Cycle of rising unemployment, foreclosures and bankruptcies raising economic stress

AP analysis: Economic stress up in much of nation
Cycle of rising unemployment, foreclosures and bankruptcies raising economic stress

(Source AP) California, Michigan and South Carolina suffered the most financial pain in May as unemployment, home foreclosures and bankruptcies rose, according to The Associated Press' monthly analysis of economic stress in more than 3,100 U.S. counties.

The latest results of the AP's Economic Stress Index show the worst financial crisis since the 1930s causing lingering damage even as other signs suggest the recession is winding down.
The average county's Stress score, fueled by worsening unemployment, foreclosures and bankruptcies, rose to 10 in May, from 9.7 in April.

In May 2008, the average Stress score was 6.2. The pain was lower then because the economy was still expanding. In fact, the second quarter of 2008 was the last time the economy grew.

The AP calculates a score from 1 to 100 based on each county's unemployment, foreclosure and bankruptcy rates. The higher the score, the higher the economic stress.

Under a rough rule of thumb, a county is considered stressed when its score zooms past 11. In May, 36 percent of the counties scored 11 or higher, up from 34 percent in April. But the latest reading was slightly better than February and March, when nearly 40 percent of counties were at or above that threshold.

Federal Reserve Chairman Ben Bernanke and many other economists predict the recession will end later this year. Even if it does, unemployment, foreclosures and bankruptcies are likely to keep climbing and cause further harm in many communities, economists predicted.

"The pain will linger well after the recession is over, making for a subdued economic recovery," said Richard Yamarone, economist at Argus Research.

Many economists say the recession eased from April to June and that the economy might start growing again as soon as the current July-to-September quarter.

Among states, California, Michigan and South Carolina showed the most economic stress in May, with their counties' scores averaging 16, 15.9 and 15, respectively, the AP analysis shows.
California has been battered by the housing bust, and Michigan has absorbed the brunt of the auto industry crisis.
"And South Carolina is a little bit of everything," said Sean Snaith, economics professor at the University of Central Florida. "Manufacturing and construction jobs have been hard hit in the state."
One common thread running through all three states is heavy jobs losses. Rising unemployment, in turn, is escalating foreclosures and bankruptcies.
The rising economic stress comes as California, saddled with a whopping $24.3 billion budget deficit, and other states are scrambling to cope with fiscal crises. Read More...
http://finance.yahoo.com/news/AP-analysis-Economic-stress-apf-2726778711.html?x=0&sec=topStories&pos=4&asset=&ccode=

Bernanke vs. Buffett: Who's Right on the Economy?

Bernanke vs. Buffett: Who's Right on the Economy?

Roubini: New Regulations "Go in the Right Direction," But Not Far Enough

Roubini: New Regulations "Go in the Right Direction," But Not Far Enough

The new Wall Street regulations announced by President Obama yesterday "go in the right direction" but only accomplish about "75% of what needs to be done," says Nouriel Roubini, professor at NYU's Stern School and chairman of RGE Monitor.

For example, making the Fed the systemic risk regulator makes sense from an institutional standpoint, "but have to have individuals committed to making sure the systemic risks are controlled," Roubini says, recalling the Greenspan Fed had the power -- but not the will -- to regulate mortgage lending during the housing boom.

"They allowed all this toxic underwriting because they did not believe in supervision," he says of the Greenspan Fed. "They were in favor of any kind of financial 'innovation'."
http://finance.yahoo.com/tech-ticker/article/266396/Roubini-New-Regulations-%22Go-in-the-Right-Direction%22-But-Not-Far-Enough?tickers=XLF,FAS,FAZ,SKF,AIG,BAC,JPM

Nouriel Roubini's Three Reasons Why Stocks Are Bound to Fall

Are Inflation Concerns Inflated?

Are Inflation Concerns Inflated?
6/3/2009

Amid new pronouncements that inflation is a looming possibility, WSJ's Economic Editor David Wessel explains the unlikely conditions that would spur inflation in the U.S.

ECB ziet economie langzaam herstellen

ECB ziet economie langzaam herstellen

(Bron, De Telegraaf DFT) AMSTERDAM (AFN) - De neergang van de wereldeconomie lijkt over zijn dieptepunt heen. Nu steeds meer indicatoren wijzen op een mogelijke stabilisering van de economie, praat ook de Europese Centrale Bank (ECB) voorzichtig over een einde van de krimp.
“Na het extreem zwakke eerste kwartaal zal de economie in de rest van het jaar veel minder sterk verslechteren”, aldus ECB-president Jean-Claude Trichet donderdag na afloop van de maandelijkse rentevergadering van de ECB. “We verwachten positieve kwartaalcijfers vanaf de tweede helft van 2010.”

De positieve signalen over de wereldeconomie kwamen donderdag zowel uit de eurozone als de Verenigde Staten. In de eurolanden verkochten de detailhandelaren in april voor het eerst in vijf maanden weer wat meer dan in de voorgaande maand. In de VS was het aantal mensen dat een werkloosheidsuitkering aanvroeg vorige week lager dan een week eerder en nam de productiviteit per werknemer in het eerste kwartaal toe. Lees Artikel...
http://www.telegraaf.nl/dft/nieuws_dft/4083486/__ECB_ziet_economie_langzaam_herstellen__.html?p=25,1

Bernanke: Recovery will be slow

Bernanke: Recovery will be slow
(01:23) Report Reuters Video

June 3. - Federal Reserve chairman Ben Bernanke says the weak labor market and the continued tightness of credit will slow the economic recovery's pace.

Federal Reserve Chairman Ben Bernanke told lawmakers on Wednesday (June 3) that data shows the economic contraction may be slowing, but unemployment will continue to rise for some time."We expect to see some growth -- not robust growth -- but some positive growth later this year," Bernanke said.Bernanke said he still anticipates that the economy will start its recovery later this year, but cautioned that "we will have a weak labor market for some time."
NOTE: Original sound only, no reporter narration.

Cost of Fed Expansion of Balance Sheet Is $30K Per American, Congressman Grayson Says

Cost of Fed Expansion of Balance Sheet Is $30K Per American, Congressman Grayson Says