Is the Worst Over?

Bernanke says the worst is over.

Yet corporate defaults continue as another 8 debt issues defaulted today, bringing the total year to date to 205. Expect corporate defaults to continue. WSJ today reported Sears in trouble...

Mass Layoffs Continue as July experienced 2,157 mass layoffs (more than 50 workers involved) affecting over 200,000 workers. Small businesses also continue to fold and lose workers at high and mostly unrecorded rates. The unemployment rate of 9.4 hasn't gone up recently because long term unemployed are beginning to be dropped from the role (see post below on prisons for implications)

Corrpution Continues as GMAC and bankrupt CIT bilk retirees by selling notes without adequately reporting risks. Sound familiar?

Mortgage Delinquencies are up considerably among prime borrowers. Deutsch bank predicts eventually 48% of mortgages in US will be underwater by late 2010. Borrowers underwater by more than 10% are very likely to walk away.

Finally, The WSJ reports this morning "Securities Sink Banks in New Phase of Crisis." Regional banks are falling fast due to imploding commercial loans as commercial real estate collapses. The latest problem is occurring as banks "succumb to large amounts of toxic loans and securities they bought from other banks" (A1).

So, where is the recovery?