Posted on 05/13/2009 10:12:54 AM PDT by SalAOR
Early yesterday I wrote about the current crisis in the U.S. Fiscal system in the areas of unemployment and our national debt, and how they are leading indicators towards a major financial collapse. Today, there are several pieces of news that add credence to that theory. First, the April retail sales and foreclosure numbers were released today, showing far worse performance than expected and leading to market declines.
Second, Social Security and Medicare are now dangerously close to being insolvent.
(Excerpt) Read more at axisofright.com ...
Unemployment is not a leading indicator, it is a lagging indicator. In a recession, unemployment is among the later problems — and in a recovery, it is among the last corrections.
SnakeDoc
Economics / Recession 2008 - 2010
May 11, 2009 - 05:35 AM
By: Money_and_Markets
Martin Weiss writes: Any economist fixated on so-called “signs of a recovery” needs to have his head examined.
As I’ll prove to you in a moment, the hard-nosed reality is that five major economic cyclones are in progress at this very moment.
The storms are not abating. Nor are they changing direction. Quite the contrary, what you see today is, at best, merely a deceptive calm before the next, even larger tempests.
For investors who follow Wall Street, it could be fatal.
[snip]
This would be true in an ordinary recession, but this is the first recession/depression of the new economic model-consumer driven economy. Thus it is not a lagging indicator but a portent of doom. We have no underpinnings in our economy as we make almost nothing these days.
You should post this...what a great article and very true.
FReeper 'FromLori' posted it yesterday but it didn't get much 'movement.' I've been tacking it onto other similar articles.
>> Thus it is not a lagging indicator but a portent of doom.
People on this board are so eager to find a “portent of doom” that they’ll latch on to any hack prediction so long as it ends in armageddon.
As much as people decry the media around here, we sure seem to buy into fabricated media-hype pretty easily. This is not a depression — it is a recession. And, honetly, it isn’t that bad a recession. Talk to people who actually lived through the great depression ... this is nothing.
We’re already showing signs of recovery. The stock market has gained around 30% in six weeks. The housing market is showing signs of bottoming. Unemployment continues to rise — but, like I said, unemployment is a lagging indicator.
The administration isn’t doing any good ... but capitalism is resilient nonetheless. We will recover.
I grow weary of “chicken-little” conservatism.
SnakeDoc
Axis O’ Fright
Did you see what CAP AND TAX will do to your electric bills?
http://bluelori.blogspot.com/2009/05/inflation-deflation-choice-is-looking.html
I am aware.
SnakeDoc
Really, the market is down 170 points. Why? Consumer spending is not picking up and with consumers making up about 70% of our economy since we produce very little...how with millions unemployed is the economy going to recover? The market it seems is beginning to realize that without a main street recovery, there will be no recovery period. I do not see continued unemployment as a lagging indicator in a consumer driven economy but rather a continuation of the economic death spiral we find ourselves in-people lose jobs=homes, autos credit cards defaults=more people losing their jobs. It’s going to get much worse when the autos go. Chrysler bankruptcy will take two years they are saying now. No way Chrysler or the suppliers survive this. GM will be far worse...thus millions more jobs will be lost. Where will the jobs come from? Hoover stated firmly ‘that prosperity was just around the corner’. However, he was wrong.
Despite some negative numbers, forecasters say the recession will be over by year's end.
[snip]
The stock market may not have reached its bottom. After a sharp two-month rally, that may sound like a crazy thing to say. But history suggests as much.
By Martin Hutchinson, breakingviews.com
Last Updated: 12:33PM BST 12 May 2009
The 57pc fall in the Standard and Poor's 500 Index to its March low was jaw-dropping: larger than the 48pc decline of 1973-74, or the 49pc fall of 2000-02. This downward move was also faster: 17 months compared to 21 and 31 months in the previous two tumbles.
Still, there have been three worse bear markets in big economies. From 1929 to 1932, the US stock market dropped 89pc. UK shares fell 72pc in 32 months in 1972-75. Finally, Tokyo fell 48pc in only nine months in 1989-90, and 64pc over 30 months. It remains 76pc below its December 1989 high.
The drop during the Great Depression may be the most relevant to the current situation. It came after a similar long period of optimism, brought a similar degree of systemic financial distress, and was just about as rapid. There were also some big rallies on the way down.
[snip]
Yep, this is what I fear is happening now. They just revised unemployment upwards to 635,000...guess it has not ‘stabailized yet’ whatever that means.
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