It’s All About Unemployment

There can be no recovery until the free market is allowed to complete the correction we are now facing. And until the correction is complete, unemployment rates will continue to come in at record high numbers.

I’ve said before that it seemed foolish to start looking for anything like “recovery” until unemployment numbers dropped significantly. Finally, someone else is saying the same thing:

Defaults among prime borrowers are really starting to pick up. Why? Cause even solid borrowers can fall behind if they lose their jobs.

Credit card companies see much deeper charge offs than they’d foreseen just a few months ago. Again, unemployment.

While the talking heads insist that unemployment is a “lagging indicator”, it’s pretty clear that the financial system is highly levered to this numbers, so it’s hard to imagine a real turnaround unless the economy stops bleeding jobs.

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