Market Update 9 21 09: The plan to drive MBS spreads lower has succeeded

The Fed and MBS Spreads

You all remember the Fed’s plans to buy over a trillion dollars worth of MBS and Agency bonds. I heard my MBS trader this morning quote that the Fed now owns around 34% of the all outstanding Fannie and Freddie pass through securities. I’ll give you a minute to let that one soak in…34% of all pass through MBS are now owned by the Fed.

A whirlwind review of how MBS spreads blew out so wide goes as follows: Hedge Funds begin to falter as sub-prime CDO’s start to fail, big creditors issue margin calls, funds sell good MBS to satisfy margin calls, prices on MBS drop as sustained selling occurs to fund an ever increasing amount of margin calls, fear enters the market and now people begin to balk at buying even high quality MBS as they know there is more forced selling coming down the pike and they don’t want to buy ahead of it. Why buy a bond today that you know will be cheaper tomorrow? Now there are fewer buyers and an increasing volume of sellers; the law of supply and demand tells us how this story will end. Huge volumes of MBS product are dumped on the market as big funds and big firms begin to fail, there are not enough buyers and prices plummet causing spreads on MBS to rise like a rocket. Current coupon 15 year MBS trade at a long term average of roughly 116 basis points over treasuries. This spread blew out to 311 basis points at the height of the crisis.

Through the entire episode we spoke of mean reversion and counseled buyers to take as much MBS product at these spreads as your position would allow. This strategy has paid off very, very well. Bonds that were purchased with spreads of 200 to 300 basis points of spread have delivered both high yields and large price gains as spreads have tightened in over time.

What was the Fed thinking?

I think it makes sense to occasionally go back and look at WHY the Fed started down this road. There is so much going on that sometimes the genesis of this program can get lost in the fray. The Feds plan was to keep borrowing rates for households and small businesses affordable and accessible. These two factors are very important parts of the lessons that Bernanke learned from the Great Depression (see the market update from Jan 8, 2009 to review Bernanke’s thoughts on the Great Depression…if you don’t have it just let me know and I can resend it). They’ve achieved their goal of keeping rates low. Every time a Fed governor gets in front of a microphone they tell us that they plan to keep rates low for a long time. OK so rates are low…but how accessible is credit?

Credit is not as accessible as Uncle Ben would like it to be. While he can control the short end of the curve very well he can’t control who banks lend to (I feel the need to add the qualifier “YET” to the end of this statement…scary times). The Feds view of how much credit should be accessible and a banks view of the same can be quite different.

In an era where individuals are highly leveraged AND they are losing their jobs it is obviously a good time for caution to be involved in the underwriting process. While the Fed sees the solution a little differently than banks do, deep down the Fed must understand that banks will begin making large volumes of loans when they get large volumes of qualified credits coming in the front door. This will take time…plain and simple. Consumers need time to clean up their personal balance sheets. It takes a while to pay off the credit cards and the car loans and to build up some cash savings in the bank. It will also take a while to get past the fear of losing one’s job or a spouse losing theirs. All of these factors act as constraints on consumer spending. Fear is a powerful thing.

Where are we today?

After all of the buying by the Fed where are we today? The Feds plan has certainly had its intended effect on the level of rates. Spreads on MBS product have been absolutely crushed. This morning the spread on current coupon 15 yr MBS sits at 125 basis points. OK…now what?

Now our attention must turn to how the Fed will exit this role as the provider of liquidity to the mortgage market. There is tremendous concern that if they just turn off the magic liquidity faucet at the deadline date then spreads will blow out in a big way. Nobody expects a reversal to the high water mark of 311 bps because the fundamentals aren’t in place to cause a run like that…the fear that drove those levels is gone. We are no longer seeing large firms and hedge funds going bust after waves of margin calls and forced liquidations. However it is widely expected that we will have some material amount of widening as the Fed tries to exit this role. The official stop date for the Feds MBS purchase program is in October. There has been a fair amount of talk that they may have to extend this deadline to early 2010 to avoid killing the housing recovery. This is a tricky piece of business. How long do you kick this can down the road? How much more will you have to spend? Is anyone comfortable with the Fed owning 50% of the mortgage market? 60%? Is supporting the recovery in housing a large enough issue to justify owning a larger chunk of the mortgage market? We all cautioned that it could prove to be a very difficult thing to disentangle yourself from so we are watching intently to see if it goes as smoothly as the Fed thought it would.

