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The San Diego County unemployment rate leapt to 7% in January from 6.5% in December, as nonfarm jobs declined by 16,400. However, much of that was seasonal. Retail jobs dropped 8700. Educational and health services jobs declined by 4000, according to the California Employment Development Department.

From January of last year to the same month this year, the county gained 28,300 nonfarm jobs. The unemployment rate was 8.5% in January of last year.

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ImJustABill March 8, 2014 @ 8:11 p.m.

The Dow Jones is over 16,000. Housing prices are back near record highs.

These are the data that the people pushing the economic policies for the past few decades care about. I'm sure they think things are going great.


Don Bauder March 8, 2014 @ 10:16 p.m.

ImJustABill: The horrible irony is that the stock market has zoomed around 170% since the recessionary bottom BECAUSE of the weak economy, not despite it. The Federal Reserve quickly lowered short term rates to zero and then went about buying bonds and mortgage-backed paper at prodigious rates to force long rates down.

With interest rates at historical lows, cash and bonds were lousy alternatives to stocks, and the Fed made no bonds about the fact it was trying to drive investors into riskier alternatives -- stocks.

The result of this is obvious: Wall Street is feasting off Main Street's pain. Nobody wants to admit it, but it is absolutely true. I still think stocks will rise moderately this year because the economy will be weak, possibly growing an anemic 2% or slightly more. The Fed will keep short rates at zero and may lessen the pace of its purchase of long term paper, but there still won't be a good alternative to blue chip stocks paying good dividends.

I have been buying blue chips with good yields since early 2009, and while the portfolio has gone up sharply, I actually feel guilty about it, because I know my success depends on most people's economic hardship. Best, Don Bauder


ImJustABill March 9, 2014 @ 1:58 a.m.

Don I think you're about the last person who should feel guilty about financial issues - you're one of those reporting on and interpreting policies in a way which sheds light on corruption and policies which only help the wealthy and well-connected few.

I can sort of buy the argument (without really agreeing with it) that the extreme QE was necessary to avoid a catastrophe in 08,09. But that was years ago now. I think we're clearly past the point where one can argue that the whole financial system is going to collapse so we have to have 0% Fed rates, and the other QE measure. Now they are just doing it to prop up the stock market.

In terms of housing, I wonder if another bubble is occurring - which will turn out to mainly benefit investors and banks at the expense of average people who just want a place to live. It seems there is a lot of speculation in housing. I hear that it's difficult to buy a house now in SD without a fully cash offer made right on the spot.

In terms of the job market my sense (and my personal situation) is that people who have jobs are expected to work longer hours for the same pay - fear of layoffs and high unemployment rates leave little choice.


Don Bauder March 9, 2014 @ 9:34 a.m.

ImJustABill: The Fed's monetary policy has greatly exacerbated the cruel distribution of income and wealth, which is the greatest economic problem we have. Just recently, the Fed boasted how households' incomes soared to new all-time levels last year.

There were two reasons: stocks went up sharply (30%) and housing values rose sharply. But 90% of the value of stocks goes to the richest 10%. The bottom 50% relies on savings, where rates are below 1%.

Yes, home values went up, but that benefits 65% of households. And Americans are intelligently fearful that home values are headed for another bubble that will burst. In metro areas like San Diego, a high percentage of home purchases is by institutional buyers, often buying with cash. As you point out, the market is difficult for first-time buyers without cash.

Fed chairmen and chairwomen will say that the interest rates have to stay low because unemployment is high. Balderdash. The Fed is run for the benefit of the banks, not the people. Banks love to pay almost nothing for deposits and loan the money out at much higher rates.

The stock market is not yet a bubble, in my judgment. Corporate profits remain high because companies aren't hiring, can borrow money for almost no interest and make acquisitions, and can buy back their own stocks, thus artificially pumping up their earnings per share.

Since the Fed has been buying up all this paper, its balance sheet is a disaster. It wants to do something, but when it says it will taper its bond-buying, the market drops. I believe we will see the Fed slow down the tapering, and maybe even reverse it. The Fed has its own bubble: its balance sheet. Best, Don Bauder


jnojr March 9, 2014 @ 11:10 a.m.

Well, the problem with QE is the same as the problem with drinking or drugs... the first hit is great. The second, not so much. You're quickly chasing a high, and next thing you know you're going full throttle just trying to maintain. One blip, and you're done.

QE was ALWAYS a bad idea. It might have been survivable if it was purely a one-time shot with a fixed end date. But once money starts flowing, there will ALWAYS be an excuse why the spigot cannot be turned off, at least today. Maybe tomorrow. Maybe someone else can get cut, but not me, not today. And so the money flows and flows and flows until we all drown in it.


Don Bauder March 9, 2014 @ 11:39 a.m.

jnojr: Precisely. This is very much like a drug or alcohol addiction. Going cold turkey would cause a great deal of pain...probably more than citizens could stand. So the addict just continues on his self-destructive course.

I don't see a way out of this. And remember, under our command, central banks all over the world have followed this course. The U.S. is hardly the only country with an addicted central bank. Best, Don Bauder


ImJustABill March 9, 2014 @ 7:49 p.m.

Yes, IF anything, QE should have been a temporary emergency measure. Instead, it's practically become permanent policy.


Don Bauder March 9, 2014 @ 8:12 p.m.

ImJustABill: Correct. Just like any welfare project -- corporate or social -- once the giveaways are in place, it is very difficult to take them away. Best, Don Bauder


Frederick Simson March 9, 2014 @ 4:28 p.m.

I am curious about how March 2014 is different from, say March 1929? It is different, isn't it?


Don Bauder March 9, 2014 @ 6:16 p.m.

Frederick Simson: Happily, there are significant differences. One stark similarity is that in 1929 as currently, there was a massive gap between the richest and the middle class and poor.

There are differences. Stocks are not as wildly overpriced today as they were in 1929 or in the year 2000, when stocks also collapsed. Also, in 1929 the Fed actually tightened when it should have been loosening. (However, by 2000, the Fed knew enough to pump money in to stem a collapse, but prices were so excessive the crash was inevitable.) Both in 1929 and 2000, tech stocks were wildly overpriced. The market is getting overpriced now, but it is not so unbalanced as it was in those two years. Best, Don Bauder


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