Real Unemployment 18% - Will Stocks Falter?

eftguide.com ^ | Friday February 5, 2010, 12:54 pm | Simon Maierhofer

[b4its2late]

How do fish get caught? They open their mouth. How do investors get ensnared or misled? They believe in non-existent phenomenons like a “jobless recovery.”

Surprising as it is, for nearly a year, investors have shrugged off mounting jobless claims and rising unemployment as an ingredient that is not really required for an economic recovery.

Yesterday’s (2-4-10) announcement by the Department of Labor that claims for unemployment benefits rose by 8,000 to 480,000 sent stocks spiraling.

Does that mean that the trend of the “new bull market” in stocks has changed? Or are we in for further declines?

The real numbers

Today’s headline numbers report was that the unemployment numbers, "surprisingly fell to a five-month low of 9.7%," according to today’s government report.

In reality, unemployment spiked to an all-time high of 18%. Yes, 18%! This is the official number reported by the Bureau of Labor Statistics (BLS).

The BLS publishes different sets of data on a regular basis. The main focus tends to be on the U-3 unemployment rate (currently 9.7%, seasonally adjusted).

[b4its2late]

Good article

[JasonC]

Doom mongers grasping at straws. When the economy is growing steadily at 3% real rates and unemployment has been falling steadily for a year, what will they say? They will run off to JFK level nuttiness, that's what. Although it is entirely normal and happens 9 years out of 10, they will pretend it cannot possibly be happening, or ever happen again. They have painted themselves into such a corner, they will shriek themselves hysterical, but never admit they are wrong.

[screaminsunshine]

Jobless Recovery is a good one. I also like the “Unemployment is a lagging indicator” schtick.

[Red Badger]

They are "faltering" now...........

[jpsb]

Dow down 130.00 to 9872

[qwertypie]

The recovery is a weak one. The consumer is very fragile psychologically.

About the only thing giving them some marginal confidence has been the stock market rally. If it sinks to where it makes the nervous nellies hesitate, it could send the economy into negative GDP territory again. A day like today, with the Dow likely to finish under 10,000 can function as a turning point.

[Oberon]

Doom mongers grasping at straws.

Maybe. Things don't look any better in my hometown.

[jpsb]

dropping like a rock, down 144 to 9857.

[qwertypie]

Btw, I was never was one of those who were claiming that Armageddon was in the process in early 2009. Just the opposite, I was recommending that people should not liquidate assests that had overcorrected.

But now, things are getting a little dicey. The expected comeback has been a weenie one after over a year of zero interest rates. And the prospect of a cascading effect from Euro-socialist credit failures is real. The monetary magic bullets have been already shot, and what’s going on is not comforting.

[MileHi]

Could you pass me the green bubble-up and some rainbow stew?

[Liberty1970]

Looks like the stock market is disagreeing with you. And it does seem to me that the 18% number is the more valid and meaningful number than the 9.7% figure.

[jpsb]

Yeah, and now due to falling tax revenues local, city and state governments are starting to layoff workers too. I think the Great Recession is just getting started.

[Lurker]

Dow down 143 to 9858. 8000 here we come.

[JasonC]

GDP has recovered 2/3rds of the ground lost in the recession, and consumption is already back to pre crash levels. US households have seen a $5 trillion increase in their asset values, covering about a third of the asset side hit. The banks are all sound, corporate rates back to normal, the bond markets open and functioning, profits up strongly. The Fed has been repaid $1.1 trillion in emergency measures because the financial system can now survive without such direct life support. What's "weenie" about it? These things simply move at their own pace.

Yes Europe has problems. But in small peripheral economies, that they can easily deal with if they are remotely serious about anything. The biggest single problem is Spain's property market, but the unrealized losses there are on the order of $200 billion tops. The crisis was a $15 trillion hit. This is an aftershock. Yes dealing with it matters, but it is 1/100th the scale of the original.

Meanwhile the serious political-economic threats domestically - giant health care boondoggles and cap and trade - are pretty much dead as a doornail.

We do need to avoid the Dems trying to "deal with the deficit" with some giant new VAT, but if they proposed that now post Massachusetts they'd be committed - before being crucified.

To me the only serious threat on the board is Iran, not any of the merely economic or domestic stuff.

[NeoCaveman]

There are no bears here.

[JasonC]

Wanna bet?

I got a freeper here to bet me that the SP500 would be below 800 at the end of 2009, back in September. Only off by 35% or so. I'll bet you that the Dow remains above 8000 all through calendar 2010.

[mulligan]

It is actually higher than 18%. Closer to 25%.

