The carnage continues

[Huggy85]

U.S. posts worst rate of job loss since 1945

http://ctv2.theglobeandmail.com/servlet/story/RTGAM.20090306.wusjobs0306/business/Business/businessBN/ctv-business

COLUMBUS, Ohio — Unemployment in the United States has reached a 26-year high and the recession is claiming jobs at a pace not seen since 1945, with no end in sight.

A total of 651,000 jobs were lost last month in the U.S. and the unemployment rate increased from 7.6 per cent to 8.1 per cent, the highest level since December, 1983, according to figures released Friday by the Labour Department. Canada's unemployment rate is 7.2 per cent.

The U.S. job numbers were worse than many analysts expected, and came at the end of a week of steep stock-market losses in Canada and the U.S. that took investors to multiyear lows.

“The U.S. economy is in freefall,” said Nigel Gault, an economist at IHS Global Insight. “This recession is becoming in some ways deeper than anything we've seen since the Great Depression.”

[GRUMPY]

I guess all that can be said is "Thanks George".

[Huggy85]

I guess all that can be said is "Thanks George".

C'mon, Grumpy. As slow will attest, you gotta know this is all Obama's fault. After all, the US recession didn't start until mid December, 2008 after Obama was elected.

[BlueSky]

C'mon, Grumpy. As slow will attest, you gotta know this is all Obama's fault. After all, the US recession didn't start until mid December, 2008 after Obama was elected.

Well, when did the sub-prime mortgage mess begin?

[Huggy85]

Bluesky, I hope you recognize my sarcasm.

As to your question, here's something...

"The peak period of the US real estate bubble which began in about 2002 when Alan Greenspan began the most aggressive series of rate cuts in Federal Reserve history was 2005-2006. Greenspan’s intent, as he admitted at the time, was to replace the Dot.com internet stock bubble with a real estate home investment and lending bubble. He argued that was the only way to keep the US economy from deep recession. In retrospect a recession in 2002 would have been far milder and less damaging than what we now face.

Of course, Greenspan has since safely retired, written his memoirs and handed the control (and blame) of the mess over to a young ex-Princeton professor, Ben Bernanke. As a Princeton graduate, I can say I would never trust monetary policy for the world’s most powerful central bank in the hands of a Princeton economics professor. Keep them in their ivy-covered towers.

Now the last phase of every speculative bubble is the one where the animal juices get the most excited. This has been the case with every major speculative bubble since the Holland Tulip speculation of the 1630’s to the South Sea Bubble of 1720 to the 1929 Wall Street crash. It was true as well with the US 2002-2007 Real Estate bubble. In the last two years of the boom in selling real estate loans, banks were convinced they could resell the mortgage loans to a Wall Street financial house who would bundle it with thousands of good better and worse quality mortgage loans and resell them as Collateralized Mortgage Obligation bonds. In the flush of greed, banks became increasingly reckless of the credit worthiness of the prospective home owners. In many cases they did not even bother to check if the person was employed. Who cares? It will be resold and securitized and the risk of mortgage default was historically low.

That was in 2005. The most Sub-prime mortgages written with Adjustable Rate Mortgage contracts were written between 2005-2006, the last and most furious phase of the US bubble. Now a whole new wave of mortgage defaults is about to explode onto the scene beginning January 2008. Between December 2007 and July 1, 2008 more than $690 Billion in mortgages will face an interest rate jump according to the contract terms of the ARMs written two years before. That means market interest rates for those mortgages will explode monthly payments just as recession drives incomes down. Hundreds of thousands of homeowners will be forced to do the last resort of any homeowner: stop monthly mortgage payments."

http://www.globalresearch.ca/index.php?context=va&aid=7413

[stupefied]

He argued that was the only way to keep the US economy from deep recession. In retrospect a recession in 2002 would have been far milder and less damaging than what we now face.
Which is the argument now used for irresponsible spending on a scale hardly imaginable. Obama didn't get them into this mess but he's going to do his best to make it worse. History judge him harshly based on what he's done so far.

[GRUMPY]

This is something that I honestly can't understand at all,years ago when Ontario was going through the identical thing the NDP who were in power at the time tried the same thing and failed. For years the Liberals and the Conservatives (when they actually were the Conservatives and not these present jokers) would always throw up that fact to the NDP every chance they could, it was even thrown up at Bob Ray just a short time ago when he ran for the head of the Liberal party why will it work now if it didn't then. Plus if it was such a stupid thing to do then why is it such a smart thing to do now?