... than the Bush Administration lets on? Doesn't the (Bush) Dept. of Labor "create" jobs out of thin air, using something that has been notoriously described as the "Employment Birth-Death Model"? The late, lamented scion of the Austrian School of Economics, Dr Kurt Richbacher, described this questionable computerized jobs-creation model as the "biggest absurdity in American economic statistics". And, Dr. Richbacher thought that there were many absurdities in American economic reporting (i.e.,hedonics,productivity #s, elimination of M-3 reporting, etc.). In an expansionary period, the assumption that nascent businesses will be created that escape the short-term notice of B.L.S. may be correct; but in a severe downturn such as this, it amounts to bloody propaganda.

The trigger is thought to be the bankrptcy of Lehman Bros.

IMO, the trigger was the militarization of America since Americans increasingly believed that war pork after WWII was sustainable.

As far as I can tell, the stock market is chronically challenged since many Americans have stopped giving away free loans to corporate America based solely on the fantasy of a future windfall.

As proof of this shift, newspapers now widely report that Americans prefer foreign stocks over domestic stocks since America isn't a growth economy.

So, if Americans no longer believe in domestic stocks, then domestic companies can't create capital by issuing stock and can't pay off their employees by issuing stock options so they'll have to actually borrow money or grow sales in order to support the material expectations of their lenders and employees.

Most likely, our notion of "quality of life" has to reset itself and that will be a good thing; everyone will get used to the new way of life.

Workers Give Up, by David Leonhardt
Friday, December 5, 2008

provided by: The New York Times

The jobs report doesn't account for the 637,000 people who dropped out of the labor force.

http://www.telegraph.co.uk/finance/newsbysector/industry/mining/3543370/Metal-prices-fall-further-than-during-Great-Depression.html

By Ambrose Evans-Pritchard
Last Updated: 7:29AM GMT 03 Dec 2008

Kevin Norrish, the bank's commodities strategist, said the average fall in the price of copper, lead, and zinc has been roughly 60pc since the peak in July this year. All three metals were traded on the London Metal Exchange in the inter-war years so it is possible to make a comparison.
Prices for the three metals fell 40pc from their highs in 1929 before touching bottom in 1933, with the bulk of the fall in 1930 as the slump spread worldwide. "Lead and zinc have already lost more than they did in the 1930s," he said.
Copper was hit hardest during the Depression, despite the electrification drive in the US and the Soviet Union, falling 70pc at one stage before creeping back in the mid-1930s. The reason was an 85pc fall in US construction, then the biggest user of the metal.
Barclays Capital said the broader equity markets are already discounting the sorts of "savage declines" in corporate profits that were last seen in the Slump. It said (trailing) price to earnings ratios are actually lower now than they were the early 1930s, with moves in credit spreads that suggest investors are anticipating depression-era levels of economic contraction.
The credit markets continued to exhibit signs of extreme stress yesterday. The iTraxx Crossover index measuring default risk on low-grade European bonds punched above 950 for the first time. The investment grade index hit 188. The spreads are now flashing the sort of danger signals seen before the collapse of Lehman Brothers in September.
Each episode of the financial crisis over the last eighteen months has been preceded by a big jump in the iTraxx indexes.

grim.
dire.
distressing.
serious.
frightful.
gruesome.
terrifying.
horrid.
grave.
dark.
gloomy.
solemn.
heavy.

heh, i can keep going. "doomed" is my current favorite.

seriously though, can anyone explain to me how most economancers being that far off the mark in their [ hell, call it "guessing" ] the unemployment numbers is a any kind of a set up for a 200+ point run-up in the Dow?

Freedom is not more important than fairness, just easier to sell and a lot easier to fake.

unemployed, unemployed no longer counted, the underemployed, and the fact the bottom is nowhere in sight; the "D" word is starting to show up with increasing frequency. Where we are heading is a place we've never seen before. I just pray Americans will show each other some compassion. We won't survive this alone. 2nd world here we come.
Here's a link;
Nouriel Roubini
http://finance.yahoo.com/tech-ticker/article/138999/2009-Recession-Will-Be-Severe-%27There-Is-a-Global-Deflationary-Risk%27-Roubini-Says?tickers=^dji,^gspc,TLT,UDN,UUP,GLD,SPY

Numerian, have any bright ideas for the Big 3 ?

Hard to imagine a conventional and successful way forward, which leads me to think that unconventional thinking is called for in this time. But never a popular option.

we could let them go belly up, and let the free market/bankruptcy handle the situation. But my guess is that the situation would be "handled" by the market by spiraling us down faster into a hole. See Keynes.

On the other hand, doing more of what they have been doing for last 30 years won't save the car companies or the rest of us.

I think we need to own them, and use their plants to build stuff we need. Order elec cars for govt. lot of them. WHOLE BUNCH. Build trolley (those electric bus things like in Boston) and ship out to many big cities and small cities. (cheaper than rail systems -- can run on roads)

Build a national healthcare system, and convert the union special benefits to a good national average

WASHINGTON, Dec. 6, 2008 (CBS/AP) After weeks of tense discussions with the heads of the U.S. auto industry, Democratic Congressional leaders have reached an agreement that may just clear the way for the Big Three to get the money they need to survive ... for now.

