The Labor Market Just Did Something that Hasn't Happened Since the 1970s

MrT said:

How did you reach that conclusion when the opposite conclusion, that the FED's suppression of interest rates since 2008 is a large part of the reason that the economy is doing so well now, is just as, if not more, likely?

And yes, they can raise interest rates now - something that they have been doing slowly already.

Click to expand...

An economy running on essentially zero interest rate and being fed through a QED tube isn't healthy. It's an economy that is still on life support.

Kushinator said:

Are you aware that only $172 billion of the ARRA was disbursed in 2009? If you subtract that from the 2009 budget deficit, what do you have left?

Click to expand...

Don't worry, if they budget for it, they will spend it.

Unemployment went down in 28 States in January 2016.
In January 2009 the unemployment rate for Michigan was 14.3 %.
By January 2016 it had dropped to 4.9%
There are only 19 states ( and Washington DC ) whose unemployment rate was 5% or above.

Unemployment Down in 28 States in January

Unemployment rates declined in 28 states and D.C. in January, according to the Bureau of Labor Statistics. Rates increased in eight states and remained unchanged in 14 states.

Compared to a year ago, unemployment has decreased in 37 states and D.C., while nine states saw rates go up.

Click to expand...

State Unemployment Rates | January 2016

Moderate Right said:

I'm glad you finally realize that the recession brought on the trillion dollar deficits and that any president afterward would have gotten the same distinction. Yes, the economy does go up and down, just like the stock market does and every president who serves 8 years gets to enjoy both sides of the economy. So yes, Obama was in the right place at the right time to get your distinction but I'd be interested in knowing who it is that "instructed" me to "rant" about deficits. Even if there is someone, which there isn't, what would it matter, because you claim it is Bush's fault for the deficits anyway. I guess you believe if the Democrats were in power, there would be no deficits. Now that's funny.

Click to expand...

The funny thing is that what they call the Bush depression got it's start in the Clinton administration with the passage of the Graham-Bliley Act, which dismantled the Glass-Steagal protections. That was a bill introduced by a Republican, passed in Congress by an overwhelming majority of both Republicans and Democrats, and signed into law by a Democrat. There is plenty of blame to go around, and the economic carnage is on the hands of both parties. This was not part of a natural cycle. This was our economy being destroyed by both major parties. Bush got the blame for it, but had Gore beaten him in 2000, the result would have been the same. It took a few years after passage of Graham-Bliley for the damage to be done, but thanks to unadulterated greed by Wall Street and the banksters, it happened. I don't blame any one party for the mess. I blame them both. Call it the Washington Tango, and Democrats and Republicans were perfect dance partners. Now it's just a lot of finger pointing. They do that because they truly have no conscience. As for their souls, they sold them to the highest bidder back in the 90's.

When are people going to ****ing wake up and realize that, no matter if they are Democrat or Republican, they have a common enemy, which is the circus that resides in Washington?

DA60 said:

So you are seriously suggesting - to ANY extent - that the American economy is doing better now then it has at any time in the last 40 years? That it is better now then during the booming eighties or during the dot.com boom or during the housing boom?
The initial jobless claims are lower now then during those periods...but no one in their macroeconomic right mind would suggest the economy is doing better now then during those time periods I mentioned.

United States Initial Jobless Claims | 1967-2016 | Data | Chart | Calendar

This is an overrated statistic. It can mean that times are good or it can mean that practically everyone that will file an initial claim has filed or a combination thereof.

Click to expand...

I don't know if it's overrated...it's not considered a principle economic indicator, and generally only used as an early warning of trends. Not a whole lot of weight is given to it.

And forget using the U-3 - it is a joke. You could have only one person working in America and have 200 million others out of work and desperate for a job. But since those 200 million have given up looking for work (because there are no jobs), the BLS in all of it's corrupt wisdom calls them out of the workforce and no longer unemployed - when CLEARLY they are unemployed and DESPERATE for work.

Click to expand...

I've asked you this question before, but I don't recall you ever responding: What do you think the Unemployment rate is supposed to measure and for what purpose? You complain that it doesn't measure people who are DESPERATE for work, but is that really something that matters? Two people are out of work for the same time doing the same things, and one is DESPERATE, and the other is not. What's the practical difference? And do you really think everyone classified as Discouraged is DESPERATE?

