I know of 4 or 5 guys late 50's to around 61 who threw in the towel. They are either (1) draining IRA's which they can do at 59 1/2 (2) planning to take Social Security at 62, (3) drawing down from 401K. My point on other older workers working part time at places like Wal-Mart was that they need to do so out of necessity as they either didn't save enough during working years or found Social Security plus savings wasn't going to get it done. I disagree ... the more out of work the more demand for food stamps etc. Curtailing illegals and requiring able bodied out of work Americans to take jobs that may be below what they expect/want should be done. Beggars can't be choosers.
Actually this would seem to reinforce the fact that this whole run back up has all been due to the fed, everyone knows that the jig is up, and that the fed was going to start tightening, next year, so now all of a sudden the stock market is in a bind again, and commodities are selling off, which would seem to imply that the whole run up was merely an illusion based on all the liquidity being pumped into the system.
You're trying to explain that to Rectum? The guy who admits he's on ET solely for trolling with no trading interest whatsoever.
Maybe true, at least in part, yet a "legitimate" but tepid recovery would look a lot like this one, too. At any rate, the liquidity has been pumped, the wealth effect has kicked in, consumers are buying again, and hiring continues, enabling more buying. The virtuous circle has been revived, the stock market will readjust to that fundamental, and the Fed no longer needs to pump. Nor does the Fed need to tighten, yet, either. They're waiting for wage inflation I suppose.
You might be interested in this: BY ANTHONY MIRHAYDARI Albert Edwards, the global strategist at Societe Generale, has attracted attention as one of the most bearish voices on the market. (“So maybe it’s time to stop dancing and sit this one out,” he just wrote in a new research note.) With stocks suffering their worst day of the year on Thursday, it’s worth looking at what Edwards sees for the market. He argues that corporate profits could very well be the single most important leading indicator for the economy. Forget job growth. Forget industrial production. Forget durable goods. It's what flows to the bottom line of corporate income statements that matters. That's because profits drive the volatile business investment component of GDP growth, the ultimate swing factor from which things like labor productivity, wages, and hiring flows. When investment dries up, it spells trouble. But before that happens, profits are pinched. The consensus thinking is that there is nothing to worry about here. Corporate profits as a share of the economy have been exploding higher. As the Q3 earnings season kicks off, expectations are healthy: S&P 500 earnings are expected to grow 6.4 percent over last year. This has been driven by a lack of wage growth during this expansion. Since labor costs are the largest expense line on most income statements, profit margins have swelled. American shoppers, squeezed by higher costs and stagnant pay, have turned to debt and asset price inflation to fund expenditures. This was never going to be sustainable. Now things are starting to change. For one, demographics dictated that the skilled labor force was going to dry up as Baby Boomers retired — something that CEOs themselves have warned about — which would tighten the job market and push up wages. Moreover, heavy corporate spending on share buybacks (which I discussed here) has meant businesses have neglected capital investment in new machinery and facilities. No surprise then that productivity growth has been disappointing. The end result of all this is that one measure of corporate profitability, as shown above, has already begun to roll over. This is the Bureau of Economic Analysis' preferred measure of whole economy profits, defined as profits from current production that removes inventory profits (an accounting measure). This measure is down nearly 7 percent year-over-year and is falling at a pace not seen since the midst of the financial crisis in 2008. Edwards focuses on this metric and the ability of shifts in the direction of this metric to lead both stock market measures of profits as well as the business investment cycle. In his words: "In that sense monitoring whole economy profits can give a good indication of economic vulnerability and predict unexpected recession (of course recessions are always unexpected!)." The reason that this hasn't shown up in more widely followed measures of stock market profitability, according to Edwards's discussion with officials at the BEA, is that alternate measures of profits are being artificially inflated by the expiration of tax provisions that allowed for accelerated recognition of depreciation expenses, which has resulted in companies expensing less depreciation for tax purposes. Removing the impact of the dark arts of accounting treatments, the message is clear: Profits are falling. And that means companies have less cash flow available for investment and buybacks, as Edwards shows in the chart above. (You can read more about this from the BEA's press release.) The overall takeaway is that with profits stealthily on the slide, the U.S. economy is more vulnerable than widely acknowledged to economic slowdowns underway in Europe and across Asia. German industrial production just dropped at its steepest rate since January 2009. Japan could already have fallen into a new recession. And China is stalling: Economic activity, as measured by the team at Capital Economics, slowed to a five-year low in the third quarter, as electricity production contracted for the first time since early 2009. Remember that this economic cycle is already getting long in the tooth: At 64 months long, it surpasses the post-war average of 11 economic cycles of 58 months and is well ahead of the 39-month average going back to 1854. (The last three expansions were longer than normal, however, at 73, 120, and 92 months.) Like a fragile senior citizen, with profits on the slide it won't take much of an adverse shock to do serious damage and increase the risk of a new recession — a fear that's far afield for most investors.
Profits, ex-one time accounting gimmicks, have been on the ropes for a long time now and the market kept on cruisin'. No, the market is finally waking up to the end of QE and potential of rising rates (though rates won't rise for quite some time - and there are bets even that long out is under question). But the lack of money printing and expansion of the balance sheet is what has driven such an incredible rise in asset prices, and that is coming to an end. And that is all that matters.
Good article. I can certainly feel the pressure. In my business we've been comfortable for years budgeting for a margin of X, but recently learned that our domestic competition is now budgeting for considerably less than X. But this isn't new, not to those who've read Marx anyway: http://en.wikipedia.org/wiki/Tendency_of_the_rate_of_profit_to_fall All the rest is distortion of benign commerce by the maldistribution of wealth (if your customers are broke you can't make sales). Thank goodness our lands still provide enough, so that in theory all can be fed and sheltered, and that alternative currencies are once again a mainstream idea. If the rentiers don't want to get their hands dirty, those who produce goods and services of real value to sell can create their own medium of exchange.
Great news! Unless you're hoping for more QE, that is. Initial Jobless Claims Collapse To April 2000 Lows As we noted last week, when there is no hiring, there is no firing and so it is that initial jobless claims collapsed to 264k this week (versus 290k expectations) - the lowest since April 2000 (and 2nd lowest ever on record). That is not what the market wants to hear right now... it is craving bad news to get The Fed re-engaged. Continuing claims inched higher from 2.382 million to 2.389 million but remains near cycle lows. To sum up: its never been better than this for employment... according to the government-supplied data.