Oracle of NY

Unemployment by the Numbers (cont.)

From the U.S. Department of Labor:

In the week ending April 25, the advance figure for seasonally adjusted initial claims was 631,000, a decrease of 14,000 from the previous week's revised figure of 645,000. The 4-week moving average was 637,250, a decrease of 10,750 from the previous week's revised average of 648,000.

The advance number for seasonally adjusted insured unemployment during the week ending April 18 was 6,271,000, an increase of 133,000 from the preceding week's revised level of 6,138,000. The 4-week moving average was 6,076,000, an increase of 131,500 from the preceding week's revised average of 5,944,500.

WHO

From the World Health Organization's web site:

Based on assessment of all available information and following several expert consultations, Dr Margaret Chan, WHO's Director-General raised the current level of influenza pandemic alert from phase 4 to 5. She stated that all countries should immediately activate their pandemic preparedness plans. At this stage, effective and essential measures include heightened surveillance, early detection and treatment of cases, and infection control in all health facilities.

Phase 5 is characterized by human-to-human spread of the virus into at least two countries in one WHO region. While most countries will not be affected at this stage, the declaration of Phase 5 is a strong signal that a pandemic is imminent and that the time to finalize the organization, communication, and implementation of the planned mitigation measures is short.

www.who.int/en/

Swine Flu vs. SARS

From an article published by Reuters, written by Vidya Ranganathan:

According to the Asian Development Bank, the cost of SARS in terms of lost GDP in nominal terms for East and Southeast Asia was about $18 billion or 0.6 percentage points of 2003 GDP.

The main channels through which SARS affected economies was through tourist arrivals. ADB data shows a 20-70 percent drop on tourist arrivals in April 2003 in the most affected economies, while others in Asia also saw declines of 15-35 percent, leading to estimated tourism revenue losses of nearly $15 billion or 0.5 percent of GDP.

SARS-affected economies experienced drops in retail sales growth in the order of 5-10 percent in early 2003. Hong Kong's economy shrank 2.6 percent and Singapore's by 2 percent in the first half of 2003. Overall growth was ironically helped by a simultaneous decline in imports and investment.

Spain's Unemployment Tops 17%

From Spain's National Institute of Statistics:

Unemployment grew by 802,800 persons this quarter. The total number of unemployed persons stood at 4,010,700, with an increase of 1,836,500 in the last 12 months. The unemployment rate increased 3.45 points in the first quarter of the year, and reached 17.36% of the active population.

Unemployment increased more for men (507,000) than for women (295,900) this quarter. The total number of unemployed men was 2,195,800 and the number of unemployed women was 1,814,900 persons.

The male unemployment rate was 16.86%, that is, 3.89 points higher than in the fourth quarter of 2008. The female rate increased 2.88 points, standing at 18.01%. In recent quarters, the two rates have progressively converged.

Unemployment grew by 524,700 persons among Spaniards, and by 278,100 persons among foreign nationals. The unemployment rate for Spaniards was 15.24% (2.72 points higher than the previous quarter), and that for foreign nationals was 28.39% (7.13 points higher).

Unemployment by the Numbers (cont.)

From the U.S. Department of Labor:

In the week ending April 18, the advance figure for seasonally adjusted initial claims was 640,000, an increase of 27,000 from the previous week's revised figure of 613,000. The 4-week moving average was 646,750, a decrease of 4,250 from the previous week's unrevised average of 651,000.
 
The advance number for seasonally adjusted insured unemployment during the week ending April 11 was 6,137,000, an increase of 93,000 from the preceding week's revised level of 6,044,000. The 4-week moving average was 5,944,000, an increase of 142,500 from the preceding week's revised average of 5,801,500.  

IMF's World Economic Outlook

From the IMF web site:

In the most severe recession since World War II, the global economy is projected to shrink by 1.3 percent in 2009, with a slow recovery expected to take hold next year, according to the IMF’s April World Economic Outlook (WEO).

While the rate of contraction should moderate from the second quarter of 2009 onward, output per capita is projected to decline in countries representing three-quarters of the global economy. Growth is projected to reemerge in 2010, but at 1.9 percent it would be sluggish relative to past recoveries.

IMF Chief Economist Olivier Blanchard told reporters that the world economy was being battered by competing crosscurrents, with the collapse in confidence and demand continuing to pull the economy down and government stimulus measures and natural stabilization mechanisms pulling the economy up.

“This is not the time for complacency, and the need for strong policies, both on the macro and especially on the financial fronts, is as acute as ever. But, with such policies in place, there is light at the end of this long tunnel. World growth can turn positive by the end of this year, and unemployment can start decreasing by the end of next year.”

Although Blanchard said that today “the first current strongly dominates the second,” he could see the balance shifting towards the end of the year, with growth in advanced countries becoming positive again in 2010, and returning to its normal level around the end of 2010.”

