ragerunner

This is why housing and home prices still have another leg down coming. The true adjustment has not been allowed to happen in its fullest yet. Only delayed. Housing: Time to Pull the Plug on Government Support "These policies are geared toward propping up home prices, the definition of a perverse public policy. Artificially holding prices at above-market levels harms new potential buyers, from young adults starting their own households to immigrants putting down stakes in the American Dream. The subsidies wrongly delay the inevitable home market price adjustment to excess supply in many markets across the country." I don't see anything being gained by holding housing prices higher than the market rate," says Dean Baker, economist and co-director of the liberal Center for Economic & Policy Research in Washington. "It is difficult to see why the government would want to pursue policies that would encourage people to pay too much for homes." http://www.businessweek.com/investor/content/feb2010/pi20100226_589467.htm

Bernanke delivers blunt warning on U.S. debt Stage is set in U.S. for a Greek tragedy "With uncharacteristic bluntness, Federal Reserve Chairman Ben S. Bernanke warned Congress on Wednesday that the United States could soon face a debt crisis like the one in Greece, and declared that the central bank will not help legislators by printing money to pay for the ballooning federal debt." http://www.washingtontimes.com/news/2010/feb/25/bernanke-delivers-warning-on-us-debt/ I wonder what congress thinks about having the FEDs tell them they will not help them? I still don't believe the FEDs will stop the printing press until external forces make them stop. Greece didn't. Japan hasn't stopped yet. Then why should we? Is Bernanke just blowing more smoke, or does he see the writing on the wall. China has stopped buying American debt and has started dumping instead. Japan and Britian have picked up the slack over the last few months, but they are both broke and will not be able to keep this up very long. Can the US economy go lower and have lost decades, yes. Can it avoid this, maybe, but I really believe the clock is ticking. I wonder if the IMF has enough funds to bail the US out? Maybe Canada and Mexico will step up?

This concept of declining population has captured my interest for several years now. While I know its not an apple to apple comparison, we will get to watch this process play out in many European countries, Japan and Russia over the next several decades. It may give some insight into how this might affect some of the US states if they enter a similar population decline. It might also give helpful solutions on how to deal with this shift in population and its economic affects. "I'm still bullish on the American economy long-term." While I think the US has plenty of growth potential in the future, I am not convinced its a given that we will grow. Right now we have done a very poor job at allocating our resources. We have squandered a lot of our financial wealth developing a built environment that we can't afford to maintain (car oriented, sprawl, etc) and its cost are growing every year. This poorly built environment is not well positioned to be successful in a 21st century world economy. If we don't correct these misallocations then we may very well find that a stagnate economy is what we will get for decades to come. History has shown time and again, that countries/empires that poorly allocated their resources became irrelevant or less relevant as time went on.

They are still building to many. Inventories are still way to high. New home sales hit record low "The Commerce Department said sales dropped 11.2 percent to a 309,000 unit annual rate, the lowest level since records started in January 1963, from an upwardly revised 348,000 in December." http://finance.yahoo.com/news/New-home-sales-hit-record-rb-2868445540.html?x=0 Home purchase loan demand at lowest since 1997 "NEW YORK (Reuters) - U.S. mortgage applications fell for a third straight week, with demand for home purchase loans sinking to the lowest level in 13 years as inclement weather weighed, data from an industry group showed on Wednesday." http://finance.yahoo.com/news/Home-purchase-loan-demand-at-rb-1475575272.html?x=0&sec=topStories&pos=7&asset=9cd52a405695cff9b75ccfab2864c519&ccode=1 Darn winter weather. :wink:

More likely, at the Federal level, there will be draconian cuts before taxes go up, since the politics of the situation would favor cuts. We are already seeing that. The state and local situations would be actual defaults since the revenues aren't there any more to support extensive local and state governements. I don't think the US government will take drastic spending cuts unless they are forced too by external forces out of their control. i.e. No one buys our debt. I believe they will go with higher taxes first.

With all funds now secured, construction equipment and work has now begun on the $480 million dollar transit hub. Its going to be really fun watching this massive project get built over the next 4 years. I hope we see a lot more of these mass transit hubs constructed in the US.

