All Posts Tagged With: "unemployment"

Why not? Wait a minute…you already know the answer to that question. Because it’s a depression. It’s the end of the road for the consumer credit economy. Consumers did their best.

We began the week wondering about the cycles of history and markets. We wondered whether Australia is following the Anglo-American cycle into a long-winter…where people lose confidence in each other, in government, and in the institutions they relied on in the past for law and order, employment, and prosperity.

This is the story we’ve been telling here at The Daily Reckoning for two years. Americans have to cut back. They are out of time and out of money.

What we saw was an over-stretched empire getting ready to snap. But we were also allowing ourselves to be lazy. Rather than deconstruct the capital structure of the world’s largest economy, we decided to sell the whole damned thing.

Millions of people, for example, earned their money in ‘housing.’ They were putting up houses in the sand states…or building granite countertops…or selling, flipping, financing the houses.

For example, corporate earnings are missing. P/E ratios are rising far above the corporate earnings that support them. This puts the market 35% overvalued, on a cyclically adjusted P/E basis, says Smithers & Co.

The problem is that the global economy in general, and the US economy in particular, is operating on so much medication that it is difficult to conduct an appropriate examination of the patient at the current time.