More easing is probably going to happen in the not to distant future. But, if they can get oil prices back down they may be able to hold on longer than many expect. Let hope Bernanke predication that the economy will pick up in the second half of the year comes true. Of course this is the same guy who told us subprime was contained, and we would not go into a recession.

 

Bernanke Leaves Door Open to Further Easing

 

"Federal Reserve Chairman Ben S. Bernanke left the door open to a fresh shot of monetary stimulus should the economic rebound he’s predicting fail to materialize.

 

The economy will probably overcome constraints from elevated energy prices and Japan- related disruptions to manufacturing, he said. Still, declining home prices, high unemployment and weaknesses in the financial system may restrain the recovery in the longer term, he said."

 

"While Bernanke and his Fed colleagues are predicting growth will pick up in the second half of this year, the slowdown in the first six months forced them to mark down their projection for all of 2011."

http://www.bloomberg.com/news/2011-06-23/bernanke-leaves-door-open-to-easing-if-economy-weakens-further.html

 

The amount of people becoming unemployed continues to far exceed our ability to create new jobs. Until the economy can fix this issue a true recovery is going to be very hard to achieve.

 

Jobless Claims Rise, Confidence Falls

 

"Applications for unemployment benefits increased 9,000 in the week ended June 18 to 429,000, Labor Department figures showed today. The level of claims exceeded the highest estimate in a Bloomberg News survey in which the median projection called for 415,000 filings. The Bloomberg Consumer Comfort Index dropped to minus 44.9 last week from minus 44."

http://www.bloomberg.com/news/2011-06-23/initial-jobless-claims-in-u-s-rose-9-000-last-week-to-429-000.html

 

Can they get oil prices back to a level they will not cause a negative effect on the economy?

 

Reserves Tapped, Oil Price Plunges to 4-Month Low

http://www.bloomberg.com/news/2011-06-23/crude-oil-tumbles-to-a-four-month-low-after-iea-says-it-will-tap-reserves.html?cmpid=

 

The oil reserve play is clearly an attempt to manipulate the inflation environment since the Fed has limited power at this point w/ rates approaching zero. It can also be done w/out getting the whole debt ceiling discussion going.

This 'little' issue seemed to have be swept under the rug for the MSM over the last 6 or 9 months but, it doesn't mean it has went away. I know through my job that many banks continue to extend and pretend on the commercial side in an effort to not have to show the true lose by foreclosing. How long they will kick this can down the road has become anyone guess. I will say a 49% hair cut across the board is pretty severe and its appears to not be a the bottom.

 

U.S. Commercial Property Prices Decline on Distressed Sales, Moody’s Says

 

"U.S. commercial property prices fell in April as sales of distressed assets made up a large share of transactions, according to Moody’s Investors Service.

 

The Moody’s/REAL Commercial Property Price Index dropped 3.7 percent from March and 13 percent from a year earlier. It’s now 49 percent below the peak of October 2007 and at its lowest point in data going back to December 2000, the company said in a report today."

http://www.bloomberg.com/news/2011-06-22/u-s-commercial-property-index-falls-to-record-on-distressed-properties.html?cmpid=yhoo

 

 

This just can't be true. The honorable GS and some of the other big boys on Wall Street would never artifically manipulate the markets for a profit at Main Street and other expense.

 

Wall Street Gets Eyed in Metal Squeeze

Some Say Warehousing Inflates Prices

 

"Goldman Sachs Group Inc. and other owners of large metals warehouses are being scrutinized by the London Metal Exchange after being accused by users like Coca-Cola Co. of restricting the amount of metal they release to customers, inflating prices."

 

“The situation has been organized artificially to drive premiums up,” said Dave Smith, Atlanta-based Coca-Cola’s strategic procurement manager. “It takes two weeks to put aluminum in, and six months to get it out.”

 

"In recent years, major investment banks like Goldman and J.P. Morgan and commodities houses like Glencore have been snapping up warehouses around the world, turning the industry from a disperse grouping of independent operators into another arm of Wall Street. The LME has licensed about 600 warehouses around the world."

http://online.wsj.com/article/SB10001424052702304186404576389680225394642.html

 

This 'little' issue seemed to have be swept under the rug for the MSM over the last 6 or 9 months but, it doesn't mean it has went away. I know through my job that many banks continue to extend and pretend on the commercial side in an effort to not have to show the true lose by foreclosing. How long they will kick this can down the road has become anyone guess. I will say a 49% hair cut across the board is pretty severe and its appears to not be a the bottom.

