Page 9 of 20 FirstFirst ... 789101119 ... LastLast
Results 81 to 90 of 197

Thread: Record 92,269,000 Not in Labor Force; Participation Rate Matches 36-Year Low

  1. #81
    Guru
    Hari Seldon's Avatar
    Join Date
    Jul 2014
    Location
    New York
    Last Seen
    Today @ 01:06 AM
    Gender
    Lean
    Liberal
    Posts
    3,572

    Re: Record 92,269,000 Not in Labor Force; Participation Rate Matches 36-Year Low

    In 2003 and 2004, with the U.S. housing boom (read, bubble) well under way, Lehman acquired five mortgage lenders, including subprime lender BNC Mortgage and Aurora Loan Services, which specialized in Alt-A loans (made to borrowers without full documentation). Lehman's acquisitions at first seemed prescient; record revenues from Lehman's real estate businesses enabled revenues in the capital markets unit to surge 56% from 2004 to 2006, a faster rate of growth than other businesses in investment banking or asset management. The firm securitized $146 billion of mortgages in 2006, a 10% increase from 2005. Lehman reported record profits every year from 2005 to 2007. In 2007, the firm reported net income of a record $4.2 billion on revenue of $19.3 billion. (Check out the answer to our frequently asked question What is a subprime mortgage? to learn more about these loans.)

    Lehman's Colossal Miscalculation
    In February 2007, the stock reached a record $86.18, giving Lehman a market capitalization of close to $60 billion. However, by the first quarter of 2007, cracks in the U.S. housing market were already becoming apparent as defaults on subprime mortgages rose to a seven-year high. On March 14, 2007, a day after the stock had its biggest one-day drop in five years on concerns that rising defaults would affect Lehman's profitability, the firm reported record revenues and profit for its fiscal first quarter. In the post-earnings conference call, Lehman's chief financial officer (CFO) said that the risks posed by rising home delinquencies were well contained and would have little impact on the firm's earnings. He also said that he did not foresee problems in the subprime market spreading to the rest of the housing market or hurting the U.S. economy.

    The Beginning of the End
    As the credit crisis erupted in August 2007 with the failure of two Bear Stearns hedge funds, Lehman's stock fell sharply. During that month, the company eliminated 2,500 mortgage-related jobs and shut down its BNC unit. In addition, it also closed offices of Alt-A lender Aurora in three states. Even as the correction in the U.S. housing market gained momentum, Lehman continued to be a major player in the mortgage market. In 2007, Lehman underwrote more mortgage-backed securities than any other firm, accumulating an $85-billion portfolio, or four times its shareholders' equity. In the fourth quarter of 2007, Lehman's stock rebounded, as global equity markets reached new highs and prices for fixed-income assets staged a temporary rebound. However, the firm did not take the opportunity to trim its massive mortgage portfolio, which in retrospect, would turn out to be its last chance.

    GREED!
    Never let your sense of morals get in the way of doing what's right.
    Isaac Asimov

  2. #82
    Guru
    Hari Seldon's Avatar
    Join Date
    Jul 2014
    Location
    New York
    Last Seen
    Today @ 01:06 AM
    Gender
    Lean
    Liberal
    Posts
    3,572

    Re: Record 92,269,000 Not in Labor Force; Participation Rate Matches 36-Year Low

    Quote Originally Posted by apdst View Post
    Bull****!

    1. Private markets, rather than the GSEs, created the subprime mortgage boom.

    The subprime mortgage boom and the subsequent crash are very much concentrated in the private market, not the public market. Subprime is a creature of the private label securitization channel (PLS) market, instead of the Government-Sponsored Entities (GSEs, or Fannie and Freddie). The fly-by-night lending boom, slicing and dicing mortgage bonds, derivatives and CDOs, and all the other shadiness of the mortgage market in the 2000s were Wall Street creations, and they drove all those risky mortgages.

    Here's some data to back that up: "More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions... Private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year."

