Unemployment, Credit Delinquencies and ‘Q & A’

Unemployment, Credit Delinquencies.  & ‘Q & A’

Unemployment: “Brown Manure, Not Green Shoots – The jobs situation is even worse than the headlines” is the forbes.com headline for it’s article by Nouriel Roubini (NYU Stern School of Business Professor and generally right-on economic prognosticator).

• For the “man-in-the-street” (and that’s us too!), the article discusses unemployment as it relates to a supposed beginning economic upswing. Here are a few key points:
• “The June employment report suggests that the alleged green shoots are mostly yellow weeds that may eventually turn into brown manure. The employment report shows that conditions in the labor market continue to be extremely weak … .”
• “It is very clear that the unemployment rate could reach 10% by later this summer – around August or September – and will be closer to 10.5%, if not 11% by year-end. I expect unemployment to peak at around 11% at some point in 2010, well above historical standards for even severe recessions.”
• “It’s clear that even if the recession were to be over anytime soon – and it’s not going to be over before the end of the year – job losses are going to continue for at least another year and a half.”

PH Note: Remember that while the professor has been nearly always correct in the direction of economic trends, he seems to frequently underestimate the extent of those trends and that economists in general almost never estimate/discuss the social CONSEQUENCES of these economic realities (read: civil disorder and political instability).

Credit Delinquencies: money.cnn.com this past 7/9/09 posted this, “Credit delinquencies hit record high” by Julianne Pepitone.  Here are some highlights:

• “Soaring unemployment and the housing bust are leaving consumers hard-pressed to make loan payments on everything from credit cards to cars.’
• “The percentage of borrowers at least 30 days late paying a balance is the highest since the group (the American Bankers Association) began keeping records in 1974.”
• “The number one driver of delinquencies is job loss Chessen (ABA Chief Economist, James Chessen) said, “When people lose their jobs, they can’t pay their bills.”

’Q & A’: On 7/9/09 Mish Shedlock’s globaleconomicanalysis.blogspot.com website posted this little Q & A clip between an interviewer and the Former Assistant Treasury Secretary, Craig Roberts. Here’s the clip:

“Craig Roberts: bank bailout was a fraud and it won’t succeed. Don’t know what sort of stupidity the Treasury Secretary and the Federal Reserve will resort to next.”

“Max Kesier: Quick question. What should the treasury Secretary be doing?

“Craig Roberts: He should be trying to save the dollar as the world’s reserve currency which means stopping the wars, reducing the bailout money, and trying to reduce the trade and budget deficits in order to save the dollar. That’s what he should be doing.”

“Max Kesier: Does the treasury secretary work for the people of does he work for the banking system on Wall Street?”

“Craig Roberts: He works for Goldman Sachs.”

Until next time: keep your eyes on the horizon as the weathers changing fast.