California's UI Trust Fund Trend

source: http://www.edd.ca.gov/about_edd/pdf/qsui-Fund_Balance.pdf

When the Great Financial Fraud recession hit in 2007, the California UI Trust Fund had about $2 billion. This is money paid by businesses to fund unemployment checks when workers get laid off. It is a joint federal/state program, but the state collects and pays the lions share. The Trust Fund ran out of money in January, 2009. It was only able to continue paying unemployment claims by borrowing money from the federal government. When the recession was declared over in the summer of 2009, the Trust Fund had a negative $2 billion balance, and it continued to dig a giant hole over the next few years bottoming in April, 2011 with a balance of over NEGATIVE $11 billion.

That is not the kind of Trust Fund you want to inherit. California continues to rely on federal assistance to pay any unemployment claims at all, and it also now gets to pay interest on all the borrowed money. Look at the recent crowing about how strong California is doing financially. From CNN,

After multi-billion dollar shortfalls in recent years, the state's budget has finally straightened out. California expects to take in $2.4 billion more in revenue than it will spend this fiscal year, which ends June 30. After paying off a shortfall from last year and setting aside funds for upcoming obligations, it's on track to end the year with a $36 million surplus.

Wow! Except for that $8.6 billion hole in the UI Trust Fund. If it stays on (polynomial) trend AND there is no new recession, the Trust Fund will no longer be insolvent by early 2016, and will recover to the 2007 level by mid-2016. The crowing seems a little premature to me. Let's celebrate when the state gets back to even.

Median Duration trend channel

This is the same data from 2013 as the previous post, just with a 2nd order polynomial trend line channel. The channel is very thin here, and it could break either way, but the trend in both channels is up. (hat tip to Stagflationary Mark for the XL pointers on the channel)

Median duration of unemployment ticks up again

source: Federal Reserve of St. Louis (FRED)

The headline employment number beat expectations for November with 203,000 jobs added. The U-3 unemployment rate dropped from 7.3% to 7.0%. However, the median duration of unemployment ticked up again to 17.0 weeks. The report was generally strong, but some of the indicators like median duration went the wrong way. The two month moving average moved up again and we moved further away from the upper bound trend line for 2013.

The median needs to drop below the upper trend line again. Outside of recessions, the median duration is typically below 8.0 weeks. A rising median duration is a seriously bad sign for the economy, indicating a recession 6 out of the last 6 times.

The 80% Vast Majority President

I am astonished that the President has declared victory for HealthCare.gov with a success rate of 80%. HHS claims an up time now of around 90%, so really the success rate at any given time can be expected to be 0.9 * 0.8 or 0.72 (72%).

I am guessing this aspiration is also in the new federally mandated Common Core education standards being pushed onto states. If we can get our best and brightest kids to aspire to get 72% in all subject areas, we have achieved success! They could get a special "vast majority" achievement trophy or presidential medal. Awesome C-, little Johnny. You are ready to run the Department of Health and Human Services!

This high standard set by the Presidential bully pulpit may ripple across the nation.

Police can expect the vast majority of their 911 telephone calls, bullets, and radios to work.

Firefighters can expect 80% of the hydrants to work.

The vast majority of sewer lines, water lines, and electricity will work in homes. A full 80%!

Phones calls, texts, and Internet service will work 80% of the time.

The vast majority of food in grocery stores will not be rotten.

Gasoline pumps will work 80% of the time.

Checks, credit cards, and ATMs will work 80% of the time.

You can expect air to stay in your tires at least 80% of the time.

80% of buildings and bridges will not collapse on themselves.

I am so excited about the new 80% vast majority world that is in store for us.

Obama declares victory for HealthCare.gov

According to Politico,

the Obama administration said Sunday that it achieved its goal of making HealthCare.gov work for the “vast majority” of users after the disastrous start of enrollment in the president’s signature health law.

"Vast majority" is defined as 80% of people that visit. Let's see, how about 80% of your checks clear the bank, or 80% of your credit card transactions work. Is that acceptable if the "vast majority" of your transactions work? Four out of five? I can't think of a single commercial web site where it is considered successful if it works 80% of the time. In fact, I can't think of another public web site with a bar that low. That is an arbitrary and terrible precedent. However, it is what the government does when it abjectly fails. Declare victory and go home. Mission accomplished!