SOBER LOOK 
April 29, 2012
The latest Spanish unemployment rate was published today. There isn’t much one can say about it other than to draw the following parallel.
Here is the chart of US unemployment rate going into the Great Depression: it maxed out at 21% – 22% (early to mid 30s).
|US unemployment rate (source: Wikipedia)|
This is Spain’s unemployment rate now: 24.4%.
|Spain’s unemployment rate (source: INE)|
Even with last night’s downgrade of Spanish government debt to BBB+, given these unemployment figures it is hard to see how these bonds could still be classified “investment grade”.