 

U.S. Commercial Property Prices Decline on Distressed Sales, Moody’s Says

 

"U.S. commercial property prices fell in April as sales of distressed assets made up a large share of transactions, according to Moody’s Investors Service.

 

The Moody’s/REAL Commercial Property Price Index dropped 3.7 percent from March and 13 percent from a year earlier. It’s now 49 percent below the peak of October 2007 and at its lowest point in data going back to December 2000, the company said in a report today."

http://www.bloomberg.com/news/2011-06-22/u-s-commercial-property-index-falls-to-record-on-distressed-properties.html?cmpid=yhoo

 

 

 

The commercial R/E market is going to have a meltdown just like housing. There are way too many dead malls, big-box stores and strip malls out in sprawl that are worth nothing. But as of right now, the properties are still valued in the six-or-seven digit range. Even the land that they're on is worth barely above farm value in actuality - and that's only because they are graded and have city water and sewer. It's going to be curtains for these property holders when the true value of these properties is exposed.

 

The recent "years to recover from the recession" report developed for the league of mayors is generating more coverage.

 

This time from "24/7 Wall Street", with a "list" article Ten Cities That Will Take a Decade to Recover from the Recession....which has some smaller cities for a change.  There are some basic stats and blurb for each city on the list. 

 

Ohio is well represnted.  Cities in rank order in the artilce

 

#5 Toldeo

#7 Youngstown

#9 Dayton

#10 Canton.

 

So 4 out of the 10 in that list are in urban Ohio.  Yay.

 

 

For some needed balance in this thread....

 

Why economists see a stronger second half for 2011

 

WASHINGTON (AP) -- Farewell and good riddance to the first half of 2011 -- six months that are ending as sour for the economy as they began.

 

Most analysts say economic growth will perk up in the second half of the year. The reason is that the main causes of the slowdown -- high oil prices and manufacturing delays because of the disaster in Japan -- have started to fade.

 

"Some of the headwinds that caused us to slow are turning into tail winds," said Mark Zandi, chief economist at Moody's Analytics.

 

http://finance.yahoo.com/news/Why-economists-see-a-stronger-apf-3447087896.html?x=0

For some needed balance in this thread....

 

Why economists see a stronger second half for 2011

 

WASHINGTON (AP) -- Farewell and good riddance to the first half of 2011 -- six months that are ending as sour for the economy as they began.

 

Most analysts say economic growth will perk up in the second half of the year. The reason is that the main causes of the slowdown -- high oil prices and manufacturing delays because of the disaster in Japan -- have started to fade.

 

"Some of the headwinds that caused us to slow are turning into tail winds," said Mark Zandi, chief economist at Moody's Analytics.

 

http://finance.yahoo.com/news/Why-economists-see-a-stronger-apf-3447087896.html?x=0

 

If oil prices can come down I think it will have a direct effect on the overall economy in a positive way. I guess we will have to see if/how much they come down by.

Another one of our fine institutions (no longer with us) and their lack of following the laws. Slowly but surely more and more info comes out about our financial industry and wall street. Of course we continue to see no one visiting jail, but its steps in the right direction.

 

How a big US bank laundered billions from Mexico's murderous drug gangs

 

"Criminal proceedings were brought against Wachovia, though not against any individual, but the case never came to court. In March 2010, Wachovia settled the biggest action brought under the US bank secrecy act, through the US district court in Miami. Now that the year's "deferred prosecution" has expired, the bank is in effect in the clear. It paid federal authorities $110m in forfeiture, for allowing transactions later proved to be connected to drug smuggling, and incurred a $50m fine for failing to monitor cash used to ship 22 tons of cocaine.

 

More shocking, and more important, the bank was sanctioned for failing to apply the proper anti-laundering strictures to the transfer of $378.4bn – a sum equivalent to one-third of Mexico's gross national product – into dollar accounts from so-called casas de cambio (CDCs) in Mexico, currency exchange houses with which the bank did business.