    As University of California, Irvine law professor David Min has argued, saying the government directly created either the housing bubble or subprime loans has a serious problem with the timing. "From 2002-2005, [GSEs] saw a fairly precipitous drop in market share, going from about 50 percent to just under 30 percent of all mortgage originations. Conversely, private label securitization [PLS] shot up from about 10 percent to about 40 percent over the same period. This is, to state the obvious, a very radical shift in mortgage originations that overlapped neatly with the origination of the most toxic home loans."

    2. The Community Reinvestment Act and the GSE's affordability mission didn't cause the crisis.

    Many conservatives argue that the "affordability goals" of the GSEs, as well as the Community Reinvestment Act (CRA), which was created in the 1970s to make sure poor communities had access to credit, either directly or indirectly led to subprime loans.

    Research from the Federal Reserve by Neil Bhutta and Glenn B. Canner (helpfully summarized in this Randy Kroszner speech), argues that the CRA couldn't have been behind the subprime and housing bubbles. "The very small share of all higher-priced loan originations that can reasonably be attributed to the CRA makes it hard to imagine how this law could have contributed in any meaningful way to the current subprime crisis." Only six percent of higher-priced loans (their proxy for subprime loans) were extended by CRA-covered lenders to lower-income borrowers or CRA neighborhoods.

    A recent paper found that while the CRA might have introduced slightly larger risks in lending portfolios, extra loans done to meet CRA compliance weren't more likely to have higher interest rates, lower loan-to-value, or be balloon/interest-only/jumbo/buy-down mortgages, or hold other subprime characteristics. So it is unlikely that the CRA was priming the pump for subprime, or subtly encouraging subprime mortgages to be made by private lenders.

    Jason Thomas and Robert Van Order's research argues that subprime loans were only 5 percent of the GSEs' losses. The GSEs' affordability mission led them to buy the highly rated tranches of mortgage bonds, for which there was already a ton of demand and were not essential to the completion of the deals.

    3. There's a lot of research to back this up and little against it.

    The United States' housing market is one of the most intensely studied capital markets in the world. What has other research found? From Min:

    Did Fannie and Freddie buy high-risk mortgage-backed securities? Yes. But they did not buy enough of them to be blamed for the mortgage crisis. Highly respected analysts who have looked at these data..including the nonpartisan Government Accountability Office, the Harvard Joint Center for Housing Studies, the Financial Crisis Inquiry Commission majority, the Federal Housing Finance Agency, and virtually all academics, including the University of North Carolina, Glaeser et al at Harvard, and the St. Louis Federal Reserve [also here], have all rejected the Wallison/Pinto argument that federal affordable housing policies were responsible for the proliferation of actual high-risk mortgages over the past decade.

    4. Conservatives arguments tend to blur the definition of subprime. Some, such as Ed Pinto of AEI, argue that the GSEs had huge subprime exposure if you create a new category that represents the risks of subprime more accurately. He created a new "high risk" category, which he then argues these high-risk loans were held by the GSEs. This argument blur categories together and obscures more than it reveals. David Min broke down the numbers, and there is more about this discussion here. Here's a graphic from Min, comparing Pinto's new "high-risk" category against subprime:

    Even this new "high risk" category, introduced by AEI to supposedly show what the GSEs were taking on, shows that it isn't anything like subprime and is instead comparable to the national average. If you then take the logical step and divide it by private label, the numbers are even worse. Private label loans "have defaulted at over 6x the rate of GSE loans, as well as the fact that private label securitization is responsible for 42 percent of all delinquencies despite accounting for only 13 percent of all outstanding loans (as compared to the GSEs being responsible for 22 percent of all delinquencies despite accounting for 57 percent of all outstanding loans)." The issue isn't this fake "high risk" category, it is subprime and private label origination.

    The Financial Crisis Inquiry Commission (FCIC) panel looked carefully at this argument and also ended up finding it doesn't work. So those who blame the GSEs can't get the numbers to work when they make up categories.

