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U.S. Added 266,000 Jobs in November; Unemployment at 3.5%

bave said:
The root cause of the financial crisis will be disputed into the infinitum. My view is that the CRA started the whole ball rolling (back in the 90's) with more and more stringent mandates on subprime lending. It then morphed into GSEs eating all the crap the banks generated as part of the CRA circle jerk. I understand the counter point in that if banks were required to have higher reserves, capital ratios, or a thousand other things that may have changed the course and path things went. However I still believe this was part of the Greenspan/Clinton plan to help lower income folks build wealth through homeownership via the CRA. It was good intentioned and the only way to get the banks to go along with it was the threat of their charter followed by the ability to dump it all into the GSEs with an implied backstop. After that is just turned into Frankenstein all on its own.



I am sorry you are having so much trouble understanding. The link you posted is a very basic and, frankly, elementary version of how sovereign financing works. If that is what you are basing your knowledge on going into a debate about global finance, then you should probably just sit at the kids table.
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No, what you are doing is making the simple complex. the budget deficit is quite clear and has to be funded with taxes. Almost the entire 2017 and 2018 deficit increases were due to interest expense and entitlement spending increases and have nothing to do with the tax cuts as the tax cuts stimulated economic activity and grew our economy 700 billion in 2017 and over a trillion dollars in 2018, bea.gov
 
Conservative said:
No, what you are doing is making the simple complex. the budget deficit is quite clear and has to be funded with taxes. Almost the entire 2017 and 2018 deficit increases were due to interest expense and entitlement spending increases and have nothing to do with the tax cuts as the tax cuts stimulated economic activity and grew our economy 700 billion in 2017 and over a trillion dollars in 2018, bea.gov
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Oh right. I must have missed that in various advanced economic and finance classes. That global sovereign finance is actually simple.

As I said before, which you apparently ignored, you are correct in that the vast driver of deficit growth is entitlements and mandatory spending. Where I disagreed with you is your assertion that FRB policy has caused the carry cost to rise materially, which is blatantly wrong and I have shown as much here. Stop trying to flail against a rock solid fact.
 
Conservative said:
What effect did Obama have on the economy with zero interest rates? 9.3 trillion added to the debt and 4 trillion added to GDP including 842 billion stimulus. You still cannot admit that you are wrong on any subject, can you?
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Obama was not in charge of the FED either.
 
bave said:
My view is that the CRA started the whole ball rolling (back in the 90's) with more and more stringent mandates on subprime lending. It then morphed into GSEs eating all the crap the banks generated as part of the CRA circle jerk.
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This view is not supported by evidence.

I understand the counter point in that if banks were required to have higher reserves, capital ratios, or a thousand other things that may have changed the course and path things went.
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This wasn't the counterpoint in my response. The point is, if the CRA pushed lenders into making risky loans as you've stated in post #596, it would show up in the data as these mortgages would be more likely to have been in default. This wasn't the case, and the data is very explicative of this fact.
 
Conservative said:
tax cuts stimulated economic activity and grew our economy 700 billion in 2017 and over a trillion dollars in 2018, bea.gov
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The economy didn't need tax cuts to grow, as unemployment was already around 4%. From an economic growth standpoint, the reason the economy cannot grow beyond 3% is that the overwhelming majority of income growth goes to the people who are least likely to spend it. Had you been properly educated in economic theory, this point would be rather intuitive. But since you're self-taught on the basis of rabid partisanship, you will continue to fail.
 
Kushinator said:
This view is not supported by evidence.

This wasn't the counterpoint in my response. The point is, if the CRA pushed lenders into making risky loans as you've stated in post #596, it would show up in the data as these mortgages would be more likely to have been in default. This wasn't the case, and the data is very explicative of this fact.
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Hold on a second. The article you cited was extremely cherry picked. You grabbed a Berkeley educated economist, at the SF-Fed, to do a sample analysis of a few California metro areas, for a few years. That still shows there is a spread between CRA foreclosures and normally underwritten loans (on my quick perusal of the article). There are *tons* of articles that conclude the exact opposite using national data. NBER and Sloan did a huge study in 2014 I believe that concluded the CRA had a "significant" impact on the housing crisis in 2008. When you are talking about a 2-3% jump in foreclosures it becomes relevant because of the leverage and cascade effects so suddenly interpretations of small variables in wide data sets is far more relevant.

I will also admit, I am not particularly keen to trust an economist from an institution like Berkeley. Sloan, Chicago, and LSE sure but Berkeley is just a joke at this point.

