Monday, March 2, 2009

The Unemployment Poll: The Final Results

The poll is now closed and there is a pretty strong focal point: 12%. I voted for 11% at the inception and the optimist in me hopes I am right that it will remain below 12% (I was thinking of 11% as anything under 12%). What is striking is how many voted for 13% to 16%. I consider this people who think we will enter a depression, not just recession. Scary. February will eclipse 10% for sure so it is really a matter of how quickly we can arrest the fall. Each week brings new bad news about the breadth and dept of the downturn making me increasingly pessimistic.

The key to everything is the quick and orderly reorganization of the banking sector. I think the fiscal stimulus is inconsequential without sorting out the credit sector. I wish the Treasury would more faster and in a more comprehensive manner. I am not quite ready to jump on the nationalize now bandwagon (I fear you run the risk of killing solvent banks if you start to nationalize the insolvent ones), but show me the current plan will work - I have yet to see private willingness to take on toxic assets even with government support.

No comments: