ragerunner

On the subject of supply and demand. Fed's Dudley: 3 million excess vacant housing units "One reason why so little housing is being built is that many existing homes stand vacant. We estimate that there are roughly 3 million vacant housing units more than usual. And more vacancies are added daily as the foreclosure process moves homes from families to mortgage lenders. This stock of vacant homes will shrink when fewer are foreclosed upon and more of these homes are sold or rented out." http://www.calculatedriskblog.com/2010/10/feds-dudley-3-million-excess-vacant.html This imbalance between supply and demand will shrink when income and housing costs rebalance and when employment increases, with wages that support the ability to afford the average housing cost. Low interest rates simply are not solving the root problem.

We have discussed the concept of 'currency wars' and how that is/can affect the US and its economic state. Europe is having more and more unrest in many nations and a lot of it has to do with jobs, debt and the inability to generate increased income for its citizens. One action that a nation or nations might take to try and stimulate job growth is to devalue their currency so that their goods are potential cheaper on the world market. Japan is doing this in a big way and China is not willing to revalue the Yuan for the very same reason. Looking at these types of internal events in different nations can give insite into what pressures may be in play related to future economic decisions. Japan and China's continuing attempts to keep their currencies down are clearly affecting the ability for the US to create jobs to releave the unemployment rate and in turn, stabilize the supply and demand issue for housing. Its a world economy.

French retirement protests take violent turn "PARIS – Masked youths clashed with police and set fires in cities across France on Tuesday as protests against a proposed hike in the retirement age took an increasingly radical turn. Hundreds of flights were canceled, long lines formed at gas stations and train service in many regions was cut in half." "The protesters are trying to prevent the French parliament from approving a bill that would raise the retirement age from 60 to 62 to help prevent the pension system from going bankrupt." http://news.yahoo.com/s/ap/20101019/ap_on_bi_ge/eu_france_retirement_strikes

I agree. There will be a lot of drama, a few tokens of 'love' towards main street that will include a lot of 'harsh' words for the banks and that will be about it. I do think that a few large investment companies might be powerful enough to get some payback for the banks for being dishonest with the products they were sellings. Any loans the banks are forced to take back will then be bought by the Feds (taxpayer). A black eye for the big banks is about all main street can hope for. I think it has become pretty apparent, through all of this, who controls Washington and its not Main Street.

I can't believe we haven't seen more of this already. Man, the lawyers are going to be making a lot of money over the next several years.

Retail sales rise chart Quick note: There was actually a decline month over month from August to September. They revised August up making September lower. The media just didn't pick up on the revision until they had already printed the headlines. http://www.marketwatch.com/story/in-charts-foreclosures-inflation-and-more-2010-10-15?pagenumber=5

Please post what you want. This thread and its previous thread had all kinds of view points. Nothing wrong with that. I think the consumer is spending better than last year (in my job we are seeing a nice uptick in retail sales). The issues with this uptick is, how much of this is just more debt/credit cards? I posted an article just a few pages back that show Americans with credit cards are going deeper into debt on them. If that is what is supporting this uptick in retail sales, then its has issues down the road. If the increase is from the American consumer seeing raises and having more disposable income, then its very good news. I wonder which it is?

Agreed. I think this Christmas will have a nice boost from Christmas 09.

There is less cards in the deck and they shuffed them differently. "J.P. Morgan reported a third-quarter profit of $4.42 billion, or $1.01 a share, up from $3.59 billion, or 82 cents a share, a year earlier. Revenue on a managed basis, which excludes the impact of credit-card securitizations and is on a tax-equivalent basis, dropped 15% to $24.34 billion." http://m.foxbusiness.com/quickPage.html?page=19453&content=43666491&pageNum=-1

Every once in a while we get a comment that this thread is to negative. So, I would like to put a positive spin on the above information. Since JPMorgan has halted foreclosures (and may be halted for a long time to come), its allowing them to set aside less money for foreclosures losses on their balance sheets, sliding that large chunk of money into the income column and getting an nice bounce for their stocks. When it comes to Wall Street, its all about now and me, no thought for the future or the American economy. Which is becoming clear and clear as more and more information comes to light on how they have been doing business. It will be interesting to see if the elephant in the middle of the room turns into a T-rex some where down the road.

