Ultra Short Financials

[This is the final installment of an ongoing series covering news on the future "replicas" of the global financial crisis, and the profit play these events can trigger.]

By Jason Simpkins
And William III Patalon
Money Morning Editors

U.S. consumers are already losing their jobs at a rapid pace.

The same is now set to arrive at their lines of credit.

But with so many Americans have lost their main source of income - their jobs - at a rate of more spiral is an economy that derives two-thirds of its power since the end consumer spending up mired in its worst funk for decades because these same consumers are losing their charge accounts?

Before dismissing the possibility, consider this: The U.S. economy weakened in all regions since mid-October, which has become more difficult to obtain loans and credit demand has declined, the Fed said in its Regional economic survey report yesterday (Wednesday). The so-called "Beige Book" report - published two weeks before the central bank policymakers are to meet and consider changes in interest rates - said that retail sales, tourism spending and manufacturing decreased in most places, housing markets labeled as "low" and concluded that the estate commercial real estate "generally weakened," Bloomberg News reported.

"We want an economy that is not only a recession but a recession that is growing rapidly," former Fed Governor Lyle Gramley, now senior economic adviser at Stanford Group Co.
told Bloomberg Television. "It's certainly a gloomy report, but no, I think, worse than what you would expect given the data [we saw] coming in."

The United States has been in recession for a year, the National Bureau of Economic Research (NBER) reported this week. This one to two economic punch could generate much-financial crisis "Aftershock" that experts from many observers. Only two of the last 10 recessions to be held since the Great Depression lasted a full year. But it could continue well into 2010.
To understand the forces at work, first examine the prospects for employment in the United States.

The ranks of workers Attenuation

nonfarm payroll employment fell by 240,000 in October and the unemployment rate jumped to 6.5%, up 6.1% last month, the Bureau of Labor Statistics reported in early November. October drop in employment followed declines of 127,000 in August and 284,000 in September.

This means that employment in the United States dropped 1.2 million jobs in the first 10 months of the year, more than half of the decline occurring in August, September and October.

Unemployment government numbers for November will not be released until tomorrow (Friday) - even if it is expected to show that the U.S. economy lost jobs for the 11th straight month, Bloomberg News reported.

But a report based private payroll data released Tuesday said that U.S. companies eliminated 250,000 jobs in November - an amount far greater than what was expected and the most since November 2001, said ADP Employer Services, a unit payroll processor Automatic Data Processing Inc. (ADP). This would take the total number of job losses for the year to 1.5 million.

The ADP report prompted some analysts to increase their estimates of job losses we see in the report of the future labor department. Among the new forecast a decline of 400,000 payroll Goldman Sachs Group Inc (GS) and a.