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alstry (35.90)

You can doubt ALSTRYNOMICS......or live in reality.....

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May 02, 2009 – Comments (11)

I know Alstry gets a bunch of criticism on CAPs...some deserved and some not....but in the end he is one of the most accurate economic forecasters on the interenet......far more accuate than many of the so called "experts."

After all the bantering back and forth..........IT IS ALL ABOUT JOBS.  If American's are not working, they can't buy a house, they will have trouble buying food, and thinking about owning a car will be out of the question.

The question for all CAPs players, and citizens alike, is at what point will so many Americans be out of a job that the economy basically shuts down?????

Right now, according to the US Department of Labor U6 stats, 16.2% of Americans in the labor force are not working, or are only working part time and desire to work full time.  This does not include the self employed Americans who are not working, or barely scraping by, and not counted since the self employed are not included in the labor force.....

This Friday....unemployment data will be released for April.....the thinkers at the Institute of Alstrynomics forecast that the U6 unemployment rate will increase from 16.2% to well over 17%.....bringing us within 8% of the peak of The Great Depression.

Regardless what you think of Alstry.....if enough Americans are not working.....not much matters....

It is your choice.....you can discount Alstrynomics.....or you can choose to live in reality.

Right now the reality is about 16.2% of the American workforce is unemployed or underemployed per US Government statistics....this number has practically doubled in little over a year.....on Friday we will find out just how much it has grown in just a month....

If the number keeps growing with more and more losing their jobs.....America's economy will be decimated as 2/3 of our economy is consumer driven.....now the only question is how high does that number have to get before we reach the point the Institute of Alstrynomics calls ZOMBULATION???????????????????????????

Any input is appreciated....including my buddy Deej.....

11 Comments – Post Your Own

#1) On May 02, 2009 at 3:44 PM, OctoStalin (51.72) wrote:

 

The Institute of Alstrynomics?Your just a American guy at a computer, why the bizarre facade?.

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#2) On May 02, 2009 at 4:42 PM, alstry (35.90) wrote:

Please judge Alstry on the quality of his analysis and the accuracy of his projections....not the color of his blog.....wouldn't the world be a better place if we all viewed the world that way.

Now please address the question.....at what rate of unemployment do you think it would take to Zombulate America?

20%....30%......40%???????????????????????????

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#3) On May 02, 2009 at 5:54 PM, mliu01 (< 20) wrote:

Don't mind about OctoStalin. LOL

People might not count those who will graduate this summer. Will unemployment take a big jump? If the way they take the right numbers. It should. 95% of the student out of school and joining the labor force will find nothing is out there for them to take. Retiree won't retire as much as before. cause they found out they simply don't have the money they used to have due to the crash in the stock market. It will be worse and much worse.

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#4) On May 02, 2009 at 7:12 PM, jegr5347 (< 20) wrote:

You are not going to believe this. I was at a seminar Friday where the guest lunch speaker was Harvey Rosenblum from the Dallas fed. They are predicting a recovery in Q4 of 2009 and  housing will lead the economy out of recession.

They also showed how the Fed's balance sheet has ballooned from $800b to a projected $3trillion once all the TAL?? TAR??? TA???? programs are fully in place.

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#5) On May 02, 2009 at 7:23 PM, alstry (35.90) wrote:

The Dallas Fed has been predicting a bottom for the past couple years.  Last year, they were saying we were not in a recession and a recession was not likely as Alstry was forecasting a collapse of the entire banking system......

amazing that these people still have jobs.....

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#6) On May 03, 2009 at 1:30 AM, usmilitiadude (33.42) wrote:

I wonder if banks will be able to keep up with property tax on forclosed homes? The tax rate is about 2% where I live.

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#7) On May 03, 2009 at 1:53 AM, Seano67 (46.43) wrote:

There's no other way around it, the unemployment rates in America are very troubling right now and wouldn't seem to bode for any kind of significant economic recovery until those trends begin to reverse. And it's even more sobering to realize that Europe has been hit even worse than we have, in Spain for example the unemployment rate has exceeded 20%, which is just plain frightening.

Everyone says that spiking rates of unemployment are a trailing indicator which have historically occurred as recessions have entered their ending phases, so let's hope that's what's happening here, but when do the upward spikes end, and when will more people be heading back to work?  That really the only pertinent question here, and no one has an answer to that, because it's unknowable.

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#8) On May 03, 2009 at 2:49 AM, JB13030 (< 20) wrote:

i think we are fine, it's bad yes, unemployment is high however it's going to improve soon. Bigger question we shoud ask, are the current group of citizens in this country ready to lead? that's the question we need to answer....

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#9) On May 03, 2009 at 10:49 AM, amassafortune (30.11) wrote:

In addition to the new June graduates, there will be more public employees laid off by mid-summer. For-profit companies began their job reductions a year ago and were deep into the exercise by October, 2008. Public employees, cushioned by labor agreements and politicians who avoid being connected to any negative news event, got a temporary reprieve from layoffs. Compromise proposals to increase public employee health contributions closer to the level of the private sector to defer layoffs, have been rejected. Due to the failure to take early action, the cuts need to be deeper as tax revenues fall faster with every private sector job loss.

Here in Ohio, the political response has been to ask for more taxes. Proposals on the May ballot will be soundly rejected, in my opinion. After the May election day, a couple more months will be lost while another round (some stimulus money already went to save public safety jobs) of requests to the federal government are made. In the end, deeper public job cuts will need to be made because action last fall was not taken when the coming budget imbalance became obvious.  

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#10) On May 03, 2009 at 11:49 AM, jgseattle (38.60) wrote:

Big Al....

I will take a crack at a direct answer, sort of. 

I think it is a combination of employement and confidence that will lead to any major Alstrynomics style downturn.

So if we see another leg down in the market with steady to incrasing job losses we are in Alstrynomics land of possible downward spiraling to very bad Alstrynomics land.

At what point of unemploymen does this start?  I think it will be headline unemployement > 10%, where that equates to U6 I do not know, but I suspect it would be around 20%.

The other side of this is wage deflation, as we have discussed in the past, and a new metric hours worked.  I talked to a postal worker who was working 52 hours a week, god knows why managment let this happen, but is now working "only 34 hours."  He is still a full time employee and not looking but he is hurting big time.

All of these things affect the income side of individuals balance sheets when the debt side is fixed based on contracts signed for mortgages.  Thus disposable income is dropping in the private sector leading to less consumption.  (as you know I think the US needs to increase savings so that would make things worse short term)

To ramble some more if you look at public disposible income you also see a contraction coming due to higher interest expenses and the aging population.

 

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#11) On May 03, 2009 at 12:00 PM, IIcx (< 20) wrote:

Employment is the last to recover from a recession.

Financials clearly aren't going to lead us out so Real Estate isn't a bad domestic call. BDI is improving and inventories are at very low levels so pushing the start of the recovery from the 3rd to the 4th quarter of 2009 may be off.

Year over year home sale prices have dropped 25% in CT. Average home price is down from 280k to 220k. Good time to start looking ;)

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