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alstry (35.18)

Reported UNemployment blows through 7%

Recs

13

January 09, 2009 – Comments (3)

We are now at over 7% REPORTED unemployment

We are now over 12.5% REPORTED unemployment/underemployment

Economists on CNBS say we have over 10 million unemployment and over 20 million underemployed(hours cut, working part time, wages cut materially....ect......)

If we take the economists number......that puts the Alstrynomics functional unemployment number at about 20%......not too far away from 30%, 40% or maybe even more.

What even even more ominous is the hours worked continues to slide foreshadowing  more cuts ahead.

Remember, if you don't have a job, you can't make you mortgage payment....no matter how low the payment.  As more and more jobs get cut, expect more and more foreclosures.

As you get more and more foreclosures, you get to a point in Alstrynomics called saturatedsupply...a point with supply that there simply is too much to satisfy demand and prices drop dramatically. 

For example, on a street with 20 homes, it really doesn't matter if you have 10 foreclosures or 15 foreclosures....there is so much distressed inventory available few want to purchase on that street and there is only demand at give away pricing.

As more and more Americans lose their jobs, more and more will likely not be able to afford a home.  Sure there will be demand for homeownership, simply not qualification.  As more and more will be forced to put their homes up for sale.....the need to sell will increase driving home prices down even further.

No matter how low prices go, as supply outstrips demand, prices will continue to fall.  You can see the practical application of Alstrynomics in many inner city neighborhoods, new home developments in outlying areas, and areas where subprime lending concentrated.  In some neighborhoods, paying  a dollar for a home is too much.

The tsunami is now hitting the shore.  I warned you it was comimg.  Hopefully most of you are prepared.  The opportunities will be amazing......so will the pain.

 

3 Comments – Post Your Own

#1) On January 09, 2009 at 9:27 AM, JGus (28.93) wrote:

Thanks for reading and reporting the numbers in a realistic way, Alstry. I just got finished posting this comment on EPSMomentum's rose-colored look at this mornings jobs report:

"If economists predicted the total and complete meltdown of our system and it came to pass, would that be a reason for the markets to rally?

What about when the reported numbers are supressed by 10% or more only to be 'upwardly revised' for the next couple months. Novembers numbers were upwardly revised by 10% this morning and Octobers were raised FOR THE SECOND TIME! I wonder how the market would have reacted to both of those jobs reports had the right number been released rather than a much lower number?"

 

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#2) On January 09, 2009 at 10:59 AM, DaretothREdux (48.03) wrote:

alstry,

Did you also see that the government is allowing a lot more people to "short sell" their homes instead of foreclosure? Geuss what the average loss was on the homeprice?

17%

Of course, that sure beats the hell out of what the banks usually lose when they sell a foreclosed house which is probably more like 40%.

Not quite time to buy a house just yet...

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#3) On January 15, 2009 at 7:28 PM, tfirst (34.35) wrote:

I wonder if the price of cardboard will go up as more people move into boxes....

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