It's Now An Obama Depression / Real Unemployment Accelerating

I went shopping yesterday with Keiko. We were looking for a fun dress for my granddaughter Sofia ~ who will be celebrating her ninth birthday this weekend. We visited the Corte Madera Shopping Center which features an abundance of high end shops including Macy's, Nordstroms, Gap, Banana Republic Pottery Barn and many other well known names.

The mall was almost deserted and the major stores relatively empty with few sales persons ~ Nordstroms had the feel of a factory outlet. We finally found what we wanted in a small boutique shop which featured quality unique items at a reasonable price with excellent service.

The mall had the feeling of a ghostly town whose best days were definitely long sense past and worst days lay directly ahead ~ a perfect metaphor for Main Street America which has been left behind in Obama's top down bailout of Wall Street and corporate America. 

It's an across the board decline in consumer spending ~ Costco Wholesale Corp (COST.O) on Thursday reported a 6 percent fall in June same-store sales, hit by a slide in demand for non-food and discretionary items. This is further retail evidence that the Bush Recession is becoming the Obama Depression.

Martin Weiss, (  ) summarized yesterday the reasons why we are now in that depression.

" UNEMPLOYMENT IS SURGING AGAIN: In June, the unemployment rate jumped to 9.5 percent, the highest since 1983. For the first time since the Great Depression, a staggering 100 percent of all the jobs created since the previous downturn have been wiped out.

CONSUMER CONFIDENCE IS PLUNGING AGAIN: We just learned that consumer confidence unexpectedly plunged by nearly 10 percent last month. The consumers whose spending accounts for 70 percent of the entire U.S. economy are snapping their wallets shut ~ saving every penny they can for the tougher times they see ahead.

LOAN LOSSES ARE EXPLODING: The American Bankers Association is reporting that loan delinquencies are exploding. In the first three months of 2009, delinquencies on both home equity loans and credit cards exploded to new, all-time record highs ~ and delinquencies on auto loans surged a mind-numbing 48 percent from the end of 2008.

Plus, according to Moody's, this flood of toxic debt is continuing RIGHT NOW: Charge-offs on bad credit card debt posted their sixth record high in a row ~ and these losses will surge to more than 12 percent by mid-2010! "

But the key indicator for the Obama Depression is rapidly accelerating unemployment.

As Claus Vogt, Money and Markets, points out yesterday ~ "Unemployment, not the Stock Market, Distinguishes a Recession From a Depression: The official U.S. unemployment rate rose from the cycle low of 3.4 percent in 2007 to 9.5 percent as of June 2009. But the Bureau of Labor Statistics computes a second unemployment rate. This broader measure includes all forms of job market slack and is a whopping 16.5 percent. Yes, one in six Americans is unemployed or underemployed right now. That's a horrible number! And it will not go away soon."

But what if I told you that the True unemployment rate is already at 20% ! 

Not to scare you with this truth, which of course I probably am, but the situation is actually much worse than it seems according to the highly respected John Williams of Shadow Government Statistics  .

SGS is an electronic newsletter service that exposes and analyzes flaws in current U.S. government economic data and reporting, as well as in certain private-sector numbers, and provides an assessment of underlying economic and financial conditions, net of financial-market and political hype.

 1  |  2