 

"Wachovia's blatant disregard for our banking laws gave international cocaine cartels a virtual carte blanche to finance their operations," said Jeffrey Sloman, the federal prosecutor. Yet the total fine was less than 2% of the bank's $12.3bn profit for 2009. On 24 March 2010, Wells Fargo stock traded at $30.86 – up 1% on the week of the court settlement."

http://www.guardian.co.uk/world/2011/apr/03/us-bank-mexico-drug-gangs

Interesting that there is no mention of the potential ripple effects of a sovereign default if the debt ceiling crisis is unresolved in the next three months.  That actually has me worried, even though I'm 90% certain that there will be a compromise before then that prevents such a default.  That other 10% possibility is enough to scare me.  I'm keeping a lot more in cash right now than I usually do.

^What do you think of the argument that a debt ceiling, in and of itself, is unconstitutional (in violation of the 14th Amendment)?  I don't know if I am fully buying into that, but I think the closer we get to a deadline, the more you will hear this argument pop up.

Interesting that there is no mention of the potential ripple effects of a sovereign default if the debt ceiling crisis is unresolved in the next three months.  That actually has me worried, even though I'm 90% certain that there will be a compromise before then that prevents such a default.  That other 10% possibility is enough to scare me.  I'm keeping a lot more in cash right now than I usually do.

 

I think they will come to an agreement. The real issues is the debt just keeps growing and we just keep kicking the can down the road. What happens if the can gets to big to kick? That is more concerning to me.

One up and two down. Hope everyone has a great 4th of July.

 

June ISM factory index rises unexpectedly to 55.3

 

"WASHINGTON (MarketWatch) -- Conditions for the nation's manufacturers picked up unexpectedly in June, easing fears of a double-dip. The Institute for Supply Management's factory index rose to 55.3% in June from 53.5% in May, the ISM reported Friday. The increase was a surprise. The consensus forecast of estimates collected by MarketWatch was for the index to fall to 52.3%. The ISM index had plunged to 53.5% in May from 60.4% in April. Below the headline, the report was also firm."

http://www.marketwatch.com/story/june-ism-factory-index-rises-unexpectedly-to-553-2011-07-01

 

May construction spending drops 0.6%

 

"WASHINGTON (MarketWatch) -- Construction spending fell 0.6% in May to a seasonally adjusted $753.5 billion, worse than the 0.1% dip that economists polled by MarketWatch had anticipated, as residential construction dropped 2.1%. That represents a 7.1% downturn from May 2010. April's data was downwardly revised to show a 0.6% drop."

http://www.marketwatch.com/story/may-construction-spending-drops-06-2011-07-01

 

Consumer sentiment index declines to 71.5 in June

 

"WASHINGTON (MarketWatch) -- A gauge of consumer sentiment declined to 71.5 at the end of June from 74.3 in May, according to the Thomson Reuters/University of Michigan survey released Friday. A preliminary June reading pegged sentiment at 71.8. Economists surveyed by MarketWatch had expected a final reading of 72."

http://www.marketwatch.com/story/consumer-sentiment-index-declines-to-715-in-june-2011-07-01

 

 

I have a question about this "construction spending" stat, just out of curiosity: does it only include new homes, or does remodeling spending count?

 

^ I don't know the answer to that question but I think that new construction is definitely easier to measure, since most new construction requires building permits. Just send a correspondant to the building department in each county in the country and ask how many new permits were issued. I don't know if any allowance is made for the value of the construction.

 

Like the other indicators, construction is just a very general index of economic activity.

As a huge supporter of smart growth/sustainability principles I agree. Unfortunately I believe the main reason this number has dropped so low is because of economic contraction, not people truly changing how they live, where they live and how they move from one location to another. Some of that has happened, but no way near enough to explain this type of decline.

 

I thought that people changing behaviors was a factor in economic expansion or contraction.

 

If a man lands a good job, buys a more expensive car, takes more trips and dines out more often, then that is economic expansion. If he loses his job, keeps his car as long as it will run, travels less and cooks at home more often, then that is economic contraction.

I'm going to add this here because the changing nature of employment has been discussed here a couple of times before....

