There s Something Hugely Wrong In the U #financial, #news, #stock,

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There’s Something Hugely Wrong In the U.S. Labor Force, Explains JP Morgan CEO Jamie Dimon

There’s one number regarding the United States labor force that worries Jamie Dimon.

The JPMorgan Chase (JPM ) CEO noted the “staggering” decline in the workforce participation rate among working-age men in a call with reporters on Tuesday. The aside came in a briefing on the Business Roundtable’s latest CEO survey. Dimon is the chairman of the corporate lobbying group.

“I want to point you to one segment, okay, which is not a collective demographic, one segment and only one segment, and you should all write about it, and it’s a staggering number,” he said when asked by a reporter about unemployment. “Labor force participation by men between 25 and 55 has gone down from 96% to something like 86 to 87%. That is not demographics folks, that’s 10 million people who left the workforce. And maybe some have gone back, my numbers are a little bit old. Write about that segment, okay? That is a huge number.”

Dimon’s numbers were not quite exact, but the sentiment hones in on a multi-decade trend of men dropping out of the workforce.

While the unemployment rate dropped 4.3% in May, labor force participation by men age 25 to 54 (commonly called “prime-age men”) fell to 88.4%, its lowest figure so far this year. Labor force participation for the group hasn’t been above 90% since 2009, and the last time it was at or above the 96% figure Dimon referenced was in 1970.

“There’s something wrong,” Dimon said.

“It’s a big deal,” said Economic Policy Institute economist Elise Gould. “If you look back from mid-century. you see that men have been declining for a very long period of time, and the trends since 2000 are really a continuation of what’s been happening.”

It’s not just men who are dropping out of the labor force but women as well. After decades of increases in labor force participation among prime-age women, it has slowly been dropping off since the turn of the century.

“The fact that that has been declining over the last 16 years is a conundrum,” Gould said.

The problem of nonworking prime-age men has been thoroughly examined by lawmakers and economists seeking a solution. The White House Council of Economic Advisers under President Obama last year released a report offering up a number of possible explanations for the trend, including increasing rates of women in the workforce, rising disability insurance claims, falling demand for less-skilled workers and barriers to employment for men with criminal records.

Brookings Institution researchers Eleanor Krause and Isabel Sawhill in a paper suggested those and other factors could be in play.

“There is no one smoking gun in this story, although if we had to point to the three most prominent, they would be a general lack of the right education and skills, too many years of slack labor markets, and high rates of incarceration,” they wrote.

“Growing inequality certainly can be seen as having a cost,” Gould said.

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12/09/2017

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And You Thought QE Was Over: The Fed Will Monetize Half

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And You Thought QE Was Over: The Fed Will Monetize Half Of This Year s U.S. Treasury Issuance

The Fed may have officially tapered QE at the end of 2014 but that doesn’t mean it is done buying Treasuries: since the Fed never ended rolling over maturing paper, it means that it will remain indefinitely active in the open market. And while there were no sizable maturities from the Fed’s various QEs to date (only $474 million in 2014 and $3.5 billion in 2015) that will change dramatically this year, when Brian Sack’s team will have to purchase about $216 billion to replace matured TSYs. According to JPM calculations, this represents half the net new government debt that will be issued over the next 12 months.

The amounts rise from there: $194 billion comes due in 2017, about $373 billion in 2018 and $329 billion in 2019 for a grand total of $1.1 trillion over the next four years as shown in the following Bloomberg chart:

The Fed’s intervention in the Treasury market is well known: here is a brief Bloomberg summary of where we’ve been and where we are going:

The Fed is the biggest holder of the government’s debt. Its $2.5 trillion hoard, amassed in a bid to support the economy after the financial crisis, is more of a focus for some investors than the trajectory of interest rates. From this month through 2019, about $1.1 trillion of Treasuries in the portfolio are set to mature.

Even though the Fed’s holdings of Treasurys won’t rise and remain flat at about $2.5 trillion, the Fed’s reinvestment mandate means a return to active POMO which also means that there will remain a backstop net buyer for 1 of every 2 bonds issued by the US government.