And I like how you try to protray it as if only including people trying to work is a new thing or unique to BLS. It's the world-wide standard and used by the US since 1920 when Census first started trying to measure unemployment. Nobody in the history of ever has measured unemployment the way you suggest, so it seems a bit odd that you're trying to present it as the common sense approach. Clearly it's not as economists have rejected it for almost a century.

Also, the Fed has given up using the U-3 as an accurate gauge of the employment situation as for years they used 6.5% as a guidepost for raising rates. Well that passed many, many months ago and they only barely raised rates last December (and then the markets crashed). Why? Because they admitted that the U-3 basically sucks (my words).

Click to expand...

Let's look at the actual words instead of your....interesting interpretation : "The maximum level of employment is largely determined by nonmonetary factors that affect the structure and dynamics of the labor market. These factors may change over time and may not be directly measurable. Consequently, it would not be appropriate to specify a fixed goal for employment; rather, the Committee’s policy decisions must be informed by assessments of the maximum level of employment, recognizing that such assessments are necessarily uncertain and subject to revision. " Longer Run Goals
In other words, they decided that setting a goal for employment was not the best idea. Not that a particular measure was faulty (though elsewhere it is pointed out that the official rate is not the best indicator of slack in the labor market) or that any other indicator is more accurate or preferred. But your spin was entertaining.

Anthony60 said:

Don't worry, if they budget for it, they will spend it.

Click to expand...

A60, Kushinator explained to you how much was spent in FY 2009 because you posted this falsehood

Anthony60 said:

What was Obama's first few budget deficits? Remember, Bush's last one was only so high because of the reckless ONE TIME stimulus. What is Obama's excuse? It should have come down right away.

Click to expand...

Bush's last budget deficit was because Bush destroyed the economy. Revenue collapsed 700 billion from estimates and spending shot up 400 billion. But that was only on budget spending. off budget was another 400 billion. that's why Bush added 1.9 trillion to deficit in FY2009. If you want to subtract the 170 billion for the stimulus, go ahead. I don't subtract it because the 170 billion paid for itself and it was necessary to end the Great Bush Recession.

DA60 said:

So you are seriously suggesting - to ANY extent - that the American economy is doing better now then it has at any time in the last 40 years?

Click to expand...

Better than some, not as well as others.

Real GDP has expanded at a 1.9% annual rate since 2010, after having grown at only 1.5% 2002-09.

>>That it is better now then during the booming eighties or during the dot.com boom or during the housing boom?

Those periods were indeed better by that measure — 3.5% 1994-2001 and 3.3% 1981-93. The economy expanded at a 2.1% annual rate 1977-81.

We "benefited" during the Reagan/Bush41 era from a lot of deficit spending, as the national debt as a percentage of GDP doubled, from 31% to 62%. Clinton had the Information Revolution as a strong wind at the economy's back.

>>[Initial unemployment claims] is an overrated statistic. It can mean that times are good or it can mean that practically everyone that will file an initial claim has filed or a combination thereof.

So consider it in light of other stats, like U-6 and U-3.



>>And forget using the U-3 - it is a joke. You could have only one person working in America and … [blah, blah, blah]. That is ridiculous.

I agree. This REALLY stupid story you have repeated over and over about "Gee, if only one person …" is as ridiculous a pile of nonsense as anyone could possibly imagine.

>>And even if the jobless numbers and the unemployment rate were accurate gauges of the economy...they mean little since the Fed is still running almost 0% rates …

More nonsense that you puke up over and over. Interest rates can be considered in this context only as they relate to inflation. Both are very low.

>>The powers that be should only take a bow when the economy can stand on it's own without MASSIVE assistance from deficits and the Fed. And that has not occurred since Obama took office.

The deficit as a percentage of GDP has dropped under Obummer from 10% to 2.5%, which is surely not "MASSIVE assistance." As always, yer claims are foolish/outrageous.

>>The U.S. economy AND the stock markets are stagnant

Yes, "stagnant" in the sense that the Dow is up 164% over the last seven years, while, as I noted, the economy is growing faster under Obummer than it was under the previous administration.

>>the middle class has been semi-gutted since 2007

It's suffered for forty years.

>>food stamp usage is up roughly 40% since the Great Recession started (and refuses to drop much)


>>home ownership rate is lower now then it was 40 years ago.

And it's about the same as it was in the, as you described them, "booming eighties."



>>I have ZERO political affiliation. I despise both major parties

Good for you.

