Home » Posts tagged 'Unemployment' (Page 5)

Tag Archives: Unemployment

Olduvai
Click on image to purchase

Olduvai III: Catacylsm
Click on image to purchase

Post categories

Post Archives by Category

Hundreds Of Thousands Stage Massive Street Protests In Brazil, In Loud Call For Rousseff’s Ouster

March 13, 2016

Hundreds Of Thousands Stage Massive Street Protests In Brazil, In Loud Call For Rousseff’s Ouster

Back in August, we said that while there are all kinds of charts one could look at on the way to judging just how bad things have truly gotten in Brazil, the most important graphic of all may indeed be this one, which depicts the scope of the various street protests that took place in the country last year.

Popular discontent with President Dilma Rousseff has waxed and waned over the last six months along with the prospects for the opposition’s impeachment bid. At times, it looked like Rousseff might be on her way out, but political wrangling and questions about whether House Speaker Eduardo Cunha – the lawmaker pushing hardest for the President’s ouster-  accepted bribes complicated the process.

As Bloomberg wrote earlier this week, a string of recent events tied to the seemingly never-ending Carwash Probe – the 2-year long investigation into corruption involving Petrobras – have brought prosecutors ever closer to Rousseff. That, combined with the fact that the country is mired in a deep economic downturn characterized by double-digit inflation and soaring unemployment has the public at wit’s end.

“On Feb. 22, Rousseff’s top campaign strategist, João Santana, was arrested for allegedly receiving $7.5 million, [then] the magazine IstoE reported that the government’s former leader in the senate, Delcídio do Amaral, had alleged that Rousseff had pushed judges to release political allies imprisoned on charges of graft,” Bloomberg recounted. Finally, former President Luiz Inácio Lula da Silva was held for questioning and five days later, he was charged with money laundering.

The BRL soared on the news as the market apparently believed the chances that Rousseff would be impeached were meaningfully higher after Lula’s detention.

…click on the above link to read the rest of the article…

Norway’s Interest Rate Conundrum

March 12, 2016

Norway’s Interest Rate Conundrum

Current Situation 

The ECB recently stimulated more than expected, cutting rates by five basis points and expanding  quantitative easing. It is already expected that Norges Bank (The Norwegian Central Bank) will cut rates next week, seeing accelerating inflation as temporary. They have a 2.5% inflation target mandate “over time,” giving them lee-way. They see demand falling off while the local economy, driven by exports, recovering. Therefore, they feel that they can cut rates. My previous articles challenged the assumptions that the oil sector will recover, showing that new technology reduces long term prices below offshore break-even points, and exports can make up the difference, illustrating that key sectors, like fishing, can be replicated in Canada, Maine, Russia and Japan.

We are experiencing 1970’s style stagflation, coming from the supply side, not demand. Prices are going up because Norges Bank continues to destroy the Norwegian Krone, turning it into the Nordic Peso. This is where they are “hiding” the damage to save rest of the economy. For example, housing prices will rise in NOK but fall in USD or gold (universal commodity) terms. It’s a shell game, leading to long term decline or even worse, an unexpected period of elevated inflation, requiring a rapid rise in interest rates.  Housing remains at risk in this situation (Norway does not have 30 year fixed loans, most people float monthly).

I am in no position to stop them from making trips to Thailand, fruit from Spain and iPhones from California more expensive, but at least I can share my knowledge with others.

The dashboard, above, lines up key figures, showing how low rates drive inflation, gradually eroding public wealth. It is important to notice that inflation is much higher than interest paid at the bank, punishing responsible behavior. A person’s savings diminishes over time in terms of purchasing power.

…click on the above link to read the rest of the article…

Striking Admission By Former Bank Of England Head: The European Depression Was A “Deliberate” Act

March 2, 2016

Striking Admission By Former Bank Of England Head: The European Depression Was A “Deliberate” Act

Once again we find that it is only after they leave their official posts that central bankers finally tell the truth.

Last night, it was Alan Greenspan who blasted the state of the economy, saying that “we’re in trouble basically because productivity is dead in the water” and when asked if he is optimistic going forward, Greenspan replied “no, I haven’t been for quite a while.”

