HappySqurriel on 10 July 2009
One factor that many people seem to be missing is how the continuing rise in the unemployment rate will cascade through the system and (potentially) create new shocks to the system on the whole.
If we're looking at 11% or 12% unemployment at the end of the year the banks that passed the "Stress Test" under the assumption of 8% unemployment will (potentially) be facing failure again, house prices will continue to fall as mortgages are foreclosed on whem people enter bankruptcy, and companies will be forced to scale back on their work force further because families with reduced income are going to dramatically reduce their spending.