 

http://money.msn.com/how-to-budget/article.aspx?post=9f97f1cd-1947-4c4d-840e-793c155bb306&GT1=33029

 

The end of the 40-hour workweek?

 

The article discusses the changing number of hours employees are being asked to put in during the recent economic times.  Not surprisingly, salary people are putting in more hours.

 

But what is most surprising is this...

 

Driving these changes, as the center explains it, are companies turning lower-level full-time jobs into part-time employment to cut costs, savings that come at the expense of workers -- and their families -- losing the traditional schedules and financial benefits that come with full-time employment.

 

and this...

 

On the other hand, lower-level workers are facing the opposite problem. The percentage of men in low-income professions who worked 50 hours a week was cut in half during the previous 30 years, despite the fact that these workers often want to put in more hours to build up their income. To make matters worse, though they work fewer hours, their schedules tend to be more irregular, with two-thirds of couples who earn less than $50,000 a year having at least one spouse who works hours outside the traditional 9-to-5 schedule (i.e., nights and weekends).

 

 

So it seems areas of the country that rely more on non-professional jobs are seeing a bigger change in income levels (percentage-wise) than areas with high concentration of salaried jobs, and the change is not for the better.  The stagation of wages on a national level may actually be masking a significant drop in wages in some parts of the country.

 

I haven't worked less than a 40 hour week in decades.

Yeah, I was about to say... What's a 40-hour work week? Vacation?!?! Even when I wasn't working from home, I still worked weekends and evenings, and often spent time on vacations doing at least some work.

The point of my post on the 40 hour work week was not that a lot of professional-type people are working over 40 hours, it's that a lot of jobs that used to be classified as 'blue-color' are working a lot LESS than 40 hours per week these days.

Ragerunner hasnt posted this, so I will.  From the BBC:

 

US Job Creation Stalls in June

 

...For Ohio, June is usually the peak month for employment, when the job creation starting from the winter low starts to peak.  So this is actually not good news. 

 

The key note is this:

 

"....The poor result was driven by continuing layoffs by the public sector - where 39,000 jobs were lost - and a much weaker-than-expected 57,000 jobs created in the private sector..."

 

The private sector number is whats key for me.  We can expect to see more public sector layoffs due to the ongoing and upcoming cuts, but the weak private sector numbers is what one should watch. 

 

Also, this is a bit of a lagging indicator, but it indicates the private-sector economy was weakening, as has been reported upthread. 

 

Also, similar news as reported by RTE:

 

US Jobs Growth Slows Signifigantly

 

"...Details of the report showed widespread weakness, though factory payrolls rebounded 6,000 after contracting in May for the first time in seven months, with the recovery reflecting a step-up in motor vehicle production.

 

Construction employment fell 9,000 last month after declining 4,000 in May.....

 

.....The report also showed the average workweek fell to 34.3 hours from 34.4 hours...

 

 

But there is a bright side:

 

 

"....Average hourly earnings slipped, more evidence that wage-driven inflation is not a risk."

 

 

 

 

 

To infinite and beyond. If they do more easying look for oil prices to spike higher in relationship to the dollars decline. This will continue to put pressure on the economy, but wall street will have some more fun.

 

Fed weighing further easing, Bernanke says

Calls study ‘prudent planning’

 

"WASHINGTON (MarketWatch) — Just two weeks after completing a second extraordinary effort to juice the moribund U.S. economy, the Federal Reserve is contemplating more “untested” steps, the head of the central bank said Wednesday."

 

“The possibility remains that the recent weakness may prove more persistent than expected and that deflationary risks might reemerge, implying additional policy support,” Bernanke told the House Financial Services Committee, in the first of two days of testimony about the economy and monetary policy.

 

At the moment, Fed officials see a recovery that “will likely remain moderate,” Bernanke said, with the unemployment rate falling “only gradually.” Inflation is expected to subside in coming months, he said."

http://www.marketwatch.com/story/fed-weighing-further-easing-bernanke-says-2011-07-13

 

It becoming very clear the to big to fail banks are in taking control of our economy and much more.

 

Hoenig targets Fed, Wall Street, big banks in Denver talk

 

"The idea of stimulating the economy by boosting liquidity and lowering interest rates began in the Asian currency crisis in 1997, Hoenig said, and has continued to today. Unemployment remains over 9 percent, with real unemployment closer to 16 percent, and “we’re wringing our hands” trying to figure out how to solve it, he said.

