Today, we’re serving up a snapshot of the U.S. banking system. (Hint: It’s healing.)
We’re also putting the latest jobs data into perspective. It’s still not pretty.
And last but not least, we’re dogging the upcoming Facebook IPO yet again. For a perfectly legitimate reason, of course.
Enjoy!
The banking sector suffered mightily through the financial crisis. Literally hundreds of banks went belly-up. But time heals all wounds. And the healing is definitely under way.
So far, the FDIC has only shuttered 23 banks. That’s down from 40 failures at the same time last year. And well below the pace in 2009 and 2010.
The unofficial list of problem banks is falling, too, according to CalculatedRiskblog.com.
Bottom line: Since banks got us into this whole mess, they’re going to have to lead us out. And although the fundamentals aren’t top notch, they’re improving. And that, my friends, is reason enough to be selectively bullish.
My True Stance on Unemployment
Readers reamed me for suggesting that the employment situation in the United States is just hunky-dory. That’s not what I said.
I merely pointed out that the U.S. youth unemployment rate is nothing to moan about compared to youth unemployment rates in Europe.
I’ll be the first to tell you that the jobs picture in the United States remains less than rosy. Just look at the labor force participation rate, which I called to your attention in early February. It measures the percentage of working-age Americans that are employed or unemployed, but looking for a job. And it keeps dropping.
The current reading of 63.6% is the lowest level since 1981.
Then there’s the fact that a massive unemployment gap remains. Job losses from the start of this recession are far from being recouped in percentage terms.
Bottom line: We’re witnessing a recovery in the employment market. But it’s a mind-numbingly slow and fragile one.
Facebook is NOT the Next Google
The hype surrounding Facebook’s upcoming IPO continues to mount. And it amazes me that people keep comparing it to Google’s IPO.
It doesn’t compare! Case in point: revenue growth.
In the four quarters preceding its IPO, Google’s sales more than doubled. Facebook’s revenue growth doesn’t even come close to measuring up to that standard. Heck, Facebook’s doesn’t even compare favorably to Zynga.
Bottom line: I still recommend you avoid Facebook’s IPO like the plague.
The views and opinions expressed herein are the author's own, and do not necessarily reflect those of EconMatters.
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