Clearly this is bullish for bond bulls (one can stop wondering why year after year Goldman is so bearish on TSYs every year with its 3.00% yield target and is so eager to buy everything its clients have to sell) for whom “the Fed’s signals that it will roll over the obligations have been another reason to doubt the consensus forecast that yields will rise in 2016. If officials had chosen to stop funneling that money into new debt, the government would likely have to boost borrowing in the market by roughly an equivalent amount this year, potentially pushing up Treasury yields.”

Hypotheticals aside, the Fed’s indirect monetization of debt has led to the Fed being the owner of about 30% of all 10-Year equivalents currently, further leading to dramatic notional scarcities among CUSIPs that were most actively purchased by the open markets desk, usually in the form of Off The Run paper, which meant that the Fed has far less On The Turn to lend to Treasury shorts in repo, leading to major “special” prints in the repo market manifesting by near-fail, or -3.00%, levels when one wishes to borrow any given Treasury.

However, as Bloomberg explains, as the Fed will rolls over maturing Treasuries, it will add new On The Run issues to its balance sheet. Since Operation Twist, the Fed has had less of those sought-after securities to lend out in a daily program it has to ease shortages in the market. As a result, these Treasuries have frequently commanded a premium in the repo market — leading more trades to go uncompleted, or ‘fail,’ in bond parlance.

If the Fed’s stock of those Treasuries grows, the central bank should be better able to alleviate the shortages through its SOMA Securities Lending program, said Joseph Abate, a money-market strategist in New York at Barclays Plc, a primary dealer.

It will become “easier for people to access the securities they need to cover any shorts in the on-the-runs and, correspondingly, the level of fails should fall,” Abate said. “The more difficult it is to cover a short, the less liquidity there is in the market.”

Dealers say bond trading has become more difficult as regulator-imposed risk limits make it costlier for banks to transact in all types of debt. While Treasuries remain one of the most liquid global markets, failing trades rose this month to about 2.5 percent of average daily volume, from about 1 percent before Twist, according to Barclays. The dollar amount of uncompleted Treasuries trades reached the highest since 2011 last month, Fed data show.

The topic of soaring repo “fails” was covered recently. and is shown in the chart below: a direct function of the Fed’s encroachment in the open market.

Then there is the question of remitting interest payments back to the Treasury, about as close to directly funding the US government as it gets (with the exception of course of the Fed directly paying $19 billion to fund the Highway Bill: that was undisputed direct funding of the US government by the banks that make up the Federal Reserve system). According to Bloomberg, if the Fed had opted not to reinvest this year, the Treasury would have had to make up for the lost funding with additional debt sales that might have boosted 10-year yields by 0.08-0.12 percentage point, according to Priya Misra at TD Securities LLC.

One wonders just how much more debt the Treasury will have to issue and how much higher yields will go up by if the Fed ever does unwind its balance sheet?

It also leads to another question: why did the Fed decide to begin the “normalization” process by hiking rates first instead of first removing the truly unorthodox support for asset classes, namely unwinding its balance sheet, or at least stopping the reinvestment of maturing bonds. The answer: because the Fed’s rate hike is a farce, further compounded by the fact that the Fed Funds rate on December 31, the only day it actually matters for bank balance sheet purposes, was well below the Fed’s 25bps floor.

But that’s a topic for another post.

For now, we leave it to Mark MacQueen, co-founder of Sage Advisory Services Ltd. which manages $12 billion in Austin, Texas, to explain precisely why those who are long assets could care less about nominal rate hikes but are terrified of the Fed’s actual balance sheet unwind: “The Fed tightening gave us little worry, but the unwind of the balance sheet gives us major worries. The Fed is keenly aware that the balance sheet has a much greater impact on the overall yield levels in the markets going forward than raising rates .”

And there’s your answer why the Fed is hiking instead of winding down its gargantuan $4.5 trillion balance sheet: it might actually achieve the intended effect.

inflation WILL not cure this. No way. When you add up gov. debt. company debt, personal debt and the GREED of the “62”. no inflation will take to sanity. We are playing for all the poker chips on the table. and sitting with crooks and cheaters who have no intention of honouring any loss (bail-in). Who stack the deck and deal from the bottom,

Systemic greed that has been concentrated slowly. Far beyond some treasury bill sale or Libor rigging.

