WARNING: EXTREME Economic Doom: Structurally High Unemployment For A Decade

[Subdivisions]

http://globaleconomicanalysis.blogspot.com/2009/08/structurally-high-unemployment-for.html

...snip...

CRE Demand Still Collapsing

Demand for commercial real estate loans is still collapsing. Massive overcapacity and weak consumer demand are the two key reasons.

The implications are severe.

Commercial Real estate was a massive driver for jobs in the post-2000 recession. Think of all the retail stores that were built: Walmart (WMT), Target (TGT), Home Depot (HD), Lowes (LOW), Walgreen (WAG), Nordstrom (JWN), Abercrombie & Fitch Co. (ANF), etc.

Think of the grocery store buildout that followed the buildout of residential subdivisions: Safeway (SWY), Kroher (KR), Whole Foods (WFMI), and Osco-Jewel & SuperValue (SVU).

Now think of all the merchandise it took to fill those stores and the trucking (and trucking jobs) involved to keep stores stocked for consumers whose demand was thought to be insatiable.

Grocery store demand is still present given that people have to eat. However, the demand for new stores (and new hires) isn't. As for the rest of the retail sector, it's as I said on April 18, 2008: Shopping Center Economic Model Is History.

Currently we are in the midst of the Worst Performance Ever For Back-To-School Sales. Expect Christmas season to be miserable again.

Consumer demand is dead. That demand is not coming back anytime soon, and there is no driver for jobs if it doesn't.

...snip...

Mike "Mish" Shedlock is not the only financial professional that is forecasting economic doom. Don't be mesmerized by the hypnosis being administered by mainstream media "green shoots" and "we're in recovery" bullshit. Be vigilant with your finances and if you believe you may be laid off eventually, takes steps to prepare for that.

Check out this chart:

http://research.stlouisfed.org/fred2/graph/?&chart_type=line&graph_id=0&category_id=&recession_bars=On&width=630&height=378&bgcolor=%23B3CDE7&graph_bgcolor=%23FFFFFF&txtcolor=%23000000&preserve_ratio=true&id=PI,&transformation=pc1,&scale=Left,&range=Max,&cosd=1995-01-01,&coed=2009-06-01,&line_color=%230000FF,&link_values=,&mark_type=NONE,&line_style=Solid,&vintage_date=2009-08-17,&revision_date=2009-08-17,&mma=0,&nd=,&ost=,&oet=,">

(I am not an investment advisor and I don't even play one on the Internet.)

[Mythsaje]

1. Have we not said it?

When you basically eliminate the manufacturing sector, you've pretty much doomed a large segment of the economy. This isn't rocket science, folks. Pissant service sector jobs aren't going to replace good union work, nor replace the disposable income such jobs allowed. Thus less money is being spent and less jobs are necessary to SERVE that sector.

:banghead:

[Subdivisions]

3. Yup. n/t

[leftstreet]

4. "Pissant service sector jobs"

Who decided they were worth less than manufacturing jobs?

Why did organized labor fold up its tent when manufacturing left the US?

:shrug:

[Mythsaje]

13. It takes me two to four days to train a new retail sales person...

How long does it take to train someone into a skilled manufacturing job?

You'll never convince anyone that there's value in paying a shlub like me 18 bucks an hour.

[Selatius]

15. Unionizing new sectors is more difficult than defending already unionized sectors.

The Taft-Hartley Act pretty much precluded unionization in non-manufacturing sectors of the economy. To be sure, there is some progress in the service sector, but for a large part, the service sector remains devoid of any strong unions. Otherwise, stores like Wal-Mart would have unions all over them.

The problem is misapplication of labor laws. The law is written in such a way that it is easier for an employer to destroy a labor union than it is for a labor union to unionize a particular workplace. It is set up in an unfair manner.