Then on Sunday, the former head of the BOE, Mervyn King, warned that another aspect of the global economy, namely the financial system whose structural problems remain untouched since the financial crisis have been untouched, is “certain to have another crisis.

“To be sure, warnings by former central bankers who are more responsible about the current global mess sound as nothing but revisionist bullshit. And yet, it was what King said today at the launch of his new book that left us surprised.

As the Telegraph reports today, according to the former head of the Bank of England Europe’s economic depression “is the result of “deliberate” policy choices made by EU elites. Mervyn King continued his scathing assault on Europe’s economic and monetary union, having predicted the beleaguered currency zone will need to be dismantled to free its weakest members from unremitting austerity and record levels of unemployment.

King also said he could never have envisaged an economic collapse of the depths of the 1930s returning to Europe’s shores in the modern age. But, he added, the fate of Greece since 2009 – which has suffered a contraction eclipsing the US depression in the inter-war years – was an “appalling” example of economic policy failure, he told an audience at the London School of Economics.

“I never imagined that we would ever again in an industrialised country have a depression deeper than the United States experienced in the 1930s and that’s what’s happened in Greece.

…click on the above link to read the rest of the article…

Fear The Smell Of (Monetary) Napalm In The Morning

February 26, 2016

Fear The Smell Of (Monetary) Napalm In The Morning

Via ConvergEx’s Nick Colas,

Warm up the choppers and put some Wagner on the loudspeakers – “Helicopter money” is a hot economic topic.

That’s where central banks print money and either hand it to the government for things like infrastructure investment or just send it out to consumers to spend. While that may sound like an extreme measure, advocates of this novel approach argue that it is a valid response to an extreme problem: slowing global growth and central banks with no “Standard” tools left in the shed.

But would it work?  There are two real-world examples in the last 15 years that offer some clues: the 2001 and 2008 tax rebate checks mailed to millions of Americans for up to $600 (2001) and $1,200 (2008). Studies by the National Bureau of Economic Research done in the wake of both events show notable differences.

  • In the first “Drop” (mid 2001), recipients reported spending most (53-73%) of their windfall.
  • In the second (early 2008), the percentage dropped to one third and most recipients reported saving the cash or using it to reduce debt.

The key lesson here: if policymakers are considering “Helicopter money”, they need to have the choppers in the air before a crisis hits. After that, it is too late.

The world’s central bankers are apparently out of ideas for how to stimulate the global economy back to health. Low interest rates?  Check.  Zero interest rates? Check.  Buying bonds to lower long term interest rates?  Big check.  Negative interest rates?  Ditto.  If monetary policy were a theme park, we could safely say we’ve been on every ride in the whole place.

…click on the above link to read the rest of the article…

2016: The Year Wishful Thinking Fails

February 16, 2016

2016: The Year Wishful Thinking Fails 

If we collectively choose wishful thinking, catastrophic consequences are guaranteed.

Wishful thinking has been an integral driver of the “recovery” 2009-2015:asset bubbles aren’t bubbles, central bank policies are brilliantly successful, unemployment has dropped to levels of full employment, and so on.

The problems with wishful thinking that I describe in my book A Radically Beneficial World are becoming more apparent by the day:

1. Elite/Technocrat self-confirmation: Those in the top technocrat/financial layer of the economy look at their own success and think since the status quo is working great for me and my peers, it’s working for everyone.

2. This wishful thinking reinforces the positive bias of status quo institutions run by the technocrat caste and state apparatchiks: the mainstream financial media, government agencies, etc.

3. Wishful thinking appears less risky that gambling on new ideas that might not pay off; wishful thinking is thus viewed by those benefiting from the status quo as the safe bet.

4. When we face difficult problems, wishful thinking is counter-productive because it doesn’t generate solutions. Wishful thinking satisfies our preference for low-risk comfort, but it doesn’t solve problems.

If you’re running a real enterprise, i.e. one that will bankrupt you if you fail to solve problems, wishful thinking is catastrophic.  There are few guarantees in life, but wishful thinking guarantees failure.