+1 NA. Everyone with an ounce of sense and financial acumen knows this and it makes them very nervous. unlike the unwoken sheep, who are blissfully unaware and preoccupied with i-thingys.

Waddya mean it’s gone.

The only reason the dollar isn’t falling versus other currency is because the other central banks are monetizing double time too.





03/09/2017

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Gulliver – s Travels to Lilliput: History, Politics, Culture – Satire

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Liliputian History, Politics, Culture Satire

Lilliputian Royal Court

Lilliput is ruled by an Emperor, Golbasto Momarem Evlame Gurdilo Shefin Mully Ully Gue. He is assisted by a first minister (who carries a white staff) and several other officials (who later bring articles of impeachment against Gulliver on grounds of treason): the galbet or high admiral, Skyresh Bolgolam; the lord high treasurer, Flimnap; the general, Limnoc; the chamberlain, Lalcom; and the grand justiciary, Balmuff.

The Lilliputian court customs are very interesting. Men seeking political office demonstrate their agility in rope dancing. How long and how skillfully a candidate can dance upon a rope determines his tenure in office. Reldresal, Gulliver’s friend, and Flimnap, are two of the candidates that are most adept in this. Other diversions include noblemen competing for official favor by crawling under or leaping over a stick, a feat for which they are then rewarded with various colored threads. The disbelief of a Divine Providence renders a man incapable of holding any public station; for, since kings avow themselves to be the deputies of Providence, the Lilliputians think nothing can be more absurd than for a prince to employ such men that disown the authority under which he acts

There are quarrels between the High Heel Party and the Low Heel Party. The conflict originated over a religious question “Which end should the faithful break their eggs, at the big end or at the little end?” The Blefuscudians break theirs, in the original style, at the big end. But, by royal edict, the Lilliputians must break their eggs at the little end.

All crimes in Lilliput are punished with utmost severity. False accuser are treated as severely as a traitor and put to death and, out of his goods, or lands, the innocent person is quadruply recompensed for the loss of his time and for the danger he underwent. Fraud is considered a greater crime than theft and is punished with death. Ingratitude is a capital crime, as whoever makes ill returns to his benefactor, must needs be a common enemy to the rest of mankind.

Lilliputians believe that parents are the last of all others to be trusted with the education of their own children; and, therefore, they have, in every town, public nurseries, where all parents are obliged to send their children to be reared and educated. These schools are of several kinds, suited to different qualities, and to both sexes. They have certain professors, well skilled in preparing children for such a condition of life as befits the rank of their parents, and their own capacities as well as inclinations.

Lilliput House

Lilliput and Blefuscu were intended as, and understood to be, satirical portraits of the kingdom of Great Britain and the kingdom of France, respectively, as they were in the early 18th century. Only the internal politics of Lilliput are described in detail; these are parodies of British politics, in which the great central issues of the day are belittled and reduced to unimportance.

Lilliput is reputedly named after the real area of Lilliput on the shores of Lough Ennell in Dysart, Mullingar, Co. Westmeath in Ireland. Swift was a regular visitor to the Rochfort family at Gaulstown House. It’s said that it was when Swift looked across the expanse of Lough Ennell one day and saw the tiny human figures on the opposite shore of the lake that he conceived the idea of the Lilliputians featured in Gulliver’s Travels. There is also an early Christian association – St. Patrick s sister, Lupita is known to the Lilliput area, which may recall her name. In fact, the townland known from ancient times as Nure was renamed Lileput or Lilliput shortly after the publication of Gulliver’s Travels in honour of Swift’s association with the area. Lilliput House has stood in the locality since the Eighteenth Century.

25/07/2017

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President Trump, first lady host governors for dinner at White House

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President Trump, first lady host first ball at White House

WATCH President Trump, first lady host governors for dinner at White House

While Hollywood rolls out the red carpet for the Oscars tonight, the president and first lady hosted a night of glamour of their own. But instead of movie stars, the guests at the White House tonight were the nation’s governors.