Kushinator said:
The economy didn't need tax cuts to grow, as unemployment was already around 4%. From an economic growth standpoint, the reason the economy cannot grow beyond 3% is that the overwhelming majority of income growth goes to the people who are least likely to spend it. Had you been properly educated in economic theory, this point would be rather intuitive. But since you're self-taught on the basis of rabid partisanship, you will continue to fail.
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I would argue one issue here is that when you get to ~4% unemployment and factor in the U3 v U6 declines one of the biggest gains you are going to see from continued "hot" expansion is rising wages for the lower end as well as increased labor participation rates, both of which at a national level are hot buttons. You don't really get that at ~5% unemployment.
 
bave said:
Hold on a second. The article you cited was extremely cherry picked. You grabbed a Berkeley educated economist, at the SF-Fed, to do a sample analysis of a few California metro areas, for a few years.
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Then i don't believe you understand what cherry-picking entails. Secondly, i didn't grab anyone to do anything. California was the hot-bed of the mortgage crisis... so it would make sense to sample from arguably the most extreme state in order to the greatest instance of CRA enforced lending foreclosures. And yet... the data shows

That still shows there is a spread between CRA foreclosures and normally underwritten loans (on my quick perusal of the article).
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You're failing to take credit scores into consideration (along with comparison between CRA and non-CRA mandated lending). When we analyze loan performance as a function of credit score variability, the evidence clearly shows CRA loan default rates were considerably lower than loans made outside CRA jurisdiction, a.k.a. independent mortgage companies like Countrywide.

fredgraph.png


There are *tons* of articles that conclude the exact opposite using national data. NBER and Sloan did a huge study in 2014 I believe that concluded the CRA had a "significant" impact on the housing crisis in 2008. When you are talking about a 2-3% jump in foreclosures it becomes relevant because of the leverage and cascade effects so suddenly interpretations of small variables in wide data sets is far more relevant.
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And yet you've provided no evidence to back up your statements, and were unable to show how the paper which i sourced can be considered invalid. Instead, you've chosen to attack the academic institution of the author, with no economic, or statistical critique of your own.

I would argue one issue here is that when you get to ~4% unemployment and factor in the U3 v U6 declines one of the biggest gains you are going to see from continued "hot" expansion is rising wages for the lower end as well as increased labor participation rates, both of which at a national level are hot buttons. You don't really get that at ~5% unemployment.
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There is no logic in growing deficits with the unemployment rate this low. I don't know how much more clear one needs to be when making this statement.
 
Conservative said:
No, what you are doing is making the simple complex. the budget deficit is quite clear and has to be funded with taxes. Almost the entire 2017 and 2018 deficit increases were due to interest expense and entitlement spending increases and have nothing to do with the tax cuts as the tax cuts stimulated economic activity and grew our economy 700 billion in 2017 and over a trillion dollars in 2018, bea.gov
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Nothing to do with tax-cuts? Effective 2018, corporations got a huge tax-cut that cut revenue.

fredgraph.png


There is no evidence that the 2017 tax-cuts (effective in 2018) boosted growth.

fredgraph.png
 
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Conservative said:
Same chart, NO CONTEXT!!! Typical liberal post. Provide context or admit you don't have any idea what makes up the budget and the deficit?
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The chart doesn’t need context.

The data blows your absurd position out of the water, even though your fervent belief is that debt/deficits incurred by the GOP is totally OK, but Dem debt is the coming of Armageddon.
 
MTAtech said:
Nothing to do with tax-cuts? Effective 2018, corporations got a huge tax-cut that cut revenue.

There is no evidence that the 2017 tax-cuts (effective in 2018) boosted growth.
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The economy did get a stimulus from deficit growth, but that is only temporary.
 
Conservative said:
No, what you are doing is making the simple complex. the budget deficit is quite clear and has to be funded with taxes. Almost the entire 2017 and 2018 deficit increases were due to interest expense and entitlement spending increases and have nothing to do with the tax cuts as the tax cuts stimulated economic activity and grew our economy 700 billion in 2017 and over a trillion dollars in 2018, bea.gov
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Look at how that economy took off!!

908342f04d7f4743d395e59b41ba5c1c.jpg
 
Kushinator said:
Then i don't believe you understand what cherry-picking entails. Secondly, i didn't grab anyone to do anything. California was the hot-bed of the mortgage crisis... so it would make sense to sample from arguably the most extreme state in order to the greatest instance of CRA enforced lending foreclosures. And yet... the data shows
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The author grabbed data from a specific period of time and very specific geographic locales. In short, I don't trust someone from a suspect partisan institution to provide a clean analysis when the data is extremely limited. The question then becomes whether it was intentional or in earnest effort.

