OECD: Unemployment and chaos will rock the world

[MrBurns]

From Crikey again -

OECD: Unemployment and chaos will rock the world
Glenn Dyer writes:

Unemployment is going to be the big issue of the next couple of years -- this will be a "jobs and social crisis" that will grip the world's biggest economies, putting one in 10 workers out of a job, according to the OECD.

The world's top 30 economies -- including Australia -- face an explosion of unemployment over next year, according to the Organisation of Economic Co-Operation and Development, which is releasing updated economic forecasts tonight for its member countries.

The forecasts will make uncomfortable reading, especially for those still in denial about the need for stimulatory packages. Overnight we got a taste of their big theme from the OECD's boss, Angel Gurria, in a speech in Rome where he warned that unemployment will hit 10% across the 30 member countries in 2010.

There will be "practically with no exceptions." The across-OECD unemployment rate will have risen from 5.6% in 2007, when the credit crunch erupted.

The surge in jobless numbers will come as the 30 advanced economies suffer what the OECD is now calculating to be a much bigger average contraction in growth, bigger than forecast by any other international agency.

The OECD believes the 30 big economies will contract by 4.3% this year, compared to the just released International Monetary Fund forecast of a 3%-3.5% contraction. 2010 will bring little or no growth.

"Our OECD projections indicate that the ongoing contraction in economic activity will worsen this year, before recovery gradually builds momentum through 2010. The uncertainties attached to this bleak outlook are exceptionally large, while the risks remain firmly inclined to the downside," Mr Gurria said in his speech.

"And the job crisis is spreading rapidly around the world. The International Labour Organisation estimates that world-wide unemployment could increase by 40 million people by the end of this year."

He warned that the ranks of the unemployed in the 30 advanced OECD countries would swell "by about 25m people, by far the largest and most rapid increase in OECD unemployment in the postwar period".

The OECD chief said the misery of joblessness was "rapidly turning into a jobs and social crisis".

Mr Gurría criticised the lack of focus on the unemployed in much of the debate over fiscal stimulus in the world; comments that will resonate here. The bad news is that globally these additional funds are rather limited, accounting for about 8 to 10 per cent of total expenditures in the United States and France and less in most of the other countries. This may turn into a missed opportunity.

The global economy is contracting. The credit squeeze, negative wealth effects (stemming from lower house and equity prices) and a generalized loss of confidence are dragging down economic activity everywhere. Trade flows are expected to fall by 9% in 2009.

Foreign direct investment inflows will further contract, after shrinking by about 20% in 2008. Development aid flows are threatened, while remittances from migrants are dropping fast.

This meltdown is rapidly turning into a jobs and social crisis. Labour market conditions are weakening throughout the world, as companies are cutting production, closing factories and dismissing workers. Our latest projections (to be released officially tomorrow) indicate that the unemployment rate in the OECD area could approach 10% by 2010 compared with 5.6% in 2007.

Miserable times ahead.

 

[metric]

One in four workers to go on welfare - economist Bob Gregory
By David Uren
The Australian
March 31, 2009 07:47am

THERE could be one person of working age on welfare for every three people with a job by the time a recession ends, according to one of Australia's leading economists, Bob Gregory.

The welfare blowout, with more than a million more people likely to be relying on benefits, will far exceed the threat posed by an increasing aged population and has so far been overlooked by federal Government and Treasury, The Australian reports.

Professor Gregory has modelled the changes in the welfare population following the 1990-92 recession, and says the rise in unemployment is likely to be followed by increases in the number of people on disability, carer and sole-parent pensions.

A paper to be presented by Professor Gregory to a Victoria University conference next month shows the full-time male workforce never recovered from the 1990-92 downturn, when it dropped from a historic average of about 62 per cent to 54 per cent of the male working-age population.



"What happens is that male unemployment goes up, and then, as time goes by, the unemployment rate comes down, not because there are more jobs but because the unemployed gradually seep into disability payments," he says.

http://www.news.com.au/business/money/story/0,28323,25267926-5017313,00.html

 

[MrBurns]

You can see it happening now, layoffs everywhere, every day.

10% unemployment is now almost a certainty - meaning.

Housing mortgage defaults by the truckload and a housing crash.

If ever there was a sure thing this is it, and the RBA ??? wouldnt listen to a word they say, they live on the 68th floor of a building somewhere away from reality.

 

[metric]

You can see it happening now, layoffs everywhere, every day.

10% unemployment is now almost a certainty - meaning.

Housing mortgage defaults by the truckload and a housing crash.

If ever there was a sure thing this is it, and the RBA ??? wouldnt listen to a word they say, they live on the 68th floor of a building somewhere away from reality.

listen to them? hell, they engineered the thing!

 

[Happy]

With the first home grant recipients should also get job guarantee for 10 years or so, similar to guarantee of bank deposits for 3 years.

I just hate to see the misery brought by dashed hope of owning a home.
Unless RudBank will prevent new homeowners from defaulting because of job loss.
Quite possible and definitely will give him win in next election.