    (Fun fact: These same conservatives sang a different tune before the crash. They argued that the CRA and the GSEs were getting in the way of getting risky subprime mortgages to risky subprime borrowers. See Should CRA Stand for 'Community Redundancy Act? from Cato in 2000 or AEI's Peter Wallison in 2004 arguing "study after study has shown that Fannie Mae and Freddie Mac are failing to do even as much as banks and S&Ls in providing financing for affordable housing, including minority and low income housing.")

    5. The government policy that likely made an impact were deregulatory actions.

    In 2000, Congress passed the Commodity Futures Modernization Act, which deregulated the derivatives market, in a lame duck session as a rider to an 11,000 page omnibus appropriation bill. A banking capital "recourse rule" in 2001 allowed the ratings agencies and private bank risk modelers to decide what banks should hold against risk. In 2003 the OCC preempted and overruled Georgia’s new anti-predatory lending laws. Alan Greenspan refused to enforce regulations on, or even investigate the wrongdoing of, the new subprime market during the 2000s. The 2005 bankruptcy reforms in BAPCPA, widely viewed as friendly if not written by the financial industry, codified the market practice of letting derivatives go to the front of the line in bankruptcy, helping create the conditions for shadow banking runs.

    These government actions all fall under the rubric of deregulation, or "letting the market decide" how to manage the rules of the financial sector, and they are more relevant to the actual crisis. Though these are government policies, and they were reckless, I doubt they are what conservatives like Rubio mean.
    Never let your sense of morals get in the way of doing what's right.
    Isaac Asimov

  3. #83
    Pragmatic Idealist
    upsideguy's Avatar
    Join Date
    Nov 2009
    Location
    Rocky Mtn. High
    Last Seen
    Today @ 01:12 AM
    Gender
    Lean
    Progressive
    Posts
    10,053

    Re: Record 92,269,000 Not in Labor Force; Participation Rate Matches 36-Year Low

    Quote Originally Posted by Gimmesometruth View Post
    Funny, over here the argument is that the President is to blame for the rising income of the owner/investment class.
    Yes this trend has been going on since the Reagan administration, who made the largest contribution this trending by 1) the ATC firings reversed years of union gains and 2) cutting the highest marginal tax rates which encouraged the wealthy to take money out of their businesses in the form of executive, rather than investing in those businesses in the form of job creation.

    Wealth Disparity - Weath Gap.jpgEco trends - unionincome.jpgchange-in-real-family-income-by-quintile-and-top-5-percent-1979-2009.png

  4. #84
    Pragmatic Idealist
    upsideguy's Avatar
    Join Date
    Nov 2009
    Location
    Rocky Mtn. High
    Last Seen
    Today @ 01:12 AM
    Gender
    Lean
    Progressive
    Posts
    10,053

    Re: Record 92,269,000 Not in Labor Force; Participation Rate Matches 36-Year Low

    Quote Originally Posted by American View Post
    Record 92,269,000 Not in Labor Force; Participation Rate Matches 36-Year Low | CNS News



    The number of those not unemployed, but employable and not working seems to be going up. This is a crisis in my opinion.

    Of course the problem with leading from an article found on a political porn site is we get half the facts.

    No where in this article to they talk about the components of those not in the workforce, which includes stay at home moms (5 million), retirees (42 million per social Monthly Statistical Snapshot, July 2014 .... not including those that retired before applying for social security), the disabled (see social cite) full-time students (21 million - Fast Facts). I, for one, am also not "in the workforce" yet I am..... I do not draw a salary, but have a business (which now employs 70 people).... I may now be in the count, as after 3 years, I have started paying taxes, so I am again on the radar, but there are tons of entrepreneurs in start-up stage very much working (probably much harder than you) that are not in the workforce. This postulate that 92 million people are sitting at home, idle, wishing they had jobs is either an expression of ignorance or disingenuousness. Which is it?

    One of the prime reasons that people are exiting the workforce is that our population is getting older.... FAST. People are retiring.

    The notion we are living in a soft economy, right now anyway, is also an absurdity. Though I recognize that I am a data point of one, I am having a very difficult time finding people in a full employment economy, which is the case in Colorado.