Consider a short list of conventional economic/financial beliefs that are shot through with wishful thinking:

— China will manage to slowly depreciate its currency without upsetting the apple carts of global growth and capital flows (never mind that China’s leadership has no history of managing such a transition.)

— Unemployment in the U.S. is less than 5%, a rate that signals full employment and a robust, durable job market (never mind the number of full-time jobs that can support a household remains anemic.)

…click on the above link to read the rest of the article…

The Age Of Stagnation (Or Something Much Worse)

February 14, 2016

The Age Of Stagnation (Or Something Much Worse)

Excerpted from Satyajit Das’ new book “The Age Of Stagnation”,

If you look for truth, you may find comfort in the end; if you look for comfort you will not get either comfort or truth, only . . . wishful thinking to begin, and in the end, despair. C.S. Lewis

The world is entering a period of stagnation, the new mediocre. The end of growth and fragile, volatile economic conditions are now the sometimes silent background to all social and political debates. For individuals, this is about the destruction of human hopes and dreams.

One Offs

For most of human history, as Thomas Hobbes recognised, life has been ‘solitary, poor, nasty, brutish, and short’. The fortunate coincidence of factors that drove the unprecedented improvement in living standards following the Industrial Revolution, and especially in the period after World War II, may have been unique, an historical aberration. Now, different influences threaten to halt further increases, and even reverse the gains.

Since the early 1980s, economic activity and growth have been increasingly driven by financialisation – the replacement of industrial activity with financial trading and increased levels of borrowing to finance consumption and investment. By 2007, US$5 of new debt was necessary to create an additional US$1 of American economic activity, a fivefold increase from the 1950s. Debt levels had risen beyond the repayment capacity of borrowers, triggering the 2008 crisis and the Great Recession that followed. But the world shows little sign of shaking off its addiction to borrowing. Ever-increasing amounts of debt now act as a brake on growth.

Growth in international trade and capital flows is slowing. Emerging markets that have benefited from and, in recent times, supported growth are slowing.

Rising inequality and economic exclusion also impacts negatively upon activity.

…click on the above link to read the rest of the article…

Husky layoffs confirmed as Calgary company continues cost-cutting

February 10, 2016

Husky layoffs confirmed as Calgary company continues cost-cutting

Latest round of cuts hits Alberta’s energy industry as oil prices remain low

More job cuts were announced for Husky Energy on Tuesday as the company looks to weather the current downturn.

More job cuts were announced for Husky Energy on Tuesday as the company looks to weather the current downturn. (CBC)

Calgary-based Husky Energy says layoffs were announced today to ensure the company’s resilience during low oil prices.

The company did not provide any specific numbers, but says the staff reductions were across its operations.

“These are difficult decisions and we will continue to take the steps necessary to ensure the company’s resilience through this cycle and beyond,” said company spokesperson Mel Duvall in an email.

Staff tell CBC News layoffs include full-time staff and contractors.

Late last year, Husky said it was looking to sell some of its conventional oil and natural gas assets in Western Canada.

That includes producing wells from northeastern B.C. to southeastern Saskatchewan, as well as pipelines and storage tanks in the Lloydminster area, but no oilsands or heavy oil assets.

Social media postings suggest that many of the positions cut were related to those assets on the block.

…click on the above link to read the rest of the article…

North Dakota’s Economy Has Been “Completely Devastated” By Oil’s Collapse

February 5, 2016

North Dakota’s Economy Has Been “Completely Devastated” By Oil’s Collapse

Yesterday, on the way to documenting the malaise China’s hard landing has inflicted on Minnesota’s mining country, we discussed the dramatic impact falling crude prices have had on the American and Canadian oil patches.

Take Texas, for instance, where a year of crude carnage has wreaked havoc upon what, until last year anyway, was the engine driving the “robust” US labor market.  As we showed in November, layoffs in Lone Star land far outrun job losses in any other state. In Houston (which was already staring down a worsening pension crisis), vacant office space is “piling up.” As WSJ wrote last week, “the amount of sublease space on the market in the Houston area hit 7.6 million square feet, or the size of more than two Empire State Buildings.”

