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Demographics - Crash Course Chapter 15

Age distribution is too lopsided to support entitlements
Friday, September 26, 2014, 5:21 PM

Our national demographic architecture no longer can afford the entitlement system we have. And that's even assuming entitlements were currently sufficiently funded. But as the last chapter showed, the existing programs are underfunded to the tune of $100-200 Trillion.  » Read more


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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

Daily Digest

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Daily Digest 7/15 - Oil May Determine South Sudan's Future, UK Charges 2 Brokers In Libor Inquiry

Monday, July 15, 2013, 11:57 AM
  • Precious Metals Stocks: The Most Undervalued Asset Class
  • China Wealth Eludes Investors as Stocks Earn 1%
  • What Sweden Can Tell Us About Obamacare
  • It’s Amazing to Be a Working Mom in France—Unless You Want a Job
  • Britain Charges 2 Former Brokers in Libor Inquiry
  • Oil May Determine South Sudan's Future
  • Climate change is a bigger threat to the Tour de France than doping
Daily Digest

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Daily Digest 7/10 - IMF Cuts Growth Forecast For World Economies, Canadians Struggle With Saving

Wednesday, July 10, 2013, 9:21 AM
  • Illinois lawmakers seek more information in hunt for fix to $97 billion pension crisis
  • IMF cuts growth forecast for U.S., world economies
  • Nurses' strike hits Portugal hospitals
  • Seniors find it harder to get home-delivered meals (Florida)
  • Chicago gun violence: 74 people shot, 12 killed over July 4 weekend
  • Job cuts: Mining companies to trim operations by 3,500 (Ghana)
  • Financial Crisis Just a Symptom of Detroit’s Woes
  • Furloughs Have Begun for Nearly 50,000 Full-Time Guardsmen Nationwide, Including Guam
  • Mining services industry forced to adapt to end of coal boom in Queensland's Bowen Basin
  • USDA: One In Six Americans Use Food Stamps
  • Puerto Rico sees surge in homeless population
  • Tuition at 14 Pennsylvania universities to rise 3 percent
  • Eurozone jobless rate worse than OECD average
  • Canadians struggle with retirement saving
  • Italy's rating lowered one notch to BBB: S&P
  • Gold borrowing cost hits post-Lehman high
  • Study: State's pension debt spiked since February (California)

Four Signs That We're Back in Dangerous Bubble Territory

Stocks, bonds – everything – at risk
Tuesday, May 21, 2013, 6:09 PM

As the global equity and bond markets grind ever higher, abundant signs exist that we are once again living through an asset bubble or rather a whole series of bubbles in a variety of markets. This makes this period quite interesting, but also quite dangerous.

With equity and bond markets at or near all-time record highs, with all financial assets consistently shrugging off bad or worse news as the riskiest of assets continue to find consistent upward bids, we find ourselves in familiar and bubbly territory. » Read more

Daily Digest

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Daily Digest 5/7 - France's Budget Gap Widens, Australia Faces Decade Of Debt

Wednesday, May 8, 2013, 9:03 AM
  • Unemployment haunts Social Security recipients
  • Spanish Banks Refinanced, Restructured $272.4 Billion in Loans
  • Australia faces decade of debt, economists warn
  • France's budget gap widens in March
  • L.A. city employees urge leaders to go after uncollected fees, taxes to balance $7.7B budget
  • Copper theft epidemic has lawmakers looking for answers
  • Wall Street sees Fed buying $1.25 trillion of assets in stimulus: Reuters poll
  • India's cheap food plans to prove costly for government
  • French Industrial Output Drops as Hollande Aims to Revive Growth
  • Wichita school district counts record number of homeless children
  • Greenspan-Era Faith in Fed Seen With Bernanke: Chart of the Day
  • Many Americans say they can't retire until their 70s or 80s
  • Bankers Warn Fed of Farm, Student Loan Bubbles Echoing Subprime
  • Australian Central Bank Cuts Key Rate to Historic Low
  • New red light camera law could raise cost of appeals
  • Moody’s Says Cities View ‘Strategic Default’ as Less Taboo

Marking the 4-Year Reflationary Rally: How Much Better Off Are We Really?

Growing amounts of data show a failure to thrive
Monday, May 6, 2013, 10:31 AM

The U.S. stock market rally has recently passed its fourth anniversary after the terrifying lows of March 9, 2009.

During that time, massive and unconventional reflationary policy from the Federal Reserve has managed to lift the S&P 500 by nearly 70%. But perhaps even more improbably, it has finally (?) built a floor under U.S. residential real estate prices. » Read more

Daily Digest

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Daily Digest 4/30 - In Dollars They Trust, Why You Can Only Buy 5 Kinds Of Apples

Tuesday, April 30, 2013, 9:54 AM
  • Statistical Discrimination Against the Long-Term Unemployed
  • Student Loan Bubble Cracks With Pulled Sallie Mae Bond Deal
  • Neil Macdonald: The 'monarchs of money' and the war on savers
  • Zimbabwe after hyperinflation: In dollars they trust
  • Presenting The Bank With The Biggest Derivative Exposure In The World
  • Jonathan Kay: China’s ruthless foreign policy is changing the world in dangerous ways
  • The Sunny T'Sou-ke First Nation Loves Solar Power
  • Serious Breaches at BP’s Norwegian Platform Cause Risk of Huge Explosion
  • Why Your Supermarket Only Sells Five Kinds Of Apples