The flip side of this coin is that a lot of buyers are sitting on cash and when the fed backs out it will cause yields will pop up, which will in turn lure buyers back to this sector, who will in effect replace the Fed as the major liquidity provider, which by definition moves us toward a more normal market. That’s the best case scenario…the Fed steps out and the normal market participants step back in. We might have to start calling this “The Bernanke Two Step”.

The ultimate question here is “when will the buyers step in?” We all know when the Fed is going to quit buying at some point. We’re all going to be watching spreads too. As spreads rise there is a tendency to not get in the way…after all prices are falling and with the 800 pound gorilla no longer in the room they might fall a good ways before they stop. Who wants to try to catch a falling knife? The fact is that if people expect the market to go one way then they tend to wait until it gets there before doing anything.

In closing

Who knows which scenario we’ll get but the facts as we know them currently are that we are approaching the end-date for the MBS purchase program, the Fed owns 34% of the pass through market, and we appear to be a long way from seeing a recovery.

If you are considering selling MBS then this is a very good time to do so. Treasury yields are very low and spreads are very tight...this combination is your friend if you are selling bonds.

If you have any questions on this material just let me know.

Yield curve forecast _ September 2009

Each month Bloomberg surveys 60 to 70 economists to get their estimates of where Fed Funds, the 2-year Treasury, and the 10-year Treasury will be over the next several quarters. I take this data and interpolate for the points in between the survey data to create the attached report. This allows us to get a broad view of where various economists see interest rates going over the coming quarters.

Interestingly enough the forecasts are lower this month for almost every spot on the curve through 2011.

If you have any questions on this material just let me know.

Market Update 9 16 09 _ What is going on in the market

What’s up with the market?

When I look at recent bond market activity I can hear Jerry Seinfeld’s voice in my head asking “WHAT is the DEAL with THAT?” His signature line could be used almost daily in this market. Yesterday a good friend of my summed it up nicely by describing the markets behavior as “schizophrenic”. This morning is a perfect example. When I came in this morning the 30 year was up 21/32’s...a few minutes later it was back to flat…a few more minutes and it was DOWN 21/32’s…and finally a few short minutes after that it was back to flat.

There has been tremendous volatility in the bond market recently, much of which seems counterintuitive. There are days that we get economic data that should cause a huge selloff in Treasuries, yet the market rallies hard driving yields to new lows. It’s very difficult to make sense of the activity. In a way I think this confusion is itself a sign that we’re at the bottom of this cycle. It’s the first time in a long time that the market seems conflicted about what to make of the numbers. Prior to this recent period there was almost a universal agreement that every number we got showed that the recession was still getting worse.

We went through a brief period in May where the clinically optimistic made their bets that recovery was just around the corner. There will always be a rush among some big money managers to be the first one diving back in when the sentiment begins to swing. They need to get those few extra basis points to beat the index and beat the competition. As we moved from the “recession is getting worse every month” mode to the “we seem to be near the bottom” mode there were a lot of people that started placing bets on a “V” shaped recovery. We saw a good bit of this type of activity in May. My opinion on this has been that we’re not going to see a “V” shaped recovery. (The Market Update piece from May 7^th, 2009 reviews the various recovery shapes along with a colorful example…if you can’t find that e-mail let me know and I can resend it).

I’ve been saying for quite some time that even if the bad news tapers off and we find a bottom, it’s not a great thing to stabilize at multi-decade lows of activity. The economy needs people spending money in order to grow. Consumers making purchases keep other people employed doing everything from importing the goods, shipping them, stocking shelves, ringing up the goods etc. There are millions former consumers that are playing a very defensive game right now. Now it’s about staying power. At this point in the business cycle I think the average consumer would rather have $3,000 more in the bank (or less on a credit card) than a 65 inch plasma TV in the living room. In times of uncertainty liquidity is your friend…the consumer gets that now. Many households have been hit directly by unemployment, most others know people that have lost jobs, still others have taken pay cuts to KEEP their jobs (FedEx is a prime example of this…reducing pay for everyone to minimize the number of firings that must be done). This is an episode that the consumer won’t soon forget…fear is a powerful thing.