 

“Part of our basic problem worldwide and here in the U.S. … is that the emperor has no clothes and no one’s willing to say it,” Hoenig said.

 

“You print money, print money and print money, but you don’t create real wealth,” he said.

 

In 1913, when the Federal Reserve  was created the five largest financial institutions controlled the financial equivalent of 2.5 percent of the U.S. gross domestic product, he said. In 1980, they controlled about 14 percent of GDP.

 

Follow this company was created, the five largest financial institutions controlled the financial equivalent of 2.5 percent of the U.S. gross domestic product, he said. In 1980, they controlled about 14 percent of GDP.

 

After the financial crisis in 2008, the five largest financial institutions now control the equivalent of 60 percent of the U.S. GDP, Hoenig said.

 

“So they are 20 percent larger after the crisis,” he said. “This says the consequence of bad management is that they’re 20 percent larger and too big to fail.”

 

He called the growth of large financial institutions “a threat to capitalism. You have to break them up. Commercial banks need to be separated from investment banks.”

http://www.bizjournals.com/denver/news/2011/07/12/hoenig-targets-fed-wall-street-big.html?page=2

I'll admit, a lot of times debating economics just ends up hurting my head. But I found this interesting. The Federal Reserve is continuing to come under scrutiny during this recession. I like Ron Paul, so I've been drawn into the discussion. The more I learn, the more perplexing and fragile our whole economy appears.

 

Paul, if you don't know, is the Chair for the House Committee on Domestic Monetary Policy overseeing the Fed. In this instance, he's bringing up the gold standard to try and trip up Fed Chairman Ben Bernanke.

 

Anyone else with a better knowledge than I care to chime in?

 

Youtube:

 

Article in our favorite mag, Forbes:

http://blogs.forbes.com/afontevecchia/2011/07/13/bernanke-fights-ron-paul-in-congress-golds-not-money/

^The whole video is great. Paul explained real inflation before that exchange:

 

 

No debt deal yet as S&P warns of downgrade

Back-up plan in works; S&P says 50% chance of ratings cut

 

"S&P said it had put U.S. sovereign ratings on formal credit watch and that, ”owing to the dynamics of the political debate on the debt ceiling, there is at least a one-in-two likelihood that we could lower the long-term rating on the U.S. within the next 90 days.”

http://www.marketwatch.com/story/debt-talks-to-resume-after-testy-exchanges-2011-07-14

 

Consumer sentiment plunges in July

 

"The Thomson Reuters/University of Michigan index of consumer sentiment fell to 63.8 in early July, reaching the lowest level since March of 2009, from 71.5 in June, according to media reports."

http://www.marketwatch.com/story/consumer-sentiment-plunges-in-july-2011-07-15

 

Manufacturing weakens in New York in July

 

"The Empire State index remained below zero for the second straight month, rising only to negative 3.8 in July from negative 7.8 in June. The index has fallen dramatically the past three months after hitting a 12-month high of 21.7 in April."

http://www.marketwatch.com/story/manufacturing-weakens-in-new-york-in-july-2011-07-15

 

 

A candidate for potential quote of the decade.

 

"We have to keep all the options on the table. We don't know where the economy is going to go,"

- Federal Reserve Chairman Ben Bernanke

 

http://www.startribune.com/business/125482988.html

 

A little concerning that the man who has been asked to steer the ship doesn't know where it is going. But, it might be one of the more honest comments we have heard in a while from the FED.

Yeah that's pretty bad.  My wife yelled at me last night for watching Bernanke testify on CSPAN at 11pm in bed.  I found it rivoting watching him squirm, trying to explain to the Senate panel why so many things continued to go wrong despite his efforts to make them go right.

I think the real problem is expecting Bernanke (or any other one person, or even one institution, even the Federal Reserve) to "steer the ship."  The economy is not a ship.  It's closer to being the sea.  It doesn't take well to attempts to steer it.

^The whole video is great. Paul explained real inflation before that exchange:

 

 

 

I can't figure out if Bernanke is really truly knocked back on his heels, or if he's just super frustrated at having to actually defend himself.

