The unemployment rate now stands at 10.2%, yet stocks are at a 2009 high. The bulls will tell you not to worry; the unemployment rate is a lagging indicator. True as that may be, Charlie Gasparino author of The Sellout, has a word of warning: the jobs data may be a leading indicator when it comes to the health of our banking system.
One of Gasparino’s sources, Calyon Securities banking analyst Mike Mayo (who warned of the credit bubble before the crash) tells him, if unemployment rises to 11%, “there could be an issue where we have round 2 of this crisis.”
Why?