Given a consumer that is more focused on rebuilding a cash cushion and paying down debt than continuing the spending spree, where will the growth come from? More one-time hits like cash-for-clunkers programs where we pull future consumption into the present using borrowed money? That is exactly the type of game that consumers played for the last several years. This just leads to more leverage, more risk, and slower growth in the future. Econ 101 tells us it’ll take time for this to get better. The consumer needs time to pay off car loans and credit cards and helocs, he needs time to build up a few months worth of cash, and he needs time to get past the concern of losing his job…and don’t get me started on the 401K.

Today’s numbers

Today’s economic data showed inflation in check with CPI numbers generally in line with the estimates. Industrial Production and Capacity Utilization for August were slightly better than expected. I wish I could tell you that the economic data had some effect on today’s activity but if it did it was impossible to discern amid the noise.

Tomorrow we see Housing Starts, Building Permits, Initial Jobless Claims, Continuing Claims, and the Philadelphia Fed Index. These are big numbers that could have a significant impact on Treasury yields. Below I’ve attached a review of today’s economic releases along with tomorrow’s scheduled releases.

I took a break. 3 or 4 days on the Gulf of Mexico. Fishing, beer, family. It was time well spent away from the market, the phone, the Bloomberg, the government spending spree, everything.

I come back and it seems like half the people have money to spend but don't like what they're seeing, and the other half are out of cash but like the bonds I'm sending. It's just a strange market.

Treasuries were all over the map today...prices down in the morning only to rally back and then be up on the day, then in the afternoon a decent sell off was underway pushing Treasury prices back down the lows of the day.

This market has a bad feel to it. Everyone wants "value". It's tough to tell them, and nobody wants to believe it but "value" is dead. There is no more "value". "Value" means "cheap" and there are no more cheap bonds. Everything is efficiently priced...and the yields suck.

One of the very nice side effects of the meltdown we saw over the last two years was inefficiency in the capital markets. Liquidity concerns drove fear into every corner of the market. Falling asset prices triggered margin calls at firms around the globe. When you get a margin call your creditor wants more cash to cover your positions...and they want it NOW. This means you have to sell something RIGHT NOW. You don't sell the junk because you can't take the loss...so you sell the good stuff to get the best price you can. The problem is that there are a lot of other folks in the same boat as you, there aren't as many buyers and the few out there know that you're under pressure to sell. The more you have to sell to satisfy the margin calls the lower the prices go on the items you're selling. It's a self defeating plan...but it's what happens in a market like the one we've had over the last two years. It's a terrible thing if you have to sell...but if you have cash...oh what a time to be a buyer.

SO...we had lots of opportunities to buy "cheap" bonds. "Value" was easy to find. MBS spreads blew out to 300 bps over Treasuries...historically these spreads run around 128 bps over. Screaming cheap they were. We sold them by the boat load and those that bought them got big yields, and now that the markets have calmed down spreads have tightened in and they have big gains too.

Therein lies the problem. The markets have calmed down. The government has propped people up, provided insurance, guaranteed liquidity, directly intervened in the market by purchasing over a trillion dollars of Agency debt...the list almost has no end. All of these things combined have absolutely crushed spreads. When is the last time you heard of someone getting a margin call? Of a money market fund breaking the buck? Of a large firm failing? You don't hear of that stuff anymore. The market is operating in a much more efficient manner than it did from 2007 to early 2009. The fundamentals that provided "value" over the last two years simply aren't there anymore. The fear is gone and everyone has the liquidity they need to operate.

It sucks...I hate it as much as you do. It's not anymore fun to buy a 3 year non-call 1 year at a 2-something yield than it is to sell it. If Bernanke is telling the truth and he has no intention to raise the overnight rate any time soon then it looks like these yields could be the norm for a while.

What would cause this to change? Inflation certainly would but where is it going to come from? From consumers and businesses that can't get loans to buy stuff? From Americans that are now far more interested in SAVING than in buying big screen TV's? The US Savings rate is on a pretty steep trajectory right now. Rising up from roughly zero percent to north of 7%. People get it now. They understand that they can't live on credit forever. They understand that their job may not be there tomorrow, and that if that happens and they have no money saved up they will be in a world of hurt.