[Shireling]

21. Good point!!

Everyone needs a union. We are not slaves!!! :grr:

[ingac70]

2. It's already been structurally high for almost a decade n/t

[Warren DeMontague]

5. Wow. Well, if the guy writing the "global economic analysis" blog says so, I guess it's true.

I mean, if you can't trust a random blogger- with links and ads for to a lot of gold and precious metals sale sites- who can ya trust, nowadays? :shrug:

[Subdivisions]

6. I'll believe a blogger in the financial trenchs any day over the mainstream media. Can you

dispute his analysis? I'm all ears...er...eyes.

[Warren DeMontague]

7. Better buy that gold, then.

I guess.

[Subdivisions]

8. I prefer cash. But thanks anyway. n/t

[Subdivisions]

9. Thank you to whomever unrecommended this. When people see that

<0 it makes them want to read the thread even more. Heck, the Kurt Cobain thread has a <0, 287 replies, and 5154 views.

:hi: A guy can dream his OP will do just as well, can't he?

[Warren DeMontague]

10. For the record, it wasn't me.

This isn't the first doom-n-gloom thread I've seen in the past 48 hours quoting that same blog, that's why I commented. My reaction is, while things may still be bad, I don't know "Mish" from a hole in the wall, and certainly there is never a shortage of folks on the internet making expert-sounding noises about why the world is about to end.

When it looks like they're hawking gold in some fashion, I get doubly suspicious.

But, people should make up their own minds. I wouldn't recommend this thread, but I didn't unrec it either. Just FYI.

As an added bonus, I just kicked it for you. :hi:

[Subdivisions]

12. I wouldn't mind if you had. Some people don't like to think about these

things. Mish is a highly respected analyst and advisor and has an extremely good record of calling this economic meltdown as has Denninger.

Personally, I don't understand the suspicion people have when it comes to selling gold. So, it was not a consideration when I decided this was important enough information to convey the message that my fellow DUers should not let down their guard with respect to the economic situation and not to be taken by mainstream media smoke and mirrors designed to keep people investing in what could potentially be a bust.

The message is simple: remain financially vigilant and develop contingencies in the event of job loss.

[aquart]

11. Yeah, I know.

Pity we don't have some socialist-type jobs project from our government.

[G_j]

14. not building more box stores doesn't seem like to worst thing

the stores have an obsolescence and are eventually abandoned, the jobs are rarely above poverty level.

[TheWraith]

16. Whatever would we do without the "Global economic analysis blog"?

Oh right--we might actually look at what's going on around us instead of running about in a panic.

[snot]

17. k&r'd, including 5.5th rec (went from 4 to 6 so guess I wasn't alone)

EVERYONE should be permitted to unionize. 'Til then, 98% of us will be underpaid.

[PSPS]

18. This is pretty obvious

On the one hand, you have professional cheerleaders who preach "green shoots," "bottom!!11!" and "buy now!" But this is nothing more than paid advertising. No sponsor would buy ad time if the program discouraged people from spending money (they don't have.)

On the other hand, just look around you. In the large city where I live, every neighborhood has a least one giant hole in the ground where some big building was going to be built, usually with large anchor tenants from the list in the article, only to have funding evaporate (over-leveraged developers) and the project abandoned. Existing commercial properties are awash in huge "FOR LEASE" signs. Clients of mine can pretty much dictate their own terms when renewing a lease these days, since half the building they're in is now vacant.

[Liberal_in_LA]

19. I noticed a lot of empty store fronts in Los Angeles today n/t

[Better Today]

20. Even if the data/graph is accurate, it is missing some KEY bits of analysis;

Since it is only showing the GWB recession and this one, there is one main difference, Democrats are in charge now. Granted they aren't a progressive's wet dream team right now, but they are also far from the Bushies. This need not have the same 10 year cycle, nor hopefully will it have the lack of full recovery and into advancement that the Bushies reigned over.

I see this graph as an example of why we shouldn't be listening to the Repubs at all when it comes to recession recovery, it proves that we never did recover and hence they failed.