Investment Risks, U.S. Job Loss Spits/Bank Closings

Investment Risks

An article yesterday titled 'Top 4 Investment Risks in the Next 2 Years' identifies them as:

·           potential (U.S.) Commercial Real Estate Foreclosures in circumstances where 'about $1.4 trillion' in commercial property mortgages issued during 2005-2007 are approaching their maturity dates and will need to be rolled over. The author says half of these mortgages will be underwater by 2011;

·           rising (U.S.) debt, deficits and higher interest rates;

·           another decade of (U.S.) zero job growth; and,

·           a double dip in (U.S.) residential housing prices.

There are other 'risks' that I think merit being on such a list, including:

·           the possibility of escalated Middle-East issues, particularly related to a repeat and possible escalation of terrorist attacks, nuclear armament by Iran, possible declining oil production (with reciprocal escalated oil prices, and ongoing issues in both Afganistan and Iraq;

·           absent possible Middle-East issues, an escalation in world oil prices simply due to supply constraints, with related energy cost escalations in both the developed and developing countries;

·           an inability of the current U.S. Administration to 'unplug' the ability of the Senate and Congress to pass meaningful bipartisan legislation aimed a ultimately (and sooner rather than later) balance the U.S. Federal budget - I just don't see agreement to make such a thing happen, and I see the economic consequences of the U.S. not doing this as very serious;

·           continued loss of U.S. manufacturing jobs to developing countries;

·           increased inflation levels (with little room for governments to increase borrowing rates to curb inflation if it occurs at unacceptable levels) or deflation - the latter I think being particularly negative for the equity markets should it occur; and,

·           the possibility of social unrest in the U.S. as its residents see a continual erosion in their standard of living - I have always believed you can't take things away from people and leave them happy.

Please advise me of any additional 'investment risks' you see as near-term possibilities at info@stockresearchportal.com.

U.S. Unemployment Distribution

An interesting article this morning titled 'U.S. Unemployment Varies Significantly Based on Income Levels' sets out U.S. unemployment demographic data for the 14.8 million statistically reported unemployed Americans. The article says the following are the prevailing percentages:  Whites - 8.7%, Blacks - 16.5%, Hispanics - 12.6%, Asians - 8.4%, Adult Men - 10.0%, Adult Women - 7.9%, and Teenagers - 26.4%.  From an 'income perspective' the article provides charts of U.S. Unemployment Rates by Income Levels' based on Q4 - 2009 data, and among other things says (based on studies quoted):

·           college graduates, many managers, government employees, and professionals are well protected from job losses;

·           blue-collar workers particularly in the construction sector, teenagers and black men have higher unemployment rates; and,

·           the unemployment rate of workers in the lowest decile (under $12,500 of income) is about 31% (a Great Depression era rate), while the second lowest decile unemployment rate was about 20%

I suggest you read the article and review its charts by clicking here.  I continue to have concerns with the extent of U.S. youth unemployment, and reiterate what I have stated in a number of prior e-mails:  'idle hands make the devil's work'.

U.S. Bank Closings