Lining up at Midnight at Wal-Mart to buy Food is part of the new Recovery. Banks offering Mattress Interest Rates. The Invisible Recovery Outside of Wall Street.
There seems to be a growing divide in the current U.S. economy. On the one hand, you have the financial sector swimming in their bailout-induced profits like a modern day Scrooge Mcduck. In their circles, it appears as if the recession is over. On the other hand, you have average Americans seeing access to credit cards shut down, equity in their homes vanishing, and their stock portfolios looking a little too much like 1999. Then you have 35.8 million Americans, roughly 11 percent of our population, on food stamps. To this group the recession is still very much alive.
The Balance Sheet Recession: $4.2 Trillion Lost in Residential Real Estate Value. Yet Mortgage Debt Down by $140 Billion.
What we are experiencing is a balance sheet recession. The reality of our current economic funk is highlighted by the growing unemployment rate and the diminishing purchasing power of many Americans. What is going to make this economic crisis drag out like a painful Hollywood divorce is the inability to reconcile the past with our current reality. Take for example the nucleus of this recession, the housing bubble.
Employment Engineering: Firing those who Work with Their Hands. Finance, Insurance, and Real Estate Jobs Protected by Bailout Structure. Other Sectors Dealing with Depression Trends.
It is hard to imagine why Wall Street would cheer a 10.2 percent official unemployment rate since the stock market actually ended the day higher after this dismal news. Since the start of the recession, 8 million people have lost their jobs. A total of approximately 27 million people are unemployed, underemployed, or have given up looking for work. All the talk of improvement got people out looking for work again and that is why the unemployment rate saw a big jump from 9.8 percent to 10.2 percent even though employers “only” cut 190,000 in October. The data is deceptive for many reasons. For one, long-term unemployment is a sign that many jobs will be lost forever. The second more ominous point is that many sectors are experiencing mini-depressions.
If Incomes are Down, Where is the Economic Spending coming from? Industrial Production Still Lower, Credit Contraction, and Average Work Week at Record Low. Wells Fargo Considering Converting Option ARMs to Interest Only Loans.
With 8 million jobs lost in this great recession, it is rather surprising to see so many people enter into a deep capture mode of believing in a quick and efficient recovery. If we look at data in the misery index, the average American has a hard time swallowing the jagged economic recovery pill. They look at their paychecks and see no recovery. They look at rising healthcare costs and see no recovery. They send their kids to colleges where costs are going up 8,9, or even 10 percent per year. The data simply does not reflect this actual reality. Are things better than say in March? Depends on what we look at. Sure, the stock market is up a record 60 percent but does your life feel 60 percent better? Is your pay up by 60 percent? What about your bottom line? If we look at disposable income for the average American, it has actually fallen. If it follows that two-thirds of our economy is based on spending, then where is this money coming from?