Public investment in the US has hit its lowest level since demobilisation after the second world war because of Republican success in stymieing President Barack Obama’s push for more spending on infrastructure, science and education," write Robin Harding, Richard McGregor and Gabriel Muller. ..
That is austerity, and it's a big reason -- maybe the big reason -- the recovery has been so sluggish. Yet Republicans still aren't satisfied, wanting another round of cuts, which is why we'll probably have another destructive budget fight all over again early next year.
2---The jobs report, gongloff
....there was an absolutely huge drop in the number of people working or looking for work last month. That's not good! The labor-force participation rate, the percentage of the working-age population in the job market, tumbled to 62.8 percent from 63.2 percent the month before, the lowest since 1978. Again, not good!
Low labor-force participation artificially lowers the unemployment rate because it means people you'd ordinarily count as unemployed have just dropped out altogether and aren't counted. It's a depressing problem that's been afflicting us for a while. So that nice, low, "clean" unemployment rate is probably too low.
3---Why Quantitative Easing Isn't Printing Money, cnbc
4---The NINJAs Have Taken Over The Subprime Lunatic Asylum, zero hedge
...even the mainstream media is finally catching on to the fact that all the "gains" in the best economic sector have been on the back of subprime.
While surging light-vehicle sales have been one of the bright spots in the U.S. economy, it’s increasingly being fueled by borrowers with imperfect credit. Such car buyers account for more than 27 percent of loans for new vehicles, the highest proportion since Experian Automotive started tracking the data in 2007. That compares with 25 percent last year and 18 percent in 2009, as lenders pulled back during the recession.
Issuance of bonds linked to subprime auto loans soared to $17.2 billion this year, more than double the amount sold during the same period in 2010, according to Harris Trifon, a debt analyst at Deutsche Bank AG. The market for such debt, which peaked at about $20 billion in 2005, was dwarfed by the record $1.2 trillion in mortgage bonds sold that year.
Of course, the enablers of this destructive behavior see nothing wrong, and live under the delusion that sub-500 FICO borrowers will actually pay them back....
An influx of new competitors into subprime auto-lending since 2010 is sparking concern of eroding underwriting standards, according to S&P. About 13 issuers have accessed the asset-backed market to fund subprime auto loan originations this year, according to Citigroup Inc.
..The average loan-to-value ratio, or LTV, on vehicle sales to consumers with spotty credit is 114.5 percent this year, compared with a peak of 121 percent in 2008.
It is so bad that even Morgan Stanley now gets it:
“Perhaps more than any other factor, easing credit has been the key to the U.S. auto recovery,” Adam Jonas, a New York-based analyst with Morgan Stanley, wrote in a note to investors last month. The rise of subprime lending back to record levels, the lengthening of loan terms and increasing credit losses are some of factors that lead Jonas to say there are “serious warning signs” for automaker’s ability to maintain pricing discipline.
5---How to tell if the job market is improving, Mark Thoma
The government's latest jobs report shows unemployment increasing from 7.2 percent in September to 7.3 percent last month. In many ways, however, the employment-to-population ratio is a better indicator of labor market conditions. And even as the economy was adding many more jobs than forecasters had predicted, that key metric fell to 58.3 percent, down 0.3 percentage points from the previous month....
anne said in reply to Robert Zonis...