kyle Bass(not much downside) we're bottoming

Thanks Riversider that was informative and I agree with Kyle's view on macro economic conditions. I do think he was pandering to the audience regarding the state of housing. He states that the policy makers are making the mistake of thinking employment will return to pre-recession levels based on historical trends. Which I believe he's spot on. Conditions have fundamentally changed - the US will not see the return of high employment. Yet his reasoning for not much downside makes the same mistake he points out. He's basing the bottoming on past performance of housing prices. Namely that historical charts indicate the drop from crest to trough takes 5-8 years. How can he honestly think we're bottoming out if there is still unprecedented downward pressure. Unemployment will remain high, GDP will be anemic at best and the shadow inventory is still lurking out there.

3 more months of good job numbers and the downtrend is over.

This month, the unemployment rate fell from 9.0 percent to 8.6 percent partly because, as Sarah Kliff points out below, workers have been dropping out of the labor force. Roughly 315,000 fewer Americans actively sent out resumés and answered job ads than the months before. That made the official unemployment rate look better.

The number of workers who want a job but aren’t counted in the labor force rose by 110,000 last month, and has risen since last November to about 6.1 million people.

http://www.washingtonpost.com/blogs/ezra-klein/post/why-are-people-dropping-out-of-the-labor-force/2011/12/02/gIQAfJLuKO_blog.html

That is why need three more months of 8.6% range unemployment. There will be more job seekers as the market is genuinely better.

U6 was down in November as well, both as compared to October and November 2010, so November represents a real improvement in the employment situation, not just people dropping out and leading to an improvement in the U3 number.

Of course, if you get to the end of Bass' well researched, but dire view of the world's debt and need to restructure, the housing market does not stand much of a chance even if it is bottoming. You can stay at bottom for a very long while.

Part of the change was also attributed to retail(seasonal) employment. That will reverse post holidays.

i did not watch this video and im not sure if there are stats documenting this kind of thing, but im not sure encouraging employment numbers are necessarily the great sign they seem to be. i am in new jersey and we have lots of malls. many malls have indoor playground type areas and most toy stores have play area inside where kids can play. i have a mini playdate at the pottery barn kids in short hill later where they have kitchens, doll houses and just tons of other things available for kids to play. anywhoo, on shitty days the mall is a very convenient place to hang out and i like to to talk to people. well over half of the people i have talked to who now work at the mall had to take that job after not being able to find anything in their white collar field. food for thought. if you're talking about employment stats, you have to try to find some background stats on how many of the employed had downgraded in their employment and how much less $ they have now.

"Part of the change was also attributed to retail(seasonal) employment. That will reverse post holidays."

The numbers are seasonally adjusted.

"well over half of the people i have talked to who now work at the mall had to take that job after not being able to find anything in their white collar field. food for thought. "

Retail is obviously not most people's dream jobs, so I'm not sure how interesting the data point is, any more than it is revealing that a lot of wait staff in the city had to take those jobs because they're not getting work acting. Personally, I had to take a white collar job because my real goal of playing professional basketball was thwarted by my lack of athletic prowess. It's true that unemployment is not the only number we care about--presumably if your theory holds we'd see higher employment but lower wages as people move into lower-paying jobs. I agree that would be troubling, but don't think there's been any real evidence that it's happening on a broad scale. It looks like the Q3 compensation data from the BLS showed modest growth both quarter-over-quarter and year-over-year.

"The numbers are seasonally adjusted."

i honestly don't know this, but is there a section of these stats that reflects earning power of these employed, not just thier numbers?

"i honestly don't know this, but is there a section of these stats that reflects earning power of these employed, not just thier numbers?"

The BLS looks at wages as well as the unemployment rate. I think you want a sort of "area under the curve" analysis, which I don't think the BLS does, but probably other people do. In any case, I just looked at the November data and hourly wages were down slightly compared to October but up year-over-year.

"don't think there's been any real evidence that it's happening on a broad scale."

would that be for the same reason as there is little evidence that this IS happeneing on a broad scale? because info on the patterns of this very cruicial detail of the employment statistic are just not collected? i say there's your problem right there. this info is essential and needs to be a part of any comprehensive look at employment trends. who should we see about this?

