it didn't work.
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If I propose a solution that includes a we do x or y will happen and then I get x but miss y by 25% in the wrong direction, then it didn't work. My personal status is irrelevant.
 
#31
#31
thekicker3 said:
Tell that to the people whose jobs were saved via the stimulus bill. Just because it doesn't help you directly, doesn't mean it didn't work.
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1. Hard to do when you can't find any.

And to the second part, (assuming your right) To those it didn't work for and can't find a job now, after losing theirs, It didn't work, and convincing those people otherwise is futile.
 
#33
#33
thekicker3 said:
Tell that to the people whose jobs were saved via the stimulus bill. Just because it doesn't help you directly, doesn't mean it didn't work.
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why don't you show us some people who's jobs were actually "saved" by the stimulus bill

ok, let me add a qualifier to that, show us private sector jobs that were saved.
 
#34
#34
paul1454 said:
1. Money supply increases are at their lowest levels since 1995.

2. In addition, although unemployment is still at 9.7%, the four-week moving average for jobless claims fell to its lowest level last week
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1. the money supply is twice what it has ever been in US history. TWICE

2. this is due to both seasonal adjustments and 800,000 census jobs.
 
#35
#35
VolInMn said:
The Standard & Poor's 500-stock index is up more than 74% from its recessionary low in March 2009. Corporate bonds have been rallying for a year. Commodity prices have surged. International currency markets have been bullish on the dollar for months, raising it by almost 10% since Nov. 25 against a basket of six major currencies. Housing prices have stabilized. Mortgage rates are low.

Why the Obama Plan Is Working - BusinessWeek


Let the gnashing of teeth begin.
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Having read the article, they went way out of their way to make this sound as good as possible.

Corporate bond rally is because the market irrationally underpriced every security in the market because of lack of liquidity with no solution in sight. Stock market pricing is about FED liquidity and not about earnings, but also looks good if one does the math after a 40% beating. Surging commodity prices is an enormous problem, but really tells us about weakness in our currency. As to the dollar, it absolutely bottomed out for several reasons. Buying dollars today is like buying distressed and massively undervalued real estate today. Housing prices have stabilized because the gov't propped up the market and gave away tax dollars. There also happens to be a basic floor in housing prices and it's tied to per capita income. Mortgage rates are no longer low and won't be for a while. The housing market is going to be hammered for a long time to come.

That said, I attribute none of this to this administration. The couple of moves they have made would have been made by almost all. The disastrous handling of GM and the stimulus debacle I do attribute. The knew healthcare feeding frenzy is also theirs. As we see people get skittish over our paper, it's about governmental spending, not about managing the economy.
 
#36
#36
Interest rates being at zero and therefore money market rates being near zero are the primary reason the corporate bond market has gone nuts. it's currently a HUGE bubble.
 
#37
#37
Droski's comments on Census jobs are spot on. Keep in mind the comments made by the Obama administration last month of the blizzards. etc. keeping hiring down last month. Roll over those people getting jobs this month and you have less of an impact on this month's "surge" as well.

Just because the unemployment figures for a month look "better", people want to say things are getting rosy. Fact is, people are taking what they can get. A guy who made $65K and was laid off is better off getting a $30K job than riding unemployment. He comes off the rolls but is making less than half of what he used to.

As for numbers moving up on the markets, companies have streamlined. They've cut positions and trimmed inventories. Companies have retooled and changed how they do business. They've discovered dead wood that cost them before. Now that they are leaner, they are better able to make a profit as well. Add to the fact healthcare and regulatory policies have come into effect, more are outsourcing overseas to cheaper labor and less 'obligations' by the government.

There may be more spending now but that would be partly from tax returns. More people on the lower end are getting more money. You may see a slight uptick on spending and a little less debt but thank some returns for that portion as well.

Fact is, things are still in bad shape with the masses. People are still being laid off. Houses are still being foreclosed on. Show me long term trends without little period related upticks and you may have a point.
 
#38
#38
I have a hard time buying into anything "economically positive" right now. I started my career as a machinist in 1985, as soon as I graduated high school. I was blessed to raise two children and have a pretty good life. Then boom, in February of this year I was let go because of "lack of work". I don't enjoy playing the blame game but three months later, with 25 years of journeyman's experience under my belt and I still can't find a job. Something's wrong with this scene..........Commish.....
 
#39
#39
Commish09 said:
I have a hard time buying into anything "economically positive" right now. I started my career as a machinist in 1985, as soon as I graduated high school. I was blessed to raise two children and have a pretty good life. Then boom, in February of this year I was let go because of "lack of work". I don't enjoy playing the blame game but three months later, with 25 years of journeyman's experience under my belt and I still can't find a job. Something's wrong with this scene..........Commish.....
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Businesses especially small businesses don't want to hire because they know how bad Obamacare will hurt them, they are affraid of what cap and tax will do to them and they know that taxes will increase under this regime.
 
#43
#43
droski said:
the stock market rally has 100% to do with the trillions of free money the fed has been pumping into the market.
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This is by and large the primary reason. I agree.


with unemployment still at 10% me thinks you can't say obamamonics is working.
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Given what you say your background is, I think you are disingenuous to link 2009-2010 policies with the labor market. Actually, any policy with any contemporaneous labor market.
 
#45
#45
shootermcgavin7 said:
Given what you say your background is, I think you are disingenuous to link 2009-2010 policies with the labor market. Actually, any policy with any contemporaneous labor market.
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generally speaking you are 100% correct. but when you spend a $1 trillion to "save jobs" in 2009 and 2010 you are no longer given that lag time. particurally when you are going on national tv saying your jobs program is hte reason why we added jobs this monty (while ignoring the census).
 
#46
#46
droski said:
generally speaking you are 100% correct. but when you spend a $1 trillion to "save jobs" in 2009 and 2010 you are no longer given that lag time.
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It may have saved jobs. Perhaps the unemployment rate would have been 16% this year without it. We don't observe the counterfactual.

I'm pretty sure if the prior administration did not step in after the Lehman failure we'd easily be looking at 16% unemployment at this point, probably a lot worse. But I can't prove it; there is no counterfactual. Just like I doubt the unemployment rate would have been HIGHER without the stimulus.
 
#47
#47
Oldvol75 said:
Obamanomics??????????????? I thank him every day for the furlough days that I have to take. I had to take 5 before Christmas and 3 before May. Its working well down here where real people live. After my wifes plant closed where she was a superviser for 28 years, it took her 362 days to find a part time job. All the numbers may look good in the books, but they don't translate very well to main street.

There really is nashing of teeth.
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Sounds like something Sarah Palin might say. I bet your town is more American than others too. :whistling:
 
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