Moderate Right said:

I'm glad you finally realize that the recession brought on the trillion dollar deficits

Click to expand...

Oh MR, why would you post such a dishonest narrative that I “finally realized that the recession brought on the trillion dollar deficits” . I was the one that explained it to you. The actual facts are only news to you. Remember you said “Obama knocked the deficits over a trillion dollars”. That was the first falsehood you posted. Saying I “finally realized” is the second. Maybe you really believed President Obama “ knocked the deficits over a trillion dollars” but you have no excuses but dishonesty for your latest falsehood. See how it gets easy for you to cross the line from delusional to dishonest because, as I’ve stated, your narrative is more important than the facts.

Even if there is someone, which there isn't, what would it matter, because you claim it is Bush's fault for the deficits anyway.

Click to expand...

Er uh MR, need I remind you that you tried to blame President Obama for the deficits. Now you belatedly blame the recession. How do you not blame Bush for the deficits? very easy I see. Oh MR, you hilariously tried to blame President Obama for the deficits because as you said "Obama knocked the deficit up to over one trillion dollars". so please explain why the reason you tried to blame President Obama doesn't apply to Bush. let me guess, because "MAGIC!!".

I guess you believe if the Democrats were in power, there would be no deficits. Now that's funny.

Click to expand...

Oh look, another false narrative. MR, you cant argue the facts I post so you have to invent some silly hyperbole to attack. mmmm, I consider that borderline dishonest. See how I respond to what you post. You should try it sometime.

danarhea said:

Interest rates already went up 50 basis points about a month ago, and a rise of another 50 basis points is expected in the near future.

Click to expand...

slight correction... The Fed raised the fed funds rate by 25 basis points. That said, interest rates in general have fallen sharply this year on treasury bonds.

danarhea said:

The funny thing is that what they call the Bush depression got it's start in the Clinton administration with the passage of the Graham-Bliley Act, which dismantled the Glass-Steagal protections.

Click to expand...

If you want to say the repeal of Glass-Steagall made the Financial Crisis worse, go ahead even though I've never seen a real good explanation. But the repeal of Glass-Steagall had nothing to do with the cause the financial crisis. that was the mortgage bubble. Bush preempted all state laws against predatory lending (to name the most toxic of his policies) and his regulators let the banks stop checking people's income. let Bush's Working Group explain it

From Bush’s President’s Working Group on Financial Markets October 2008

“The Presidents Working Group’s March policy statement acknowledged that turmoil in financial markets clearly was triggered by a dramatic weakening of underwriting standards for U.S. subprime mortgages, beginning in late 2004 and extending into 2007.”

http://www.treasury.gov/resource-center/fin-mkts/Documents/q4progress update.pdf

You cant have 50% of all loans where the borrower's ability to repay the loan wasn't verified (a dramatic weakening of underwriting standards) until you preempt all state laws against predatory lending. that's why all regulatory efforts after the Bush Mortgage Bubble were about verifying the borrower's ability to repay the loan. here's the 50% thing

“Another form of easing facilitated the rapid rise of mortgages that didn't require borrowers to fully document their incomes. In 2006, these low- or no-doc loans comprised 81 percent of near-prime, 55 percent of jumbo, 50 percent of subprime and 36 percent of prime securitized mortgages."

http://www.dallasfed.org/assets/documents/research/eclett/2007/el0711.pdf

"Another form of easing" is their version of " a dramatic weakening of underwriting standards"

MrT said:

Fewest jobless since November 1973 - Business Insider



The Job Market continues to improve and there can be little doubt that we are nearing full employment as a country. This is further evidence that the individuals engaging in a bashing of the economy are doing so purely for political reasons that have little basis in fact. The lone couple of job statistics that continue to perform poorly are wages and the labor force participation rate. The former should, hopefully, adjust itself upward very soon as the lack of a slack in the job market allows individuals to negotiate with employers for higher wages. The later will, on the other hand, remain near historic lows and will probably drop even further due to global market trends like automation and globalization.

This feather also adds to a rather impressive list of 40-year records that have taken place during Obama's tenure.

Lowest increase in year-to-year healthcare costs in 40 years
Fastest decrease to the deficit in 40 years
Fewest troops in combat scenarios in 40 years
Fewest jobless clams in 40 years

P.S. For the Mods, I was unsure whether I was supposed to quote the actual title of the article or the title from the web address, so I used the title of the article. Please adjust as warranted. Also, if Business Insider is a non-MSM source, please move the thread. Thanks.