The Chinese drywall issues is really and ugly one. Have family in that area that had to deal with that. Southwest Florida, Phoenix, Las Vegas and parts on the Inland Empire are going to stay in a housing bust for years to come. Supply and Demand in these locations are just completely out of control and future job growth in many of these locations give little hope to consume the supply anytime in the future.

Part of what will help start 'healing' the housing bust is getting people out of homes they can't afford to be in. This will then allow those individuals to start on the path of potentially becoming a future buyer down the road, which will increase demand in the future. The longer this process takes the further down the road the recovery for housing will be. Delaying the ability to readjust supply and demand will also increase the time frame for the construction/RE industry to heal itself. I also think that having an even longer period of time, before we work through the foreclosures, will give buyers the feeling that potentially cheaper prices will be available down the road (and may very well be). This will delay purchases and add even more pressure on supply and demand. These are just some of the items that I believe, this delay in foreclosures, will weaken the recovery of the demand side. What this process does do, is allow banks to hold onto fantasy mark to market prices on their books for a longer period of time (Once they foreclosure and resale they must then show the losses on the books). Depending on your point of view, this could be a good or bad thing.

Do people have rights, yes. So if illegal activities took place during the foreclosure process, then that needs to be dealt with. Will it prolong the housing downturn. Yes. I would say that most people were not 'wrongfully evicted', they were evicted because they were not making their mortgage payments. That is part of the loan contract, if you stop making payments the bank has the right to take control of the house and remove it occupants. At the end of these lawsuits, etc. the results will still be the same, if you are not paying for the house then you have to get out. What will result from these lawsuits: - Some people will get to stay in their house mortgage free for a little longer; - Banks will hopefully get an ugly black eye.

Thanks for the chart. I think this chart shows visually why we are seeing a greater potential for a currency war. At the beginning of all of this it was about 'saving the banks' and many of the world banks 'needed' saving. So we saw more cooperation on the international scene to work together since many nations had bank problems and still do. Now we are seeing the shift to what is considered the next big problem, jobs. Europe is starting to see some noticeable unrest in certain countries and a lot of it has to do with unemployment. The US is starting to feel the need to take a more proactive stand to help create jobs locally as well. One way for a nation to potentially create jobs is to create a currency situation that make its goods more affordable on the national and international market. If China won't reset the value of the Yuan, then other countries are going to take steps to lower the value of their currency to compete (Japan has been very active of late in this effort). This process will grow if/when internal pressure from citizens grow. A currency war and the devaluing of a nations money has its own problems, but the flip side might outway it, especially for short term politics.

That has been happening since the big hurricane season back in 2004. For many in Florida the only insurance that is available is the state run home insurance company (I think its called Citizens Property Insurance Corporation).

You couldn't make this stuff up, even if you tried. What's a few more trillion and they usually estimate low. I am sure record Wall Street bonuses will also apply. Banks' $4 trillion debts are 'Achilles’ heel of the economic recovery', warns IMF "More taxpayer support is needed to ensure global financial stability despite the billions already pledged, the International Monetary Fund has warned, as banks remain the “achilles heel” of the economic recovery." http://www.telegraph.co.uk/finance/economics/8043800/Banks-4-trillion-debts-are-Achilles-heel-of-the-economic-recovery-warns-IMF.html

Economy loses jobs at faster pace in September Nonfarm payrolls down 95,000 as governments reduce rolls "WASHINGTON (MarketWatch) — The U.S. economy lost 95,000 nonfarm jobs in September as local and state governments shed positions at a faster rate than the private sector was adding, the Labor Department reported Friday." http://www.marketwatch.com/story/us-economy-sheds-95000-jobs-in-sept-2010-10-08?dist=countdown And the ADP report showed that the private sector was losing jobs as well. Add in the growing foreclosure numbers, and the race around the world to devalue currency and we are clearly going to see more significant stimulus and QE. You know its a pretty bad job market when the birth/death model doesn't save the day right before an election. The good news is, the recession is over.

