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dwot (99.50)

Jobless rate versus Unemployment Rate

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April 12, 2008 – Comments (2)

Yves has a good post linked to good graphs showing the BS in the reported numbers for jobless versus unemployment.

The one thing that is not reported in this that is also extremely problematic for the economy is that the ratio of working age people to seniors is changing.  So, 10% jobless 20 years ago was a differerent problem than 10% jobless today simply because of the grossly increasing number of people on social programs. 

Lol, this is actually a very good story and I see the Big Picture is also reporting it.  

Mish had a good piece on the G7 meeting that is also making its round in the news.  Calculated Risk also had something to say about the G7 meeting.

What is disgusting here is that economists have been warning about the problems for years.  They have been ignored and trivialized that had you listened to them you'd have missed the bullrun and all kind of other unearned comments as the bubble got bigger and bigger.  If they had been listened to and the problems they were talking about had action to fix them, there would not have been the continued bull run, nor would there be the gross financial instability the markets now face.

People just don't seem to get it.  There is a serious debt problem and currency crisis.  What was a serious problem when the economists started to warn, has mushroomed into something that has no road map.

2 Comments – Post Your Own

#1) On April 12, 2008 at 1:27 PM, alstry (35.54) wrote:

The people will get it very very soon.  It started about a year ago.  First with subprime.   Then with private equity.  Then with commercial real estate.  Followed by Alt A.  Home Equity Loans.  Then Municipal Debt.  Now even Student Loans.

As debt keeps defaulting, borrowing money is becoming more and more difficult.  As borrowing becomes more difficult, the economy slows and jobs are lost.

Many many companies around America are cutting 10% or more of the workers.  Jefferson County Alabama is preparing for the biggest government bankrupctcy in American history...bigger than Orange County in the 1990s.

I expect that Jefferson county will be the first in a long line of government bankruptcies.  I expect that government layoffs are just beginning.

I truly do think that the current crisis has the potential to be much worse than 1929.  Back then America was a growing economy and we were exporting our products around the world.  We were creating brand new industries.  The problem was a liquidity crisis as revenues for many of our industries were growing.

The current problem is a solvency crisis.  Debts exceed assets and ability to pay and many governments, business, and individuals are bankrupt.  Now we are a consumer based economy simply servicing each other and exporting relatively little.  For the last ten years we depended on borrowing money to keep paying each other and buying goods from overseas.  The borrowing went nuts over the last five years as anyone with a pulse could borrow practically as much as they wanted.  Now money is evaporating as many are realizing that a lot of the borrowed money will never be paid back and current access to credit contracts daily.

Our budget deficit is running at record highs.  Job cuts get bigger every week.  Companies are going bankrupt all around us.  Food and Fuel gets more expensive everyday as wages remain stagnanat or go down.

And now Paulson and government officials are telling us we are in trouble?

Wow!!!!!  Just wait until America finds out how much trouble we really are in and what our government leaders, ratings agencies, and corporate leaders were afraid to tell us as the looted the nation of its wealth.

DWOT, we are all broke and there ain't much we can do about it...except watch as the banks get bailed out for loaning out all that money that allowed their exectutives to get such amazing bonuses.

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#2) On April 12, 2008 at 9:52 PM, dwot (99.50) wrote:

I haven't studied the depression in detail, I just know there was a stock market problem, a housing bubble and a bond problem.  The housing bubble wasn't as bad as today's bubble as lending standards were stronger even though people got into trouble and couldn't afford their payments.  The terms were such that they could be extended.  With 30-year mortages the norm today, that option isn't available.

I read somewhere when the bank problems settled people got back 88c on the dollar, which isn't too bad.  It certainly is recoverable.  How do you get that back today when the banks have basically given investor's money away? 

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