CBS News correspondent Kimberly Dozier reports that significant progress came Friday night, when Democrats from both the House and Senate agreed to bail out the struggling General Motors, Chrysler and Ford with federal funds.

Several officials say the White House and congressional Democrats have agreed on $15 billion in loans, which is less than half of what the car chiefs were seeking.

They say the breakthrough came after House Speaker Nancy Pelosi bowed to a demand by President Bush that any aid come from a fund that had been intended to help Detroit produce more fuel-efficient cars.

Pelosi said the House would consider legislation next week to provide "short-term and limited assistance" to the U.S. auto industry.

The agreement came after another round of confrontational hearings, pitting exasperated lawmakers against desperate corporate heads.

Facing the automakers who returned to Capitol Hill seeking money, Rep. Jeb Hensarling, R-Tex., said, "Can you name me three industries in this economy that aren't hurting that couldn't use $34 billion? Name one that couldn't use it."

The bosses of Chrysler, Ford and GM say bankruptcy just is not an option.

"It's going to cream our revenues, said GM CEO Rick Wagoner. "And if our revenues go down like this, we will never be able to cut costs enough to get ahead of that."

As executives from Detroit pleaded with lawmakers for loans to help them survive, the government reported the worst single month's job loss in 34 years - 533,000 jobs gone in November - and an unemployment rate of 6.7%.

Officials in both parties said the legislation would include creation of a trustee or group of industry overseers to make sure the bailout funds were used to transform General Motors, Ford and Chrysler into competitive enterprises.

Democratic leaders insist this money is a loan, not a gift.

"We are writing a bill whereby the federal government will be the first to be repaid when there is some money," said Rep. Barney Frank, D-Mass.

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Richard Heinberg

...

Now with the Collapse of 2008, economists are rushing to announce a new era of neo-Keynesianism: lack of regulation in the finance industry has led to a cataclysm of unimaginable proportions, and only massive government intervention can put us back on track.

Sadly, this time the tracks have been moved, maybe dismantled altogether. The two great economic paradigms of our age simply took too much for granted. They assumed that economies run on money and labor, whereas real economies also need energy and natural resources. They assumed that because population, resource extraction, and available energy had grown throughout the 19th and 20th centuries, they would continue to grow in perpetuity; all that was necessary was to properly adjust the relations between money, market forces, and government regulation. No one (within the economics profession) stopped to think that limits to Earth's supplies of fossil fuels, topsoil, water, and other resources might impose ultimate limits on economic activity.

The fields of ecological economics and biophysical economics have sprung up in the past two or three decades to fill in this enormous blind spot of conventional economic thinking, but both are currently marginalized to the point of irrelevance.

In the months and perhaps years ahead we will see a titanic battle to the finish between the free marketers and the state controllers over who is right about the economy, and about who is capable of restoring the beatific condition of perpetual growth. Sadly, neither camp has the answer this time around. Humanity has reached a significant physical limit to growth—Peak Oil—that will spell ruin to all economic philosophies that fail to take such limits into account.

How long will it take the theoreticians to figure this out? How much of our remaining wealth will they destroy in a futile attempt to prove one or another of their paradigms to be eternally true? How far will society unravel before someone in charge begins to question the received wisdom?

Let's hope their learning curve is short.

I did inhale.

By Robert Pear IHT
Published: December 6, 2008

ASHLAND, Ohio: As jobless numbers reach levels not seen in 25 years, another crisis is unfolding for millions of people who lost their health insurance along with their jobs, joining the ranks of the uninsured.

is; there were 1.2 million jobs lost in the last 3 months alone. And this is the "worst" recession since WWII. Another layer peeled off the onion.

November data show largest net loss in 26 years; Ontario's manufacturing sector hit especially hard

Ann Perry | December 6

The Toronto Star - The devastating economic malaise gripping the United States has finally infected Canada's job market, which shed nearly 71,000 positions in November, the largest monthly net loss in 26 years.

The higher-than-expected job losses pushed the country's unemployment rate to 6.3 per cent, up one-tenth of a percentage point from October.

"If you needed one piece of evidence to prove that Canada has finally entered that slippery slope toward recession, this would be it," said Michael Gregory, a senior economist at BMO Capital Markets.

Canada posted a net gain of 133,000 jobs in the first 11 months of the year, compared with almost two million jobs lost in the United States over the period.

The picture was especially bleak in Ontario, Canada's manufacturing heartland, where 66,000 jobs evaporated. Those losses drove the province's unemployment rate to 7.1 per cent, up from 6.5 per cent the month before.

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“The absence of any US-Iran bilateral channel...may have the perverse effect of reinforcing Iranian interest in progressing in the nuclear realm so that the US will be forced to take it seriously and engage it directly." ~ Richard Haass