Click to expand...

1) Lowest labor participation rate in 40 years
2) Deficit is still higher than pre-crisis deficits and avg deficit is highest in history
3) The jobs added have been predominantly low paying retail and food service jobs. Healthcare the other sector where most job growth has come from.
4) Healthcare costs still going up despite promises that the average family would save money.
5) Income gap continues to widen under Obama

Vern said:

Oh MR, why would you post such a dishonest narrative that I “finally realized that the recession brought on the trillion dollar deficits” . I was the one that explained it to you. The actual facts are only news to you. Remember you said “Obama knocked the deficits over a trillion dollars”. That was the first falsehood you posted. Saying I “finally realized” is the second. Maybe you really believed President Obama “ knocked the deficits over a trillion dollars” but you have no excuses but dishonesty for your latest falsehood. See how it gets easy for you to cross the line from delusional to dishonest because, as I’ve stated, your narrative is more important than the facts.



Er uh MR, need I remind you that you tried to blame President Obama for the deficits. Now you belatedly blame the recession. How do you not blame Bush for the deficits? very easy I see. Oh MR, you hilariously tried to blame President Obama for the deficits because as you said "Obama knocked the deficit up to over one trillion dollars". so please explain why the reason you tried to blame President Obama doesn't apply to Bush. let me guess, because "MAGIC!!".



Oh look, another false narrative. MR, you cant argue the facts I post so you have to invent some silly hyperbole to attack. mmmm, I consider that borderline dishonest. See how I respond to what you post. You should try it sometime.

Click to expand...

You twist my words around so much it is impossible to debate you.

MrT said:

How did you reach that conclusion when the opposite conclusion, that the FED's suppression of interest rates since 2008 is a large part of the reason that the economy is doing so well now, is just as, if not more, likely?

And yes, they can raise interest rates now - something that they have been doing slowly already.

Click to expand...

The Fed's low interest rates are the number one reason that the economy recovered. Obama helped but was stymied by an obstinate Congress starting in 2011.

Vern said:

If you want to say the repeal of Glass-Steagall made the Financial Crisis worse, go ahead even though I've never seen a real good explanation. But the repeal of Glass-Steagall had nothing to do with the cause the financial crisis. that was the mortgage bubble. Bush preempted all state laws against predatory lending (to name the most toxic of his policies) and his regulators let the banks stop checking people's income. let Bush's Working Group explain it

From Bush’s President’s Working Group on Financial Markets October 2008

“The Presidents Working Group’s March policy statement acknowledged that turmoil in financial markets clearly was triggered by a dramatic weakening of underwriting standards for U.S. subprime mortgages, beginning in late 2004 and extending into 2007.”

http://www.treasury.gov/resource-center/fin-mkts/Documents/q4progress update.pdf

You cant have 50% of all loans where the borrower's ability to repay the loan wasn't verified (a dramatic weakening of underwriting standards) until you preempt all state laws against predatory lending. that's why all regulatory efforts after the Bush Mortgage Bubble were about verifying the borrower's ability to repay the loan. here's the 50% thing

“Another form of easing facilitated the rapid rise of mortgages that didn't require borrowers to fully document their incomes. In 2006, these low- or no-doc loans comprised 81 percent of near-prime, 55 percent of jumbo, 50 percent of subprime and 36 percent of prime securitized mortgages."

http://www.dallasfed.org/assets/documents/research/eclett/2007/el0711.pdf

"Another form of easing" is their version of " a dramatic weakening of underwriting standards"

Click to expand...

The repeal of Glass Steagall did have a big impact on the financial crisis. It allowed the investment banks to merge with the insurance companies and retail banks. This broke down traditional firewalls that existed between the investment banks and retail banks. It wasn't the sole reason for the crisis by any means, but it certainly greatly influenced the practices that led to the collapse.

Vern said:

Bush's last budget deficit was because Bush destroyed the economy.

Click to expand...

LOL! You're going to have to explain that one.

Revenue collapsed 700 billion from estimates and spending shot up 400 billion.

Click to expand...

Thanks to the democrats screwing around with banks and forcing them to make bad loans through the CRA. They really screwed the economy.

But that was only on budget spending. off budget was another 400 billion. that's why Bush added 1.9 trillion to deficit in FY2009. If you want to subtract the 170 billion for the stimulus, go ahead. I don't subtract it because the 170 billion paid for itself and it was necessary to end the Recession.