It’s an annual tradition for the president to invite the nation’s governors to the White House for a dinner. Tonight’s Governor’s Ball was a first for President Trump and first lady Melania Trump as host and hostess at the White House for a gala event.

“I hear this is a record number of governors, 46, and that’s the highest that have ever showed up for this evening,” the commander in chief said during a toast.

The theme of the dinner was Spring’s Renewal, with the first lady saying in a statement, “The scents of jasmine and roses fill the air as we give thanks for this great nation and the glory of renewal.”

She also said the night will be an opportunity to leave political labels behind and unite.

“I am proud to invite all the governors to the White House for this important annual event,” Melania Trump said. “Tonight, we come together as one nation, leaving political labels and partisan interests behind.”

However, Donald Trump briefly touted the accomplishments of his young presidency, highlighting border security, saying, “I can say that after four weeks, it’s been a lot of fun accomplished, but we’ve accomplished almost everything we’ve started out to accomplish. The borders are stricter, tighter.”

He teased the group’s upcoming discussion of former President Obama’s signature legislative achievement, the Affordable Care Act.

“Tomorrow we’re going to meet, and we’re going discuss things like perhaps health care will come up, perhaps, and I think we’ve made a lot of progress on that, and we’re going to have a speech Tuesday night, and we’re going to be speaking very specifically about a very complicated subject,” Trump said. “We’re going to have it fixed, and we’re going to repeal and replace, and I think you’re going to see something very special.”





08/07/2017

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Gulliver – s Travels to Lilliput: History, Politics, Culture – Satire

#gullivers travel
#

Liliputian History, Politics, Culture Satire

Lilliputian Royal Court

Lilliput is ruled by an Emperor, Golbasto Momarem Evlame Gurdilo Shefin Mully Ully Gue. He is assisted by a first minister (who carries a white staff) and several other officials (who later bring articles of impeachment against Gulliver on grounds of treason): the galbet or high admiral, Skyresh Bolgolam; the lord high treasurer, Flimnap; the general, Limnoc; the chamberlain, Lalcom; and the grand justiciary, Balmuff.

The Lilliputian court customs are very interesting. Men seeking political office demonstrate their agility in rope dancing. How long and how skillfully a candidate can dance upon a rope determines his tenure in office. Reldresal, Gulliver’s friend, and Flimnap, are two of the candidates that are most adept in this. Other diversions include noblemen competing for official favor by crawling under or leaping over a stick, a feat for which they are then rewarded with various colored threads. The disbelief of a Divine Providence renders a man incapable of holding any public station; for, since kings avow themselves to be the deputies of Providence, the Lilliputians think nothing can be more absurd than for a prince to employ such men that disown the authority under which he acts

There are quarrels between the High Heel Party and the Low Heel Party. The conflict originated over a religious question “Which end should the faithful break their eggs, at the big end or at the little end?” The Blefuscudians break theirs, in the original style, at the big end. But, by royal edict, the Lilliputians must break their eggs at the little end.

All crimes in Lilliput are punished with utmost severity. False accuser are treated as severely as a traitor and put to death and, out of his goods, or lands, the innocent person is quadruply recompensed for the loss of his time and for the danger he underwent. Fraud is considered a greater crime than theft and is punished with death. Ingratitude is a capital crime, as whoever makes ill returns to his benefactor, must needs be a common enemy to the rest of mankind.

Lilliputians believe that parents are the last of all others to be trusted with the education of their own children; and, therefore, they have, in every town, public nurseries, where all parents are obliged to send their children to be reared and educated. These schools are of several kinds, suited to different qualities, and to both sexes. They have certain professors, well skilled in preparing children for such a condition of life as befits the rank of their parents, and their own capacities as well as inclinations.

Lilliput House

Lilliput and Blefuscu were intended as, and understood to be, satirical portraits of the kingdom of Great Britain and the kingdom of France, respectively, as they were in the early 18th century. Only the internal politics of Lilliput are described in detail; these are parodies of British politics, in which the great central issues of the day are belittled and reduced to unimportance.