Kushinator said:
You're failing to take credit scores into consideration (along with comparison between CRA and non-CRA mandated lending). When we analyze loan performance as a function of credit score variability, the evidence clearly shows CRA loan default rates were considerably lower than loans made outside CRA jurisdiction, a.k.a. independent mortgage companies like Countrywide.
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Apples and oranges more often than not. The jurisdiction are not equal. Bakersfield, CA got smashed inside out in the housing crisis, but that doesn't show up in the data because the author focused on three major metro areas in the same state.

Kushinator said:
And yet you've provided no evidence to back up your statements, and were unable to show how the paper which i sourced can be considered invalid. Instead, you've chosen to attack the academic institution of the author, with no economic, or statistical critique of your own.
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Again, go yank the NBER or Sloan analysis, it is easy to pull. There are a thousand sources out there that will take contrarian points to the author here and a ton of them are from a less partisan source, with far wider data sets and thus IMO more trustworthy. Do you honestly believe an economist trained out of Berkeley is a valid non-partisan source? In all my travels in finance and economics I have never met a privately employed finance/econ expert from Berkeley, they are all think tanks because their ideas are borderline communist. Jesus, just look at the crap that Reich spews out of there.

Forget partisanship for a moment, they are just ignoring facts in the entirety because their conclusion is predetermined.

Kushinator said:
There is no logic in growing deficits with the unemployment rate this low. I don't know how much more clear one needs to be when making this statement.
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Let's pretend I agree for a moment, the vast bulk of the deficit has nothing at all to do with Trump. If we were serious about reducing deficit spending then it lands pretty squarely on entitlement reform (read: Cuts).

Kushinator said:
The economy did get a stimulus from deficit growth, but that is only temporary.
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You can absolutely generate economic growth through deficit spending.
 
Threegoofs said:
Look at how that economy took off!!
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In fairness, you cannot compare economic performance under Obama to much of anything. He walked into an economy that had just finished cratering spectacularly. From that point is was nigh impossible to look bad. It is much more difficult to extend economic gains late in the cycle than it is to post fantastic numbers coming out of a crater.
 
Kushinator said:
The economy didn't need tax cuts to grow, as unemployment was already around 4%. From an economic growth standpoint, the reason the economy cannot grow beyond 3% is that the overwhelming majority of income growth goes to the people who are least likely to spend it. Had you been properly educated in economic theory, this point would be rather intuitive. But since you're self-taught on the basis of rabid partisanship, you will continue to fail.
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The unemployment numbers wasn't the issue, the quality of jobs and part time jobs for economic reasons was, also the declining GDP dollar growth and the 1.6%. You keep focusing on percentage and I will keep countering with dollars. You don't spend percentages you spend dollars. Rapid partisanship to you means something different to me, I am partisan for pro growth, capitalism, state's rights, and people keeping more of what they earn. You cannot seem to grasp that reality
 
Threegoofs said:
The chart doesn’t need context.

The data blows your absurd position out of the water, even though your fervent belief is that debt/deficits incurred by the GOP is totally OK, but Dem debt is the coming of Armageddon.
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Yes, the chart does need context as it is meaningless, what part of those public debt numbers include DEBT SERVICE!!! What was the debt service in 2017-2018? Context!!!!
 
Threegoofs said:
Look at how that economy took off!!

908342f04d7f4743d395e59b41ba5c1c.jpg
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You have no concept as to the components of GDP do you? Any idea what the Obama stimulus did to GDP? Can you explain why Obama left us with higher U-6 unemployment number than when the recession began? You don't seem to grasp context at all and simply focus on bottom line. The American people don't spend percentages they spend dollars and declining GDP dollar growth, and part time jobs for economic reasons gave Obama 4 million fewer votes in 2012 than 2008. Can you name for me one President who was re-elected with fewer votes than received when initially elected? People get it, you apparently never will
 
Conservative said:
Yes, the chart does need context as it is meaningless, what part of those public debt numbers include DEBT SERVICE!!! What was the debt service in 2017-2018? Context!!!!
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Debt service is a minimal component.

Didn’t you get schooled on this yesterday?
 
bave said:
The author grabbed data from a specific period of time and very specific geographic locales.
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That was the point of the study. It's irrelevant to consider CRA default rate differentials vs. IMC's in 1989 when trying to understand the housing bubble that emerged between 2004 and 2007.

In short, I don't trust someone from a suspect partisan institution to provide a clean analysis when the data is extremely limited. The question then becomes whether it was intentional or in earnest effort.
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Your lack of faith isn't up for discussion, and is entirely irrelevant to this topic.