Econ 101 tells us there are only two things you can do with a dollar...save it or spend it. Americans are beginning to save...this is a very positive thing. BUT every dollar saved is a dollar that isn't spent. Every dollar that isn't spent means less stuff needs to be manufactured, shipped, stocked on a shelf, and rung up at a register. Fewer jobs are needed to support the lower demand for goods. This is by necessity a painful adjustment to make. The current powers in Washington are trying desperately to make this a painLESS episode. They are spending money like there is no tomorrow. It's like they are all sitting around reading John Maynard Keynes and smoking crack.

Market update 7 21 09 _ Bernanke testifies

Bernanke testified before the House Financial Services Committee this morning. The short story is that Bernanke has reiterated for the umpteenth time that rates will remain low for an extended period, and that the Fed has the ability to take liquidity out of the system in the future to prevent runaway inflation. Bernanke penned an article for the Wall Street Journal today that does a very good job of explaining his case.

I was going to write that the appearance before the House Financial Services Committee was a colossal waste of time but upon further reflection I realized just how important it was. For the last three hours I watched as people who are arguably the most qualified Congressmen in the country regarding banking and finance issues, ask questions of the Federal Reserve Chairman. The meeting began with a series of statements from various politicians on both sides of the aisle. These are actually just long winded speeches that are prone cliché and rhetorical questions. As far as I can tell they serve no purpose other than to provide a platform from which the congressman can bloviate. Listening to these opening remarks is literally enough to make you bang your head on your desk.

From there the meeting moves on to the question and answer session. I didn't catch all of the questions but I caught a lot of them. The biggest revelation of the day was just how ignorant most of these people are with regard to the problems at hand. Bernanke comes across as a 150 watt bulb in a room full of night-lights. Very few of these congressman appeared to have even a basic understanding of the problems we face, much less the solutions. I hope they know more about healthcare then they do about banking…these people frighten me.

The longer Bernanke spoke the higher Treasury prices rose. When I came in this morning the 10-year Treasury was off 12 tics to yield north of 3.60%. It is now up over a point to yield 3.48%. The message from the Fed is unchanging to the point of monotony…they will keep rates low for an extended period. They say it every chance they get, and they appear to mean it. Rather than try to summarize Bernanke's article I've attached it in its entirety. It's a good read.

If you have any questions or if there is anything I can be doing for you just let me know.

WSJ: Opinion: Bernanke: The Fed's Exit Strategy

By BEN BERNANKE

The depth and breadth of the global recession has required a highly accommodative monetary policy. Since the onset of the financial crisis nearly two years ago, the Federal Reserve has reduced the interest-rate target for overnight lending between banks (the federal-funds rate) nearly to zero. We have also greatly expanded the size of the Fed's balance sheet through purchases of longer-term securities and through targeted lending programs aimed at restarting the flow of credit.

These actions have softened the economic impact of the financial crisis. They have also improved the functioning of key credit markets, including the markets for interbank lending, commercial paper, consumer and small-business credit, and residential mortgages.

My colleagues and I believe that accommodative policies will likely be warranted for an extended period. At some point, however, as economic recovery takes hold, we will need to tighten monetary policy to prevent the emergence of an inflation problem down the road. The Federal Open Market Committee, which is responsible for setting U.S. monetary policy, has devoted considerable time to issues relating to an exit strategy. We are confident we have the necessary tools to withdraw policy accommodation, when that becomes appropriate, in a smooth and timely manner.

The exit strategy is closely tied to the management of the Federal Reserve balance sheet. When the Fed makes loans or acquires securities, the funds enter the banking system and ultimately appear in the reserve accounts held at the Fed by banks and other depository institutions. These reserve balances now total about $800 billion, much more than normal. And given the current economic conditions, banks have generally held their reserves as balances at the Fed.

But as the economy recovers, banks should find more opportunities to lend out their reserves. That would produce faster growth in broad money (for example, M1 or M2) and easier credit conditions, which could ultimately result in inflationary pressures—unless we adopt countervailing policy measures. When the time comes to tighten monetary policy, we must either eliminate these large reserve balances or, if they remain, neutralize any potential undesired effects on the economy.

To some extent, reserves held by banks at the Fed will contract automatically, as improving financial conditions lead to reduced use of our short-term lending facilities, and ultimately to their wind down. Indeed, short-term credit extended by the Fed to financial institutions and other market participants has already fallen to less than $600 billion as of mid-July from about $1.5 trillion at the end of 2008. In addition, reserves could be reduced by about $100 billion to $200 billion each year over the next few years as securities held by the Fed mature or are prepaid. However, reserves likely would remain quite high for several years unless additional policies are undertaken.

