The strongest economy in the world collapsing. Impossible. Those people losing their homes must have been “subprime”.

Doc, thank you as always for the info. One comment, California is an “at will” state, meaning companies can and do terminate people instead of laying them off. They thereby avoid having to pay any severance or unemployment benefits. I’ve heard this is rampant in the bay area. These number do not show up as layoffs as far as I know. I wonder what a “U-7″ number would be that includes these terminations that are illegal in other states but legal in CA due to past lobbying in Sacramento.

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Oh dear ….where to start….so much of this is simply DEAD WRONG!

(1) At will employment is NOT ILLEGAL in any state in the US. Without a written employment contract, under Federal law an employer can fire any employee for any reason they want so long as it is not because of the employee’s race, age, religion, sex, national origin, physical or mental handicap unrelated to the ability to perform the job, or union activity or use of FMLA. A few states add things like marital status or weight. BTW, a written employment contract can be an individual contract or collective bargaining contract (unions) or, in some states under certain conditions, an employee handbook issued by the employer.
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(2) NO state or federal law requires the payment of severance.
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(3) If a person is an employee -as opposed to an independent contractor or leased employee – 99.99999% of the time their employer has to pay into unemployment, If the “employee” is discharged – and not discharged for ’cause’ such as theft or tardiness or performance- they will qualify for unemployment if they have worked enough time.
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(4) The phrase ‘layoff” in employment law and labor economics means that the employer ceased the employee’s work activities temporarily and the both the employer and employee expect that the employee will be recalled to his job when work picks up. Layoff is a cessation of employment with the expectation of recall.
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The phrase “termination” in employment law and labor economics means to end the employment relationship and there is NO expectation of recall.
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(5) In the unemployment data the unemployed are classified by the reason for the unemployment. The classes are :
(a) Job loser – Terminated (see definition above)
(b) Job Loser – Laid off (see definition above)
(c) Job leaver – those who quit a job before finding a new one and who are weeking work
(d) Re-entrant – those who have been out of the workforce and had an interruption in their job seeking acitivites.
(e) New entrant – first-time job seeker.
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(6) Neither the U-3, nor U-6 or other similar data from the BLS is based solely upon the filings for unemployment.
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(And I practiced labor and employment law for over 25 years……)

I guess when your inner tube is going over the falls, you might has well give it the best ride that you can. Evidently the investment community doesn’t want to miss the bear-market rally. I suppose that just making infinite amounts of federal reserve phantom notes is the answer to all problems and that there will be no repercussions. We have forced the world’s hand, and the world knows that we are too big to fail. En Espanol: Muy MAL (Mutually Assured Lunacy). Everyone knows not a dime of this will ever be paid back–we must keep printing and borrowing from now on. It’s just the greatest Ponzi scheme of all time: Buy new 10 & 30 years or the crap you’re holding now will fail. The can seems to have been successfully kicked down the road another few months. Sublime, Optical-Illusion Arms and Alt-Ape mortgages along with Mark-to-Mirage coming back? Is there really another option at this point? Maybe this is the only way to play this hand…