World Bank President gives markets reality check: ‘unemployment may cause loan defaults’ Gee ya think?!

Seriously. That is the CNBC headline: ‘Unemployment May Cause Loan Defaults in US’. Well that is a keeper for the No Shxt Sherlock files. In other news Water is Wet!

Since it is the World Bank President saying it and not we little people maybe the markets will BUY A FRAKKIN CLUE!

CNBC:

Stubbornly high joblessness threatens to trigger loan defaults and drag on consumption next year, hobbling a U.S. economy struggling to rebound from recession, World Bank President Robert Zoellick said Wednesday.

...”You’re going to have problems with delinquencies of credit card loans, consumer loans, people won’t be able to pay their mortgages,” Zoellick told reporters in Singapore. “Some banks are going to continue to be troubled by bad loans.”

Government stimulus spending will likely fuel economic growth through the middle of next year, Zoellick said. After that, consumer spending and business investment must take the baton to boost expansion, he said.

“If you’ve got large scale unemployment, if you’ve got consumers rebuilding savings and deleveraging, I don’t think the consumer is going to play that role,” he said. “What’s the other source of demand?”

Gee that sounds familiar! Cause we have been saying it here at MiM for OVER A YEAR!!

…Governments should execute existing stimulus packages, but hold off on implementing new ones, he said.

Asian authorities should consider ways to tighten monetary liquidity, such as raising interest rates, before asset price bubbles get out of hand, Zoellick said. Asian stock indexes and some property markets have soared since March….

Can you say China bubble? Hong Kong real estate bubble?

November 11, 2009. Tags: Asian Economy, Consumer Confidence, Consumer Spending, Obama Budget, Obama economy, Robert Zoellick, Unemployment, US consumer, US economy, US GDP, US Stimulus, World Bank, World Economy. Economy, Finance, Foreclosures, Housing, Labor Department, Obama Administration, Politics, Popular Culture, Unemployment Statistics, Wall St. Comments off.