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He’s Got My Vote

Yesterday I was driving into New York City for a couple of meetings, and I heard an old friend from the business being interviewed by Kathleen Hays on Bloomberg Radio.

I was amazed that Warren Mosler is running for Chris Dodd’s seat in the US Senate.

I thought his business interests in Florida and the US Virgin Islands would keep him from coming back to New England, but maybe he’s getting a jump on future northward migration from global warming.

Warren was a “blogger” on economic and market topics before there was blogging. Besides making the fastest sports car on the planet, he used to pen columns on the economy, the market, and government policy before we even used the internet to communicate.

His position papers and thought pieces that were very popular with professionals in the bond business throughout the late 80’s and 90’s, so I suppose it’s no surprise to find him sharing his thoughts on the web today.

I’ll be contacting the campaign to see how I can help.

hh

Bio

Howard Hill is a former Wall Street mortgage finance “rocket scientist” who invented a number of successful bond structuring techniques and analytic tools in the 1980’s and 1990’s. He headed research, finance, sales and trading groups at major Wall Street houses in the first half of his career, and became a customer for Wall Street in the new Millennium, analyzing and buying the same kinds of bonds he used to create. In addition to scores of mortgage deals, he structured the first securitized deals with apartment building loans, nursing home loans, mobile home park mortgages, computer leases, life insurance policyholder loans and Argentine mortgages.

Payrolls


Karim writes:

  • Better than expected overall; private payrolls up 67k, consistent with recent trend.
  • Net revisions up 123k (July private payrolls revised from +71k to +107k)
  • UE rate up from 9.51% to 9.64%
  • Hours flat but July revised up from 0.3% to 0.4%
  • Avg hourly earnings up 0.3%
  • Private payroll strength even more impressive considering -61k swing in mfg employment (totally out of synch w/ism employment indicator)
  • Median duration of unemployment down to 19.9 weeks, from 22.2 last mth and high of 25.5 in June
  • U6 UE measure up to 16.7% from 16.5%

Conclusion: Beneath the surface, solid gains this quarter in the components that drive personal income: jobs+wages+hours. Politically, the headline UE rate and the U6 measure are a problem and will make the various fiscal stimulus measures more likely. So really may be best of both worlds for economy.

Agreed!

UE up as people reenter the labor force, which happens as jobs open up in this part of the cycle.

And low/negative productivity last quarter could be telling us businesses critically understaffed due to uncertainty are finally being forced to get to where they need to be to service current sales/client bases. So hiring rises faster than output for a while. This is also a good sign as that supports personal income and consumption.

There never was a double dip in the cards. It would have had to come from an outside shock. The federal deficit now seems more than large enough to continue to support modest top line growth, and any further increase will offer further support.

The ongoing federal deficits have also largely repaired household balance sheets, adding income and savings of financial assets to the non govt sectors, and continue to do so.

This sets us up for the ‘hand off’ to private sector deficit spending (credit expansion) taking over from govt sector deficit spending, usually via cars and houses. Car sales seem to already be improving, and housing has nowhere to go than up as well. Starts could double and still be at historically low levels.

So the outlook remains very good for equities, not so good for rates, and not so good for large share of the population that needs to work for a living, as most of the incremental wealth flows to the top.

Obama speech- not your father’s Democrats

There is a quick fix, a full payroll tax holiday for employees and employers.

His small business proposals show he and the rest of Congress still don’t understand that employment is a function of sales.

There is nothing in their proposals to support consumption, which is the only point of any economy.

I suspect they are afraid of the trade gap and fear domestic consumption will hurt net export growth.

Their goal is to have us be the world’s slaves via rising net exports.

This is all very good for business and the stock market, not so good for people who need to work for a living.

These are not your father’s Democrats.