Lilliput is reputedly named after the real area of Lilliput on the shores of Lough Ennell in Dysart, Mullingar, Co. Westmeath in Ireland. Swift was a regular visitor to the Rochfort family at Gaulstown House. It’s said that it was when Swift looked across the expanse of Lough Ennell one day and saw the tiny human figures on the opposite shore of the lake that he conceived the idea of the Lilliputians featured in Gulliver’s Travels. There is also an early Christian association – St. Patrick s sister, Lupita is known to the Lilliput area, which may recall her name. In fact, the townland known from ancient times as Nure was renamed Lileput or Lilliput shortly after the publication of Gulliver’s Travels in honour of Swift’s association with the area. Lilliput House has stood in the locality since the Eighteenth Century.

30/05/2017

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Gulliver – s Travels to Lilliput: History, Politics, Culture – Satire

#gullivers travel
#

Liliputian History, Politics, Culture Satire

Lilliputian Royal Court

Lilliput is ruled by an Emperor, Golbasto Momarem Evlame Gurdilo Shefin Mully Ully Gue. He is assisted by a first minister (who carries a white staff) and several other officials (who later bring articles of impeachment against Gulliver on grounds of treason): the galbet or high admiral, Skyresh Bolgolam; the lord high treasurer, Flimnap; the general, Limnoc; the chamberlain, Lalcom; and the grand justiciary, Balmuff.

The Lilliputian court customs are very interesting. Men seeking political office demonstrate their agility in rope dancing. How long and how skillfully a candidate can dance upon a rope determines his tenure in office. Reldresal, Gulliver’s friend, and Flimnap, are two of the candidates that are most adept in this. Other diversions include noblemen competing for official favor by crawling under or leaping over a stick, a feat for which they are then rewarded with various colored threads. The disbelief of a Divine Providence renders a man incapable of holding any public station; for, since kings avow themselves to be the deputies of Providence, the Lilliputians think nothing can be more absurd than for a prince to employ such men that disown the authority under which he acts

There are quarrels between the High Heel Party and the Low Heel Party. The conflict originated over a religious question “Which end should the faithful break their eggs, at the big end or at the little end?” The Blefuscudians break theirs, in the original style, at the big end. But, by royal edict, the Lilliputians must break their eggs at the little end.

All crimes in Lilliput are punished with utmost severity. False accuser are treated as severely as a traitor and put to death and, out of his goods, or lands, the innocent person is quadruply recompensed for the loss of his time and for the danger he underwent. Fraud is considered a greater crime than theft and is punished with death. Ingratitude is a capital crime, as whoever makes ill returns to his benefactor, must needs be a common enemy to the rest of mankind.

Lilliputians believe that parents are the last of all others to be trusted with the education of their own children; and, therefore, they have, in every town, public nurseries, where all parents are obliged to send their children to be reared and educated. These schools are of several kinds, suited to different qualities, and to both sexes. They have certain professors, well skilled in preparing children for such a condition of life as befits the rank of their parents, and their own capacities as well as inclinations.

Lilliput House

Lilliput and Blefuscu were intended as, and understood to be, satirical portraits of the kingdom of Great Britain and the kingdom of France, respectively, as they were in the early 18th century. Only the internal politics of Lilliput are described in detail; these are parodies of British politics, in which the great central issues of the day are belittled and reduced to unimportance.

Lilliput is reputedly named after the real area of Lilliput on the shores of Lough Ennell in Dysart, Mullingar, Co. Westmeath in Ireland. Swift was a regular visitor to the Rochfort family at Gaulstown House. It’s said that it was when Swift looked across the expanse of Lough Ennell one day and saw the tiny human figures on the opposite shore of the lake that he conceived the idea of the Lilliputians featured in Gulliver’s Travels. There is also an early Christian association – St. Patrick s sister, Lupita is known to the Lilliput area, which may recall her name. In fact, the townland known from ancient times as Nure was renamed Lileput or Lilliput shortly after the publication of Gulliver’s Travels in honour of Swift’s association with the area. Lilliput House has stood in the locality since the Eighteenth Century.

21/04/2017

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