40.9 Million Missing Jobs (Musical Tribute)

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If the exponential trend failure in that chart hasn't made you gasp in horror then please feel free to examine the following short-term chart closely. There's hope for a good scream yet!


Click to enlarge.

What does this mean?

First, as I have been saying for more than a year, we aren't going to make it back to the long-term (1939 to present) median growth trend this time. And why not? It's an "unexpectedly" weak recovery of course. Duh!

Second, it is definitely time for a musical tribute in honor of yet another economic nail potentially being hammered into the labor market's long-term coffin. The odds of us reversing the downward trend established over the last few years is infinitesimally small in my opinion. The new downward trend is not our friend. Few seem to even notice it, much less talk about it. It was nothing but rationalization after rationalization on CNBC today.

Run to the hills!
Run for your lives!

That's about the most advice I would ever dare to offer on this site. I am as bearish on our economy right now as I have ever been. The second chart reminds me in no small part of what the economy looked like when I started this blog back in the fall of 2007 (right down to, in my opinion, the unsustainable stock market euphoria over unsustainable corporate profits).

The bond market sure hasn't bought the rose-colored glasses theory though. Just look at those low yields. As a side note, if this latest employment report is any indicator then so much for the supposed bond bubble popping any time soon. And how about all those hyperinflation predictions? Good luck on those theories too. Probably not gonna happen, at least in the short-term. In the long-term, we're all dead of course.

And on that note, they can pry the long-term TIPS, I-Bonds, and EE-Bonds from my cold dead fingers. Who are they? They are the bond vigilantes of course. They can't ever seem to BUY enough, much to the ongoing dismay of Jeremy Siegel.

As economic growth recovers and real rates rise, the price of Tips will fall leaving Tips investors with large losses in the face of accelerating inflation. - Jeremy Siegel, February 2, 2011

What a frickin' joke that was... every part of it. The 20-Year TIPS yielded 1.82% that day. Today it yields just -0.03%. Yes, that truly is a negative sign in front of it. So much for the recovering economic growth fueling rising real rates theory.

All these questionable recovering prosperity theories need to be taken out behind the woodshed. It pains me to say it, but they need to rest in peace. Sigh.

Source Data:
St. Louis Fed: All Employees: Total nonfarm