 

[Uncle Festivus]

And some light reading from The Economist

http://a330.g.akamai.net/7/330/2582....com/specialReport/manning_the_barricades.pdf

Job losses are at the heart of the growing political crisis. The International
Labour Organisation expects global unemployment to rise by around 30m this
year compared with 2007, and by as much as 50m if the world economy turns
desperately downward. In the US alone, more than 2.5m jobs were lost in the
four months from November 2008 to February this year. Unemployment is
being driven, in part, by a collapse in industrial production, which has fallen by
more than 10% year on year in most countries. Japan's exports plunged by a
shocking 46% in January this year and its economy by more than 12% in the
fourth quarter of 2008, at an annual rate. Service industries are shedding jobs
just as quickly. Few employers, apart from government, are hiring.

 

[Julia]

With the first home grant recipients should also get job guarantee for 10 years or so, similar to guarantee of bank deposits for 3 years.

Happy, you're not serious in this proposal are you????

 

[Gundini]

That's it!

I've had enough.....

I gunna jump off a cliff

PS: and DOW futures up 74.... are they living under a rock?

 

[Aussiejeff]

That's it!

I've had enough.....

I gunna jump off a cliff

PS: and DOW futures up 74.... are they living under a rock?

Hahaha! Don't yer just love the contrarian nature of the remaining Raging Bulls On Steroids?

IMO there are no "smart" or "cautious" "investors" left in the markets. What we are seeing is primarily those Bully Beasts who have managed to survive to this point (courtesy of having bigger, deeper pockets than those who have fallen by the punter's wayside), who of course are convinced that the ever-worsening world economic outlook is some sort of conspiracy or con trick and that consequently, NOW is really THE time to buy up stocks bigtime.

So I would expect these "illogical" Bull Runs to keep escaping into the paddock no matter how bad the "conspiratorial economic blurb" gets.

Interesting, ain't it?



Go Bull$!

PS: I just had a thought - maybe just knowing we have three of the Greatest Leaders The Modern Civilized World Has Ever Known (Mr Obama, Mr Obama-Rudd & Mr Obama-Brown) is enough to inspire waves of optimism to wash away our woes. Mmmmmmm..... Ommmmmmmm.....

 

[Happy]

Happy, you're not serious in this proposal are you????

Julia, I wish I wasn’t.

Reading between the lines there were hints that struggling home owners will be looked after much better than subprime victims in USA.

If brown matter hits the fan (sorry UK PM for the pun) to avoid having tens of thousands of vacant houses that owners could not afford to pay and nobody is interested to rent, some intervention from Government is almost inevitable especially that so many billions were happily spent to save the big end of town.

 

[Temjin]

That's it!

I've had enough.....

I gunna jump off a cliff

PS: and DOW futures up 74.... are they living under a rock?

Remember, daily movement in the stock markets are simply noise. Look at the trend instead.

The forecasts will make uncomfortable reading, especially for those still in denial about the need for stimulatory packages

That's bulls--t. I'm in denial about the need for stimulus packages simply because I do not think they will work at all. If people are laid off because of over-capacity, then they should be laid off and fed for themselves. Free market at its best.

 

[White_Knight]

With the first home grant recipients should also get job guarantee for 10 years or so, similar to guarantee of bank deposits for 3 years.

One of the most brainless things i have ever read.

 

[Happy]

One of the most brainless things i have ever read.

How did you take then 3 years guarantee for bank deposits?


Ah, late welcome to the forum and I got impression that you don't read much

 

[Glen48]

In USA Bank are refusing to foreclose because thy don't want the properties in their hands due to the councils, who are broke wanting money, chasing the bank to repair broken down/vanalised houses/unpaid rates etc.
One woman had her investment property repo'd and then the banks decide they didn't want and gave it back to her she is now responsible for the over due rates and upkeep.
Free housing in God's country

 

[tommymac]

IMO there are no "smart" or "cautious" "investors" left in the markets.

I agree fully with you AussieJeff. Take the example of the Pension Benefit Guarantee Corp in the US. The PBGC protects employees Defined Benefits should their company go bankrupt. Hence it needs to be pretty cautious with its investments. So months before the crash, it decides to invest billions in shares.

http://www.boston.com/news/nation/washington/articles/2009/03/30/pension_insurer_shifted_to_stocks/?page=full

No surprise its not providing any details.

 

[Julia]

That's bulls--t. I'm in denial about the need for stimulus packages simply because I do not think they will work at all. If people are laid off because of over-capacity, then they should be laid off and fed for themselves. Free market at its best.

Well, Temjin, it seems the IMF doesn't share your view. On today's Radio National's "The World Today", the head of the IMF declared that Australia's stimulus was "the best in the world" and "the most effective". "Australia was a shining example to the rest of the world, could afford to spend more" etc etc. I can just see our fearless leader's chest swell with pride.

So there you go.

