Will Immigration, "undocumented" unemployment rates, and the Sub prime mess invevitalbly Lead the U.S. into a Recession?

"You can't turn a financial toad (into a prince) by kissing it or by securitizing it or by transferring its ownership to somebody else"

So Warren Buffet says the U.S. is nearing a recession if "jobless rates increase", eh. Guess what...they will. What most Americans and obviously the mainstream press, analysts, and all the Real Estate prognosticators fail to mention is how the "housing crunch" affects not only the "jobless rate", but also the immigration debate.

Let me be a little more clear. We all know that many "illegal immigrants" are concentrated in the construction industry. These people are NOT counted in our POLLS. Therefore the "jobless rates" are dramatically off kilter.

In many of the declining markets unemployment rates are misrepresented. These "illegals" are in the shadows. In short, the "jobless rate" has increased and will continue to as long as developers and investors begin to slow their projects. The "illegals" that are laid off will become UNEMPLOYED, but not COUNTED. Hence an increase in rates. Welcome to the RECESSION!

Here are a few excerpts of the article from Reuters,

Billionaire investor Warren Buffett said the United States could slip into a recession if the jobless rate increases, he told CNBC television on Tuesday.
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"If unemployment picks up then we could be in for a recession," Buffett said.

The U.S. unemployment rate in October rose to the highest level since August 2006, and was steady at 4.7 percent in November.

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Buffett said daily figures from his own outlets, which include a broad range of companies in sectors ranging from food to furniture, indicated the season was "looking soft."

asked about the subprime mess and the Financial industry "write downs", Buffet commented,

"You can't turn a financial toad (into a prince) by kissing it or by securitizing it or by transferring its ownership to somebody else"

The dollar is shot! Unemployment is up! The Fed is wildly lowering rates! Foreigners are realizing their power and purchasing many U.S. assets! Welcome to the impending recession.

Same Players. Different Scandal.

The Sub Prime Fallout Continues...Fed Cuts Interest Rates, again

Continual bailouts, the fall of the U.S. dollar, increased foreclosure rates...when will it end? The U.S. Federal Reserve hopes soon and have lowered interest rates to 4.5 % hoping to spur investment.

From the BBC,

The US Federal Reserve has voted to cut US interest rates from 4.75% to 4.5% to help revive the country's faltering housing and credit markets

The move had been widely expected by traders, who have been relentlessly selling the dollar and buying higher yielding currencies in anticipation.
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It follows last month's dramatic rate cut - the Fed's first in four years.
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The bold intervention in financial markets was designed to restore confidence in the nation's housing market, which has badly suffered from the repercussions of two years of interest rate rises between 2004 to 2006.
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They have particularly hurt those with poor credit ratings or on low incomes, who had been sold sub-prime home loans when borrowing costs were cheap. (that is exactly what homeowners did..BORROW their homes..and now it's time for the banks to reclaim them. Bad Realtors, bad lenders, bad inept policymakers)

A Congressional committee report said last week that up to two million US families - especially those considered risky lenders - could eventually lose their homes as borrowing cost rises filter through and lenders become more choosy as to who they lend to. ( not the banks, but the people. The banks have been 'bailed out' of their shady 'investments',)

Many analysts had taken the view that more rate cuts would be necessary to relieve the pain of higher borrowing costs on house buyers and consumers, which account for a critical two-thirds of US gross domestic product.

The Fed has been forced to take these cuts, yet the private equity firms and banks who created the 'problem' walks away without repercussions. Awful. Lower interest rates rock, but bailing out the 'sub primes' only continues the problem. Let them eat their losses and everything would change overnight.
Expect Greenspan to be on the press circuit, again with his "I didn't do it" tour, again. Greenspan's involvement is Paramount. His leadership allowed the 'problem' to persist. The racket continues.....

Same Players. Different Scandal.

CEO Justice: No "Home Depot style' severence package for Northern Rock Chairman

Finally, a corrupt overpaid 'boss' will NOT receive a GIANT "golden goodbye" from his former company. Matt Ridley, Chairman of the UK's Northern Rock will get what he is deserved...NOTHING for presiding over the bank during the first 'run' in over 150 years in the UK.

Under the terms of his contract, Mr Ridley is not eligible for any compensation on departure and will therefore leave his £315,000-a-year job without a financial package.

Mr Ridley resigned last week as chairman of the Newcastle-based bank after facing a Treasury select committee to explain Northern Rock's collapse. He was felt to have performed badly in front of the MPs in what was his first public appearance since the crisis that engulfed the Newcastle-based bank began in September.
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"He had offered to resign before the hearing but was asked to stay in order to testify." Guardian

The MP's are lucky he even showed up for his 'hearing'...within the American political system, Bush has been accommodating all his accomplices with 'executive privilege'.

Gonzo..didn't stick around...neither did Rove or Snow, Greenspan even ran from the impending crisis as fast as he could. When American corporate/banker executives get in trouble..they spilt town as fast as they can.

Perhaps, Mr. Ridley learned his lesson. If you're going to run a business into the ground....make sure you do it in the United States where the government will pat you on the back and your former company will give you a cushy "golden goodbye".

Same Players. Different Scandal.