An upward acceleration in average weekly initial claims trend with a change in TIME should not be ignored by policy makers (chart 1). Remember, inaction towards jobless benefit extension will butcher incumbents in the 2014 mid-term elections.
Chart 1: Average Weekly Initial Claims State Unemployment (AWIC) And YOY Change
Headline: End of Jobless Benefit Extension 'the Real Cliff'
Hovering in the background of the "fiscal cliff" debate is the prospect of 2 million people losing their unemployment benefits four days after Christmas.
"This is the real cliff," said Sen. Jack Reed, D-R.I. He's been leading the effort to include another extension of benefits for the long-term unemployed in any deal to avert looming tax increases and massive spending cuts in January.
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- A major trendline break in the movement of capital from the public to private sector.
- As demand for public sector assets declines, the Fed will increasingly become the buyer of last resort to fund the old paradigm.
Chart 2: Long-Term U.S. Corporate Bonds Total Return Index (LTCBTRI) to Long-Term U.S. Government Bonds Total Return Index (LTGBTRI)
Headline: Federal Reserve may buy more bonds
More stimulus for the U.S. economy could be on the Federal Reserve's agenda when its policy committee meets this week.
The Fed will present new economic forecasts at the conclusion of its two-day meeting on Wednesday. Fed chairman Ben Bernanke will also discuss the state of the economy at a press conference.
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