Politics: A new beginning

[sgtclub]

Originally posted by Tyrone_Slothrop
Like a good Democrat, I said it was bad news because we didn't create enough jobs to keep pace with population growth.

Like a good Republican, sgtclub said it was bad because the market reacted poorly. Res ipsa loquitur.

And like a good democrate, you do not acknowledge that my reasons lead to your reasons.

[Tyrone Slothrop]

Originally posted by sgtclub
And like a good democrate, you do not acknowledge that my reasons lead to your reasons.

No, if anything it was my reasons -- the underlying facts -- which led to your reasons -- the market's response. Duh. In any event, the market's response could signal that this was good news, but not as good as the market was expecting, for whatever reasons known only on Wall Street. Or, the market could be reacting to something else. In any event, I think the effect on average working people is more significant, as a matter of the commonweal, than the effect on the owners of capital. You probably think that what's good for the capitalists is ipso facto good for the average Joe.

[sgtclub]

Originally posted by Tyrone_Slothrop
In any event, I think the effect on average working people is more significant, as a matter of the commonweal, than the effect on the owners of capital. You probably think that what's good for the capitalists is ipso facto good for the average Joe.

Let's step back a moment. Anytime you add jobs, it is good for working people. So the fact that it was not as many jobs as expected does not really alter than. What it does alter is company (i.e., employer) valuations, which in turn alters incentives.

So, what's good for EMPLOYMENT PROVIDERS is good for the EMPLOYMENT SEEKERS. I don't look at this in terms of increasing stockholders' wealth, I look at this in terms of valuations and company's being able to raise cheap money, which in turn allows them to expand, which in turn allows them to HIRE EMPLOYMENT SEEKERS.

But this is probably far to elementary for someone as schooled in finance/economics as you.

[Atticus Grinch]

Originally posted by sgtclub
So, what's good for EMPLOYMENT PROVIDERS is good for the EMPLOYMENT SEEKERS.

Really? I thought large pools of qualified employment seekers are good for EMPLOYMENT PROVIDERS, and not-so-good for EMPLOYMENT SEEKERS. I'm willing to be educated on this topic.

[sgtclub]

Originally posted by Atticus Grinch
Really? I thought large pools of qualified employment seekers are good for EMPLOYMENT PROVIDERS, and not-so-good for EMPLOYMENT SEEKERS. I'm willing to be educated on this topic.

I assume you are being sarcastic.

[Tyrone Slothrop]

Originally posted by sgtclub
Let's step back a moment. Anytime you add jobs, it is good for working people.

But that's not the question. The question is whether you are adding enough jobs to keep up with new entrants to the work force.

So the fact that it was not as many jobs as expected does not really alter that.

Yes. Which is why the market reaction does not really matter.

So, what's good for EMPLOYMENT PROVIDERS is good for the EMPLOYMENT SEEKERS.

Whether the stock market goes up or down on a given day is, in the end, not really all the important, and doesn't have much to do with a company's valuation and ability to raise money.

[sgtclub]

Originally posted by Tyrone_Slothrop
But that's not the question. The question is whether you are adding enough jobs to keep up with new entrants to the work force.

I thought the question is whether the 59,000 new jobs is good or bad news. You said no, for the reasons above. I said, it's good news for those newly employed, but also dissappointing news because the market had expected more and that our reasons are related. What question are you answering?

Originally posted by Tyrone_Slothrop Yes. Which is why the market reaction does not really matter.

Whether the stock market goes up or down on a given day is, in the end, not really all the important, and doesn't have much to do with a company's valuation and ability to raise money.

Conventional wisdom was that the numbers would be about 90,000 jobs better today and this would push the market above 10,000. Once that seal is broken, whether rationale or not, many watchers believe that we would see substantial market gains.

You are right that the movement of the market in any given day is fairly insignificant. But the movement of the market as a whole is hugely significant for the reasons I previously discussed (i.e., cheap money).

Anotyher related point, the market does not react retrospectively. It reacts prospectively (6-12 months) and often times has self fulfilling prophesies. So if the numbers were better today and we broke 10,000, and 2 months from now we were at 10,500, most would agree that this would have a snowball effect for job creation.

[Say_hello_for_me]

While I hate to agree with SITC's pessimistic line, I agreed at least in part after watching CNBC this morning.

3 panelists were talking after the numbers came out. One was Kudlow and I forget the names of the other two.

What one guy brought up was outsourcing, excess existing capacity, and improved productivity. His opinion was that the 3 combined mean that real job growth is some ways off.

While acknowledging that corporate profits are up 30% yr/yr (or something like that), he noted that its not a reason, in and of itself, for companies to start hiring. Rather, you hire American workers when you need more American workers to ensure you can produce the goods or services for the next incremental buyer.

