This piece was reprinted by OpEd News with permission or license. It may not be reproduced in any form without permission or license from the source.
Business bankruptcies will increase, and so will the numbers of unemployed and those losing their homes. And if interest rates rise, the junk and Treasury bond markets will crater.
As for consumers, consumption will continue weak. Disposable income will decline, so recovery in 2010 isn't likely. In addition, without more stimulus (he believes won't come), unemployment will rise to 27 million from the current 24 million level, U-6 unemployment will reach 19% by year end, (the true number will be close to 25%), and hiring that does occur will be mostly low-wage temporary and part time.
Home foreclosures will also exceed seven million, "on their way to a possible 10 million." After stabilizing, home prices will again fall, and by year end "Between 33 percent to 50 percent of homes will be under water," a grave situation with many owners walking away from them and glutting the market more with unsold properties.
Rasmus also sees no interest rate hike until after the November mid-term elections, no meaningful financial reform, a lower dollar, more defaults like Dubai-World, perhaps in troubled economies in Latvia, Ukraine, Greece and Italy, and US states in greater trouble than today because of falling revenues, rising deficits, little in the way of relief, and forced budget cuts and layoffs exacerbating a dire situation. In other words, Rasmus, like Rosenberg, sees hard times ahead, in contrast to the consensus rosy outlook.
He discusses his views monthly on The Lendman News Hour, easily accessed through the archives link at the end of this article or listened to live.
Reality Check in California, Michigan and Other States - Except One
In December 2009, the National Governors Association (NGA) and National Association of State Budget Officers (NASBO) issued their latest biannual Fiscal Survey of States, assessing their economies and presenting their outlook for the year ahead, a very glum one in their opening statement saying:
"States are currently facing one of the worst, if not the worst, fiscal periods since the Great Depression. Fiscal conditions significantly deteriorated for states during fiscal 2009, with the trend expected to continue through fiscal 2010 and even into 2011 and 2012."
Next Page 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13 | 14
(Note: You can view every article as one long page if you sign up as an Advocate Member, or higher).
2
