How could it get worse? According to US Government reports issued today, new unemployment claims reached a 16 year high. Claims lasting more than one week are at a 25 year high. New home construction hasn't been this slow since 1959. That's no typo. 1959. The Dow is under 8000. GMAC won't lend you money without a 700 credit score. The Detroit Three CEOs flew into DC yesterday (in private jets, mind you) to beg Congress for $25 billion as bankruptcy rumors circle like vultures around GM and Chrysler. Loan delinquency rates are at an all-time high. OK, I think you get the picture. The only bright side is oil is at a 4 year low-it closed at $49.62. Some bright side. Our Fed funds rate is 1% and credit is flowing slower than cold creamed gravy. I'm afraid this is the big one, as Fred Sanford used to say.
Truthfully, I never worried much about recessions. Things slowed for a year or two and then got better. I'm afraid that won't happen this time. How do you recover from losing your home? What about the 45 year old autoworker whose industry has been so downsized he has no hope of ever working there again? How does his family recover? Go back to school, right? Right. Where will he get the tuition? He can't pay it back even if he could find a willing lender. Even if he does, where will he work? What industries are going to absorb the torrent of the newly jobless? Even McDonalds doesn't need that many people. Have we peaked as a country?
No comments:
Post a Comment