US Jan mass layoffs edge up on weak manufacturing "A total of 182,261 workers were affected last month." "Since December 2007, when the worst recession in 70 years started, the U.S. economy has shed 8.4 million jobs." "Payrolls have declined every month since then except for last November when they increased by 64,000." http://www.reuters.com/article/idUSN239866720100223?type=marketsNews

I think this is almost a given now. There are going to be more sovereign defaults, potential state defaults, and municipal defaults and sooner or later the US printing press will be turned off and taxes are going to increase significantly. Other options: - The US decides to default on our debt and give the world the finger. - Another option is the world creates a single currency. Harvard’s Rogoff Sees Sovereign Defaults, ‘Painful’ Austerity "Feb. 24 (Bloomberg) -- Ballooning debt is likely to force several countries to default and the U.S. to cut spending, according to Harvard University Professor Kenneth Rogoff, who in 2008 predicted the failure of big American banks." "The U.S. is likely to tighten monetary policy before cutting government spending, sending “shockwaves” through financial markets, Rogoff said in an interview after the speech. Fiscal policy won’t be curbed until soaring bond yields trigger “very painful” tax increases and spending cuts, he said." http://www.bloomberg.com/apps/news?pid=20601087&sid=aaeViPPUVSw4

So lets see, Wall Street and the FEDs are telling everyone the recession is over in the US, green shoots for everyone. Yet the states that make up the US believe the worse is yet to come. Add in the municipalites and their issues on top of this. Bad economies in states to worsen: governors "The situation is fairly poor for a lot of states around the country. In fact, most states," Vermont Governor Jim Douglas, who is chairman of the association, said at a press conference at its annual meeting. "What we're finding out from a fiscal standpoint is that the worst is yet to come," Douglas said." http://www.reuters.com/article/idUSTRE61J26V20100220

If this keeps up it will really dent any potential economic upswing. This would also give us a 15%-17% inflation rate for the year. Either the producers will pass it on to the consumer or take a big hit in revenue. Producer prices soar 1.4% on energy costs "WASHINGTON (MarketWatch) -- U.S. wholesale prices rose a seasonally adjusted 1.4% in January on double-digit increases in gasoline and home heating oil, the Labor Department estimated Thursday." http://www.marketwatch.com/story/producer-prices-soar-14-on-energy-costs-2010-02-18 Novembers PPI was 1.5% Decembers PPI was .4% While the 'official' federal unemployment numbers goes down, the real unemployment numbers continue to rise. Jobless claims rise 31,000 to 473,000 Total jobless claims rise to 11.8 million, including federal benefits "WASHINGTON (MarketWatch) -- The number of people filing initial claims for state unemployment benefits rose by 31,000 to a seasonally adjusted 473,000 last week, the Labor Department reported Thursday, a sign that labor markets remain very weak." http://www.marketwatch.com/story/jobless-claims-rise-31000-to-473000-2010-02-18-83100

we have at least 61 million in local funds. Sorry, I guess I missed when those funds were announced. Can you list them again.

It appears that most of the projects have significant local matching funds and/or tax dollars. I think it would be very helpful for Cincy to figure out that part of the equation. The FEDs want to see a true financial commitment from the local community.

Indy Connect aims to gather public input "February 10th, 2010 -- INDIANAPOLIS—Central Indiana’s transportation future took a major step forward today with the announcement of Indy Connect: Central Indiana’s Transportation Initiative, a regional effort to gather public input on a draft transportation plan for Central Indiana. The announcement was made today at Union Station and was highlighted by the official hand-off of a year-long regional transportation study conducted by the Central Indiana Transit Task Force, a group of business leaders dedicated to identifying transportation solutions for Central Indiana residents." http://www.indyconnect.org/press.htm For more info, including a video and interactive map. http://www.indyconnect.org/ I think what is interesting about this mass transit effort, is that its being lead and pushed by the business community. Not just government. Should be interesting to see how it plays out over the next year or two.

Denver lands $80 million dollar grant from FEDs for rail. More excepted next year. Feds deliver on loans and grants RTD needs for FasTracks "FasTracks’ federal funding picture came into sharper focus today as the Federal Transit Administration announced it will provide the sought-after $304 million in loans toward the conversion of Denver Union Station into a regional commuter rail hub. FTA Administrator Peter Rogoff, who traveled to Denver for the announcement, also said that by including $80 million in grants to the two commuter rail corridors to Denver International Airport and Arvada-Wheat Ridge in President Obama’s proposed 2011 budget, the feds are sending a clear signal that they intend to sign agreements with RTD, likely next year, to provide New Starts grants for the East Corridor and Gold Line commuter rail projects." http://www.inside-lane.com/2010/02/05/feds-deliver-on-loans-and-grants-rtd-needs-for-fastracks/

The joy of sprawl.

