As I’ve been saying – from the Washington Post:
Unemployment is set to remain higher for longer than previously thought, according to new projections from the Federal Reserve that would mean more than 10 million Americans remain jobless through the 2012 elections – even as a separate report shows corporate profits reaching their highest levels ever…
Don’t put too much faith in those corporate profits – the banks have a whole bunch of make-believe profits based upon everyone ignoring the fact that they are insolvent coupled with an absurd rise in stocks over the past year. Real profits are not as good as advertised, and mostly bought by keeping employment costs low (ie, letting people go and/or not hiring).
Meanwhile, another surge of foreclosures will hit in 2011 as the 2006 ARMs come due and unemployment remains high. China and the European Union are increasingly gripped by financial problems and the world teeters on the edge of another financial collapse. The Fed is projecting 3% or so growth in 2011 – but that happens only if nothing goes wrong. Things will go wrong. Period.
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