Meantime, suggestion exists that in the coming federal Budget, spending will be slashed, e.g. the existing scheme which allows people with large number of prescriptions to get these free after they have spent X amount p.a. will be axed.

So here we have logic and fairness at its absolute best, do we not?
Penalise sick people so that Rudd & Co get a quick blip in the quarterly figures from handout money being spent on frivolities.
Meantime, hospitals lack sufficient beds, schools lack good teachers etc etc.

 

[kincella]

I am beginning to think this whole thing has been blown out of proportion....the figures coming out for OZ are nowhere near as bad as all the media and doomsdayers were calling...
3 new world leaders...all newbies...going to how many G20, or G7 or whatever conferences held so far....for a party and and a photo shoot...
oh and there is another planned for next month....like how many conferences do they need...

I think its all a trumped up fabrication ....all the bigger companies crying poor...so they can get a govt handout.....
it will all prove to be nothing like all the kids and scaredy cats are making it out to be....
its another 'year 2000' scarey moment...that phizzes out

in the meantime...more regulation from govt's...and the banks scoring all those commercial properties.....ready for the next time they set up a trust for you to invest in...while they take more of your money...

I am not one for conspiracy theories.....but all this hype spread over the net....and all those old and new guru's coming out of hibernation.....extreme stories and apparently believed by many as gospel......makes me wonder...
:sheep:
Barack Obama and the Strategy of Manufactured Crisis
By James Simpson
http://www.americanthinker.com/2008/09/barack_obama_and_the_strategy.html

 

[gfresh]

If ever there was a sure thing this is it, and the RBA ??? wouldnt listen to a word they say, they live on the 68th floor of a building somewhere away from reality.

RBA was saying a +0.5% growth rate in February..

Yesterday they come out and say Australia is already in recession, and we will not avoid several quarters of negative growth.

So they're hardly on top of their predictions.

Posters here were saying a recession was almost a certainty 12 months ago..

If brown matter hits the fan (sorry UK PM for the pun) to avoid having tens of thousands of vacant houses that owners could not afford to pay and nobody is interested to rent, some intervention from Government is almost inevitable especially that so many billions were happily spent to save the big end of town.

But surely you run the risk of hindering the natural repair process.. as we've seen in the US eventually houses that are not needed fall by the wayside, are abandoned as scrap, and what is left of able buyers start stepping forward to buy what they can at cheap prices. On the whole as prices come down (rental or purchase) you actually enable more to afford them in the longer-term in the changed economy as it redevelops itself.. as prices adjust to what that level of employment/wages can actually pay for across the board. These prices may be much lower than they were in the past, but it's all relative.

When everybody is dead broke, and everything has been destroyed, the only way is up from there. Some of the best growth periods throughout history have followed on from great wars for instance.

 

[Happy]

Well, Temjin, it seems the IMF doesn't share your view. On today's Radio National's "The World Today", the head of the IMF declared that Australia's stimulus was "the best in the world" and "the most effective". "Australia was a shining example to the rest of the world, could afford to spend more" etc etc. I can just see our fearless leader's chest swell with pride.

..

Oppositon seems to disagree

From ABC, 1 Apr. 09

OECD FIGURES SHOW 'FLASH FLOOD' STIMULUS NOT WORKING


The Federal Opposition says the latest report on the world economy by the OECD shows that the United States is the only country to have spent more than Australia on economic stimulus packages.
The OECD now expects its members' economies to shrink by more than 4 per cent this year, driving up unemployment.

Opposition treasury spokesman Joe Hockey says the report confirms that the billions of dollars spent by the Government on economic stimulus packages have not worked.
"What Kevin Rudd did was decide to spend, spend, spend - to try and address a problem that he was unable to fix," he said.

"Kevin Rudd's solution to a drought was to create a flash flood and it did not work."
But Finance Minister Lindsay Tanner has told ABC1's Lateline program the OECD figures back up Australia's view that other G20 participants need to continue efforts to stimulate the world economy.
"You would have to expect that the argument for stronger stimulus action across the developed nations would be strengthened by this data because they do underline just how bad the situation is globally," he said.

But, come to think about it, opposition cannot agree and oppose at the same time, can they?

 

[Uncle Festivus]

I am not one for conspiracy theories.....but all this hype spread over the net....and all those old and new guru's coming out of hibernation.....extreme stories and apparently believed by many as gospel......makes me wonder...
:sheep:

Yes, they are extreme stories, apparently spread by the US Fed no less, which sorta turns them into facts. Have a look at some of the 'scary' charts at the Fed's own website - Alfred - then decide if it's all smoke & mirrors.

http://alfred.stlouisfed.org/

Job losses - clearly not your ordinary recession?
Federal Debt - clearly insolvent?
Unemployed - 12.5 MILLION and increasing at 600k per month
World population - somethings gonna give? The unemployed masses will riot for food & justice, or just plain anarchy?

Your 'beer & skittles' view somehow indicates that Australia won't be affected somehow??