Warren is more special than all the other suburban counties in America. They have Snoopy and he will make everything wonderful. :wink2:

Actually, maybe, Yes. US Suburbs Bearing Brunt of Poverty Amid Downturn "WASHINGTON (Oct.7) -- Battered by the downturn, America's suburbs are bearing the brunt of poverty among those of working age that has climbed to its highest level in almost a half century, creating strains on dwindling safety-net programs focusing mostly on the inner-city poor. A pair of analyses by the nonprofit Brookings Institution paint a bleak economic picture for the 100 largest metropolitan areas over the past decade and in the coming years, when the U.S. poverty rate is projected to edge toward 15 percent." http://www.aolnews.com/nation/article/suburbs-bear-the-brunt-as-us-poverty-climbs-in-downturn/19664578 Maybe, Monroe or West Chester are the next Over the Rhine, without the great architecture. :lol:

A quick look at what is going on the world economic stage. Its a race to create jobs to head off unrest within a country. China Asks The World Not To Beat The Yuan "China’s Premier Wen Jiabao has told European leaders that if they join the US in an effort to devalue the yuan that all will regret the decision. “I say to Europe’s leaders: don’t join the chorus pressing [China] to revalue the yuan,” Wen said." Read more: China Asks The World Not To Beat The Yuan - 24/7 Wall St. http://247wallst.com/2010/10/07/china-asks-the-world-not-to-beat-the-yuan/#ixzz11ggWcw2A IMF chief warns about lack of cooperation Strauss-Kahn says currency war bad for global economy "WASHINGTON (MarketWatch) -- Cooperation on the global economy is “decreasing,” the head of the International Monetary Fund said Thursday, as he warned countries about the risks of a so-called currency war." http://www.marketwatch.com/story/imf-chief-says-global-cooperation-falling-2010-10-07 Race to the bottom in currency markets Commentary: Just another form of protectionism "SAN FRANCISCO (MarketWatch) — Avoid protectionism. If there’s been one mantra among political and economic leaders since the financial crisis rocked the world two years ago, it’s been to avoid protectionist policies at all costs. History tells us, if not Federal Reserve Chairman Ben Bernanke, that it was the headlong rush among countries into protectionist trade policies after the stock market crash of 1929 and subsequent financial crisis that sent the world spiraling into the Great Depression in the 1930s." http://www.marketwatch.com/story/race-to-the-bottom-in-currency-markets-2010-10-07

Yes, But this was not expected. It also put employment numbers down significantly from September of 2009 and 2008 (the so called heart of the recession). YOY continues to get worse, not better. This is one major reason having the recession called over is useless. On the street things have not improved, and on the private sector employment side they continue to deteriorate. http://www.adpemploymentreport.com/ I also think this continuing lose in the private sector job world is going to put a lot more pressure on commercial and office real estate.

Consumer Confidence is clearly important. In Sept. 2007 before the recession started Consumer Confidence Index was about 110 (100 is the base). Sept. 2010 CCI is at 48.5 (a drop of 4.7 from Aug.). It has not been this low since the benchmark year for the index was set in 1985. I think this thread is right with the average opinion of Main Street on our current economy. It sucks.

Our friends at Goldman are giving us a glimps into their crystal ball and what a crystal ball they have proven to have. Goldman Sachs: US Economy May Be 'Fairly Bad' "Goldman Sachs Group Inc. said the U.S. economy is likely to be “fairly bad” or “very bad” over the next six to nine months." “We see two main scenarios,” analysts led by Jan Hatzius, the New York-based chief U.S. economist at the company, wrote in an e-mail to clients. “A fairly bad one in which the economy grows at a 1 1/2 percent to 2 percent rate through the middle of next year and the unemployment rate rises moderately to 10 percent, and a very bad one in which the economy returns to an outright recession.” http://www.bloomberg.com/news/2010-10-06/oldman-sachs-says-u-s-economy-to-be-fairly-bad-recession-is-possible.html

Well, the southwest coast of Florida is cleary sprawlville. But in all fairness, parts of Naples and Fort Myers have some nice urban center areas with some great historic neighborhoods. To bad they didn't take pictures of that as well.

What's a small 60,000 miss to the economist, just another payday. I am sure when the FED numbers come out on Friday things will look better. That birth/death model sure comes in handy when job loses are high. It also helps when the model just assumes X amount of government jobs are being created every month. Even though state, county and city governments are axing away. Private sector sheds 39,000 jobs in Sept: ADP "WASHINGTON (MarketWatch) -- Employment in the U.S. private sector fell by 39,000 in September, the first drop since January, according to the ADP employment report released Wednesday. The drop surprised economists who had on average anticipated a 20,000 increase. U.S. stock futures pointed to a flat start on Wall Street after the report’s release." http://www.marketwatch.com/story/private-sector-sheds-39000-jobs-in-september-adp-2010-10-06