  5. #85
    Pragmatic Idealist
    upsideguy's Avatar
    Join Date
    Nov 2009
    Location
    Rocky Mtn. High
    Last Seen
    Today @ 01:12 AM
    Gender
    Lean
    Progressive
    Posts
    10,053

    Re: Record 92,269,000 Not in Labor Force; Participation Rate Matches 36-Year Low

    Quote Originally Posted by apdst View Post
    Yeah, leave it to a member of the Ayn Rand Institute to blame the government.....

    I see yours and raise you mine (and my Forbes article is by an actual published contributor to Forbes, not something written on their website....)

    http://www.business.cch.com/bankingf...ime_WP_rev.pdf
    Lest We Forget: Why We Had A Financial Crisis - Forbes
    Thomas, Hennessey and Holtz-Eakin: What Caused the Financial Crisis? - WSJ
    Three Causes of the Subprime Mortgage Crisis - ForensisGroup.com


    I can also give you a first hand witness account of this as I did a considerable amount of business planning for a boiler-room mortgage originator with big credit lines (and tons of unreasonable incentive) provided by Lehman and Countrywide.
    Last edited by upsideguy; 09-07-14 at 01:55 AM.

  6. #86
    Villiage Idiot
    imagep's Avatar
    Join Date
    May 2010
    Location
    Upstate SC
    Last Seen
    Yesterday @ 04:46 PM
    Gender
    Lean
    Independent
    Posts
    23,567

    Re: Record 92,269,000 Not in Labor Force; Participation Rate Matches 36-Year Low

    Quote Originally Posted by upsideguy View Post
    Yeah, leave it to a member of the Ayn Rand Institute to blame the government.....

    I see yours and raise you mine (and my Forbes article is by an actual published contributor to Forbes, not something written on their website....)

    http://www.business.cch.com/bankingf...ime_WP_rev.pdf
    Lest We Forget: Why We Had A Financial Crisis - Forbes
    Thomas, Hennessey and Holtz-Eakin: What Caused the Financial Crisis? - WSJ
    Three Causes of the Subprime Mortgage Crisis - ForensisGroup.com


    I can also give you a first hand witness account of this as I did a considerable amount of business planning for a boiler-room mortgage originator with big credit lines (and tons of unreasonable incentive) provided by Lehman and Countrywide.
    Enough with the facts already. They don't match the rhetoric of those on the right, thus the facts don't matter. Some of us "can't handle the truth."
    Quote Originally Posted by ocean515 View Post
    ...I'm not interested in debating someone who is trolling for an argument....
    Quote Originally Posted by Papa bull View Post
    I see a big problem with the idea that whatever the majority wants is OK.

  7. #87
    Sage
    VanceMack's Avatar
    Join Date
    Feb 2010
    Last Seen
    Today @ 01:50 AM
    Gender
    Lean
    Independent
    Posts
    54,600

    Re: Record 92,269,000 Not in Labor Force; Participation Rate Matches 36-Year Low

    Add in another 40-50 million, and in not time, the actual unemployment rate will be down to a very attractive 2-3%. Progress!!!

  8. #88
    Pragmatic Idealist
    upsideguy's Avatar
    Join Date
    Nov 2009
    Location
    Rocky Mtn. High
    Last Seen
    Today @ 01:12 AM
    Gender
    Lean
    Progressive
    Posts
    10,053

    Re: Record 92,269,000 Not in Labor Force; Participation Rate Matches 36-Year Low

    Follow-up to previous post.... almost 90 million of "persons not in the workforce" can be explained as follows (not references, should you want to verify)

    Not in Workforce.jpg


    The US is an aging population, with 10,000 per day (or 300,000 per month) turning 65. While the act of turning 65 does not mean you retire and leave the workforce, it is a leading indicator and support for why the "not in workforce" number will continue to climb. Its not a bad thing.

    Baby Boomers Retire | Pew Research Center

    Another significant item that helps facilitate people out of the workforce is the Affordable Care Act. People in the 55-65 age bracket had often stayed in their jobs or took on a job just to get health insurance. That is no longer necessary with the ACA.