Click to expand...

The economy would have recovered without that spending, it was a waste.

Did you notice that Obama had three deficits that were over $trillion? Is that Bush's fault too?

Anthony60 said:

Did you notice that Obama had three deficits that were over $trillion? Is that Bush's fault too?

Click to expand...

If you do not understand why the correct answer to that second question is, "To an extent, yes," then you do not understand basic macroeconomics.

Anthony60 said:

Don't worry, if they budget for it, they will spend it.

Click to expand...

Why even bother to hit reply if you lack the courage or capacity to respond to my questions?

whataboutbob said:

Lowest labor participation rate in 40 years

Click to expand...

So what? Baby boomers are retiring. You want the gubmint to drag people in their eighties and nineties back into the employment market? Privatizing SS might just get that done.

>>Deficit is still higher than pre-crisis deficits and avg deficit is highest in history

As a percentage of GDP (the valid measure), much less than they were when Obummer came into office — down from 10 to 2.4%. And below the forty-year historical average.



>>The jobs added have been predominantly low paying retail and food service jobs.

Evidence?

Since the Great Recession began, we've indeed lost jobs in construction, education, and state and local gubmint. Clinton/Sanders will move to correct that with smart investments in infrastructure, education, and research.

In 2015, professional services was the fastest-growing sector (+585k), while construction added 222K, financial services 128K, transportation 107K, and gubmint 100K. Those are 1.14 million of the 2.45 million added last year, nearly half.

>>Healthcare costs still going up despite promises that the average family would save money.

Slowest rate of increase in fifty years. The savings are relative to what the costs would have been without the ACA.

>>Income gap continues to widen under Obama

He's only been able to accomplish so much. We can start soaking the rich under Clinton/Sanders.

Vern said:

If you want to say the repeal of Glass-Steagall made the Financial Crisis worse, go ahead even though I've never seen a real good explanation. But the repeal of Glass-Steagall had nothing to do with the cause the financial crisis. that was the mortgage bubble. Bush preempted all state laws against predatory lending (to name the most toxic of his policies) and his regulators let the banks stop checking people's income. let Bush's Working Group explain it

From Bush’s President’s Working Group on Financial Markets October 2008

“The Presidents Working Group’s March policy statement acknowledged that turmoil in financial markets clearly was triggered by a dramatic weakening of underwriting standards for U.S. subprime mortgages, beginning in late 2004 and extending into 2007.”

http://www.treasury.gov/resource-center/fin-mkts/Documents/q4progress update.pdf

You cant have 50% of all loans where the borrower's ability to repay the loan wasn't verified (a dramatic weakening of underwriting standards) until you preempt all state laws against predatory lending. that's why all regulatory efforts after the Bush Mortgage Bubble were about verifying the borrower's ability to repay the loan. here's the 50% thing

“Another form of easing facilitated the rapid rise of mortgages that didn't require borrowers to fully document their incomes. In 2006, these low- or no-doc loans comprised 81 percent of near-prime, 55 percent of jumbo, 50 percent of subprime and 36 percent of prime securitized mortgages."

http://www.dallasfed.org/assets/documents/research/eclett/2007/el0711.pdf

"Another form of easing" is their version of " a dramatic weakening of underwriting standards"

Click to expand...

The mortgage bubble came about BECAUSE of the dismantling of Glass Steagal. It allowed banks to package risky mortgages they would have not made before into derivatives, which they sold to speculators. That was illegal before Graham Bliley.

danarhea said:

The mortgage bubble came about BECAUSE of the dismantling of Glass Steagal. It allowed banks to package risky mortgages they would have not made before into derivatives, which they sold to speculators. That was illegal before Graham Bliley.

Click to expand...

I disagree.
Most of the Glass Steagal Act was not repealed until 1999.
A JP Morgan team came up with the Credit Default Swaps idea in 1997,
which was 2 years before Graham Bliley.

I posted the following on this board in 2013.:
---------
I think the blame for this past recession falls on the pure greed of the financial institutions.

Although the financial institutions would like us to believe and have led us to believe that mandated morgage lending is the reason they are/were in trouble ,
I believe the Credit Default Swaps are the real reason that our financial institutions were in dire straights.

This last recession was unlike any other I ever experienced.
In the past we had manufacturing crisis, fuel crisis, inflation crisis, dot. com crisis etc.

