sdr: I think what everyone can agree on is that, statistically speaking, its hard to argue a sustainable recovery in the face of some of these numbers, most especially unemployment.
I’m a California kid and I have seen the ups and downs in this state since the 1970s. What I know for sure, is that we (as a state) have never been here before. Unemployment is soaring, businesses and people are leaving the state in droves, we’re broke (individually and collectively) and it looks like things might get worse, before they get better (if that new FDIC report is any indication). The state budget shortfall woes aren’t over. State revenues, which are largely driven by large earner incomes and sales, are slumping badly. The legislature doesn’t appear to have a clue as to how to fix things and states like Texas are cleaning our clock when it comes to wooing California residents and businesses away.
The government has done a masterful job of “pay no attention to the man behind the curtain” when it comes to manipulation of circumstances, but, if that FDIC report is correct, there are only so many bullets that they can fire, before the gun runs dry.
I think we’re close to that point. In spite of Bernanke and Co. assuring us that everything is okay, the recession is over, “green shoots” are sprouting, etc, most folks I know are not only skeptical, they’re downright convinced that this “recovery” isn’t a recovery at all.
Unemployment drives home sales and, consequently, home values. The health and wealth of the State of California exerts similar upward or downward pressure. Consumer sentiment and confidence weighs in as well. All of these factors are at their worst point in years, if not decades.
When I talk about a second leg down, this is exactly what drives my thinking. You and I share a common background as accountants and, as we both know, it either pencils or it doesn’t. This for me doesn’t pencil at all.