Another day another surprise for the 'experts'. First-time jobless claims rise unexpectedly New jobless claims rise unexpectedly to 480,000 as layoffs continue, jobs remain scarce http://finance.yahoo.com/news/Firsttime-jobless-claims-rise-apf-106391038.html?x=0&sec=topStories&pos=1&asset=cad1a1ff92758a185ac973f70ef68115&ccode=mp I know I have brought this up several times in the past, that Europe and Japan are in economic crap and its getting deeper every day. Of course, is the US really that far behind? If Great Britian joins the 'party' the world markets are going to go crazy. Greek debt woes spread to Portugal and Spain Portuguese CDS hit record high as contagion fears intensify http://www.ft.com/intl/markets Sovereign debt fears rattle investors Euro and equities tumble and yields widen as contagion spreads http://www.ft.com/intl/markets And the big shock for the day. :wink: BofA charged with ‘duping’ shareholders Lewis and Price face action for Merrill deal http://www.ft.com/home/us

That is correct. That is why a 50% increase from $100,000 is $150,000. But a 50% decrease from the new $150,000 brings the home price back to $75,000. The decrease number is always a bigger financial lose because it comes from a higher starting price.

Green Shoots for everyone!!!!! Verizon to Cut 13,000 Jobs as Businesses Reduce Lines http://www.bloomberg.com/apps/news?pid=20601087&sid=agU7mHVKGOFk&pos=4 US meat sector job cuts to almost 2000 in three days http://www.meatinternational.com/news/us-meat-sector-job-cuts-to-almost-2000-in-three-days-id2277.html Walmart to Cut 11,200 Sam’s Club Jobs, Cornell Says http://www.bloomberg.com/apps/news?pid=20601087&sid=aMpbHZkczetk&pos=2 Home prices dip in November, Case-Shiller says http://www.marketwatch.com/story/home-prices-dip-in-november-case-shiller-says-2010-01-26

Denver's Union Station Transit Hub secures final funding ($480 million - cost doesn't include the private investment only the transit public costs). Construction will begin within the next month or so. Here are some picks of the project.

We have never in recorded US history seen duration of unemployment go this high and its still climbing. This will continue to impact the economy and the housing market (along with many other things) into 2010. Home sales tumble as tax credit lift wanes "WASHINGTON (Reuters) - Sales of previously owned homes suffered a record drop last month as the boost from a popular tax credit waned, raising doubts the housing market recovery can be sustained without government support." "Today's numbers clearly indicate that the rebound in housing demand observed so far has been largely supported by government programs and therefore that the recovery is far from becoming self-sustaining," said Anna Piretti, an economist at BNP Paribas in New York." http://www.reuters.com/article/idUSTRE60O3ES20100125

Agreed, I think a lot of the analyst thought that the money that was flowing to those, now gone retail companies, would simply be diverted to others. (Circuit City to Best Buy, Frys and Wal-Mart.) The real truth of the matter is, there is not as much money on Main Street today as there was 2 years ago. Trillions have been wiped out during this recession and I think Trillions more is still to come.

This is only the tip of the iceberg. The commercial defaults have only started their engines. These defaults are going to grow significantly over the next few years. These are some unattractive numbers considering a lot of lenders have been 'postponing' moving foward on a lot of the loans that are already in default. Cincinnati’s real estate problems threaten recovery "Cincinnati’s commercial real estate owners were in default on $306 million in securitized loans at the end of 2009, boosting the region’s default rate to nearly 9 percent. New figures from the New York-based research firm Trepp show Cincinnati’s default rate is 284 basis points higher than the national average of 6.1 percent. Cincinnati ranks 28th in the country in the value of loans in default. Eight cities have more than $1 billion in delinquencies." http://www.bizjournals.com/cincinnati/stories/2010/01/18/story1.html?b=1263790800^2727911

I was about to post the same thing before I read your post. Happens every year, same time. There usually is a drop in workforce after the holidays. But, to have a retail sales drop from November to December (with the holidays) is not normal. That is why the economist were predicting a nice up tick, not a lose. Johio is right, they should have know it was coming because of all the unemployed, underemployed, decreases in incomes and foreclosures. The economy is still in serious pain, expecting people to go out and spend, spend, spend is not in the cards at this time.

So true, but it was a surprise to the Wall Street economist. What has become amazing in all of this is they apparently don't see the obvious like you do.

Some good news on the transit/streetcar funding front. US DOT just removed (yesterday) their long standing requirements that limited transit/rail funding opportunities. This is a significant step forward and should allow transit to be more competitive for federal dollars. US DOT also announced that they may tap into TIGER funds ($1.5 billion) for rail projects. US DOT will also be announcing who will be awarded the $130 million in streetcar funds early this year. A maximum of $25 million per project will be allocated. They will also be allocating $150 million for bus transit needs as well. Hopefully Cincy is one of the 5 getting the first round of $25 million.