David Rosenberg: Unemployment Will Hit 12-13%

Credit Writedowns:

David Rosenberg thinks the unemployment rate is headed much higher than anyone anticipates. If you recall, back in January when the stimulus package was crafted, the Obama Administration felt that passing the bill would mean an unemployment rate which would top out at 8.0%. As the situation deteriorated, the President recognized that 10.0% was more likely -- a number we just got last week. But Rosenberg is the only one (except Meredith Whitney) who is talking about 12-13%.

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Comments

[paddio]

As they say the Lord helps those that helps themselves. We have, happily, (only our bought and paid for politicians don't realize it), a hole in in our economy. That is an efficient High Speed Rail system connected to commuter rail. Do a Wikipedia search to realize how sad we are in HSR. Many suggest tax cuts or building more roads ,bridges or schools. Tax cuts are great if you are making money , most smal business are not making money. Roads etc., when they are done , they are done producing litle or no new jobs or revenue, and only benefit the brick and mortar industries. HSR would help aggregate cos. rebuilding track beds, steel companies making steel for rail, manufacturers making locomotives & passenger cars, high-tech to make the control rooms >and< brick and mortar cos.(building overpasses, stations and access roads.. Hell, all of it. The most ambitious rail project ever undertaken in the world. Foreign investors would buy bonds. > You cannot outsource a railroad< Wake up...PUT PEOPLE TO WORK! ...and at the end of the day you will have a revenue producing, GREEN, not foreign oil based means of fostering commerce and tourism...JOBS,JOBS JOBS.

[KCFreedom]

Double that number.

There's soooo many people left out of the numbers.

[sarabono]

Well, when the Obama Administration's Government has done absolutely nothing over the last year to stimulate to encourage private sector employment (with the exception of more Federal paper pushing jobs), one could expect this possible end result.

Yep, increasingly tax and regulate those that provide jobs. That will show them who is boss!

[KCFreedom]

Seems like they just follow what the Republicans were doing, and would do.

[KCFreedom]

Oh, at least the Dems provided unemployment insurance extensions.

The GOP would have never done that, and love to try to block it every time.

[NoMoreBail2]

We, the American people, dug ourselves into this hold for which there is no escape.a

hat tip to: http://financeopinionss.blogspot.com

[texastrixie]

Big woo! I have been writing that we were going to hit 12% for over six months, and I'm no economist! At this point I hope all three of us are wrong, wrong, wrong. But every day I see little announcements that Amazon is laying off 500 people, the next day 600 laid off from some other company, and the state and city lay-offs are largely still to come because cities exist on last year's money. They're living off 2008 taxes now, so the low tax year of 2009 won't start hitting until late this year.

I totaled up, and we spent less than 10% (probably more like 7%) this year on stuff we didn't have to have - like clothes, recreation, movies, eating out, etc. I don't count cable in that. We don't have almost any reason to worry, but I have just turned on the American corporation. Nothing is made in this country anymore, so buying a shirt, shoes, or a car usually benefits the lone salesperson, and some foreign corporation or American corporation in name only. (We buy only Fords). I can afford $50 sandals, but no one in this country earned even the minimum wage making those sandals. Some poor kid in Sri Lanka made them for 25 cents an hour. So I refuse to buy them for more than $10 a pair. American business has abandoned the American worker except for when they want to sell something.

[MilwaukeeDan]

The reason I never get excited about any new incomming administration is because our government is all about keeping the status quo going for as long as they got theirs. It's a lot like GM, the competition passed them by long ago, but they just keep plugging along with the same old sh*t, hoping it sells. Geitner and Summers should be in jail, not giding the president's economic policy. And it's the same trickle down economics Reagan's crew employed, let's rescue the financial system and hope it keeps getting the comsumers into greater debt. Sooner or later the bill will come due, they are just hoping it doesn't happen on their watch. It will always come down to real jobs with real pay for America to prosper, anything else is just a band aid. As for stories where these numbers get thrown about, they are meaningless. Every government manipulates the statistics.

[texastrixie]

Oh yes, its so much better to be sending our money to some foreign company like Toyota.

[MilwaukeeDan]

You missed my point, completely.

[drkazmd65]

well,.. technically,.. if you counted the part-timers who want to be full time, those that have stopped looking or are over benefits limits, and others who are disaffected,... we are already quite a bit over 12-13%.

Just sayin',.. it isn't that big a stretch to say were are at that level now.

[masher]

I'm surprised we don't see the old "Give Obama more time" folks. Where are the "Obama can't do everything" people? Did they finally realize that he is doing super things but only for Wall Street?

[olephart]

Many are starting to realize that they been punked.

[texastrixie]

We are all waiting for you all (the Republicans, or worse, teabaggers) to take control again and watch the number of homeless people living on the streets EXPLODE. Obama may not be getting it all right, but at least he isn't completely tied to the rich like the Republicans are. The Republicans may yet regain control of the country. When they do, we are going to be faced with a huge underclass of people (probably close to 25% when you count people working part-time, living off of family, etc.) many of whom will have no money to live on.

