Category: Business

2022 Week 42

Notes, thoughts and observations - Compiled weekly


Labor Market

Maintain austerity in good times to avoid layoffs in bad times. - Carlos Slim

  • (Dispatch) :: Economy Still Too Hot
    • U.S. employers added about 263,000 jobs in September, dropping the unemployment rate to 3.5 percent from 3.7 percent in August.
    • The labor force participation rate fell 0.1 percentage points—from 62.4 percent to 62.3 percent—but about half a million more Americans are working now than were in February 2020, before the pandemic.
  • (Mauldin) :: Where Are the Workers?
    • Starting at least in December 2000 and presumably much earlier (though we don’t have hard data), the number of unemployed workers always exceeded the number of job openings.
      • The gap widened in recessions but existed even in good times. That’s “natural unemployment.”
    • The lines first crossed not when COVID arrived, but more than two years earlier in January 2018. Check the media archives and you’ll see a lot of stories about a labor shortage in 2018‒2019.
      • The labor shortage didn’t start in the pandemic era. It was already there well before.
    • The ratio peaked in 2010. Is it coincidence that’s when the oldest Baby Boomers (born 1945) turned 65? I think not.
      • Our largest generation of workers started becoming eligible for retirement that year, and more each year thereafter.
    • This labor shortage isn’t temporary. It’s structural, it’s demographic, and it isn’t going away. It may improve somewhat, but even a return to 2018 conditions won’t restore the “normalcy” employers want.
      • For employers, the days of picking the cream of the crop are gone. The crop is smaller now.


It’s a recession when your neighbor loses his job; it’s a depression when you lose yours. - Harry S Truman

  • (Kyle Bass) :: Big market undercurrents building up steam
    • Central Bank Interventions FAILING. Rates differentials are going to BREAK SOMETHING BIG.
      • BOJ intervenes on Yen at 145…now 147.
      • BOE intervenes on 30YR Gilts at 5%…back to 5%.
      • CHINA intervenes on CNH at 7.20 and almost 7.20 again.
    • Hat tip to Morgan Stanley
  • (Liz Ann Sonders) :: Unbelievable decline in shipping rates … cost to send 40-ft container from Shanghai to Los Angeles has fallen by 74% from peak and is back to August 2020 levels.
Regional real estate sales graph