“The unemployment rate in Texas rose sharply to 9.2% in 1986, an all-time high for the state,” Goldman wrote recently, recalling a previous period of low oil prices in a note entitled “How Bad Can Texas Get?”

“Real house prices fell 30% peak to trough, and the number of bankruptcy filings (including both business and non-business filings) more than doubled from 1984 to 1986,” the bank added.

North of the border, things are even worse. As regular readers are no doubt aware, Alberta is a veritable nightmare as suicide rates rise, the number of jobless multiplies, food bank usage soars, and property crime in Calgary spikes.

“Lower for longer” has been a disaster for many state and local governments in the US, as revenue projections devised before oil’s historic plunge prove increasingly optimistic.

Take Louisiana for example, where Lt. Gov. Jay Dardenne recently announced that the state is facing a $750 million deficit.

…click on the above link to read the rest of the article…

Canada lost 5,700 jobs in January

February 5, 2016

Canada lost 5,700 jobs in January

Alberta had 10,000 fewer jobs, country’s unemployment rate inches up to 7.2%

Canada's jobless rate currently stands at 7.2 per cent after the economy lost 5,700 jobs last month.

Canada’s jobless rate currently stands at 7.2 per cent after the economy lost 5,700 jobs last month. (LM Otero/Associated Press)

The Canadian economy lost 5,700 jobs in January and the unemployment rate inched up to 7.2 per cent.

That’s worse than what economists were expecting — for the economy to add about 6,000 jobs during the month.

Statistics Canada reported Friday that fewer people were working in Alberta, Manitoba as well as Newfoundland and Labrador in January. Ontario was the lone province with an employment increase.

“Perhaps the greatest thing of note is that regional weakness in the energy dependent areas is being offset by regional strength in Ontario,” Scotiabank economist Derek Holt said in a note after the numbers came out.

Alberta led the downside, with 10,000 fewer jobs.

Ontario added twice that many, with 20,000 new jobs created. In the past 12 months, Alberta has lost 35,000 jobs, while Ontario has added 100,000.

At 7.4 per cent, Alberta’s jobless rate is now at its highest level in almost 20 years, and is also now higher than the national average for the first time since 1988.

“This is a mild disappointment on Canadian job markets but nothing to get terribly excited over given the small magnitude of the decline and the mixed details,” Holt said.

CANADIAN UNEMPLOYMENT IN DECEMBER

Mass Layoffs To Return With A Vengeance

February 3, 2016

Eric Von Seggern/Shutterstock

Mass Layoffs To Return With A Vengeance

How safe is your job?

Remember the mass layoffs of 2008-2009? The US economy shed millions of jobs quickly and relentlessly, as companies died and the rest fought for survival.

Then the Fed and the US government flooded the banks and the corporate sector with bailouts and handouts. With those giga-tons of liquidity sloshing around, as well as taking on massive amounts of new cheap debt, companies were able to finance their working capital needs, hire workers back, and even buy-back their shares en mass to make themselves look deceptively profitable. The nightmare of 2008 soon became a golden era of ‘recovery’.

Well, 2016 is showing us that that era is over. And as stock prices cease to rise, and in fact fall within many industries, layoffs are beginning to make a return as companies jettison costs in attempt to reduce losses.

Since January 1st, here is a but of subset of the headlines we’ve seen:

…click on the above link to read the rest of the article…

Negative Interest Rates Already In Fed’s Official Scenario

February 2, 2016

Negative Interest Rates Already In Fed’s Official Scenario

Over the past year, and certainly in the aftermath of the BOJ’s both perplexing and stunning announcement (as it revealed the central banks’ level of sheer desperation), we have warned (most recently “Negative Rates In The U.S. Are Next: Here’s Why In One Chart”) that next in line for negative rates is the Fed itself, whether Janet Yellen wants it or not. Today, courtesy of Wolf Richter, we find that this is precisely what is already in the small print of the Fed’s future stress test scenarios, and specifically the “severely adverse scenario” where we read that:

The severely adverse scenario is characterized by a severe global recession, accompanied by a period of heightened corporate financial stress and negative yields for short-term U.S. Treasury securities.

As a result of the severe decline in real activity and subdued inflation, short-term Treasury rates fall to negative ½ percent by mid-2016 and remain at that level through the end of the scenario.
And so the strawman has been laid. The only missing is the admission of the several global recession, although with global GDP plunging over 5% in USD terms, we wonder just what else those who make the official determination are waiting for.

Finally, we disagree with the Fed that QE4 is not on the table: it most certainly will be once stock markets plunge by 50% as the “severely adverse scenario” envisions, and once NIRP fails to boost economic activity, as it has failed previously everywhere else it has been tried, the Fed will promtply proceed with what has worked before, if only to make the true situation that much worse.

Until then, we sit back and wait.

Here is Wolf Richter with Negative Interest Rates Already in Fed’s Official Scenario

…click on the above link to read the rest of the article…

Alberta Loses Most Jobs In 34 Years As Oil Crunch Cripples Labor Market

January 27, 2016

Alberta Loses Most Jobs In 34 Years As Oil Crunch Cripples Labor Market

Times are tough in Alberta and to be sure, we’ve piled it on heavy when it comes to cataloguing the long list of pitiable outcomes that have accompanied crude’s steep slide.

The province is at the center of Canada’s dying oil patch and as crude extended its seemingly endless decline last year, Alberta saw oil and gas investment plunge by a third. That’s bad news for authorities who count on resources for 30% of provincial revenues.

Rig activity fell by half in the first seven months of 2015 and as the job losses mounted, the sorrow deepened – literally. Suicide rates jumped by 30% and in Calgary commercial break-ins almost doubled from a year earlier, while bank robberies were up 65% and home invasions increased 52% (read more here).

Meanwhile, food bank usage spiked as those who used to be donors found themselves depending on the free meals for subsistence.

And speaking of food, prices for fresh fruit and vegetables are seeing double-digit inflation thanks to the plunging loonie.

All in all, a very bad situation indeed and on Tuesday we learned that the picture was actually materially worse than an initial round of statistics led us to believe.

“Statscan’s annual revisions of its national Labour Force Survey data ratcheted up Alberta’s net job losses last year to 19,600, from the 14,600 the statistical agency originally reported in its final 2015 survey released in early January,” The Globe And Mail reports, adding that the losses “exceed the 17,000 jobs Alberta shed in the Great Recession in 2009.”

In fact, 2015 was the worst year for job losses in the province since 1982.

By the end of last year, Alberta’s unemployment rate had risen to 7.1% from just 4.8% at the end of 2014. As The Globe And Mail goes on to note, that’s the highest level in two decades. And it’s projected to get worse. Alberta could see unemployment rise to 7.5% in H1.

…click on the above link to read the rest of the article…

China Warns “Social Stability Threatened” As 400,000 Steel Workers Are About To Lose Their Jobs

January 25, 2016

China Warns “Social Stability Threatened” As 400,000 Steel Workers Are About To Lose Their Jobs

In late September, we were stunned to read (and report) that in the first mega-layoff in recent Chinese history, the Harbin-based Heilongjiang Longmay Mining Holding Group, or Longmay Group for short, the biggest met coal miner in northeast China had taken a page straight out of Jean-Baptiste Emanuel Zorg’s playbook and fired 100,000 workers overnight, 40% of its entire 240,000 workforce.

For us this was the sign that China’s long awaited “hard landing” had finally arrived, because as China’s paper of record, China Daily, added then: “now, many migrant workers struggle to find their footing in a downshifting economy. As factories run out of money and construction projects turn idle across China, there has been a rise in the last thing Beijing wants to see: unrest.”

We added that “if there is one thing China’s politburo simply can not afford right now, is to layer public unrest and civil violence on top of an economy which is already in “hard-landing” move. Forget black – this would be the bloody swan that nobody could “possibly have seen coming” and concluded that as for the future of China’s unskilled labor industries, the Fifth Element’s Jean-Baptiste Emanuel Zorg has a good idea of what’s coming.

