Note: Sorry I had to repost this... my learning is often steep...

This is why we like Bill the Brain at Calculated Risk.

Bill writes excellent analysis on economic issues and trends in general, mortgages, foreclosures in particular with great clarity. Now that I praised Bill's clarity, under the odd title "Another Involuntary Landlord and Summary"...Bill covers unemployment with his usual insight and links to his previous top notch posts on the subject.

Another Involuntary Landlord and Summary

Known for is ironic wit, the picture of the "Another Involuntary Landlord" with for lease sign in front is? Click on his photo and read the plaque:

The National Association of Homebuilders, National Housing Center in Washington DC.

But I thought sentiment among homebuilders was up on increasing month over month new home sales??

As Bill has taught me... Real Estate is cyclical on an annual basis. Sales always go up in April through August. People always try to buy and get moved in before school starts for their kids and/or the holiday season. These trends have repeated in the US, year after year, decade after decade. Believe the trend line.

Never pay attention to month over month, always pay attention to year over year... this month last year. Month over month is used to mislead... like the National Association of Realtors and Homebuilders.

Bill on unemployment:

 

Courtesy Calculated Risk

Unknown to the American public, historical perspective is important because so much of what happens today, is path dependent on past political and economic decisions. Path Dependency is real. We will look at good ol' Glass-Steagall here shortly...

I think it was Gore Vidal who coined the phrase "Citizens of the United States of Amnesia" for their unfailing lack of forgetting what happened yesterday. Those who defraud the American public count on that.

In one of the links below the chart, Bill gives a good break down on how unemployment is spread among different industries in the US economy:

Unemployment: Stress Test Scenarios, Diffusion Index, Weekly Claims

Here is a look at how "widespread" the job losses are using the employment diffusion index from the BLS...

Before September, the all industries employment diffusion index was close to 40, suggesting that job losses were limited to a few industries. However starting in September the diffusion index plummeted. In December, the index hit 20.5, suggesting job losses were very widespread. The index has recovered since then, but declined slightly in June to 28.6, suggesting job losses are still widespread.

However job losses have really picked up over the last 9 months (4.4 million jobs lost, red line cliff diving on the graph), and the current recession is now the 2nd worst recession since WWII in percentage terms - and also in terms of the unemployment rate (only early '80s recession was worse).

On unemployment insurance: Notice a nice chart showing both initial and continuing unemployment insurance claims since 1971.

Employment-Population Ratio, Part Time Workers, Hours Worked

In this post, Bill analyzes hours worked and those forced to work part time, either because they are full time employees who have been cut  to part time or were hired part time because that was all that was available. Why should part time workers be an issue in the unemployment numbers? Have you ever tried paying your rent or more importantly in this foreclosure environment, your mortgage with part time wages? Part time employment might just affect economic conditions after all...

So why exclude part time from the U3 unemployment numbers? Why exclude people who have run out of unemployment insurance? Why invent job creation (Birth/Death Ratio) that your payroll data and 60k a month household survey has allegedly missed? Add 1.3 million jobs in a single year (Bush Jr. 2007) ?

Two great charts:

Part Time Unemployment: 

Employment-Population Ratio

 

The general upward trend from the early '60s was mostly due to women entering the workforce. As an example, in 1964 women were about 32% of the workforce, today the percentage is close to 50%.

This measure is at the lowest level since the early '80s and shows the weak recovery following the 2001 recession - and the current cliff diving!

Part Time for Economic Reasons (sometimes referred to as involuntary part-time workers)

Not only has the unemployment rate risen sharply to 9.5%, but the number of workers only able to find part time jobs (or have had their hours cut for economic reasons) is at 9.0 million.

You can find analysis on increasing year over year personal bankruptcies in June, up 40%...

 Then move on to "Naught for the Naughts" Just an observation ..."

 Naught for the Naughts?

This is a nice little comparison. This guy has an eye for data and what to do with it. There is a lot of data out there. The whole thing about statistics is what method you use to analyze it based on the parameters and are you correctly taking into account outlier data... What you use and what you do with it. Mr. Bill has a keen mind for both... and is it relevant.

On the '00s (the "Naughts") ...

Employment Dec 1999: 130.53 million

Employment Jun 2009: 131.69 million

A gain of just 1.16 million. What are the odds that the economy loses another 1.16 million jobs over the next 6 months? Pretty high. That would mean no net jobs added to the economy for the naughts:

Naught for the Naughts!

Mr. Bill on education: Really his blog is to inform the public on economic issues. In that regard if you click:

The Compleat UberNerd

You will find some very informative subject postings by his former writing partner. 

From December 2006, until she passed away from ovarian cancer on Nov 30, 2008, Tanta was my co-blogger. Tanta worked as a mortgage banker for 20 years, and we started chatting in early 2005 about the housing bubble and the changes in lending practices.

 In Memoriam: Doris "Tanta" Dungey

The UberNerd Collection:

Mortgage Servicing

Negative Amortization

Private Mortgage Insurance I

Private Mortgage Insurance II

Foreclosure and REO

MBS I

MBS II

MBS III

Delinquency and Default

Reverse Mortgages

Leverage, Ratings, and Forced Unwind

Mortgage Origination Channels

These are all worth taking the time to read to better understand this "once in century" economic calamity that no one could see coming... fraudsters never want to see a good thing coming, huh Wall Street?

For a little foreclosure lunacy and sarcastic comments with facts and figures, click on "Jim The Realtor" on the right margin.

Note: Jim's link seems to move. The Calculated Risk list of Jim's postings:

Calculated Risk list of Jim the Realtor videos

Jim works in San Diego handling a lot of banked owned foreclosures. While Jim video tapes, he gives a run down on the property, the facts, figures and assessment of what is going on. His commentary is both hilarious and truly astounding. He critiques banks that are too cheap to paint or repair foreclosures so they can sell, to the original purchase prices, how may refinances and how each particular foreclosure ended up where it did.

His latest video documents a rash of foreclosures and NOD's on upper end homes in the over $1 million price range.

 Jim TV SD Pre-Foreclosure Tour

If you watch the series of Jim's videos as a whole they are quite educational. From the low end and investor rental end of the market, to the upper end 4k square footers and unscrupulous new home development deals... with brand new houses foreclosing less than a year after they sold... it gives you a whole new perspective on the foreclosure problem, the lack of regulation at all levels and top down securitization greed from Wall Street that got us into this fine mess.

All of Jim's videos:

Jim the Realtor

Got to love Jim the Realtor... and Bill the Brain at Calculated Risk.

Back to math...