U6 is the true measure of unemployment here in the USA.
It should look like the below.
Using the U6 numbers, we really have 17.3 % unemployment...not some 10% the Fed's love to call out. If reporters were using the right metric (U6) there would be kaos in the streets of Washington D.C. from the millions of Americans (and frustrated Chinese), who would demand the Feds make something positive happen in employment.
Well the Fed's did...they spent 8,000,000,000,000 dollars of your money and mine and our sons and daughters money and maybe even their children's future tax payments too. The shocking thing confirming the stimulus is not working is that the U6 number is returning to pre-holiday levels...
Here is a national average. It takes just under a year for people to lose their homes after the credit and cash savings are gone. In the Great Depression we had a "Farm Holiday", an effort by Government to force banks to leave families in their homes so they could maintain the asset, live there free and pay notes again when they could. The OBAMA administration is doing everything it can to force banks to keep people in their homes no matter what is owed and essentially off the street.
For the fortunate few, pressure on banks by Obama's Banking Regulators to leave people in their homes (under a no mortgage pay system), are the only thing standing between these families living as they are now and under the bridge (or in refugee camps). Program after program are being tried to assist people find a way to stay in their home. This is good and this is bad. Good, in that families will continue to have a roof over their head. Bad, in that the piper must be paid....LATER than sooner...furthering the time it will take to deflate the economic bubble.
Asset recovery (meaning banks taking control of a home for wealth transfer back to the bank...and value migration meaning selling it off to other investors, families, etc. is how banks move the asset from the liability side of the balance sheet to the asset side. Normally, the same bank that owns the mortgage note is not the same as the mortgage servicing bank. So now 2 are involved.
If unemployment is 17.3 percent...at 308 Million people in the USA, that's 26,470,000 people out of work or greatly underemployed. At roughly 40% for ratio of average renters to home owners...that is a whopping 15,882,000 homes that are now at risk of default in less than a year. With an average mortgage of $115K that's $18,264,300,000,000 in play. 18 Trillion Dollars.
Let's do some projections and assumptions...The deflation bubble on real estate is far from over...we lost some 1.4 Trillion to sub prime toxic mortgages. That's only roughly 7% of the "yet to come" mortgage defaults should unemployment continue at this or even higher levels.
We still have a long way to go.
And what about all those derivatives tied to defaulting mortgages that are not sub-prime? I recall only some 45 trillion was in play in sub-prime as derivatives. Yes, the same derivatives that took down Lehman Brothers and a lot of other banks and securities firms. So roughly derivatives exposure is roughly 32 times the default value of the security asset. At 18.2 Trillion, that equals now a whopping $582.4 Trillion left to deflate in investment securities.
And the current administration is focused on stealing 1/6th of the economy in health care....absurb.
Depression anyone....???
When you start seeing you neighbors ask you if they can move in...ask yourself if you trust the Fed's spending another dime of your money on wasteful programs.
They better marshal the remaining credit lines to pay for all the food, shelter, warmth and health care that is going to be needed for the 26 million people who will be living on the street. The Fed's could not even manage Katrina with some 200 thousand....displaced people....now they are going to manage 26 million>>>>
It's time to make plans to march on Washington....
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