Although unemployment figures in the U.S. have remained steady at 10.0 %, long-term unemployment has continued to increase. Long-term unemployment is defined as more than 27 weeks unemployment. 39.8% of unemployed Americans, or 6.1 million Americans have been unemployed for at least 27 weeks as of December 2009. This compares to 22.9% of unemployed Americans, or 3.5 million Americans suffering from long-term unemployment in 2008.
In November 2009, Federal Reserve officials predicted modest economic growth and predicted the jobless rate would drop to between 8.2% and 8.6% in 2011. Still, the Fed cautioned it would take 5 or 6 years for the jobless rate to drop down to pre-2007 levels. Others suggested even longer.
Not all economists agree with these predictions. Some are suggesting unemployment will climb to 10.5% before declining late in 2010.
Either way, 2010 will not be 'business as usual' no matter how much profit Wall Street rakes in. Prudent management of companies, regardless of scale or industry, will do well to keep an eye on expenses as we move into a cautiously optimistic, but uncertain, economic future.
Showing posts with label Wall Street. Show all posts
Showing posts with label Wall Street. Show all posts
Thursday, January 14, 2010
Monday, September 14, 2009
Ignoring the Lessons of the Past
On the anniversary of the collapse of Lehman Brothers, President Obama urged Wall Street to learn 'the lessons of Lehman' and not repeat the same mistakes.
There are many who are suggesting that Wall Street has not learned the lessons of Lehman, opting instead to fight any new regulations that might impede lending, borrowing, investing or any other business the banks are involved in.
What lessons should have been learned? What lessons have been learned?
Large banks CAN and Do fail.
Re-packaging junk and calling it AAA doesn't change reality.
Being highly leveraged in high-risk securities is dangerous.
Investing in complex derivatives that you don't understand is downright foolish.
However, what has probably been learned is this: if Big Banks get into trouble, the government will bail them out.
Without the bailouts, the crisis would have been massive. With the bailouts, the lesson is not learned.
Caught between a rock and a hard place.
There are many who are suggesting that Wall Street has not learned the lessons of Lehman, opting instead to fight any new regulations that might impede lending, borrowing, investing or any other business the banks are involved in.
What lessons should have been learned? What lessons have been learned?
Large banks CAN and Do fail.
Re-packaging junk and calling it AAA doesn't change reality.
Being highly leveraged in high-risk securities is dangerous.
Investing in complex derivatives that you don't understand is downright foolish.
However, what has probably been learned is this: if Big Banks get into trouble, the government will bail them out.
Without the bailouts, the crisis would have been massive. With the bailouts, the lesson is not learned.
Caught between a rock and a hard place.
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