U.S. Sues UBS; Unemployment Highest Since 1967; BoA Criticizes Housing Plan; Oil Soars Over $39; HP Lowers Forecast; Brazilian Jetmaker Cuts 20% of Workforce

Always being on the lookout for inflation is part of The Mogambo Way (TMW), as there is nothing else that can destroy a society faster than a lot of angry people who cannot afford to buy food for themselves or their hungry children, and after awhile the incessant whining and crying of hungry babies gets on the nerves of the adults both in the room and for blocks around until, suddenly, one day, something just snaps and there is Hell To Pay (HTP).

The number of Americans filing new claims for jobless benefits rocketed to a 26-year high last week, surpassing already gloomy forecasts, as the U.S. economy sinks deeper into recession.

In the currency market, the dollar slipped against the euro. Late Thursday, the euro was trading at $1.2917 vs. $1.2837 on Wednesday.

In the currency market, the dollar rallied again against the euro. Late Friday, the euro was trading at $1.5383 vs. $1.5421 on Thursday.

The US unemployment rate rose to 5.5% in May, the biggest jump since 1986.

The picture would be even bleaker were it not for controversial changes in statistical methodology at the US Department of Labor, says Dave Gonigam in The Daily Reckoning.

Slowly but surely, awareness is growing that government economic figures are being cooked.

Since the beginning of the subprime crisis last July, financial companies around the world have fired a total of 83,000 workers, sparking fears that the global recession could be worse than expected. This from Bloomberg:

It’s as if the entire workforce at Goldman Sachs Group Inc. and Morgan Stanley vanished in less than a year.

From Tokyo to London to New York, financial companies announced plans to shed more than 83,000 jobs since last July as revenue and compensation pools evaporated, according to figures compiled by Bloomberg.

Former Federal Reserve Chairman Alan Greenspan told the Financial Times today that, “I still believe there is a greater than 50 per cent probability of recession.” But, “that probability has receded a little and I think the probability of a severe recession has come down markedly”.

In the currency market, the dollar reversed its recent trend and pushed higher against the euro. Late Thursday, the euro was trading at $1.5701 vs. $1.5791 on Wednesday.

“When sorrows come, they come not single spies, but battalions…”

Hamlet