Tuesday, July 29, 2003

That Giant Sucking Sound On tonight's The NewsHour with Jim Lerhrer was an unsurprising, but still sobering report on the true unemployment figure. The piece included an interview with John Challenger, of the outplacement firm Challenger, Gray & Christmas, Inc. "The problem is much deeper than is looks", said Challenger. He feels that the real unemployment figure is over 12%. "Over 2 million have been out of work 27 weeks or more, that's double the number of people it was two years ago. Right now we are seeing search times just under 4 1/2 months, that's the longest we've seen since we began tracking the numbers in the mid-eighties" (emphasis mine). The report concludes that--at least for working age men--the real unemployment numbers rival those of 1982, when the official unemployment rate hit its post-depression high of 10.8%. The segment examined the factors that depress the current official numbers, including demographic changes inherent in an older workforce, millions more discouraged workers (not counted in the official rate), more people on disability (the report noted that disability applications tracked the swings in the economy, so at least some of the applicants were driven there by the state of the economy) and a larger prison population. When one looks at the total number of working-age men (16-64) not employed (for all reasons, including disability, incarceration, early-retirement and discouraged) that number was 17.8 %, higher than the 1982 number of 17.3%. 9:09:25 PM    comment []trackback []

Is it Me, or is this just weird? And I thought privatizing Amtrack was a bad idea . . . From The Wall Street Journal Online Exchange Chooses Turmoil as a Commodity In Bizarre U.S. Project, Traders To Bet on Events in Middle East The intent of the project, called the Policy Analysis Market is to use "market-based techniques for avoiding surprise and predicting future events," according to a Pentagon report to Congress. One question posed in the Pentagon report: "Will terrorists attack Israel with bioweapons in the next year?" Traders would be those willing to bet their own money on when the events will occur. Critics blasted the venture. Such a commodities market is "effectively an Internet casino," said Sen. Byron Dorgan (D., N.D.). He is seeking, along with colleagues, to thwart a Pentagon effort to secure $8 million to expand the project; the Pentagon already has spent about $750,000 to cover start-up costs. The effort is loosely based on the Iowa Electronic Markets, a futures exchange run by the University of Iowa College of Business, that anticipates U.S. election results and Federal Reserve decisions. "You're sort of making up a form of commerce," says Charles Polk, president of Net Exchange, a 10-person firm founded by California Institute of Technology faculty members that designed the Middle East exchange and will operate it. The Department of Defense's Defense Advanced Research Projects Agency, or Darpa, is funding the project but said it won't have access to traders" identities and funds (www.darpa.mil/iao/FutureMap.htm). Mr. Polk said Net Exchange will acquire its underlying data from the Economists Group's Economist Intelligence Unit. The London-based Economists Group publishes the Economist magazine. Here's how it would work. Traders could purchase one-year futures contracts that would assess possible economic, civil and military events in Egypt, Jordan, Iran, Iraq, Israel, Saudi Arabia, Syria and Turkey. As benchmarks of how well or poorly a country is faring, traders can nominate specific events, such as the overthrow of the King of Jordan or the assassination of Yasser Arafat. The contracts would set a specific date by which the event must occur, and traders would buy and sell based on what they think will happen. One example cited on the project's Web site: the U.S. will recognize Palestine in the first quarter of 2005. Anyone can trade, according to the Web site, provided they register and deposit funds in a trading account. Organizers are especially keen to attract people with special knowledge or interest in the Middle East. "Whatever a prospective trader's interest...involvement in this group prediction process should prove engaging and may prove profitable," says the Web site, www.policyanalysismarket.org. [Update: If you don't have a subscription to the WSJ, here is a link to the LA Times story] 6:47:09 AM    comment []trackback []