 

He has to be wincing every time he's accused of printing money out of thin air lol.

 

I think the real problem is expecting Bernanke (or any other one person, or even one institution, even the Federal Reserve) to "steer the ship."  The economy is not a ship.  It's closer to being the sea.  It doesn't take well to attempts to steer it.

 

I would take that even a step more. I think its a lot to expect anyone or any agency to have the ability to deal with a truly broke Country that is basing a lot of it economic growth on financial based products.

Gold is at $1600 an ounce. WOW

^Scary.

I think the real problem is expecting Bernanke (or any other one person, or even one institution, even the Federal Reserve) to "steer the ship."  The economy is not a ship.  It's closer to being the sea.  It doesn't take well to attempts to steer it.

 

I would take that even a step more. I think its a lot to expect anyone or any agency to have the ability to deal with a truly broke Country that is basing a lot of it economic growth on financial based products.

 

I don't know how this goes a step beyond what I said, though I also don't know what you mean by "deal with."

So who's buying them? There is a massive supply yet they still build? I don't understand.

 

http://money.cnn.com/2011/07/19/news/economy/housing/index.htm?hpt=hp_t2#disqus_thread

 

NEW YORK (CNNMoney) -- New home construction ticked higher in June, the government said Tuesday, as two key measures topped expectations.

Housing starts, the number of new homes being built, rose 14.6% in June to an annual rate of 629,000 units, up from a revised 549,000 in May, the Commerce Department said.

 

That's the highest level since January, when 636,000 housing starts were reported. Economists had expected an annual rate 570,000 units, according to consensus estimates from Briefing.com.

The report also said there were 624,000 building permits issued in June, 2.5% above the revised May rate of 609,000. Building permits were forecast to have remained steady at an annual rate of 609,000 units.

I would say those buying them are newlyweds, many of whom still have jobs. I'm on a fairly large local moms board and people are constantly buying new houses on there, and many of them are "brand new" not formerly owned.

I just saw a graph on this and actually most of the uptick is do to multi family home. If the trend continues, multifamily starts will out number single family home starts for the first time in decades.

 

http://www.theatlantic.com/business/archive/2011/07/chart-of-the-day-the-diverging-home-building-sectors/242195/

I just saw a graph on this and actually most of the uptick is do to multi family home. If the trend continues, multifamily starts will out number single family home starts for the first time in decades.

 

http://www.theatlantic.com/business/archive/2011/07/chart-of-the-day-the-diverging-home-building-sectors/242195/

 

Now THAT I can believe. There are a lot of single-family homes out there made obsolete by the shift in demographics and market preferences in this country. Half of this nation's population is comprised of GenY and the aging Baby Boom. Many in GenY don't want the same sprawl lifestyle as their predecessors, and the Baby Boomers are downsizing. Soon they will be moving into independent or assisted-living communities.

 

Then add gas prices into this equation, which has stalled the exurban sprawl with rising costs of travel as well as by demand for corn for ethanol. So farms near metro areas in places like Ohio are being bought by agri-energy companies rather than by housing developers.

 

These are very different times from what I've come to know and accept since the 1970s.

^

also, people wont be qualifying for mortgages or able to afford downpayments or carrying costs for single family "ownership", if we are seeing a signifigant amount of downward mobility due to the economic changes coming out of the recession.

 

The chart is fascinating since its such a long time series.  Interesting to see  those big jumps in mutlifamily construction in the late 1960s/early 1970s.

 

 

Sales of existing homes slip 0.8% in June

 

"WASHINGTON (MarketWatch) — Sales of existing homes slipped in June to a seven-month low, and a real estate trade group attributed the surprise downturn to a weak economy and a spike in cancellations.

 

The National Association of Realtors reported sales of single-family existing homes fell 0.8%, the third consecutive monthly drop, to a seasonally adjusted annual rate of 4.77 million from 4.81 million in May. Compared with June 2010, the scheduled closing deadline for the home buyer tax credit, sales fell 8.8%."

http://www.marketwatch.com/story/sales-of-existing-homes-slip-08-in-june-2011-07-20

 

So who's buying them? There is a massive supply yet they still build? I don't understand.

