FLASH : REAL UNEMPLOYMENT NEAR 10% - and that is our own lying number (I added for effect).
And, guess what? It was over 8% for May of 2007 - LAST YEAR! Did you read that anywhere? Noooooooo. You read unemployment at historical lows - 4.5%.
These definitions are real and also from the BLS. Please focus on the hitherto unmentioned crazy relative locked in the basement - U-6.
Definitions of U-1 to U-6:
U-1: Persons unemployed 15 weeks or longer, as a percent of the civilian labor force
U-2: Job losers and persons who completed temporary jobs, as a percent of the civilian labor force
U-3: Total unemployed persons, as a percent of the civilian labor force (the official unemployment rate)
U-4: Total unemployed persons plus discouraged workers, as a percent of the civilian labor force plus discouraged workers
U-5: Total unemployed persons, plus discouraged workers, plus all other “marginally attached” workers, as a percent of the civilian labor force plus all “marginally attached” workers
U-6: Total unemployed persons, plus all “marginally attached” workers, plus all persons employed part time for economic reasons, as a percent of the civilian labor force plus all “marginally attached” workers
U-6 IS the real unemployment, as bad as it gets. It is still a lie but it's now more like a really, really big white lie.
No more needs to be said.
This is a lot like the FED no longer publishing the M-3 measure of the money supply because it so, so, so massively disturbing. They know what it is but they no longer publish it. Best guess of folks that try to continue to calculate it...in excess of 20%...per year.
Or consider the insulting "core" inflation numbers of 3%+/-. Does anybody actually live without energy or housing or any other "adjusted-out" items?
Are you now beginning to understand why you feel like you have been in a recession?
Of course you do because you've been in one one for more than a year.
Wait until the next post for a discussion of Greenspan's ultimate bonehead thought. This one, if we un-correct his correction, would reduce GDP by nearly 2%. Sooooo, for as long as our "reported" GDP has been less than 2%, we have actually been in a recession.
So, we have understated unemployment, understated inflation and understated growth in the money supply. And these are just the first three crazy relatives!
Ah, I feel so clean now. Now we can talk about ALL of the other relatives in the basement. It's actually a small compound down there. We'll bring them up one at a time to get you used to them...slowly.
Hell, some one left the basement door open...they are all coming out...they're hideous...derivatives, Alt-A mortgages, negative am mortgages, consumer loans, real government deficits, real government debt, unfunded government liabilities, Level 3 assets...AAARRRGGGHHH!
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