Fast forward to today when, if not a full million, Xinhua reports that as part of China’s proposed excess capacity production curtailments the country’s steel production slash will translate into the loss of jobs for up to 400,000 workers, estimated Li Xinchuang, head of China Metallurgical Industry Planning and Research Institute. Li said more people will be affected in the upstream and downstream industries. According to some estimates just like every banker job in New York “feeds” up to three downstream jobs, so in China every worker  in the steel industry helps support between 2 to 3 additional job.s Which means, 400,000 primary layoffs would mean a total job loss number anywhere between 1.2 and 1.6 million jobs!

…click on the above link to read the rest of the article…

EI claims rose 9.2% in the year to November with Alberta hardest hit

January 21, 2016

EI claims rose 9.2% in the year to November with Alberta hardest hit

More than 31,000 new jobless in Alberta as EI rolls climb to 544,200

There have been several rounds of layoffs in the oilpatch since 2014, with trades, transport, technical support, finance and management affected.

There have been several rounds of layoffs in the oilpatch since 2014, with trades, transport, technical support, finance and management affected. (Todd Korol/Reuters)

The number of Canadians receiving employment insurance benefits rose 9.2 per cent in the year ending in November 2015, according to new data from Statistics Canada, with most of the newly unemployed in Alberta.

There were sharp increases in new applicants from Saskatchewan, Alberta and Manitoba, bringing the total receiving EI to 544,200 people. The unemployment rate in Canada last November was 7.1 per cent.

About two-thirds of the increase in the past year has been in Alberta, with 31,030 people applying for benefits in the year to November.

The pain has been spread equally between Edmonton and Calgary, with just over 20,000 new people on the EI rolls in each city.

Alberta has suffered several rounds of layoffs related to the low price of oil, with companies cutting back first contract workers, then long-time employees as the world market price fails to cover the cost of crude production.

Job losses in Saskatchewan, Manitoba

There’s been a 16 per cent increase among workers in trades and transport or equipment operation and a 17 per cent increase in natural and applied sciences, a term Statistics Canada uses to apply to more skilled workers including geologists and mine technicians.

Alberta has also seen job losses in finance, administration and management categories.

Statistics Canada says the number of new claimants has levelled off in the past few months.

Despite that, Saskatchewan saw a 4.6 per cent rise in claimants in November, Alberta was up 2.7 per cent and Manitoba was up 1.9 per cent.

…click on the above link to read the rest of the article…

Canada’s “Other” Problem: Record High Household Debt

January 20, 2016

Canada’s “Other” Problem: Record High Household Debt

Earlier today, the Bank of Canada surprised some market participants by failing to cut rates.

True, the loonie was plunging and another rate cut might very well have accelerated the decline, further eroding the purchasing power of Canadians who are already struggling to keep up with the inexorable rise in food prices, but there are other, more pressing concerns.

Like the fact that some analysts say the CAD should shoulder even more of the burden as Canada struggles to adjust to a world of sub-$30 crude. In short, if Stephen Poloz could manage to drive the loonie lower, the CAD-denominated price of WCS might stand a chance of remaining above the marginal cost of production. Barring that, the shut-ins will start and that means even more job losses in Canada’s oil patch, which shed some 100,000 total positions in 2015.

Alas, Poloz elected to stay put, characterizing the current state of monetary policy as “appropriate.”

We’re reasonably sure that assessment won’t hold once the layoffs pick up and as we noted earlier, the longer Poloz waits, the larger the next cut will ultimately have to be, which means that if the BOC waits too long, Poloz may have to rethink his contention that the effective lower bound is -0.50%.

While there are a laundry list of concerns when it comes to assessing the state of the Canadian economy and the impact of either higher rates (the loonie is supported but growth is further choked off) or lower rates (the economy gets a boost but consumer spending is stifled as Canadians watch their purchasing power evaporate), perhaps the most important thing to remember is that Canada is now the most leveraged country in the G7.

According to a new report from the Parliamentary Budget Officer (PBO) the household debt-to-income ratio is now a whopping 171% which means, for anyone who is confused, “that for every $100 in disposable income, households had debt obligations of $171.”

…click on the above link to read the rest of the article…

Post navigation

← Older posts Newer posts →

Olduvai IV: Courage
Click on image to read excerpts

Olduvai II: Exodus
Click on image to purchase

Click on image to purchase @ FriesenPress