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http://www.guardian.co.uk/business/2...ion-job-losses
Itulip forecast of double digit umemployment is going to be right on, sadly.
Just what this will do to USA housing, more liquidation in stocks, more support for the dollar, more disinflation/deflation, not so good for gold in the next 6 months...maybe.
The Moodies spread between BAA and 10yr is scary (pink line, 2nd from bottom).
UnemploymentUgl0y.jpg
But Graham Turner, of consultancy GFC Economics, says the rising cost of corporate debt is now flashing a red warning signal that far worse is to come over the next few months and job losses are heading for levels last seen in the 1930s Great Depression.
Corporate bond yields have rocketed since the credit crisis began as investors flee risky assets in search of safe havens such as US Treasuries. That effectively means many firms are being forced to pay eye-watering interest rates to borrow funds.
Turner says when the gap between the yield on high-risk company bonds and US Treasuries widens sharply, unemployment tends to shoot up - and current credit conditions are pointing to a doubling in the pace of layoffs, to more than a million workers a month, by spring.
'The correlation is holding up all too well,' he said. 'It's very disconcerting.' He added that the pace of layoffs already happening in the US 'is indicative of panic'. During the 1970s oil crisis the panic was relatively short-lived, he says. 'But the worry now is that this will just roll on and on.'
Corporate bond yields have rocketed since the credit crisis began as investors flee risky assets in search of safe havens such as US Treasuries. That effectively means many firms are being forced to pay eye-watering interest rates to borrow funds.
Turner says when the gap between the yield on high-risk company bonds and US Treasuries widens sharply, unemployment tends to shoot up - and current credit conditions are pointing to a doubling in the pace of layoffs, to more than a million workers a month, by spring.
'The correlation is holding up all too well,' he said. 'It's very disconcerting.' He added that the pace of layoffs already happening in the US 'is indicative of panic'. During the 1970s oil crisis the panic was relatively short-lived, he says. 'But the worry now is that this will just roll on and on.'
Just what this will do to USA housing, more liquidation in stocks, more support for the dollar, more disinflation/deflation, not so good for gold in the next 6 months...maybe.
The Moodies spread between BAA and 10yr is scary (pink line, 2nd from bottom).
UnemploymentUgl0y.jpg