Unemployment will crest only toward the end of 2010, however, and should decrease after that. Historical evidence presented in the WEO suggests recovery may be slower than in other recessions.

Global Financial Stability Report

From the IMF's Global Financial Stability Report:

Without a thorough cleansing of banks’ balance sheets of impaired assets, accompanied by restructuring and, where needed, recapitalization, risks remain that banks’ problems will continue to exert downward pressure on economic activity.

Though subject to a number of assumptions, our best estimate of writedowns on U.S.-originated assets to be suffered by all holders since the outbreak of the crisis until 2010 has increased from $2.2 trillion in the January 2009 Global Financial Stability Report (GFSR) Update to $2.7 trillion, largely as a result of the worsening base-case scenario for economic growth.

In this GFSR, estimates for writedowns have been extended to include other mature market-originated assets and, while the information underpinning these scenarios is more uncertain, such estimates suggest writedowns could reach a total of around $4 trillion, about two thirds of which would be incurred by banks.

www.imf.org/External/Pubs/FT/GFSR/2009/01/pdf/text.pdf

The Great Recession

We may have avoided a 1930's-like Great Depression, but many admit we've been in a Great Recession.

Speaking at Vanderbilt University, Paul Volcker, a senior economic adviser to the Obama administration said the unprecedented tumble in economic activity in late 2008 may not have left the United States in a Great Depression but has left it "in a great recession for sure."

I Googled the term "Great Recession" to see who coined it and found that Catherine Rampell of the New York Times had done her research. In an article last month, she found that no one could take credit for the term, since it has been used in every recession over the past few decades.

There is nothing new under the sun!

http://economix.blogs.nytimes.com/2009/03/11/great-recession-a-brief-etymology/

Unemployment by the Numbers

From the U.S. Department of Labor:

In the week ending April 11, the advance figure for seasonally adjusted initial claims was 610,000, a decrease of 53,000 from the previous week's revised figure of 663,000. The 4-week moving average was 651,000, a decrease of 8,500 from the previous week's revised average of 659,500.

The advance number for seasonally adjusted insured unemployment during the week ending April 4 was 6,022,000, an increase of 172,000 from the preceding week's revised level of 5,850,000. The 4-week moving average was 5,796,000, an increase of 146,000 from the preceding week's revised average of 5,650,000.

The Beige Book on Labor Markets and Wages

From the Beige Book economic survey released by the Federal Reserve:

Labor market conditions were weak and reports of layoffs, reductions in work hours, temporary factory shutdowns, branch closures and hiring freezes remained widespread across Districts.

Staffing firms in the New York, Cleveland, Richmond, Chicago, and Dallas Districts reported that demand for workers remained sluggish.

The manufacturing and energy extraction sectors were the most affected but there were numerous reports of job cuts in the retail and services industries as well.

The St. Louis District reported payroll declines in information and medical services, while the Cleveland District cited layoffs in transportation and financial services.

The Dallas District noted further cuts in the real estate and construction industry; layoffs at major financial firms continued in the New York District; and the Philadelphia District reported that unpaid furloughs had been instituted by state and local governments.

In contrast, Districts including Cleveland, Chicago, and Minneapolis reported some hiring in healthcare.

Contacts in the Richmond District noted solid demand for technically-skilled professionals and IT and office-support workers.

The Chicago and Dallas Districts saw a slight uptick in hiring of finance personnel due to the sharp increase in mortgage refinance activity.

The St. Louis District reported that a food manufacturer and some wood and plastic manufacturers planned on expanding their operations and hiring additional staff.

The employment outlook is generally bleak.

Contacts in several Districts have instituted hiring freezes and anticipate further cuts in jobs and work hours.

Continuing layoffs, furloughs and hiring freezes kept wage pressures minimal. Contacts from a broad range of industries reported pay freezes, with some noting salary reductions.

The Minneapolis District reported that unionized faculty at Minnesota's technical and community colleges had tentatively accepted a two-year pay freeze. Contacts in the Boston, Philadelphia, Richmond, Chicago, and San Francisco Districts reported cuts in certain non-wage employment benefits, including cuts in bonuses, elimination or suspension of employer contributions to employee retirement programs, and increases in copayments on employer sponsored healthcare plans.

Goldman Sachs, Wells Fargo and Warren Buffet

With recent good earnings announcements from Goldman Sachs and Wells Fargo, the market has been given a lift, and Warren Buffet's steady hand has once again proven him to be the Oracle of Omaha.

From Chairman Bernanke's speech at Morehouse College:

My remarks today will focus on the ongoing turmoil in financial markets and its consequence, the global economic recession. The financial crisis, the worst since the Great Depression, has severely affected the cost and availability of credit to both households and businesses. Credit is the lifeblood of market economies, and the damage to our economy resulting from the constraints on the flow of credit has already been extensive.

