From Bloomberg: Roubini Says Stocks Have Risen ‘Too Much, Too Soon, Too Fast’

“I see the risk of a correction, especially when the markets now realize that the recovery is not rapid and V-shaped, but more like U- shaped. That might be in the fourth quarter or the first quarter of next year.” [Roubini said in an interview in Istanbul on Oct. 3.]
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“The real economy is barely recovering while markets are going this way,” Roubini said. If growth doesn’t rebound rapidly, “eventually markets are going to flatten out and correct to valuations that are justified. I see a growing gap between what markets are doing and the weaker real economic activities.”

It's only a matter of time before mainstreet catches up with Wall Street again - remember folks the people who pumped and pimped last summer are the ones doing the pumping and pimping now.

Remember 1933 - when the reality of the economy finally took away all confidence in the market. Market prices did not return until 1954.

Then as now EMPLOYMENT is the deal. It's no lagging indicator - it is the cancer that eats away at the society.

The Beltway crowd and the Einsteins of high finance who never saw this economic collapse coming are now telling us with their usual breezy arrogance that the Great Recession is probably over. Their focus, of course, is on data, abstractions like the gross domestic product, not the continued suffering of living, breathing human beings struggling with the nightmare of joblessness.

Even Mr. Obama, in an interview with The Times, gave short shrift to the idea of an additional economic stimulus package, telling John Harwood a few weeks ago that the economy had likely turned a corner. “As you know,” the president said, “jobs tend to be a lagging indicator; they come last.”

The view of most American families is somewhat less blasé. Faced with the relentless monthly costs of housing, transportation, food, clothing, education and so forth, they have precious little time to wait for this lagging indicator to come creeping across the finish line.

Americans need jobs now, and if the economy on its own is incapable of putting people back to work — which appears to be the case — then the government needs to step in with aggressive job-creation efforts.

Nearly one in four American families has suffered a job loss over the past year, according to a survey released by the Economic Policy Institute. Nearly 1 in 10 Americans is officially unemployed, and the real-world jobless rate is worse.

We’re running on a treadmill that is carrying us backward. Something approaching 10 million new jobs would have to be created just to get back to where we were when the recession began in December 2007. There is nothing currently in the works to jump-start job creation on that scale.

A massive long-term campaign to rebuild the nation’s infrastructure — which would put large numbers of people to work establishing the essential industrial platform for a truly 21st-century American economy — has not seriously been considered. Large-scale public-works programs that would reach deep into the inner cities and out to hard-pressed suburban and rural areas have been dismissed as the residue of an ancient, unsophisticated era.

We seem to be waiting for some mythical rebound to come rolling in, magically equipped with robust job creation, a long-term bull market and paradise regained for consumers.

It ain’t happening.

This disconnect reminds me of the Vietnam War where the Generals fought a war based on statistics and the grunts fought the real war.

If unemployment lasts at this level, society will be gutted. It is not good enough to say that employment is a "lagging indicator". For in this recession the jobs are not going to return.

I see no evidence that the administration is looking at what is behind the numbers - that good jobs have been in decline since 1983 - that the number of manufacturing jobs is now at the level of 1940! - that the wait for a new job is longer than at any time recorded - that without a job people will have to lose their home.

I see evidence that the policy reaction is all about "we know how to do this" lets incent employment etc.

In reality what is required is a reinvention of the economy - re-localize work and control.

It's so frustrating to see how much a prisoner the White House is of the system.

On an email discussion group, a right-wing friend of mine gloated that youth unemployment in the US is currently at 52.2%. Glenn Reynolds reported the same statistic, and so have many other right-wing bloggers. They’re all relying on the same source, the New York Post’s Richard Wilner, who wrote:

The unemployment rate for young Americans has exploded to 52.2 percent — a post-World War II high, according to the Labor Dept.

Wilner is wrong. Wilner claimed his statistic was for those aged 16 to 24. According to the Labor Department, unemployment for young Americans aged 16 to 24 is 18.5%. (That’s the highest they’ve ever seen “in July”.)

One of Glenn’s readers wrote to tell him that current youth unemployment is 25%, not 52.2%. (Glenn’s reader was a little off-base. It’s 25% for folks in the 16-19 age group; it’s 18.5% for those in the 16-24 age group Wilner was talking about.) Glenn responded by asking “Anybody have an idea what’s going on?”

I have an idea. From the Labor Department’s press release:

The employment-population ratio for young men was 52.2 percent in July 2009, down from 57.9 percent in July 2008. The employment-population ratios for women (50.5 percent), whites (55.2 percent), blacks (36.4 percent), Asians (41.3 percent), and Hispanics (46.5 percent) in July 2009 also were lower than a year earlier.

So I’m pretty sure that what happened is that Wilner is so ignorant that he doesn’t know the difference between the “unemployment rate” — the percent of people who are looking for work without success — and the “employment-population ratio,” which is the percent of people who have a job.

It’s okay not to know that difference. Lots of smart people don’t. But if you’re going to write a column read by hundreds of thousands of people, it would be helpful to have a clue what you’re talking about.

(One last point: The economic situation sucks, especially for employment. We shouldn’t lose sight of that reality as the partisan bickering goes on. 18.5% is tragically bad, and it’ll probably get worse before it gets better.)

I stand corrected but agree with the final sentiment of this writer - It's still terrible and it still is a major problem.

The New York Post yesterday ran with this staggering story on newly released figures from the Bureau of Labor Statistics:

"The unemployment rate for young Americans has exploded to 52.2 percent -- a post-World War II high, according to the Labor Dept. -- meaning millions of Americans are staring at the likelihood that their lifetime earning potential will be diminished and, combined with the predicted slow economic recovery, their transition into productive members of society could be put on hold for an extended period of time."

Almost fifty five percent of young Americans are unemployed. The figure is just mind-boggling. And yet the Administration continues to throw more of our money down the drain on this failed so-called 'stimulus'. Despite the fact that every country that has tried to spend its way out of a recession throughout history has failed. Without exception. And stimulus packages are failing all around the world now.

It is often said that the definition of insanity doing the same thing and expecting a different result. Let us hope the Administration faces reality and reverse its failed policies of the past.

What will this mean? What will it mean that maybe a generation of young - not just those who leave school at grade 8 but those that have gone to graduate school - will miss the first rung on a ladder of work?

What does it mean that this is not even being discussed at a policy level or that weasel words about employment being a lagging indicator are all that is said?

Dr Jonathan Shay knows the answer to these questions. He is THE man who understands PTSD better than any other. What affected the Vietnam Vet more than any other factor was the act of Betrayal. They suffered and did things for a lie. The Mission was a hoax and those in charge fed off their involvement.

It is the kind of betrayal that is incest - the parent exploiting the child. The kind of wound that never heals.

The crime is the betrayal of an entire generation of young - the elite captured to high ground - told everyone that it was OK - but who have left the children with ashes.

Shay also knows what the outcome is as well.

The capacity for Trust is destroyed. The ability to be in relationships is destroyed. The moral compass is destroyed.

The whole idea of work hard get a degree and get a good job is shown to be a sham - that is for the hard working and the diligent. The less so have known this to be a crock for a time already.

The brightest and the best of America and the UK have been shafted. Look at the footage of Pittsburgh - these are the kids who will still be under employed or not employed in 10 years time.

They are not stupid. They will be very angry. They will have nothing to lose.

The dragons teeth have now been planted.