Thursday, March 11, 2010

STRUCTURAL UNEMPLOYMENT A TICKING BOMB

Why is this important to understand? It just sounds like so many gobbledeegook economic mumbojumbo. OK then let's take a stab at it.

What does Malinvestment and Unemployment mean to each other. Malinvestment for example occurs when a decision by the powers is made to ramp up an economy using an unsustainable model that is driven by leverage through the creation of money by a ponzi scheme of derivatives that basically weapons of financiall mass destruction as defined by Warren.

I am trying to keep this simple so bear with me....This creates a structural unemployment bomb. In other words....A structural change in the labor market occurs when hiring patterns change not as a function of economic fluctuations, but because of shifts in the economy's production that reallocate workers among industries ... in this case it was into construction and related real estate...as an effort to pump up the last bubble bursting in 2000.

We are in a structural collapse and its secular not cyclical.....This is essentially an unresolvable (at least in the short term) employment issue without profound political and exonomic changes occuring. Add in a pinch of demographics and 60 Trillion in Debt and Unfunded Mandates....well you see the problem. I cannot even touch Ocun's law or frictional, or technological unemployment definitions..I don't believe they apply to us now but you can google them to your hearts desire.

Back to the subject and then I quit. Malinvestment and structural unemployment go hand in hand. A newsletter Joe sends me addressed malinvestment and I can now clearly see how this issue directly creates the moral hazard of sturctural unemployment. Without a clear political structural change these issues will not be adressed in the near term. My guess is the law of nature will eventually define your solution and as Joe likes to say...you aren't gonna like their solution. gl and enjoy.

10 comments:

  1. I think you are off a bit on the 60 trillion. I have seen it is more like 75 trillion. But hey what is a few trillion here and a few trillion there. Your number could be correct, my number could be correct. But we both agree OUR deficit is not 12.5 trillion.
    Jeff

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  2. We had a similar unemployment situation in the early 80's. I remember people saying double digit unemployment will be the norm.

    A massive military build up, tax cuts and deregulation at the time got us through but only kicked the can down the road and is part of the reason we are where we are today.

    Unfortunately we are coming to the end of the road and theres no place to kick the can.

    SWC, SLW and SSRI all rise to the occasion once again.

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  3. the unfunded mandates have a range of 50 to 70..so its just ludicrous to even fathom the problem.....anyway how bout those gaps today......hehehe

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  4. Temo,

    What a nice gap for SWC again today,heheeee!

    Joe

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  5. Auy turned at 9.85 today BUT volume is low, still early in the morning so let's see what happens.

    Joe

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  6. Temo,

    I have already made my target for how much I wanted to make this yr mainly thanks to SWC .

    Joe

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  7. Sprint's low today just like yesterday was around 3.58 and nice gap from there. I like this one since price is cheaper than SWC and volume always heavy, lot more shares can be traded without droping the bid, heheeee!

    Joe

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  8. Nice, parked at exactly S&P 1150. A strong sustained move above 1155+ means 1225 (200 week moving average)is in play sooner rather than later. Retracement to 1045 possible but seems further out the longer we stay above 1150.

    A strong showing through March will allow the Fed to gracefully back out of keeping the $1.25 trillion mbs program going at current levels.

    Gold will lag this in this coordinated move as the weekly stochs continue to bottom out.

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  9. Red,

    I think your 1225 scenario is the most likely and I suspect we will see an increase in volume as well. 1225/1250 for the top of the range and small pullbacks along the way.

    I wouldnt be surprised if we see that before the end of April.

    Of course the EW guys will keep predicting just a little higher all the way up from here. The same as they did last year at 875.

    Joe,

    S is another good one that behaves well. hehehe Similar to how XRA previously played.

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