In the last 40 years every other recessions our country was in those who had very good or excellent credit were able to get loans.

This last recession was different because the lending institutions did not have the money to loan.

I think the problem started way before the mandated morgage lending.
I think it stated back in 1997 when the JP Moragn came up with a wonderfully evil ( my words) idea to free up their monies called Credit Default Swaps.

The Credit Default Swaps were invented in 1997 by a team working for JP Morgan.

They were designed to shift the risk of default to a third-party, as this shifted risk did not count against their regulatory capital requirements. In essence the swaps were created as a regulatory loophole


Basically banks used to need to keep monies on hand to back up loans. The financial institutions decided they could free up more money for loans if they had a 3rd party be responsible if a loan was defaulted.
Kind of like an insurance policy but unlike a real insurance company which is regulated these 3rd party companies are not regulated and did NOT have money to pay the defaults and that is why our financial institutions are/were in such a mess.

The banks kept lending money they did not really have until lots of defaults are coming in with no one to pay the defaults.
Then the financial institutions almost collapsed and we the taxpayers ended up bailing them out.

More info on Credit Default Swaps:

Credit Default Swaps: The Next Crisis? - TIME

mmi said:

So what? Baby boomers are retiring. You want the gubmint to drag people in their eighties and nineties back into the employment market? Privatizing SS might just get that done.

Click to expand...

Baby boomers retiring accounts for maybe a third of the dropoff... and that is a big maybe. You forget that the echo boomers are entering the labor market as the boomers are leaving.

>>Deficit is still higher than pre-crisis deficits and avg deficit is highest in history

As a percentage of GDP (the valid measure), much less than they were when Obummer came into office — down from 10 to 2.4%. And below the forty-year historical average.

Click to expand...

LMAO... so now you want to talk about it as a percentage of GDP? Bottom line is that deficit spending under Obama has been atrocious.

>>The jobs added have been predominantly low paying retail and food service jobs.

Evidence?

Click to expand...

Where the jobs are and aren't under Obama - Feb. 5, 2015

>>Healthcare costs still going up despite promises that the average family would save money.

Slowest rate of increase in fifty years. The savings are relative to what the costs would have been without the ACA.

Click to expand...

LMAO... that is just nonsensical bull****. That is not what Obama promised. That is just the crap his defenders say because they know he lied.

minnie616 said:

I disagree.
Most of the Glass Steagal Act was not repealed until 1999.
A JP Morgan team came up with the Credit Default Swaps idea in 1997.

I posted the following on this board in 2013.:
---------
I think the blame for this past recession falls on the pure greed of the financial institutions.

Although the financial institutions would like us to believe and have led us to believe that mandated morgage lending is the reason they are/were in trouble ,
I believe the Credit Default Swaps are the real reason that our financial institutions were in dire straights.

This last recession was unlike any other I ever experienced.
In the past we had manufacturing crisis, fuel crisis, inflation crisis, dot. com crisis etc.

In the last 40 years every other recessions our country was in those who had very good or excellent credit were able to get loans.

This last recession was different because the lending institutions did not have the money to loan.

I think the problem started way before the mandated morgage lending.
I think it stated back in 1997 when the JP Moragn came up with a wonderfully evil ( my words) idea to free up their monies called Credit Default Swaps.

The Credit Default Swaps were invented in 1997 by a team working for JP Morgan.

They were designed to shift the risk of default to a third-party, as this shifted risk did not count against their regulatory capital requirements. In essence the swaps were created as a regulatory loophole


Basically banks used to need to keep monies on hand to back up loans. The financial institutions decided they could free up more money for loans if they had a 3rd party be responsible if a loan was defaulted.
Kind of like an insurance policy but unlike a real insurance company which is regulated these 3rd party companies are not regulated and did NOT have money to pay the defaults and that is why our financial institutions are/were in such a mess.

The banks kept lending money they did not really have until lots of defaults are coming in with no one to pay the defaults.
Then the financial institutions almost collapsed and we the taxpayers ended up bailing them out.

More info on Credit Default Swaps:

Credit Default Swaps: The Next Crisis? - TIME

Click to expand...

Yea, JP Morgan did it before the Act went into effect, but at the time it was illegal for banks to engage in that practice.

