Back to top

Real Time Insight

 

When I started thinking about locating the next Cyprus is really anyone's guess.  There are a myriad of factors that can contribute to a financial crisis.  One of them is unemployment, and while it doesn't tell the whole story I decided to look at that factor to determine who might be next, or at least who we should be worried about.

According to the Bank of Cyprus, the "harmonized rate of unemployment" moved from 6% in 2010 to 9.5% in 2011 and ended last year at 14%.  That is some serious growth in a key factor of economic success for a country.

I then went on to look at the rest of the world... and I found out that 14% unemployment is an enviable rate for at least 74 other nations.  I counted 71 countries that had unemployment rates of 15% or more... three other countries Syria, Turkey and Bahamas had rates higher than Cyprus, but less than 15%.

The top of the list was Congo with 67% unemployment, and Africa placed a significant amount of countries in the Top 35.  Africa being mostly under-developed shouldn't be our focus.  I am not sure that Kenya at 40% or even Ethiopia at 26% have than big of an impact on the world economy.

Let's at least take a look at few countries that could impact the world economy, and I will start with my pick for the source of the next blow up.  Spain has an unemployment rate of 26%, which is a lot for a developed nation, but the blow your mind part of the Spanish situation is that unemployment was only 8% in 2008 ... so it has more than tripled in over the last 5 years.

Next is Italy with 11.7%, which is up from 8.2% in 2008.  Not nearly the blow up that is Spain, but still an increasing rate while most of the rest of the developed world has seen declines in the rate of unemployment.  

Finally, we have France... which has avoided many of the big headlines of being a problem country.  I see unemployment steadily rising in France over the last several quarters.  Their unemployment rate bottomed at 9.5% in mid-2011, but has since increased in each of the last six quarters.  It currently stands at 10.6%.

Based on all of this, do you think that the rate of increase in unemployment can tell us where the next blow up might be?  Do you think it’s one of the three nations that I highlighted or are there warning flags elsewhere?  

Chime in and let us know!

 

 

Just Released: 5 Stocks to Double

Today, you are invited to download a free Special Report from Zacks Investment Research. It reveals five moves that could gain +100% and more in the next 12 months:

One is a "boring" business delivering blistering growth. Another is a red-hot oil and gas producer set to surge on a drilling breakthrough. Still another, an online payment provider, ignited a 53% sales explosion during the past year.

Close This Panel X

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
RPC INC RES 24.91 +8.35%
LITHIA MOTO… LAD 94.59 +4.60%
DELTA AIR L… DAL 39.15 +3.90%
FLAMEL TECH… FLML 14.51 +3.50%
SOUTHWEST A… LUV 28.87 +2.92%