The document was written by Ethan Harris, the head of global economics research for the corporation’s investment banking arm, Bank of America Securities. The memo was titled “Mid-year Review: One revision away from a recession,” written from June The memo was somehow obtained by The Intercept.
At the bottom of the first page of the memo, Harris wrote:
A modest further rise in the participation rate should help push up the unemployment rate, but we think most of the increase will likely come from weaker demand for workers.
By the end of next year, we hope the ratio of job openings to unemployed is down to the more normal heights of the last business cycle. Keep a close eye on this.
The Intercept provides a little more of an explanation:
Parts of the mid-year review, in particular its emphasis on a looming recession, received press coverage at the time of the memo’s release to clients. This is the first publication of the document in full.
What the memo calls “the ratio of job openings to unemployed” is generally calculated the other way around — i.e., the ratio of unemployed people to job openings. The more widely used ratio offers one measurement of the balance of power between workers and employers. The lower this number, the more options unemployed people have when searching for work and the greater opportunities employed people have to switch to jobs with better pay and conditions. According to the Bureau of Labor Statistics, this ratio stood at 0.5 as of May, meaning that there were then two job openings per unemployed person.
In 2009 — at the worst moments of the economic calamity that followed the collapse of the housing bubble during the end of the George W. Bush administration — the ratio climbed as high as 6.5, so there were more than six unemployed workers for each open job. It then slowly declined over the next decade, reaching 0.8 in February 2020 before Covid-19 lockdowns began.
This recent, unusual moment of worker leverage made Bank of America quite anxious. The memo expresses distress about “a record tight labor market,” stating that “wage pressures are … going to be hard to reverse. While there may have been some one-off increases in some pockets of the labor market, the upward pressure extends to virtually every industry, income and skill level.”
The memo recalls a previous Bank of America memo in 2021, which it says warned of “very strong momentum in the labor market, suggesting the economy would not just hit but blow through full employment. Fast forward to today, and these trends have been worse than expected.”
AUTHOR COMMENTARY
The Intercept is a very leftist and anti-capitalist outlet, and the article goes on to try and craft a narrative that rising corporate earnings and the rich getting richer somehow translates to skyrocketing inflation. Nonsense as usual. The WinePress has shown and documented the CORE of the problem, to wit, the Federal Reserve printing infinite sums of cash and stimulus, while at near-zero interest rates; justifying funding new crises (Crisis Economics, I call it), and total artificial rigging of the various financial markets.
The Quickest Way To Know The Economy Is Broken Beyond Repair
The United States Does Not Have An Economy
The Federal Reserve Is Guaranteeing Inflation Will Persist: Ignore The Media’s Rhetoric
Federal Reserve Raises Interest Rates Another 75 Points. Will Still Fix Nothing
With that being said,
Every prudent man dealeth with knowledge: but a fool layeth open his folly.
[7] The rich ruleth over the poor, and the borrower is servant to the lender. [16] He that oppresseth the poor to increase his riches, and he that giveth to the rich, shall surely come to want.Proverbs 13:16, 22:7, 16
This quite frankly should come as no surprise, as I have been documenting and explaining for a long time, that these mega-banks and ruling elites are on a mission to create a feudal system of haves and have-nots, completely erasing the middle class; which they have essentially succeeded in doing thus far, and will be finally culled-off soon enough.
[7] Who goeth a warfare any time at his own charges? who planteth a vineyard, and eateth not of the fruit thereof? or who feedeth a flock, and eateth not of the milk of the flock? [8] Say I these things as a man? or saith not the law the same also? [9] For it is written in the law of Moses, Thou shalt not muzzle the mouth of the ox that treadeth out the corn. Doth God take care for oxen? [10] Or saith he it altogether for our sakes? For our sakes, no doubt, this is written: that he that ploweth should plow in hope; and that he that thresheth in hope should be partaker of his hope. (1 Corinthians 9:7-10).
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America can’t be living in the fantasy that the economy will somehow someday spring up and we’ll all be back to suburban white picket fenced house neighborhood community living – which I avoid and LOATHE!
We are about to become like Honduras or Nicaragua, and, as I say like a broken record, we deserve it.
So another diversion to veer the masses away from the root cause of rising inflation. Wily. Thankful to the Lord that you’re always on these things Jacob.