[Lurker]

The banks are all sound,

Really? Here's a list of banks shuttered by the FDIC in the last 35 days:

American Marine Bank, Bainbridge Island, WA with approximately $373.2 million in assets and approximately $308.5 million in deposits was closed. Columbia State Bank, Tacoma, WA has agreed to assume all deposits, excluding certain brokered deposits. (PR-027-2010)

First Regional Bank, Los Angeles, CA with approximately $2.18 billion in assets and approximately $1.87 billion in deposits was closed. First-Citizens Bank & Trust Company, Raleigh, NC has agreed to assume all deposits, excluding certain brokered deposits. (PR-026-2010)

Community Bank and Trust, Cornelia, GA with approximately $1.2 billion in assets and approximately $1.1 billion in deposits was closed. SCBT National Association, Orangeburg, SC has agreed to assume all deposits, excluding certain brokered deposits. (PR-025-2010)

Marshall Bank, N.A., Hallock, MN with approximately $59.9 million in assets and approximately $54.7 million in deposits was closed. United Valley Bank, Cavalier, ND has agreed to assume all deposits. (PR-024-2010)

Florida Community Bank, Immokalee, FL with approximately $875.5 million in assets and approximately $795.5 million in deposits was closed. Premier American Bank, N.A., Miami, FL has agreed to assume all deposits, excluding certain brokered deposits. (PR-023-2010)

First National Bank of Georgia, Carrollton, GA with approximately $832.6 million in assets and approximately $757.9 million in deposits was closed. Community and Southern Bank, Carrollton, GA has agreed to assume all deposits, excluding certain brokered deposits. (PR-022-2010)

Columbia River Bank, The Dalles, OR with approximately $1.1 billion in assets and approximately $1.0 billion in deposits was closed. Columbia State Bank, Tacoma, WA has agreed to assume all deposits. (PR-018-2010)

Evergreen Bank, Seattle, WA with approximately $488.5 million in assets and approximately $439.4 million in deposits was closed. Umpqua Bank, Roseburg, OR has agreed to assume all deposits, excluding certain brokered deposits. (PR-017-2010)

Charter Bank, Santa Fe, NM with approximately $1.2 billion in assets and approximately $851.5 million in deposits was closed. Charter Bank, Albuquerque, NM has agreed to assume all deposits, excluding certain brokered deposits. (PR-016-2010)

Bank of Leeton, Leeton, MO with approximately $20.1 million in assets and approximately $20.4 million in deposits was closed. Sunflower Bank, N.A., Salina, KS has agreed to assume all deposits. (PR-015-2010)

Premier American Bank, Miami, FL with approximately $350.9 million in assets and approximately $326.3 million in deposits was closed. Premier American Bank, N.A., Miami, FL has agreed to assume all deposits, excluding certain brokered deposits. (PR-014-2010)

Barnes Banking Company, Kaysville, UT, with approximately $827.8 million in assets and $786.5 million in deposits was closed. The FDIC has created the Deposit Insurance National Bank of Kaysville, UT ("DINB of Kaysville") to facilitate the resolution of Barnes Banking Company, Kaysville, UT. (PR-010-2010)

St. Stephen State Bank, St. Stephen, MN with approximately $24.7 million in assets and approximately $23.4 million in deposits was closed. First State Bank of St. Joseph, St. Joseph, MN has agreed to assume all deposits. (PR-009-2010)

Town Community Bank and Trust, Antioch, IL with approximately $69.6 million in assets and approximately $67.4 million in deposits was closed. First American Bank, Elk Grove Village, IL has agreed to assume all deposits, excluding certain brokered deposits. (PR-008-2010)

Horizon Bank, Bellingham, WA with approximately $1.3 billion in assets and approximately $1.1 billion in deposits was closed. Washington Federal Savings and Loan Association, Seattle, WA has agreed to assume all deposits, excluding certain brokered deposits. (PR-004-2010)

Are you saying there will be NO further bank failures this month, this quarter, and this year?

Yes Europe has problems. But in small peripheral economies,

You must consider Britain, Spain, and Italy 'small, peripheral' economies.

that they can easily deal with if they are remotely serious about anything.

Guess what. They're not serious.

To me the only serious threat on the board is Iran,

And North Korea, and Al Queda in Yemen, and the Syrian/Hezbolla threat to Israel. Other than those there are no serious threats.

L

[Toddsterpatriot]

It is actually higher than 18%. Closer to 25%.

130 million employed, out of 300 million in the US.

Looks like unemployment is over 56%.

[b4its2late]

Here's the complete list, updated every Monday.

FDIC List