Sketch of Week’s 6 Key Events and A Few Things to Monitor

Risk appetites returned in a big way in October, as equities, emerging markets, commodities and currencies all generally advanced and smartly so, recouping much of the ground lost in September. The events in the week ahead will likely set the tone for the month of November. They include three central bank meetings (RBA, Fed and ECB), two data points (UK Q3 GDP and US employment report) and the G20 summit

What US GDP and jobless claims say about the US economy

We got two good proxies for the economic trajectory in the US this morning at 830 AM. Jobless claims were 402,000 with the 4-week moving average now settling in at 405,500. GDP rose an annualized 2.5% in the third quarter according to the government’s advanced estimate. In the second quarter, real GDP had risen 1.3%

Hockett says restructure debt and invest in infrastructure

Cornell University professor Robert Hockett explains his paper with Nouriel Roubini and Daniel Alpert on “Moving From the Post-Bubble, Post-Bust Economy to Growth”. His prescription is one part credit writedowns, one part debt rebalancing, and one part reflation via infrastructure spending

Roubini: Moving From the Post-Bubble, Post-Bust Economy to Growth

Here are the important extracts from a recent paper in terms of the causes of the crisis. I have also embedded the full pdf version, which has suggested policy prescriptions as well

Pippa Malmgren on the Republican Presidential Debate

Former George W. Bush official Pippa Malmgren does a good analysis for Bloomberg of the issues important to voters and how they will play in this year’s presidential election

Chart of the day: U.S. September Job Creation by Industry

A chart which breaks down the job losses and gains by industry

Jobs, Jobs, Jobs

Markets choppy ahead of the US employment report; global stocks mixed, commodities softer. US economic data performance continues to outperform; Sep. Canadian employment surges. Custody holdings at the Federal Reserve for foreign central banks continue recent decline

Jobs! Jobs! Jobs! Business Roundtable and Challenger

Since the fourth quarter of 1972 (when founded) the most important thing that the BRT does is a survey once a quarter which provides a forward looking view of the economic outlook of BRT’s 140 member CEOs. One of the other major changes from one month ago was the answer to the question, “How do you expect your company’s U.S. employment to change over the next 6 months?” The response from 24% of the CEOs surveyed, answered that question with “LOWER!!” All in all, the latest report by BRT was much worse this past quarter than almost any time except during the “financial crisis” in 2008-2009.

Challenger, Gray & Christmas, Inc. (Challenger) is in the business of keeping track of job cut announcements. This past September they just reported that layoffs surged to the highest total since April 2009 at 115,730 or 212% higher than one year ago where employers announced just 37,151 layoffs. In fact, this is the first announced monthly layoffs of over 71,500 over the past 21 months

Questionable Rally

We continue to be amazed at the eagerness of the market to rally in the face of negative fundamental data. The U.S. stock market rallied today on the news that the European Central Bank is getting together with other Central Banks (Bank of Japan, Federal Reserve, Bank of England, and Swiss National Bank) to provide more liquidity to help Europe as they are trying to keep their heads above water. The coordinated action between governments has generated a “trust” that we expect to be short lived

Chart of the Day: The World’s Largest Employers

Great graphic from the Economist. Note that 7 of the 10 are government-run. Amazing WalMart employs almost as many as the People’s Liberation Army. Gives new meaning to the “Human Wave Theory.”

Franklin Roosevelt on Social Security

Below are two messages from Franklin Roosevelt, proposing the Social Security program and signing it into law. The main points to note in the text deal with the purpose and funding of Social Security and unemployment insurance i.e. the why and the how

Mosler: The Speech that President Obama Should Make

Warren Mosler has three proposals specifically designed to get sales up to make sure business has a good paying job for anyone willing and able to work. He arguess that’s good for businesses and all the people who work for them and says these proposals are bipartisan. His view is that they are supported by Americans ranging from Tea Party supporters to the Progressive left, and everyone in between