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alstry (35.88)

Why can so few see realilty about 30-50% Unemployment?

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April 22, 2009 – Comments (12)

Every time I ariticulate my forecast for 30-50% unemployment, I am amazed how so many otherwise intelligent people can't see what seems so clear to me.  Especially that U6 unemployment rate is now at 16.2% and everyone says unemployment is going much higher.

Credit Card defaults are about to cross the 10% threshold.  Foreclosures are at record highs and growing.  Commercial vacancies are exploding and revenues are evaporating as fewer and fewer are bringing in enough revenues to cover taxes, interest and insurance.

We are at 16.2% and we are about to gut 1/2 to 2/3 of the auto industry.  We are looking at hundreds of thousands of jobs just there between dealers and manufacturers and suppliers not to mention tens of thousands of support workers.

We are likely to close over 100,000 additional retailers in 2009.  Already more have closed in 2009 than all of 2008.....and we know a bunch closed in 2008.

Hotel workers are getting released, so are airline workers, so are technology workers....AND NOW HEALTH CARE WORKERS.

The next big shoe to drop will be state and local government workers.  LA ALONE is releasing about 5000 teachers.

As an academic exercise.....what percentage do you CAPS players think U6 unemployment will reach.

12 Comments – Post Your Own

#1) On April 22, 2009 at 8:51 AM, JeanDavid (81.19) wrote:

"The next big shoe to drop will be state and local government workers.  LA ALONE is releasing about 5000 teachers."

That seems to be a mistake to me. Instead of paying about 5000 teachers, that might do some good for the community, you move them from the teaching budget to the unemployment insurance or wellfare budget, where they do no good at all. How is this a saving?

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#2) On April 22, 2009 at 8:53 AM, dustydiamond (< 20) wrote:

Maybe it's because unemployment at that level would mean economic Armageddon.

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#3) On April 22, 2009 at 8:54 AM, dudemonkey (36.83) wrote:

If it's at 16.2%, I think it goes to 20%.  Maybe 22%.  I don't think it will hit 25%.

I have no calculations to back that up.  It's just pure speculation on my part.

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#4) On April 22, 2009 at 8:59 AM, alstry (35.88) wrote:

dusty,

Economic hard times....definitely.......armageddon?  I am not so sure.

Dude,

Thanks for your input.

 

The rest of you, with U6 unemployment CURRENTLY at 16.2%, what level do you think unemployment will peak out, especially after all the announced layoffs kick in????

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#5) On April 22, 2009 at 9:56 AM, Bupp (28.66) wrote:

U6 is the US measure which includes part-time workers that want full time work right? comparable to canada's r8 number?

In that case I can see it hitting 25%-30% no problem.

 People who find that impossible to believe get confused because they think it is a percentage of everyone not a percentage of the labour force which is a much smaller group of people.

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#6) On April 22, 2009 at 11:01 AM, youngrekless (54.15) wrote:

 Why does everyone forget the past? Why does everyone act like this recession is some kind of new card trick they haven’t seen 20 times already and say things like “economic Armageddon” For one this recession as of now is smaller, shorter and less damaging (so far) then the depression, the oil crises of the 70s and the tech bubble of the 90s. And in all of them the unemployment rate soared. And big deal!

 I mean maybe it’s because I just finish my history class last semester but I really don’t understand all the gloom and doom talk about unemployment, consumer spending and all that jazz. Does no one remember how this all plays out? We all sit around saying “yup this is the end for sure, yup I say 40% unemployed, we are all going to the poor house” …etc. and low and behold americore gets a bigger budget infrastructure gets a renewed focus, people get new jobs in new interesting emerging industries (green energy manufacturing to name one) people calm down, and poof!  The economy pulls your card out of the middle of the deck just like the last time, and our bubble bust train starts chugging along once again! And everyone acts surprised. Come on, lay off 2/3s the auto industry? Perfect! Those wind turbines aren’t going to build themselves! And look! A large unemployed mob of skilled labor looking for work!!! THE SKY IS FALING WHAT WILL WE DOOOO!!!!

Look my point is Americans are going to do what Americans do and that’s adapt. 25% 30% unemployed? Excellent! That just means a diversification in labor, an opportunity for smaller companies to get well skilled capable workers to grow and prosper emerging markets!

 So I say 30% and bring it on the sooner the better! I have a retirement to plan for in 40 years!

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#7) On April 22, 2009 at 11:06 AM, jddubya (< 20) wrote:

My guess is U6 will approach 25%, but, I believe that in reality it will be much higher due to government manipulation of the numbers to keep the masses from being exposed to so much negativity.

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#8) On April 22, 2009 at 11:25 AM, scm68gt (< 20) wrote:

The U6 may hit that level .. but only because Big Business wants even MORE H1B visas and will ship even more jobs off shore. 

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#9) On April 22, 2009 at 11:29 AM, alstry (35.88) wrote:

Adapt, Improvise, Overcome.....Gunny Highway........that is the American Spirit......

But as we move foward, we are likely to see industry after industry get gutted......

The two most immediate will be autos and banking.....we could see 3,000 to 5,000 regional banks shut down.....we should get a better perspective Friday afternoon.....

Let's see what happens...

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#10) On April 22, 2009 at 12:39 PM, briyan (31.38) wrote:

I tend to agree with jdubya.  I think U6 at 30% is a reasonable expectation but we have seen in the past that the government likes to change the rules on how unemployment is measured and reported. I think we'll see this trend of manipulation continue as Washington hopes to shield itself from negative sentiment.

 

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#11) On April 22, 2009 at 12:54 PM, OctoStalin (44.75) wrote:

Alstry, bank spreads are exceding high that moment and the goverment is bailout happy. They should in theory earn their way out if they didn't have too much subprime exposure. 5,000 regional banks is a bit much.

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#12) On April 22, 2009 at 3:32 PM, alstry (35.88) wrote:

Octo,

Are they high enough to offset the defaulting debt?

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