Even if our balance sheet stays large for a while, we have two broad means of tightening monetary policy at the appropriate time: paying interest on reserve balances and taking various actions that reduce the stock of reserves. We could use either of these approaches alone; however, to ensure effectiveness, we likely would use both in combination.

Congress granted us authority last fall to pay interest on balances held by banks at the Fed. Currently, we pay banks an interest rate of 0.25%. When the time comes to tighten policy, we can raise the rate paid on reserve balances as we increase our target for the federal funds rate.

Banks generally will not lend funds in the money market at an interest rate lower than the rate they can earn risk-free at the Federal Reserve. Moreover, they should compete to borrow any funds that are offered in private markets at rates below the interest rate on reserve balances because, by so doing, they can earn a spread without risk.

Thus the interest rate that the Fed pays should tend to put a floor under short-term market rates, including our policy target, the federal-funds rate. Raising the rate paid on reserve balances also discourages excessive growth in money or credit, because banks will not want to lend out their reserves at rates below what they can earn at the Fed.

Considerable international experience suggests that paying interest on reserves effectively manages short-term market rates. For example, the European Central Bank allows banks to place excess reserves in an interest-paying deposit facility. Even as that central bank's liquidity-operations substantially increased its balance sheet, the overnight interbank rate remained at or above its deposit rate. In addition, the Bank of Japan and the Bank of Canada have also used their ability to pay interest on reserves to maintain a floor under short-term market rates.

Despite this logic and experience, the federal-funds rate has dipped somewhat below the rate paid by the Fed, especially in October and November 2008, when the Fed first began to pay interest on reserves. This pattern partly reflected temporary factors, such as banks' inexperience with the new system.

However, this pattern appears also to have resulted from the fact that some large lenders in the federal-funds market, notably government-sponsored enterprises such as Fannie Mae and Freddie Mac, are ineligible to receive interest on balances held at the Fed, and thus they have an incentive to lend in that market at rates below what the Fed pays banks.

Under more normal financial conditions, the willingness of banks to engage in the simple arbitrage noted above will tend to limit the gap between the federal-funds rate and the rate the Fed pays on reserves. If that gap persists, the problem can be addressed by supplementing payment of interest on reserves with steps to reduce reserves and drain excess liquidity from markets—the second means of tightening monetary policy. Here are four options for doing this.

First, the Federal Reserve could drain bank reserves and reduce the excess liquidity at other institutions by arranging large-scale reverse repurchase agreements with financial market participants, including banks, government-sponsored enterprises and other institutions. Reverse repurchase agreements involve the sale by the Fed of securities from its portfolio with an agreement to buy the securities back at a slightly higher price at a later date.

Second, the Treasury could sell bills and deposit the proceeds with the Federal Reserve. When purchasers pay for the securities, the Treasury's account at the Federal Reserve rises and reserve balances decline.

The Treasury has been conducting such operations since last fall under its Supplementary Financing Program. Although the Treasury's operations are helpful, to protect the independence of monetary policy, we must take care to ensure that we can achieve our policy objectives without reliance on the Treasury.

Third, using the authority Congress gave us to pay interest on banks' balances at the Fed, we can offer term deposits to banks—analogous to the certificates of deposit that banks offer their customers. Bank funds held in term deposits at the Fed would not be available for the federal funds market.

Fourth, if necessary, the Fed could reduce reserves by selling a portion of its holdings of long-term securities into the open market.

Each of these policies would help to raise short-term interest rates and limit the growth of broad measures of money and credit, thereby tightening monetary policy.

Overall, the Federal Reserve has many effective tools to tighten monetary policy when the economic outlook requires us to do so. As my colleagues and I have stated, however, economic conditions are not likely to warrant tighter monetary policy for an extended period. We will calibrate the timing and pace of any future tightening, together with the mix of tools to best foster our dual objectives of maximum employment and price stability.

—Mr. Bernanke is chairman of the Federal Reserve.

Interpolated Yield Curve report for July

Each month Bloomberg surveys 60 to 70 economists to get their estimates of where Fed Funds, the 2-year Treasury, and the 10-year Treasury will be over the next several quarters. I take this data and interpolate for the points in between the survey data to create the attached report. This allows us to get a broad view of where various economists see interest rates going over the coming quarters.

