Trillions have been asserted to be invested in getting us out of the recession, crisis or whatever you care to call it to-date. However to-date most of it hasn’t found its way out of bureaucratic processes. Even still, the CEO of GE, Jeffrey Inmelt, and others believe that "the crisis is over”.
Do you agree with him? Whether you do or don’t consider please…
June unemployment: Another half million added to the 14.5 million unemployed bringing the rate to 9.5%. This is expected to increase. There is a 70% chance that unemployment will be above 10.25% at year end. As a CEO of a company, we will be reluctant to resume hiring until growth commences.
Consumer Spending Reducing: Credit card companies are curbing consumer spending further as they are being stung by increased defaults and delinquencies. But consumers are adding to this be saving hard for the rainy day as evidenced by the recent saving statistics. With less people employed, spending will reduce further.
Individual States in Crisis: E.g. California defaulting on short term obligations. They can’t run current budget deficits. With taxes falling they are forced to cut spending (something the Irish government seem unbelievable slow to do) which will reduce consumer spending now and the foundation for growth in future as education spending is being cut.
Foreclosures Increasing: The rising number of foreclosed and abandoned homes and commercial property. There are about 2 million foreclosed or abandoned homes now.
So the crisis is over? Alas this seems wishful thinking to me at least.