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The Trouble with Numbers

Our 'good' data worsens the closer we look
Tuesday, June 10, 2014, 11:06 AM

According to the ever-strident popular press, the world is in recovery. The stock market says so, the bond market says so, and the politicians and monetary bureaucrats all say so.

The only trouble is the central banks continue to flood the world with liquidity, something they shouldn't need to be doing if a true recovery were really upon us. » Read more



Why Demand Will Become Even More Scarce

Prospects for disinflation in 2014
Tuesday, April 22, 2014, 12:14 PM

Executive Summary

  • Anemic employment & wages growth depresses the odds of near-term interest rate hikes
  • Why energy costs increases are experiencing a lull, keeping inflation lower than many expected
  • The demographic arguments for deflation
  • Why the US is becoming more vulnerable to a repricing of natural gas -- vs oil -- in the coming decade

If you have not yet read Part I: When Every Country Wants to Sell, Who Buys?, available free to all readers, please click here to read it first.

The most recent US jobs report was once again a disappointment, despite the headline number of 192,000 jobs created. Over the past two years, the economy has reliably created about 150,000 jobs per month. This has been just enough to keep up with population growth, but alas, not enough to put the long-term unemployed back to work. The concerning data in the report came in the details of the jobs created: as usual--and this has been a trend for several years now--mostly in the lower wage sectors. A few wrap-up tweets from Dan Alpert of Westwood Capital summed up the facts rather nicely:

Other notable observations from recent trends in US jobs reports include the fact that job creation in 2013 was no higher than in 2012. Not exactly an encouraging trend for those who would be looking for inflation risk, or strong growth in 2014.

But perhaps worst of all has been the number of workers leaving the workforce. Part of this can be explained, of course, by demographic retirements. It's no secret that the US has an aging population, and there's a bulge of retiring workers that will admittedly create some gaps in the labor market over the next decade. But the large numbers of workers exiting the workforce is also explained by discouraged workers, and that unemployment benefits for many have started running out.

What many in the public do not understand, is that workers taking unemployment checks are counted as active seekers of employment. They are added to the composition of the workforce, and when they continue to take unemployment checks but do not find work, they serve to keep the unemployment rate elevated. But when unemployment benefits expire, and workers leave the workforce, the unemployment rate may... » Read more


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You've Got No Job!

A glimpse into the future of (un)employment
Friday, February 7, 2014, 1:45 AM

Today, the pundits are a-buzz making sense of the latest lackluster jobs report. Expect much hand-wringing over the impact of the 'polar vortex' and that Punxsutawney Phil saw his shadow.

But most of us care more about the state of one particular job: our own. How relevant is this latest bit of data to that? Not very.

So, to better understand the trends in the work environment most likely impact our own paychecks, it will help to look at another bellwether similar to our fuzzy groundhog friend: AOL. » Read more


Off the Cuff: Playing a Bad Hand

The game is rigged & the deck is stacked
Thursday, September 12, 2013, 11:04 AM

In this week's Off the Cuff podcast, Chris and Mish discuss:

  • Sanity on Syria?
    • The rush to war may be slowing down
  • Markets a-bubblin'
    • Irrational valuations everywhere
  • Japan's woes
    • Bug, meet windshield
  • The disability disaster
    • The new permanent form of welfare

This week, Chris and Mish look at the sorry cards on the table and wonder why anyone wants to play this game.

Stock market valuations are back to non-sensical levels. Even members of the Fed are beginning to admit that their liquidity policies are creating an ongoing stream of asset valuation bubbles. » Read more


Jennifer Winn: How to Successfully Transition to a 'Great-Fit' Career

Self-understanding & visioning
Thursday, June 6, 2013, 4:29 PM

As many Peak Prosperity readers know, I was on a very different career track before opting out of the corporate race and teaming up with Chris.

To maximize my odds for success in transitioning not just to a new job, but also hopefully to a lifelong "great-fit" career, I spent a lot of time studying the science of career management and engaging with a platoon of professional consultants and executive coaches. Through this research, I learned that there are indeed time-honored practices that statistically and materially can improve your chances for identifying work that matches your aptitudes and passions AND for finding gainful employment in this new field. » Read more


Let's Stop Fooling Ourselves: Americans Can't Afford the Future

Unemployment, Taxes and Unfunded Retirement are Squeezing Ea
Tuesday, March 12, 2013, 10:24 AM

The truth is: The three adult generations in the U.S. are suffering, and their burdens are likely to increase with time. Each is experiencing a squeeze that is making it harder to create value, save capital, and pursue happiness than at any point since WWII. At that point, we were a creditor nation with an economy exploding into dominance on the world stage. Now, however, the U.S. is the largest debtor nation and our economic hegemony is increasingly at seige across a number of fronts.

A continuation of the status quo is a decision to sleepwalk face-first into the constraints hurtling towards us.

Instead, shouldn't we stop fooling ourselves and ask: What should we be doing differently? » Read more


Time to Choose

A fundamentals-driven breakout seems imminent. But which dir
Friday, February 8, 2013, 6:44 AM

Whether you're aware of it or not, a great battle is being waged around us.

It is a war of two opposing narratives: the future of our economy and our standard of living.

The dominant story, championed by flotillas of press releases and parading talking heads, tells an inspiring tale of recovery and return to growth. 

The other side, less visible but with a full armament of high-caliber data, tells a very different story. One of growing instability, downside risk, and inequality.

As different as they are in substance, they both share one fundamental prediction and this is why you should care: This battle is about to break. And when it does, one side will turn out to be much more 'right' than the other. The time for action has arrived. To position yourself in the direction of the break you think is most likely to happen.

It's time to choose a side. » Read more


Running on Fumes

Things are beginning to run recklessly hot
Friday, February 1, 2013, 5:49 PM

The stock market blasted higher, with the Dow crossing the 14,000 mark because the jobs report came in well under expectations.  In today's world, one follows the other.

In yesterday's world, the one where logic and reason ruled the day, that first sentence would not have been written.  Economic weakness would not have been rewarded with a big surge in stocks.

But this all makes perfect sense in today's world, once you tilt your view to the "new normal" and get with the program.

I titled this piece 'running on fumes' because, in one very real sense, that's exactly what this current market is doing.  The fumes in this case happen to be thin-air money that the Fed is injecting into the financial markets to the tune of $85 billion per month, or roughly $4 billion per working day.

When an engine finally runs out of gas and turns to fumes, the last act of that engine is to run really hot – to race for a while – before finally quitting. » Read more

Daily Prep

Credit: Jess Jiang and Lam Thuy Vo /NPR

The Deadliest Jobs in America

In one graphic
Thursday, January 24, 2013, 2:14 PM

When thinking about switching jobs or making the leap to the agrarian life, it is important to consider the physical, life threatening risks that come with the job. An infographic for the work-related, on-the-job deaths in 2011 for U.S. workers.