tag:blogger.com,1999:blog-11027528911364475.post5998725172346229063..comments2024-02-18T21:10:05.205-08:00Comments on EconomPic: Continuing Claims Continues ClimbJakehttp://www.blogger.com/profile/07946497592651234440noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-11027528911364475.post-42579878006518607002009-05-21T12:25:16.050-07:002009-05-21T12:25:16.050-07:00mike- the link below is too a LONG article, but pr...mike- the link below is too a LONG article, but probably the first thing i read that allowed me to fully grasp what has happened:<br /><br />http://www.debtdeflation.com/blogs/2009/01/31/therovingcavaliersofcredit/#_ftn6<br /><br />highly recommendedJakehttps://www.blogger.com/profile/07946497592651234440noreply@blogger.comtag:blogger.com,1999:blog-11027528911364475.post-22555630805895070612009-05-21T11:39:51.260-07:002009-05-21T11:39:51.260-07:00I think you are right about "this time is dif...I think you are right about "this time is different". Just for the fun of it, I went out and found a quick characterization of all the recessions since the great depression at http://www.investopedia.com/articles/economics/08/past-recessions.asp.<br /><br />What I pulled from this quickie analysis was that few if any of the other recessions were caused by such deep systemic failures. Most were caused by a dramatic increase in the cost of commodities like oil. The damage these recessions caused seemed to have little multiplicative effects compared to the cascade of effects we are seeing this time, largely in the housing market. <br /><br />Another major consideration this time compared to previous recessions is that this time, there was a huge destruction of personal wealth and personal credit worthiness. The bubble caused housing values to crash, causing all industries related to housing to crater. Those affected industries shed employees. Those employees stopped consuming and quit paying their mortgages, destroying their credit ratings and throwing away all perceived equity. I contend that this cycle went round and round more in this recession than in previous ones because the bubble was not just a commodity or an investment, but rather a product with thousands of hours of productivity contributing to its value.<br /><br />Now that those who lost their homes have no money and their credit rating is shot, they can't buy that house or new car or really anything else until they get the cash. Without them buying, there is no demand and no need for employers to start hiring again, and when they do, it won't be for the high wages they were paying 18 months ago. <br /><br />Later today I think I will read up some on the Japan's lost decade to see if there are some better parallels to what we are seeing today than looking back at our historical recessions.<br /><br />Mike<br /><><NewCreaturehttps://www.blogger.com/profile/07767208115190482660noreply@blogger.comtag:blogger.com,1999:blog-11027528911364475.post-59963573217238222152009-05-21T09:41:25.567-07:002009-05-21T09:41:25.567-07:00Thanks for the comment Mike. Historically it has a...Thanks for the comment Mike. Historically it has actually been the case that initial were leading and continuing were lagging. In my original post I link to an article from Credit Writedowns that details this clearly. <br /><br />My argument is that this time is different. I'll actually have a post later in the day which theorizes that maybe the "this time is different" may be a generational issue as the U.S. economy may no longer be able to support as many private workers in the past, thus this more a secular trend than many currently believe.Jakehttps://www.blogger.com/profile/07946497592651234440noreply@blogger.comtag:blogger.com,1999:blog-11027528911364475.post-27611690116907955532009-05-21T09:32:00.147-07:002009-05-21T09:32:00.147-07:00Great post about continuing claims. I took your ad...Great post about continuing claims. I took your advice and revisited your previous post titled "Net Claims is What Matters" and wholly agree with your thoughts on the topic.<br /><br />One thing I thought might be interesting to try to visualize after looking at the charts there is the average amount of time it takes to recover from job losses when measured against the continuing claims number. As I looked at Hired less Fired chart it was pretty easy to see approximately where the recessions started AND the re-employment spike seemed fairly consistent in slope. <br /><br />Based on that, two things could be extrapolated. First, if the recession ended today, assuming the re-employment slope was fairly consistent with historical slopes, it would be interesting to see when we would be back into positive territory.<br /><br />Second, it would be interesting to see if the fired less hired is a leading or trailing indicator for the economy. Without the historical recessions visualized, it is hard to see.<br /><br />MikeNewCreaturehttps://www.blogger.com/profile/07767208115190482660noreply@blogger.comtag:blogger.com,1999:blog-11027528911364475.post-89899331997125459482009-05-21T07:12:44.794-07:002009-05-21T07:12:44.794-07:00revised!revised!Jakehttps://www.blogger.com/profile/07946497592651234440noreply@blogger.comtag:blogger.com,1999:blog-11027528911364475.post-82022143421691915902009-05-21T07:07:01.660-07:002009-05-21T07:07:01.660-07:00You missed a great alliterative headline:
Continu...You missed a great alliterative headline:<br /><br />Continuing Claims Continues ClimbJack Crowwhttps://www.blogger.com/profile/02434427249200943248noreply@blogger.com