Right now, people can be asked to do more (productivity and excess capacity) or you can have the work done overseas less expensively. At least in some or many cases.

He also noted that its the small companies that are hiring right now... the big companies are too busy visiting India and China to outsource their work.

I'm not saying it's wrong. In fact, I believe its right not to hire the next body til you need the next body (or you reasonably anticipate needing the next body). But it does not bode well for either salaries or the unemployment rate until the other hurdles are overcome.

That said, I do note that it appears some companies and firms held off on laying people off until they were confident the people would land on their feet. I've seen some layoffs that can not reasonably be explained another way. Good workers, personality conflicts, not given notice for more than a year through the rising unemployment rate. As soon as things start picking up a few months ago, bam, the firm tells em to start looking... things will be okay.

On another note, and only anecdotally, staff hiring in the DC area seems to have picked up considerably. And someone on another board said some SV firms aren't even seeing anything close to the resumes they seek for tech-type lawyers. Everyone who wanted to leave already left, and everyone else with the desired qualifications (think EE/CS/PhD and patents) in the area already has a job. As for the DC area, I'm hearing that some firms are seeing massive staff turnover as the staff suddenly have opportunities for 10-15K more on K street.

So some areas are starting to see growth.

And the last boom started in CA, right?

How are CAs unemployment numbers looking? Moving down?

Hello

[Tyrone Slothrop]

Originally posted by sgtclub
I thought the question is whether the 59,000 new jobs is good or bad news. And so on.

Never mind. I no longer care about this. You are right.

Conventional wisdom was that the numbers would be about 90,000 jobs better today and this would push the market above 10,000. Once that seal is broken, whether rationale or not, many watchers believe that we would see substantial market gains.

You are right that the movement of the market in any given day is fairly insignificant. But the movement of the market as a whole is hugely significant for the reasons I previously discussed (i.e., cheap money).

Anotyher related point, the market does not react retrospectively. It reacts prospectively (6-12 months) and often times has self fulfilling prophesies. So if the numbers were better today and we broke 10,000, and 2 months from now we were at 10,500, most would agree that this would have a snowball effect for job creation.

Your theories about the snowball effect involved here are interesting. Very interesting. If I hacked the government computers and released phony numbers, causing the market to drop today, when it otherwise would have reached 10,000, breaking that seal, could lots of people sue me for the vast economic damage I caused?

Also, I have a pal with similar theories who is selling some products you might be interested in. He'll be giving you a call.

[Tyrone Slothrop]

Originally posted by Say_hello_for_me
What one guy brought up was outsourcing, excess existing capacity, and improved productivity. His opinion was that the 3 combined mean that real job growth is some ways off.

Productivity was up, what, 9%? Something about that number seems highly screwy to me. I personally don't think I've been any more productive lately. So, for that number to be right, that means both (a) that someone, somewhere, has to have been 18% more productive, to make up for me, and (b) that everyone else in the country has to have been, in the aggregate, 9% more productive. This seems unlikely.

[sgtclub]

Originally posted by Tyrone_Slothrop
Your theories about the snowball effect involved here are interesting. Very interesting. If I hacked the government computers and released phony numbers, causing the market to drop today, when it otherwise would have reached 10,000, breaking that seal, could lots of people sue me for the vast economic damage I caused?

Also, I have a pal with similar theories who is selling some products you might be interested in. He'll be giving you a call.

Jest all you want, but this is how it works in the real world (excluding, of course, San Francisco, where convential wisdom is that jobs just appear and disappear by magic).

[sgtclub]

Originally posted by sgtclub
Jest all you want, but this is how it works in the real world (excluding, of course, San Francisco, where convential wisdom is that jobs just appear and disappear by magic).

[edited to add the following]

What do you think the bubble was, a rational response?

[Tyrone Slothrop]

Originally posted by sgtclub
[edited to add the following]

What do you think the bubble was, a rational response?

sgtclub: if the jobs report had been better, the market might have broken the seal at 10,000, and would have snowballed, and we'd be at 10,500 soon

me: that's silly

sgtclub: if you think that's silly, you must have thought the internet bubble was rational

me: yeah, that follows

[Atticus Grinch]

Originally posted by Tyrone_Slothrop
sgtclub: if the jobs report had been better, the market might have broken the seal at 10,000, and would have snowballed, and we'd be at 10,500 soon

me: that's silly

sgtclub: if you think that's silly, you must have thought the internet bubble was rational

me: yeah, that follows

Slave called. He wants his schtick back.

By which I mean his old schtick. The new one isn't schticking so good.

[Tyrone Slothrop]

Originally posted by Atticus Grinch
Slave called. He wants his schtick back.

By which I mean his old schtick. The new one isn't schticking so good.

Slave invented that? No kidding. Maybe he'll let me license it.