Apples and oranges more often than not. The jurisdiction are not equal. Bakersfield, CA got smashed inside out in the housing crisis, but that doesn't show up in the data because the author focused on three major metro areas in the same state.
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You are more than welcome to provide data and evidence that supports your position... so far, you've provided an opinion.

Again, go yank the NBER or Sloan analysis, it is easy to pull. There are a thousand sources out there that will take contrarian points to the author here and a ton of them are from a less partisan source, with far wider data sets and thus IMO more trustworthy. Do you honestly believe an economist trained out of Berkeley is a valid non-partisan source? In all my travels in finance and economics I have never met a privately employed finance/econ expert from Berkeley, they are all think tanks because their ideas are borderline communist. Jesus, just look at the crap that Reich spews out of there.
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By all means, you are most welcome to make the case for your own argument. It's not my responsibility to make your case.

Let's pretend I agree for a moment, the vast bulk of the deficit has nothing at all to do with Trump.
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Only if we pretend that revenue growth didn't decline relative to what it would have been sans tax cuts.

If we were serious about reducing deficit spending then it lands pretty squarely on entitlement reform (read: Cuts).
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A deficit is defined as: revenue - spending ≤ 0

You can absolutely generate economic growth through deficit spending.
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I never argued to the contrary.
 
Threegoofs said:
Debt service is a minimal component.

Didn’t you get schooled on this yesterday?
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Really? why don't you then post the amount of that "insignificant" component?

Really impressed that you think you have the ability to school anyone on the budget. Debt service is the 4th largest budget item
 
Conservative said:
The unemployment numbers wasn't the issue, the quality of jobs and part time jobs for economic reasons was, also the declining GDP dollar growth and the 1.6%.
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Cyclical unemployment is the major risk to economic growth. Your obsession with PTFER data is of absolutely no consequence to the point being made in the post you've decided to quote. We've been through this on multiple occasions, so there really is no excuse for your inability to comprehend the subject matter. The problem arises with your partisanship, as you try to look for data to fit your narrative. Your position isn't derived from understanding data, and that is why you fail.

You keep focusing on percentage and I will keep countering with dollars.
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You're just moving the goalpost so that you can attempt to use large numbers to avoid making a valid comment. And we know why. For a year, you were convinced rGDP growth for the calendar year would eclipse 3% only to see your predictions fail. As a result, you've shifted focus from inflation adjusted growth rates to nominal GDP growth as a means to manipulate the data to drive your partisan agenda. It's a byproduct of an education deficiency, as you're unable to operate in a manner that requires critical thinking.

You don't spend percentages you spend dollars.
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Nobody claimed people spend percentages. However, the use of percentages allows us to make more accurate comparisons as a function of time.

I can create the same scenario: From 1981 to 1990, nominal GDP grew by $2.6 trillion. From 2009 to 2017, nominal GDP grew by $4.6 trillion. Hence, the Obama economy grew 80% more than the Reagan economy.

If you're not smart enough to understand why this is a garbage way of making an argument, then we don't have much to discuss. You live in an alternate reality.

Rapid partisanship to you means something different to me, I am partisan for pro growth, capitalism, state's rights, and people keeping more of what they earn. You cannot seem to grasp that reality
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You're nothing more than a lying hypocrite and it has been displayed more times than anyone here wishes to count. Hence, nobody respects you or your opinions.
 
Conservative said:
Really? why don't you then post the amount of that "insignificant" component?

Really impressed that you think you have the ability to school anyone on the budget. Debt service is the 4th largest budget item
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You don't even know how much debt service grew... as you don't understand what debt service entails. Why not save us the trouble by linking to gross interest so we can poke fun at your ignorance for the nth time.
 
Conservative said:
Really? why don't you then post the amount of that "insignificant" component?

Really impressed that you think you have the ability to school anyone on the budget. Debt service is the 4th largest budget item
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It was already posted.

Kinda wonder why YOU don’t post it since it’s *your* argument, but I think we all know by now that most of the statistical data you have resides only in your head.
 
bave said:
In fairness, you cannot compare economic performance under Obama to much of anything. He walked into an economy that had just finished cratering spectacularly. From that point is was nigh impossible to look bad. It is much more difficult to extend economic gains late in the cycle than it is to post fantastic numbers coming out of a crater.
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That just isn't true. There was enormous economic overhang and much personal debt unwinding to result in a boom. The recessions that result from the Fed raising interest rates to control inflation and then we get a boom when they take their foot off the brakes, is different than recessions caused by financial meltdowns.
 
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