MrT said:

Fewest jobless since November 1973 - Business Insider



The Job Market continues to improve and there can be little doubt that we are nearing full employment as a country. This is further evidence that the individuals engaging in a bashing of the economy are doing so purely for political reasons that have little basis in fact. The lone couple of job statistics that continue to perform poorly are wages and the labor force participation rate. The former should, hopefully, adjust itself upward very soon as the lack of a slack in the job market allows individuals to negotiate with employers for higher wages. The later will, on the other hand, remain near historic lows and will probably drop even further due to global market trends like automation and globalization.

This feather also adds to a rather impressive list of 40-year records that have taken place during Obama's tenure.

Lowest increase in year-to-year healthcare costs in 40 years
Fastest decrease to the deficit in 40 years
Fewest troops in combat scenarios in 40 years
Fewest jobless clams in 40 years

P.S. For the Mods, I was unsure whether I was supposed to quote the actual title of the article or the title from the web address, so I used the title of the article. Please adjust as warranted. Also, if Business Insider is a non-MSM source, please move the thread. Thanks.

Click to expand...

Those are initial weekly claims which go up and down a lot. Definitely a dip in the last few months, but it will probably go back up to the average. And total claims has been rising since november, to about 2.2 million claiming benefits. Plus another 5 million unemployed but not insured.

So, good headline, meaningless statistic. See the full context here

http://www.dol.gov/ui/data.pdf

danarhea said:

Yea, JP Morgan did it before the Act went into effect, but at the time it was illegal for banks to engage in that practice.

Click to expand...

I think you are wrong. I think they were selling Credit default swaps before 1999.

IIRC they were selling them in 1997.

From the following article:

Credit default swaps (CDS) are the most widely used type of credit derivative and a powerful force in the world markets. The first CDS contract was introduced by JP Morgan in 1997 and by 2012, despite a negative reputation in the wake of the 2008 financial crisis, the value of the market was an estimated $24.8 trillion, according to Barclays Plc. In March of the same year, Greece faced the biggest sovereign default the international markets have ever seen, resulting in an expected CDS payout of approximtely $2.6 billion to holders. Read on to find out how credit default swaps work and how investors can profit from them.

Click to expand...

Credit Default Swaps: An Introduction | Investopedia

Wiki says Credit default swaps have been around since 1994.

Credit default swaps have existed since 1994, and increased in use after 2003. By the end of 2007, the outstanding CDS amount was $62.2 trillion,[3] falling to $26.3 trillion by mid-year 2010[4] and reportedly $25.5[5] trillion in early 2012. CDSs are not traded on an exchange and there is no required reporting of transactions to a government agency.[6] During the 2007-2010 financial crisis the lack of transparency in this large market became a concern to regulators as it could pose a systemic risk.[7][8][9][10] In March 2010, the Depository Trust & Clearing Corporation (see Sources of Market Data) announced it would give regulators greater access to its credit default swaps database.[11]

Click to expand...

https://en.m.wikipedia.org/wiki/Credit_default_swap

whataboutbob said:

The repeal of Glass Steagall did have a big impact on the financial crisis. It allowed the investment banks to merge with the insurance companies and retail banks. This broke down traditional firewalls that existed between the investment banks and retail banks. It wasn't the sole reason for the crisis by any means, but it certainly greatly influenced the practices that led to the collapse.

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I agree with you that there were many factors and conditions as well as many people's hands in the mortgage bubble and that popping of that bubble. It's a far mor complex situation that built itself over time than lends to simple one line arguments and blame assignment, contrary to what some believe.

The starting conditions go all the way back to Clinton's administration as a start and continue to build all the way to Bush's. During that years, the control of both congress and the white had changed parties several times over, and one has to ask, why in any of the intervening administrations, why wasn't the building bubble deflated in a controlled manner before it violently popped, such as it did?

I'm afraid that trying to get Vern to acknowledge this reality over his own constructed or issued reality of 'it's Bush's fault and the working paper proves it', is pretty much , in my experience anyway, like tilting at windmills. He'll never get beyond his preconceived notion of the talking points he's been issued from his central command. As this thread serves as a testament: http://www.debatepolitics.com/us-pa...-bush-mortgage-bubble-faqs-w-1083-1531-a.html

And after all that, what, exactly, does the mortgage bubble have to do with the topic at hand? Which, if I recall, was something that the Labor Market recently did, that it hadn't since the 70's.

I'd respectfully submit, that if you want to argue about the mortgage bubble, take it to the thread where it's already discussed, and is in fact the thread topic.

eace