With recent job losses exceeding half a million per month, this year's college graduates are facing the toughest labor market in 25 years. In the communities in which you and I grew up, many families are trying to cope with lost employment and depleted savings or are facing foreclosure on their homes.

Firms have shut factories and cancelled construction projects. States and municipalities are scrambling to find the funding to provide critical services. And although we naturally tend to be most aware of conditions in the United States, we should not overlook the impact that the crisis is having virtually everywhere in the world, particularly on many citizens of countries that struggle economically even when the global economy is doing well.
 
The Fed's mandate from the Congress is to promote maximum sustainable employment and stable prices. In addition, the Fed is expected to contribute to financial stability by acting to contain financial disruptions and prevent their spread outside of the financial sector. Thus, we have been serving as a first responder to the crisis. 
 

FASB Guidance on Mark-To-Market Accounting

The Financial Accounting Standards Board (FASB) issued a FASB Staff Position (FSP) intended to provide additional application guidance regarding fair value measurements:

FSP FAS 157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly, provides guidelines for making fair value measurements more consistent with the principles presented in FASB Statement No. 157, Fair Value Measurements.
 
FSP FAS 157-4 relates to determining fair values when there is no active market or where the price inputs being used represent distressed sales. It reaffirms what Statement 157 states is the objective of fair value measurement—to reflect how much an asset would be sold for in an orderly transaction (as opposed to a distressed or forced transaction) at the date of the financial statements under current market conditions. Specifically, it reaffirms the need to use judgment to ascertain if a formerly active market has become inactive and in determining fair values when markets have become inactive.

http://www.fasb.org/pdf/fsp_fas157-4.pdf

The Fed Sees High Unemployment through 2010

From the Minutes of the Federal Open Market Committee:

The staff’s projections for real GDP in the second half of 2009 and in 2010 were revised down, with real GDP expected to flatten out gradually over the second half of this year and then to expand slowly next year as the stresses in financial markets ease, the effects of fiscal stimulus take hold, inventory adjustments are worked through, and the correction in housing activity comes to an end.

The weaker trajectory of real output resulted in the projected path of the unemployment rate rising more steeply into early next year before flattening out at a high level over the rest of the year.

Mark-To-Market Reaffirmed

FASB reaffirmed FAS 157, saying it essentially the same as it has always been but also came out with the following change regarding fair value disclosures for any financial instruments that are not currently reflected on the balance sheet of companies at fair value:

The current rule is that fair values for these assets and liabilities are only disclosed once a year. The Board voted yesterday that these disclosures should be required on a quarterly basis, providing qualitative and quantitative information about fair value estimates for all those financial instruments not measured on the balance sheet at fair value. For commercial banks, one financial asset impacted by this is loans, which will now have disclosures about their fair value every quarter.

From Tel Aviv to Taiwan

Joshous
In Israel  - The Marker newspaper
I wish you all the best in your new job
I'm looking for a Licensee in NYC for a new website which will give services to jewish couples planning to get married
The site is in 4 Languages and the licensee  - In general  - Has to develope and promote it in NYC - If you have any Idea  - Pls let me Know
Thk Gily

Shalom Joshua
Thank you for witting me. I sow your Picher in one of our newspaper and
I think that your Picher is a brilliant marketing idea
It is moor then good to her from you that you did ménage to find a new job
We wish you all the best and haag sameach.
Elico

Hi  Mr.  Persky!
I  live  now  in  Israel  after  staying  in  Philadelphia for  26  years.
We  came  here  in  2006  to  be  close  to  my  family.
By  reading  today  the  "Marker  Weekly" in  Hebrew, I  came  across
an  article  about your looking  to  be  hired.
Wishing  you  all  the  best,happy  holiday  and find  a  job  soon.
Good  luck
Zvi 

Dear Joshua,
Thank you for giving me many details :)
By the way, I'd like to know if there any Chinese people in your company? I want to introduce a website about coffee to you and your colleagues. However, the website was written in Chinese. Therefore, I ask if there any Chinese people in your company :) If it's possible, could you (they) give a suggestion to that website, that will be great! http://www.coffeecenter.com.tw/
Thank you all :)
Be well.

MY NAME IS MICHAEL CHUNG, I'M COME FROM CANTON, PR CHINA, I STUDY @ UNIVERSITY FOR ACCOUTING AND FINANCIAL MANAGEMENT, I READ THE BLOOMURG NEW AND SEE YOUR PICTURE, I KNOW YOU USE A VERY SPECIAL METHOD TO FIND A JOB AND I'M VERY INTERESTED IN IT, SHALL WE TALK? I'M LOOKING FORWARD TO HEARING FROM U