 

http://money.cnn.com/2011/07/19/news/economy/housing/index.htm?hpt=hp_t2#disqus_thread

 

NEW YORK (CNNMoney) -- New home construction ticked higher in June, the government said Tuesday, as two key measures topped expectations.

Housing starts, the number of new homes being built, rose 14.6% in June to an annual rate of 629,000 units, up from a revised 549,000 in May, the Commerce Department said.

 

That's the highest level since January, when 636,000 housing starts were reported. Economists had expected an annual rate 570,000 units, according to consensus estimates from Briefing.com.

The report also said there were 624,000 building permits issued in June, 2.5% above the revised May rate of 609,000. Building permits were forecast to have remained steady at an annual rate of 609,000 units.

 

I have noticed in my job that we had an nice surge in new home construction this spring but it appears that a nice chuck (50%+) of all those new homes are still empty and have signs infront of them saying available. While not at the same level as in the past I think we maybe seeing another overestimation by the home builders of market demand and price points.

They're just going to keep building as long as thay have the money to do it. Seems like they didn't see much fallout from the whole mess except that they had to stop building for a while (low sales), unlike the mortgage companies, banks and homeowners. They build and let everybody else worry about what happens afterward.

I think that the homebuilders saw a lot more fallout from the housing bust than you think.  After all, a home that doesn't sell is a serious nonperforming and illiquid asset on the books of the homebuilder.  There have definitely been developers going bankrupt in Northeast Ohio.

How much of a chance is there that these homebuilders will seriously slash the prices of the available new homes they're just now building? I'm sure they're already priced very low, but I mean big, deep cuts to offset all the developments sitting mostly empty?

It's probably more likely you'll get the slashing on the existing homes that have been sitting for a while. If a homebuilder is building something now, and they're not using their own cash, it's probably pre-sold. I can't think of anyone that's letting people build on spec.

And the bill is coming due and a lot of Americans have seen their incomes go down noticably.

 

Slumps in Consumer Spending

"During economic downturns, consumers usually spend less on what the Fed calls “discretionary services” — items like education, entertainment, restaurant meals and insurance. But in the chart below, it’s clear that consumers today are cutting back much more sharply. Part of the reason: In previous years, households often added debt to continue spending. Now the bill has come due."

http://www.nytimes.com/interactive/2011/07/15/sunday-review/consumer-spending.html?ref=sunday-review

 

I think this data shows a lot more than companies being reluctant to hire, they are still laying off a LOT of people. 18,000 new jobs in June won't even come close to touching the amount of people losing their jobs or entering the workforce.

 

Applications for U.S. jobless benefits rise

Claims jump to 418,000 from 408,000

 

"WASHINGTON (MarketWatch) — New applications for U.S. unemployment benefits rose last week in yet another sign that companies remain reluctant to hire, government data showed."

http://www.marketwatch.com/story/applications-for-us-jobless-benefits-rise-2011-07-21

 

Here is just a quick look at job cuts announced/implemented in just the last 2 weeks (and this is by no means a full list):

 

- 6,500 Cisco

- 10,700 Borders

- 200+ San Francisco Superior Courts

- 350 Whirlpool

- 625 City of Chicago

- up to 1,000 Goldman Sachs

- 6,500 Lockheed Martin

- 1,500 State of Connecticut

- up to 500 CA Tech

I'm trying to figure out what these unemployed people are going to do to "pay the rent" if there are not enough jobs out there...

 

 

 

I'm trying to figure out what these unemployed people are going to do to "pay the rent" if there are not enough jobs out there...

 

They are supposed to disappear and not inconvenience anyone.

Here is something I found by doing a quick google....these folks have a nickname, The 99er's

 

....and a website for themelves...99ers Net

 

@@@

 

I was wondering about this because a secretary and I were at the copier the yesterday and she asked me if I noticed more homeless people.  Since I ride public transit and my lifeworld is pretty much inner city and cheap apartments these days I cant say I did. 

 

She says she seems to see more.  She says she sees them on Route 40 with their packs, hitting the road I guess.  She says shes more of this these days. (She lives in or near Springfield, I guess).

 

Didn't make much sense at first... unless you think of these guys hitchiking cross country.  It would be more uobstrusive to do this on something like US 40 since youd get busted by Ohio State Police for walking and thumbing down the interstate.