"a lot of wait staff in the city had to take those jobs because they're not getting work acting. Personally, I had to take a white collar job because my real goal of playing professional basketball was thwarted by my lack of athletic prowess. "

sorry for being unclear. these people were not out of work actors, nor were they physically inadequate though inspiringly optimistic aspiring professional athletes. they were people who had lost their white collar jobs and were unable to find not only equally paying jobs but NO jobs in their former field at all. they went from working at an office to working at the mall. and yes, working at the mall certainly has all kinds of perks that being a full time office monkey simply does not, nevertheless, their monetary compensation was significantly less at these jobs.

"sorry for being unclear. these people were not out of work actors, nor were they physically inadequate though inspiringly optimistic aspiring professional athletes. they were people who had lost their white collar jobs and were unable to find not only equally paying jobs but NO jobs in their former field at all. they went from working at an office to working at the mall. and yes, working at the mall certainly has all kinds of perks that being a full time office monkey simply does not, nevertheless, their monetary compensation was significantly less at these jobs."

Sure, my point was that lots of people want jobs that aren't available all the time, and being a mall employee isn't high up anyone's list of priorities. The fact that you're at the mall makes it very likely you're going to run into people who work at the mall, and those people will definitionally want to be doing some other work. The extent to which this is a meaningful trend rather than selection bias in the set of people you happen to be talking to should be reflected in the data. If this were really common, you'd see average wages move down, which doesn't seem to be happening, which relates to your other point:

"because info on the patterns of this very cruicial detail of the employment statistic are just not collected? i say there's your problem right there. this info is essential and needs to be a part of any comprehensive look at employment trends. who should we see about this?"

I keep pointing this out. The BLS does collect wage data and while it's not doing awesome, it's definitely not dropping dramatically.

"The fact that you're at the mall makes it very likely you're going to run into people who work at the mall, and those people will definitionally want to be doing some other work."

these are not people who WISH

"these are not people who WISH"

Obviously they are since they work at the mall instead of whatever else they would rather be doing.

to be doing other jobs. they HAD other jobs, they are QUALIFIED to do other jobs, they are the people who made up the former "norm" and now make up the new "norm". they are the poorer regular people, who when they they were richer made your world go around. and now that they are broke, they WILL make your world stop. it hasn't happened, which some finance types seem to think is a reflection of how good they are at whatever the hell it is they do, but it will. because the regular people who NEED to be doing as well as they had in the past are not. they are in trouble. they are working at the mall.

"If this were really common, you'd see average wages move down, which doesn't seem to be happening"
"I keep pointing this out. The BLS does collect wage data and while it's not doing awesome, it's definitely not dropping dramatically."

it's true you do keep pointing this out, and you may very well be right. it would help if you linked some sort of official-looking report to support that. that way we can all see how not awesome those numbers are. my only point on this thread (and i don't always have a point) was that in this fluctuating economic situation where so much of the good news is essentially wording and context and can easily be deconstructed into not so good actual development it just isn't logical to only consider the number of people employed or unemployed. especially since so many are no longer technically unemployed since they just gave up and many of the lucky employed are earning a fraction of their glory days salaries. is all i'm saying.

right, it isn't logical if you want to actually understand what is happening. but if one's purpose is to make things appear in a way that benefits their purpose it is obviously logical to do whatever you need and cite whatever numbers that make that happen for you.

Here's the link to the BLS data for November:

http://www.bls.gov/news.release/empsit.nr0.htm

From the summary at the top:

"Average hourly earnings for all employees on private nonfarm payrolls decreased in
November by 2 cents, or 0.1 percent, to $23.18. This decline followed a gain of 7
cents in October. Over the past 12 months, average hourly earnings have increased by
1.8 percent. In November, average hourly earnings of private-sector production and
nonsupervisory employees increased by 2 cents, or 0.1 percent, to $19.54."

Links to all the data are below.

thanks!