You keep pushing that Obama has failed, everything he did was wrong. What are you going to be saying after you take over, when we have marches on Washington of millions of hungry, homeless, destitute Americans? The Republican response is always give money to the rich, and the poor can just starve. That works if you have only a few poor. A fourth of the population, unable to feed or house their kids, will make the teabagger uprising look like nothing.

[jerrypl]

The sky is falling with real shoes!!! President Obama has been surrounded by individuals who were culpable in the economic collapse because their world view of economics was not about the real economy but more about saving the financial economic crime syndicate bosses.

They believed in allowing the bankstas to create wealth out of thin air, without regulation, and ship jobs overseas forcing working Americans to borrow in order to keep afloat, as well as stimulating their fantasies that spending was good for them, and debt was healthy.

http://eye-on-washington.blogspot.com

[tompoe]

Too late! We're already sitting at 20%. The question is, will we break the Great Depression record?

[uneeda]

exactly

[FreeSpeech4All]

In real numbers, we already have. They don't count the millions who have stopped looking, the 150,000 new workers entering the job market each month, or the millions of workers who have been forced to take reduced hours and/or pay cuts. They also don't count the self-employed like myself, who have seen our income drop precipitously in this "downturn."

The private sector has seen zero jobs growth in the past decade. Most of those jobs lost are not coming back, and our government doesn't have the stomach to get real with the American people. All I have to do is look around to see that we're already in a Depression.

[DemocratCongress]

Can congress & Obama stop the backpedaling on wall street compensation?

good articles; http://financeopinionss.blogspot.com

where is the reform?

[Donnat]

I want to believe Obama came into office with the idea of not handing money over to these grifters but he didn't realize how completely both parties in Congress are owned by them. I think he's backing off so he can get healthcare reform passed, but in doing so he's made a deal with the devils and along with it, threw women under the bus. He'll have he11 to pay in 2012 if he doesn't turn this around.

[stargazer13]

Merrill was it not you !!! who speculated oil prices to 140 a barrel !!! and caused our country too go bankrupt

yes I watched the senate hearing 15 + years ago when the five sisters came before you and begged you to listen to them and every thing they said has come to pass !!

you shut in our stripper wells that provided 20 % of our oil here in the U.S. and sold the equipment to Russia

and china !! you did not !!! make oil and gas a part of National Security

you have and are continuing to lose your skilled labor when it come to extracting oil and gas !!

yes I remember the five sister ,s in the senate hearing and I remember you elected took no !! heed !!

[ResearchtheFacts]

Don't forget people are tied to these numbers. And, then there is the domino affect were as you try to hold on to everything you have ever worked for and some people don't manage to do so. This creates another sub-set of problems. The worst it gets...the worst it gets. Everyone knows it is not easy to rebound from extreme hardship. These projections are frightening.

[olephart]

The Obama Administration has greatly underestimated the damage done to this Nation by 28 years of Reaganomics. The top down tax policies, off shoring of jobs and destruction of regulations designed to prevent financial malfeasance has set this country back 100 years. Not since the age of the robber barons has corporate greed created such a disparity in wealth. Worse, it has done practically nothing to correct these problems. Tax policies are still convoluted, trade policies and jobs policies are unchanged and no progress in re-regulation has been forthcoming.

The stimulus was woefully inadequate and unfocused. In case anyone hasn't noticed this is not your ordinary recession. Meager tax cuts, unemployment compensation extensions, State aid and random spending simply will not produce anything of substance. All are designed as temporary measures not as a meaningful economic lift. The deficits that liberal economists are unconcerned with are not yielding improved conditions. We are thus being short changed because Obama has not changed the Bush policies of War, defense boondoggles, ruinous tax cuts for the undeserving and corrupt crony contracting. Thus monies that could produce meaningful results are being squandered on past failures.

The primary thrust of Obama's efforts has been directed toward Wall Street. This has involved showering the banksters with taxpayer monies. These actions are diametrically opposite of what is essential in creating a lasting economic framework. Fiduciary malfeasance has been rewarded not chastened. The effects of these policies are evident as expansion of credit remains elusive.

[BobsNotWorking]

No recovery in the residential housing industry = No recovery.

[ImmanuelGoldstein]

Well forget about that. We have 18 million vacant housing units in this country.
Anyway growth based on building more houses is illusory. Houses don't create new wealth once they are built. They are a wealth sink not a wealth source.

[BobsNotWorking]

All may be true, but from cutting the trees to handing over the keys, it employs more people than any other industry. In the fifties, most everybody understood that much of the prosperity was due to widespread employment in the housing industry. The wealth created was not based on the houses themselves, but on the business of building and selling them. You're absolutely right that we have glut of empty dwellings that will take a long time to work through. Last I read we were on pace to build something like 500k units this year yet our natural population growth is around 300k per month. Something's got to give. Couple this with the estimates that as many as 50- to 60-percent of mortgages are, or will be, under water by 2010 and it all adds up to a huge problem. A mortgage loan cannot be worth more than the underlying asset. With so much money locked in upside down mortgages - who will be lending to finance new ones? I say again, without the employment of residential construction, there will be no recovery.