    And, again, entrepreneurs and many of the self employed are also off the employment grid. They are creating tomorrows jobs, which should also be considered a good thing.

    So, don't fear the number.

  9. #89
    Banned
    Join Date
    Nov 2012
    Location
    Denio Junction
    Last Seen
    11-13-14 @ 12:09 AM
    Lean
    Other
    Posts
    7,039
    Blog Entries
    4

    Re: Record 92,269,000 Not in Labor Force; Participation Rate Matches 36-Year Low

    Exactly, 92 million grubby dependents likely to vote for the greater hand out. Screw the rest!


    Quote Originally Posted by apdst View Post
    Thank you Mr. President!

  10. #90
    Guru
    pinqy's Avatar
    Join Date
    Dec 2012
    Location
    Northern Virginia
    Last Seen
    Today @ 12:58 AM
    Gender
    Lean
    Centrist
    Posts
    4,369

    Re: Record 92,269,000 Not in Labor Force; Participation R ate Matches 36-Year Low

    Quote Originally Posted by DA60 View Post
    Okay, I assume I found where you got this from:

    Table A-16. Persons not in the labor force and multiple jobholders by sex, not seasonally adjusted

    (would have been nice if you had a included a link in the first place, but whatever - at least you mentioned it, so thanks)
    Actually, I was using the seasonally adjusted numbers from Table A-1, but it doesn't really matter.


    Personally, I question the number
    Why? What seems off about it?

    and I would need to see the exact question AND the questions that led up to it to feel it was or was not accurate.
    Well, first the respondent is asked about work...if they own a business or farm, then if they've worked, and what they've done for work. The question for want to work is "Do you currently want a job?" CPS Questions and Interviewer's Manual


    But let's assume the number is true. That means that we 'know' that there are at least 5,016,000 people who are not in the work force but who want a job.
    And that is a minimum number because the 'Other persons marginally attached to the labor force' statistic is vague to say the least.
    I'm really not sure how you're reading the table. First is Total Not in the Labor Force: 91,794,000
    Then Persons who currently want a job: 6,382,000 (I have no idea how you got 5,016,000). Not sure why you thing other marginally attached is vague: It's everyone who is marginally attached but not discouraged.

    A better breakdown is Table A-38 which shows some of the reasons why the marginally attached quit looking.

    To me, those 5,016,000 people should be considered 'unemployed', whether they are officially in the labor force or not. They wish to work, are available to work but cannot find a job they want and have given up looking out of frustration (among other reasons).
    Where are you getting the idea that all of them are available? Or that they've looked for work? And it's verrrrry interesting you stress "frustration" when that's not true for most.

    Let's look at Table A-38
    Not in the Labor Force, want a job now: 6,382,000
    Of those....3,607,000 have not looked for work (including just asking friends or family) in over a year. So they have little to do with the current month, and are not likely to start looking for work. Seriously, if someone hasn't done anything at all about finding work in over a year, do you think they actually want a job or are being more hypothetical?

    Of the 2,775,000 who have looked in the last year but not last four weeks, 634,000 could not have started work during the reference week if offered a job. So that hurts your "available" claim.

    So now we're down to the Marginally Attached: People who want a job, recently looked for work, could take a job if offered, but not currently looking. Most had to stop for personal reasons....take care of kids, parents, going to school, etc

    So let's think about that. Someone was looking for work, and her elderly parent became ill and she had to act as caregiver. Now, the parent no longer needs care, but she hasn't started to look for work yet. So we can't say she's unemployed.

    Basically..the UE rate is a look at the labor market. Why you would want to include people who aren't looking is beyond me. We're not measuring desire for work, or poverty, or need...just who is trying and failing. If 100 people come into your store and 10 of them didn't buy anything, how many lost sales did you have? 10 lost sales or 7 billion lost sales counting all the people who didn't enter your store?
    Therefore, since the world has still/Much good, but much less good than ill,
    And while the sun and moon endure/Luck's a chance, but trouble's sure,
    I'd face it as a wise man would,/And train for ill and not for good.

Page 9 of 20 FirstFirst ... 789101119 ... LastLast

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •