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Productivity may have increased on average 2.2 percent per year in the non-farm business sector over the last 20 years, a cumulative increase of 56 percent, yet these numbers are not what they seem.
Productivity figures like these are misleading and incomplete. In theory productivity increases should generate higher paying jobs and a lower cost of living as technology, capital, and process improvements are employed to make labor more efficient. But this applies only if the work is done in American factories by American workers. In reality, much of the recent productivity improvement reported by American corporations stems from shifting work abroad, often to low-wage nations. Intuitively, if a corporation fires most of its workers at home and outsources most of its manufacturing, it can dramatically increase its reported output per American worker.
Thanks to the loss of 3.7 million manufacturing jobs in the last 20 years, we now have fewer people employed in manufacturing than we did in 1955. This is truly remarkable when you realize that America's population has risen by 77 percent in the interim (from an estimated 167 million in 1955 to 296 million today).
Yes life is still great for those that lives in Richistan America.
[edit on 8-10-2009 by marg6043]
Thirty-year bonds sold at lowest yield since March
NEW YORK (MarketWatch) -- The Treasury Department sold $12 billion in 30-year bonds (UST30Y 3.97, -0.03, -0.70%) on Thursday at a yield of 4.009%, the lowest level since the March auction. Bidders offered $2.37 for every $1 of notes available, compared to $2.65 on average in the last three reopenings, where the debt sold has the same maturity and coupon as the original issue. Indirect bidders, a class of investors that includes foreign central banks, bought 34.5% of the auction, compared to an average of 48.6% at the last three reopenings. After the auction, yields on the benchmark 10-year note (UST10Y 3.17, -0.01, -0.44%) , which move inversely to prices, turned higher and rose 2 basis points at 3.21%.
Stocks advanced Thursday after jobless claims beat and Alcoa kicked off the earnings season with exactly what analysts wanted to see: better-than-expected revenue.
California Raises Yields, Scales Back Bond Sale to $4.1 Billion
Oct. 8 (Bloomberg) -- California, which struggled to get individual investors to buy its long-term bonds this week, raised yields to entice institutional buyers today and reduced the amount it sold by 8 percent to $4.14 billion.
The U.S. state with the most people, the lowest credit ratings and record 12.2 percent unemployment sold $505 million to retail buyers, according to California State Treasurer Bill Lockyer’s office. The rest were sold to institutions.
“We were able to get a $4 billion plus deal in a cold and inhospitable market,” Tom Dresslar, spokesman for Lockyer, said in an e-mail late today.
The largest single maturity, $1.75 billion of taxable 30- year Build America Bonds, was priced to yield 7.23 percent, 0.95 percentage point more than comparably rated corporate bonds, data compiled by Bloomberg show.
Problems at the Federal Housing Administration, which guarantees mortgages with low down payments, are becoming so acute that some experts warn the agency might need a federal bailout.
Running questions about the F.H.A.’s future — underscored by interviews with policy makers, analysts and home buyers — came to the fore on Thursday on Capitol Hill. In testimony before a House subcommittee, the F.H.A. commissioner, David H. Stevens, assured lawmakers that his agency would not need a bailout and that it was managing its risks.
But he acknowledged that some 20 percent of F.H.A. loans insured last year — and as many as 24 percent of those from 2007 — faced serious problems including foreclosure, offering a preview of a forthcoming audit of the agency’s finances.
Since the bottom fell out of the mortgage market, the F.H.A. has assumed a crucial role in the nation’s housing market. Created in 1934 to help lower-income and first-time buyers purchase homes, the agency now insures roughly 5.4 million single-family home mortgages, with a combined value of $675 billion.
In addition, these loans are bundled into mortgage-backed securities and guaranteed through the Government National Mortgage Association, known as Ginnie Mae. That means the taxpayer is responsible for paying investors who own Ginnie Mae bonds when F.H.A.-backed mortgages hit trouble.
“It appears destined for a taxpayer bailout in the next 24 to 36 months,”
U.S. Job Openings Fall to Lowest Level in at Least Nine Years
Oct. 9 (Bloomberg) -- Job openings in the U.S. fell in August to the lowest level in at least nine years, signaling the economy hasn’t improved enough to prompt companies to take on more staff.
The number of unfilled positions fell by 21,000 to 2.39 million, the fewest since records began in 2000, the Labor Department said today in Washington. Openings were down by 2.4 million, or 50 percent, since peaking in July 2007.
