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[mad_doctor]

That flushing sound you hear?  It's the economy swirling down the drain, circling a few last times before finally hitting the bottom.

The true unemployment rate, BTW, is probably somewhere between 18% - 20%.  The 10.2% is based on unemployment claims, and doesn't include: 1) people who never filed a claim b/c the unemployment system is unfavorable to their profession, 2) people who have been filing claims, but whose eligibility has run out, 3) partially-employed and underemployed people, 4) and people who have stopped looking.  To get a more honest figure, we should probably also discount government employees from the workforce since their jobs really aren't part of the open labor market, that is, they don't come into play when we want to figure the "true" unemployment numbers, and they can't be fired or laid off.  If we discount government employees from the workforce we're probably between 19% - 22%.

[clean]

At least when you hit bottom, you are on firm ground and have a good place to kick up from.

[new_bus_prof]

For the US, since December 2007
15.7 million umemployed
9.3 million underemployed (taking part-time work though wanting full-time)

And economists say we have NOT hit bottom yet.

[prytania3]

For the US, since December 2007
15.7 million umemployed
9.3 million underemployed (taking part-time work though wanting full-time)

And economists say we have NOT hit bottom yet.

As I said on another thread, the stock oracle Robert Prechter did a study on zombies and recessions. The popularity of zombies always peaks before the bottom. Well, new zombie movies and zombie games have just come out...

[new_bus_prof]

Ah, the allure of the differentially alive...

[peppergal]

Not to mention the popularity of Pride and Prejudice and Zombies.  When that becomes a movie, we'll know the end of the recession is in sight.

[galactic_hedgehog]

Not to mention the popularity of Pride and Prejudice and Zombies.  When that becomes a movie, we'll know the end of the recession is in sight.

http://entertainment.timesonline.co.uk/tol/arts_and_entertainment/film/article5683554.ece:

Hollywood studios are bidding to turn a radical reworking of Austen’s most popular book, now called Pride and Prejudice and Zombies, a parody to be published in April, into a blockbuster movie.

According to IMDB, it's in development.

[normative_]

It will get worse before it gets better. If the current uptick in the economy is sustained, we'll see a gap for a while before employers employ again.

[mad_doctor]

I don't think the current uptick is anything more than false expectations.  The PE ratio of the S&P 500 is somewhere between 130 and 150, which is way too high.  Most people think a PE of 20 is a good buy, a 40 or 50 is a good buy if the company has solid long-term growth projections, a 130 is a sign of seriously flawed over-valuation.  Think about this - for the S&P to have a 50 PE ratio today would require the S&P 500 to be valued at about 400, and the Dow around 4,000 - 4,500.

[mad_doctor]

I see now that the President is acalling a jobs summit to talk about unemployment.  I'm thinking this may be a prelude to selling a new "jobs" stimulus package?  He'll beat up on the businessmen for a few days, declare he's the only one standing between them and the mob with the pitchforks, and tell us all the only way out is another huge spending bill.

[prytania3]

I love Bill Clinton, but the repeal of Glass Steagal pains me terribly. I don't like too big to fail. I think every institution in America should have the opportunity to fail if it so screws up. I like free markets although I do believe in prudent regulation, and it would have been nice to see all these zombie banks and companies bite the dust.

But then, if Clinton hadn't repealed it, I suppose Bush would have.

[mad_doctor]

I'm missing something here, prytania...  Didn't Glass Steagall regulate banking?  How are the repeal of the act and "too big to fail" connected here?  In fact, now that the act is repealed, it seems that there is no legal basis for "too big to fail" (speaking as a non-lawyer here). Or, are you referring to Glass-Steagall's restrictions on banks operating in both securities and banking at the same time?

[prytania3]

I'm missing something here, prytania...  Didn't Glass Steagall regulate banking?  How are the repeal of the act and "too big to fail" connected here?  In fact, now that the act is repealed, it seems that there is no legal basis for "too big to fail" (speaking as a non-lawyer here). Or, are you referring to Glass-Steagall's restrictions on banks operating in both securities and banking at the same time?

They are connected because Glass Steagall separated commercial banks from investment banks, so banks like C and BAC wouldn't have been in such trouble, The investment banks who were in trouble could have gone down the Bear Sterns path.

[mad_doctor]

Got it, thanks prytania.

[jonesey]

From today's Huffington Post:

"Three things," the senator [Dorgan] told me in an interview. "One is to separate investment banks and FDIC-insured banks. Second, prohibit FDIC-insured banks from dealing in risky financial instruments on their own proprietary accounts... And third, abolish 'too big to fail.' If you're too big to fail, you're too big. Too big to fail is what I call no-fault capitalism."