Posted by WARREN MOSLER on 3rd October 2008
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(email exchange)
Right, thanks!
>
> On Fri, Oct 3, 2008 at 10:01 AM, wrote:
>
> In a message dated 10/3/2008 01:00:23 Mountain Daylight
> Time, wrote:
>
> Jean-Claude Trichet, president of the European Central Bank,
> said the EU’s structure was ill-suited to a common bail-out
> scheme.
>
> ”We do not have a federal budget, so the idea that we could
> do the same as what is done on the other side of the Atlantic
> doesn’t fit with the political structure of Europe.” Silvio
> Berlusconi, the Italian prime minister, will want to be seen
> supporting Mr Sarkozy in proposals for greater regulation. But
> with the desperate state of Italy’s public finances – debts of
> more than 103 per cent of gross domestic product – he will
> not be in a position to offer much in terms of an EU bail-out
> package.
>
> Bingo! Berlusconi gets it!
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Posted in EU | 9 Comments »
Posted by WARREN MOSLER on 3rd October 2008
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From Karim:
Broad-based weakness.
- Payrolls -159k, net revisions +4k.
- Unemployment rate rises from 6.055% to 6.125%.
- Avg hourly earnings up 0.2%.
- The shocker was hours worked down 0.5% and down 2% at annualized rate in Q3.
- Labor income = payrolls X average hourly earnings X hours worked.
- Hours data implies negative GDP in Q3 and very weak handoff to Q4, where some forecasts are already in -2% to -3% area for real GDP.
- Diffusion Index down from 44.7 to 38.1.
- Manufacturing -51k
- Retail -40k
- Construction -35k
- Finance -17k
- Temp Services -24k
- Education +25k
- Government +9k
BLS stated weather did not have ’substantial’ effect on number.
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Posted in Email, Karim | No Comments »
Posted by WARREN MOSLER on 3rd October 2008
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(email exchange)
He gets it!
>
> On Fri, Oct 3, 2008 at 8:49 AM, Karim wrote:
>
> Trichet says solvency is an issue
> for governments.
>
Yes!
>
> Trichet: West passing through
> most serious time since WWII.
>
The largest systemic risk is in the eurozone.
>
> Trichet: We must do everything
> to preserve unity in Europe.
>
Good luck to them!
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Posted in Email, Karim | No Comments »
Posted by WARREN MOSLER on 3rd October 2008
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Just heard 10 year US credit default swaps are at 35 basis points.
The Fed needs to sell this in unlimited quantities and drive the price to near 0 to help restore and normalize liquidity.
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Posted in Credit | No Comments »
Posted by WARREN MOSLER on 3rd October 2008
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There is only one immediate response that will turn the tide that I know of.
The US Congress can declare a ‘tax holiday’ and lower the ‘payroll taxes’ (social security, medicare, payroll deductions) at least temporarily to 0%.
This tax is currently killing about $80 billion a month in aggregate demand- about $1 trillion per year.
This would IMMEDIATELY add maybe 5% to GDP.
The financial sector is immediately supported as the increase in after tax incomes allows workers to make their mortgage payments and pay their other costs of living.
This is ‘trickle up’ economics at work.
Politically, it would look like this:
Rather than Congress taking $700+ billion from taxpayers (and removing that much aggregate demand) and allocating $700+ billion to buy securities from the financial sector which adds no aggregate demand), and hoping for this to somehow ‘trickle down’ to the real economy.
Congress instead lets workers keep their $700+ billion so they can make their mortgage payments and support the real economy as the funds ‘trickle up’ to the financial sector.
There are no ’scare resources’ causing this financial crisis and slow down.
It’s a purely ‘nominal’ event that’s causing the problems.
That’s why a ’solution’ is necessarily ‘easy’ and immediately executable.
All we need to do is change numbers on spreadsheets.
It is only a vote to change those tax rates that is separating the world from an instant return to prosperity.
And once again that vote probably won’t happen due to the absurd myths about government deficits that should have fallen by the wayside decades ago.
Warren
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Posted in EU, Proposal | 4 Comments »
Posted by WARREN MOSLER on 3rd October 2008
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Unemployment Rate (Sep)
| Survey |
6.1% |
| Actual |
6.1% |
| Prior |
6.1% |
| Revised |
n/a |
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Unemployment Rate ALLX 1 (Sep)
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Unemployment Rate ALLX 2 (Sep)
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Change in Nonfarm Payrolls (Sep)
| Survey |
-105k |
| Actual |
-159k |
| Prior |
-84k |
| Revised |
-73k |
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Change in Nonfarm Payrolls YoY (Sep)
| Survey |
n/a |
| Actual |
-519.00 |
| Prior |
-279.00 |
| Revised |
n/a |
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Nonfarm Payrolls ALLX (Sep)
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Change in Manufacturing Payrolls (Sep)
| Survey |
-57k |
| Actual |
-51k |
| Prior |
-61k |
| Revised |
-56k |
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Change in Manufacturing Payrolls YoY (Sep)
| Survey |
n/a |
| Actual |
-3.2% |
| Prior |
-3.0% |
| Revised |
n/a |
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Manufacturing Payrolls ALLX (Sep)
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Average Hourly Earnings MoM (Sep)
| Survey |
0.3% |
| Actual |
0.2% |
| Prior |
0.4% |
| Revised |
n/a |
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Average Hourly Earnings YoY (Sep)
| Survey |
3.6% |
| Actual |
3.4% |
| Prior |
3.6% |
| Revised |
n/a |
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Average Hourly Earnings ALLX 1 (Sep)
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Average Hourly Earnings ALLX 2 (Sep)
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Average Hourly Earnings ALLX 3 (Sep)
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Average Weekly Hours (Sep)
| Survey |
33.7 |
| Actual |
33.6 |
| Prior |
33.7 |
| Revised |
n/a |
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Average Weekly Hours ALLX 1 (Sep)
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Average Weekly Hours ALLX 2 (Sep)
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ISM Non Manufacturing Composite (Sep)
| Survey |
50.0 |
| Actual |
50.2 |
| Prior |
50.6 |
| Revised |
n/a |
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Posted in Daily | No Comments »