The report showed hiring and firing both slowed in August, indicating last month’s acceleration in payroll losses may have been due to a lack of employment rather than a pick up in dismissals. Labor Department figures last week showed employers cut staff by a net 263,000 workers in September and the unemployment rate increased to the highest level since 1983.
“We’re not going to signal the all-clear on the jobs market until we see hiring pick up,” said Zach Pandl, an economist at Nomura Securities International Inc. in New York. “Firing has cooled off but firms have not really ramped up hiring activity.”
Many new jobs are being created but what the media generally fail to report is that most new jobs are in non-tradable service industries or in government. Even when jobs are created in manufacturing, these tend to be in industries like building materials which do little exporting. Total manufacturing employment has plummeted to the levels of the 1950s. In any case, overall job creation is not keeping pace with the rise in our nation's population.
Job growth over the last five years is the weakest on record. The US economy came up more than 7 million jobs short of keeping up with population growth. Over the past five years the US economy experienced a net job loss in goods producing activities. The entire job growth was in service-providing activities--primarily credit intermediation, health care and social assistance, waiters, waitresses and bartenders, and state and local government. US manufacturing lost 3 million jobs, almost 17 percent of the manufacturing work force. The wipeout is across the board. Not a single manufacturing payroll classification created a single new job.
FACTBOX-Steps US Treasury could take to avoid debt limit
Oct 9 (Reuters) - Standard & Poor's Ratings Services said on Friday it expects the U.S. Congress to raise the government's $12.1 trillion debt limit this quarter.
Publicly held U.S. debt subject to the ceiling currently stands at $11.87 trillion, leaving a $230 billion cushion for Treasury borrowing, according to the Oct. 7 Daily Treasury Statement.
S&P said that although the required legislation may become enmeshed in other political debates, raising uncertainty in the debt markets and perhaps disrupting some government functioning, "we do not believe that the debt ceiling issue will prevent timely service of U.S. federal government debt."
S&P rates U.S. government debt AAA with a stable outlook.
The Treasury asked Congress in August to raise the debt limit as soon as possible to keep the Treasury from defaulting on its financial obligations
At that time, it predicted it could hit the limit, which was raised in February, as soon as mid-October. The Senate is expected to act in November.
Below are brief descriptions of steps the Treasury could take to avoid hitting the debt ceiling.
CASH MANAGEMENT BILLS
The Treasury could cut issuance of longer-term government debt and rely more heavily on short-term cash management bills to gain more day-to-day control over the amount of debt outstanding. Cash management bills are typically issued for days instead of normal Treasury bill maturities of four weeks to one year.
STATE AND LOCAL GOVERNMENT SERIES SECURITIES
The Treasury could suspend sales of state and local government series securities, known as "slugs," which are special low interest-bearing Treasury securities offered to local governments and other tax-exempt entities for the investment of bond-issue proceeds. Slugs, which count against the debt limit, were last halted in September 2007 to avoid hitting the ceiling then.
CIVIL SERVICE RETIREMENT AND DISABILITY FUND
As it has in the past, the Treasury could suspend payments to the Civil Service Retirement and Disability Fund, a government employee pension fund. For the first 11 months of the fiscal year, the government has contributed an average of $5.63 billion to this fund every month.
EXCHANGE STABILIZATION FUND
The Treasury could dip into this seldom-used pool of money earmarked to stabilize currency rates. For the past year, the Treasury has pledged $50 billion from this fund to guarantee money market mutual funds, but that program is due to expire on Sept. 18.
GOVERNMENT SECURITIES INVESTMENT FUND
To free up cash, the Treasury can stop investing in a federal employee pension fund known as the G-fund. Normally, the G-Fund is reinvested daily in government securities. But the Treasury has statutory authority to retain a portion of the fund daily, as long as it provides proper notification and reimbursement for any lost earnings from the move.
FANNIE MAE AND FREDDIE MAC DEBT
The Treasury could sell its holdings of Fannie Mae and Freddie Mac debt, which totaled $165 billion as of Sept. 30, 2009.
Originally posted by pause4thought
I wonder what happens when Mr. G comes face to face with the laws of physics?
Originally posted by pause4thought
Just wondering: what's the general opinion these days on what happens above 10,000?