All of the talk from the Fed is of rates staying low for a long time to come. Just recently Janet Yellen said that the Fed could conceivably leave the overnight rate at zero for “years”. Recent statements from the Fed also say that if we weren’t already at zero on Fed Funds then they’d be lowering rates right now…the economic picture is just that bad.

With a recovery nowhere in sight it looks like the only thing that could change the Feds mind on leaving rates at current levels is inflation. While the Fed would love to keep rates low long enough to let the economy work through its problems, the government continues to spend money like a drunken sailor on a 72 hour liberty. How long that can continue without igniting inflation concerns is another matter.

The Fed for its part insists that if inflation reignites they will have the political independence necessary to raise interest rates…even in the face of an economy that is still stalled. It will be a very interesting story to watch if we have 10% unemployment and the Fed has to begin tightening. The terms “stagflation” and “double-dip recession” have been getting more air time recently…“recovery” not as much. The economy is in such poor shape that even the politicians are pushing back talk of recovery. Now we hear statements like “it may take years” for a recovery to take place.

The survey data below are the latest estimates from economists surveyed by Bloomberg. This can serve as a useful sounding board as we move into the second half of 2009.

If you have any questions on this material just let me know.

Market Update 7 09 09 _ How many unemployed?

It’s another beautiful summer morning here in Memphis, Tennessee. On my way in to work this morning it was 72 degrees, no humidity, clear skies, and the windows were down. The big decision was “do I turn right and go to work, or do I turn left and go bass fishing?” Work always gets the nod but asking the question at least makes me feel better. So on the way in I was thinking about today’s pending economic releases and the plans I’ve heard from the government on how to “fix” the economy. More specifically I had been pondering the government’s plan to reduce unemployment by putting people to work on infrastructure projects funded by the stimulus plan. We frequently joke about the wisdom of using unemployed people from non-construction industries to build roads and bridges as it doesn’t seem efficient or safe. For instance, how many unemployed waitresses have ever tied rebar for pouring a reinforced concrete slab? I’m certain it’s not many. However, on the drive in this morning I was waiting for my turn to go through a construction zone that had funneled a two-lane road down to one-lane. As I sat there it hit me…every job site like this one has at least two people that don’t need any skill at all…these are the guys holding the “stop/slow” signs. In theory you could put all 7 million unemployed to work if you had 3.5 million construction sites that needed “stop/slow” sign holders (one guy at each end). In reality this is likely a union job anyway so we’d need 5 people per sign to get a full 8 hours of sign holding done…so 10 people per site. All we need is 700,000 construction sites like this and the government can get the unemployment rate to zero percent. I’m writing my congressman this morning…then I’m going fishing.

Initial Claims

Initial jobless claims were released at a lower level than expected this morning. This is a series that tracks the number of first time applications for jobless benefits. This number has been running north of 600,000 per week for 22 consecutive weeks. The pace has been quite dramatic. Today the number broke below 600,000 and posted a 565,000 reading. The estimate from the Bloomberg Survey was for 603,000 people to file. The series has definitely seen a slow decrease in filings over the last several weeks, today’s number was a larger drop than the trend would have indicated. It’s interesting to note that last week was a short week…how many people can you fire in a short week? And of those fired they have 1 less day to file for benefits if the government office that takes the applications is closed on Friday. It will be interesting to see if this number bounces back up next week.

Continuing Claims

Even though the pace of Initial Jobless Claims has dropped a bit, we still have a huge stockpile of unemployed people. The Continuing Claims number was expected to show 6.7 million receiving unemployment benefits, the actual release was 6.88 million. Where will these almost 7 million Americans find jobs? We still have close to 600,000 a week losing their jobs. It must be a surreal scene at the unemployment office. 6.8 million people picking up unemployment checks with the TV in the background telling them that things are getting better…the line will only be 580,000 people longer next week.

How long does it take to put 7 million Americans back to work? Where will the economic growth come from to create jobs? When you step back from the day to day process of being involved in the market and you look out over a longer horizon you don’t see a lot of factors that scream “growth”. I see massive deficit spending, higher taxes, and more government regulation; none of these things causes growth…they work against it.

Below is a graph of Continuing Jobless Claims going back to 1967. If you have any questions on this material or if there is anything I can be doing for you just let me know.