Blogs

Why Did the Unemployment Rate Drop When Only 120,000 Jobs Were Added?

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The headlines blare unemployment rate lowest since March 2009! Yet November only added 120,000 jobs, barely enough, as usual, to keep up with population growth. So, how could the official unemployment rate drop -0.4 percentage points, from 9.0% to 8.6% in a month?

Let's look at the data.

Harry's Law Takes On Bank Bail Outs, Channels OWS

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This evening's episode of Harry's Law literally takes on the banks and uses the show, as a Populist soapbox. The plot contrasts how a homeless, foreclosed on, single mother, turned bank robber, gets 20 years, yet if one is incorporated and has lobbyists, then one gets $7.7 trillion in Federal Reserve loans. The episode is below.

 

Central Banks Make Swappin' Out Your Euro Cheaper

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The headlines proclaim the DOW is up 400 points! Yippie, hurrah! But why?

In the middle of the night, the Federal Reserve moved to make it cheaper to swap Euros for dollars, in a coordinated move with Switzerland, Canada, England, the European Central Bank and Japan.

From the Federal Reserve press release:

The Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Federal Reserve, and the Swiss National Bank are today announcing coordinated actions to enhance their capacity to provide liquidity support to the global financial system.

This is supposed to stem a global liquidity crunch. In other words, to prop up the Euro's value.

These central banks have agreed to lower the pricing on the existing temporary U.S. dollar liquidity swap arrangements by 50 basis points so that the new rate will be the U.S. dollar overnight index swap (OIS) rate plus 50 basis points. This pricing will be applied to all operations conducted from December 5, 2011. The authorization of these swap arrangements has been extended to February 1, 2013. In addition, the Bank of England, the Bank of Japan, the European Central Bank, and the Swiss National Bank will continue to offer three-month tenders until further notice.

More interesting the Central banks are offering swaps in multi-currency denominations:

The Real America

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If you watch most media you'd never guess what's the real America. From television shows where minimum wage jobs pay rent on $2000 a month flats, to families who never seem to run out of money or get foreclosed on, to messages of if only you follow some green line you'll have enough money for retirement, a never ending weave of fiction is spun. Like prey in the spider's web of tall tales, we're stunned and hypnotized into no longer seeing the poverty and despair all around us.

Bloomberg's Bail Out Bombshell Du Jour

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nuclear bombBloomberg news has served up another bombshell story on the Federal Reserve loans during the 2008-2010 bail outs. Banks made $13 billion off of secret and ultra-cheap loans from the Federal Reserve. Banks lost $21.6 billion during the same time. That's $13 billion of free money in essence.

Literally the Fed committed $$7.77 Trillion to bailing out these banks. This dwarfs the $700 billion TARP bail out. Bloomberg:

Saved by the bailout, bankers lobbied against government regulations, a job made easier by the Fed, which never disclosed the details of the rescue to lawmakers even as Congress doled out more money and debated new rules aimed at preventing the next collapse.

A fresh narrative of the financial crisis of 2007 to 2009 emerges from 29,000 pages of Fed documents obtained under the Freedom of Information Act and central bank records of more than 21,000 transactions. While Fed officials say that almost all of the loans were repaid and there have been no losses, details suggest taxpayers paid a price beyond dollars as the secret funding helped preserve a broken status quo and enabled the biggest banks to grow even bigger.

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