Figures lie and liars figure

There are any number of pundits out there in Punditistan who remind us why this isn’t the Great Depression 2. There are no bread lines, no hoboes, blah, blah, blah. The thing is, we are so near the beginning of a long, long process. There were no soup kitchens in 1929 and 1930 saw one of the greatest stock market rallies ever.

I read a great bit of wisdom from some old English dude, whose name escapes me, “We leap into debt, and crawl out of it.” I think the whole GDII thing is like that. When your neighbor loses her job, it’s a recession. When you lose yours, it’s a depression.

So anyway, one of the pearls of wisdom being cast before the swine (present company excepted) is that unemployment is “only” six and a half percent. Jeez, when I got out of college it was over ten percent. (Remind me to whine about how much that sucked.) Here’s a little inside baseball. There are many different unemployment numbers. Really.

The “official unemployment rate” is technically known as U3. Over time it has been twisted to make things seem better than they are. It does NOT include discouraged workers, part time employees who want fulltime work and marginally employed workers. These folks are however counted in U6, which is the number they never tell you about. They used to, but not anymore, so any historical reference (“It was much worse back then”) is either misleading or patently false. How’s that for a pisser? They think we’re stupid, and unfortunately, they’re usually right.

Here’s the deal. For October 2008, the “official” U3 unemployment rate was 6.5%, which is high, but not historically. The more accurate, and underreported U6 unemployment rate was 11.8%, and that my friends is a nasty number. No bread lines. Yet. No hoboes. Yet. No food riots. Yet.

Let’s take care of each other, remember the neediest and share what you have with those who need it. It’s a great time to short the market, but a lousy time to short karma.