GOLDMAN: Bad Jobs Report Puts Odds Of QE Next Week Above 50%

TBI ^ | 9-7-2012 | Joe Weisenthal

[blam]

GOLDMAN: Bad Jobs Report Puts Odds Of QE Next Week Above 50%

Joe Weisenthal
August 7, 2012

BOTTOM LINE: With today’s August employment report showing a nonfarm payroll gain of 96,000 and an unemployment rate of 8.1% because of a drop in the participation rate, we expect a return to unsterilized and probably open-ended asset purchases at the September 12-13 FOMC meeting.

MAIN POINTS:

1. We now anticipate that the FOMC will announce a return to unsterilized asset purchases (QE3), mainly agency mortgage-backed securities but potentially including Treasury securities, at its September 12-13 FOMC meeting. We previously forecasted QE3 in December or early 2013. We continue to expect a lengthening of the FOMC’s forward guidance for the first hike in the funds rate from “late 2014” to mid-2015 or beyond.

[NormsRevenge]

Carter ReduX — I’m waiting for the ‘chill wind’ and wool sweaters ads.

Whatever happened to Tim Robbins anyway? Where is Sean Penn? oh wait, they have jobs.

[NormsRevenge]

Gold - COMEX

1,741.00 Up 33.10(1.94%) 3:07PM EDT

[Hoodat]

QE has absolutely positively NOTHING to do with the jobs report. The sole purpose of QE is to finance government deficit spending while keeping interest rates low. If government had to compete on the open bond market in order to raise $1.5 trillion in dollars each year, every year, then they would have to set interest rates above 20%. With QE, they no longer have to entice lenders with high interest rates.

That's it in a nutshell. It's all about funding government - not fueling the economy.

[Varsity Flight]

Socialists Union backed by their fascist so called “banking” and “insurance” benefactors, haven’t got their bailout, so Qe continues until planned 2014 HillaryRomney Extortion-Care.

[Varsity Flight]

That’s right, and that funding is flooding price pressures on all essentials, food, fuel, etc., The reason for the fascist plan and their enablers for the 2014 Extortion-Care heist of HillaryRomney.

[Jane Long]

I agree that QEW(hatever) is about funding....funding O’s campaign and paying off what few large donors they have.

[ex-Texan]

More like 80% methinks due solely to Mr B's corrupt and disingenuous policies designed to further enslave the American taxpayer to a debt based currency system

Read The Creature from Jekyll Island . . .

[mcleodglen]

QE coming! Wall Street gonna be so happy!

[C210N]

BTW, isn’t counterfeiting illegal?

The government will go after you for counterfeiting in the same vein as when one mafia organization will go after another for working its home turf.

[Rockitz]

If GS says go long, it’s time to go short.

[A Navy Vet]

"The good news is that any easing won’t take effect for months. Too late to help The Disaster."

Yup, people tend to forget that when and if ever QE helps, it's always many months out, although Wall Street loves it immediately. Obama can claim on the campaign trail that this next round of QE has helped the Markets, but there will be NO indication of it helping main street until after the election. Of course it won't help.

So this is a non-starter for Bambi. It will simply hurt our dollars more, and possibly increase the cost of staples before the election, which WILL hurt him.

What Romney needs to drive home is not those who apply for unemployment insurance (now at 8.1%), but how many have given up looking for work and are underemployed and those who have RUN OUT OF UNEMPLOYMENT INSURANCE and dropped from Bureau of Labor roles! As I've said many times, there are only so companies that can downsize and most of that happened in the last two years. So there are fewer applicants at the local unemployment office as the result.

It's a tough sell since so many don't follow the employment stats like us political junkies, but with the right charts and rhetoric it will back Romney's question, "Are you better off now...". He needs to minimize those "applying" and concentrate on the above categories. Hell, I could do it and I'm an uneducated layman. Think Perot with his charts.

[A Navy Vet]

"Don’t bet on “hyper-inflation”. When construction is dead and housing prices not recovering there won’t be any inflation defined as a rising general price level."

Really? We are financially okay (so far), but even my wife has noticed the ever-increasing cost of staples. No, it's not "hyper-inflation", but we are in an inflationary era. Yes, it can go either way, but with the Fed printing more money with QE3, which way do you think it will head?

[PaleoBob]

If Americans were not so selfish even a greater number would drop out of the labor participation and we see the unemployment rate drop to a respectable 0%

---

Every month hundreds of thousands of American “drop out of the workforce.” It is a bit of mystery to me what this actually means—though it does seem to mean that while fewer people are working, the unemployment rate actually improves. But who are these people, where are they, what do they do now. I have many questions about those who “drop out of the workforce.” There are millions of them, I’m told.

1. Were these people in the “workforce” because they were working? Don’t their employers need to replace them? If a guy is managing a parking garage and one night says, “The hell with this, I’m dropping out of the workforce,” does his employer need to replace him? If he replaces him, why does any of it count one way or the other in the “unemployment rate.” Somebody else gets a job if someone “drops out of workforce,” right? Or do they just not hire another manager at all and let everyone park for free at the garage because Bill “dropped out of the workforce?”

2. Can you be in the workforce but not have a job? If you don’t have a job, what makes you part of the “workforce” in the first place? If you already don’t have a job, what difference does it make that you have “dropped out of the workforce?” You weren’t really working in the workforce anyway.

3. Has the media ever identified a person a person who “dropped out of the workforce?” Would there be a better chance of such a person being found by the media if Romney was elected? There are something like 8 million people who have “dropped out of the workforce.” How many have the media found? Do you know anyone who “dropped out of the workforce?” Was there cake and ice cream to celebrate? Do you get a gold watch that doesn’t run for “dropping out of the workforce?”

4. Um.... I dunno. I’m not even sure I know what the “workforce” is. And that makes me wonder what it is that people do when they “drop out” of it. As near as I can tell, they disappear — like people did back in the Soviet Union. Poof! There one minute, gone the next.

[Toddsterpatriot]

policies designed to further enslave the American taxpayer to a debt based currency system

How are you enslaved when the Fed buys a T-Bill? Spell it out.

Read The Creature from Jekyll Island . . .

Read it. At least until I couldn't see....from all the laughter....at the stupid errors.

[Toddsterpatriot]

If government had to compete on the open bond market in order to raise $1.5 trillion in dollars each year, every year, then they would have to set interest rates above 20%. With QE, they no longer have to entice lenders with high interest rates.

In the last 12 months, the debt rose $1.36 trillion. Over the same period, the Fed sold $10.983 billion in treasuries. It doesn't look like the Treasury needs the Fed's help to sell bonds right now.

Fed Balance Sheet 9/8/2011

Fed Balance Sheet 9/6/2012

[Red in Blue PA]

Am always amazed when the markets rally bc of QE anything. The need for QE is saying the economy is in the toilet.

[KTM rider]

The economy will continue to flounder because it is based on gambling (with the buying and selling of debt).

It will not recover until it returns to being based on production, not gambling.

the moneyhandlers are addicted to gambling so I dont see it happening

[KTM rider]

the moneyhandlers are addicted to gambling with the winnings collected on extreme usery interest from make believe play money

the extreme usery interest becomes more difficult to collect as government becomes more addicted to overegulation and stealing from the producers

the producers are bled dry

so the moneyhandlers just make believe more make believe money to bleed the already dry producers with

neither the government or the monehandlers will ever take their addicted thug jackboot off of any producers neck so their is no solution

[arrogantsob]

We are a long way from hyper-inflation. Rhetoric does not go too far in financial analysis. Study Germany in 1923 for the classic study of hyper-inflation.

[arrogantsob]

Money is printed by the Fed Reserve not jerk-water professors. Its emissions are BY DEFINITION and LAW not counterfeit.

Silliness does not help us deal with the problems facing the nation.