Posted on 01/24/2013 9:35:56 AM PST by whitedog57
It is now official. According to the Federal Reserve of St. Louis, this is the WORST economic recovery in modern US history.
This chart shows the recovery in even starker terms.
The disappointment in the economic recovery can be seen in today’s Bloomberg Consumer Confidence index which fell today to -36.4. It has not risen above -30 that we last saw in 2008. Moral of the story? Asset bubbles (like housing) are DANGEROUS and don’t let the Federal government enact policies (like Clinton’s National Homeownership Strategy) that nearly destroyed our economy. nhsdream2
But the good news today is that claims for jobless benefits in the U.S. dropped last week to a five-year low. Applications for unemployment insurance payments decreased by 5,000 to 330,000 in the week ended Jan. 19, the fewest since the same week in 2008, according to the Department of Labor.
Also on the good news front, the preliminary flash manufacturing purchasing managers index for the U.S. rose to a 56.1 reading in January from 54.0 in December, according to a Markit report released Thursday. This is the strongest rate of growth since March 2011.
And the Conference Board US Leading Index MoM rose in December to +0.5 from a print of -0.2% in November.
The reaction in the bond markets? The 10 year Treasury bond yield rose to 1.856% as of 10:35am this morning.
Let’s see if the Bankrate 30 year fixed rate average increases in coming days after the rise in the UST 10 year yield.
The 30 year rate on FHA insured loans is creeping up as well.
Treasury and mortgage rates are rising. But house prices are rising as well (mostly due to investors rather than traditional home buyers). Here is a chart of Case-Shiller home prices versus the Bankrate FHA 30 year mortgage rate average.
Rising house prices is contributing to the decline in underwater borrowers (where the amount owed to the lender exceeds the property value. In 2012, 1.4 million borrowers exited out of negative equity, but we still have 10.7 million American underwater.
So, the good news if that rising home prices is reducing the negative equity problem, But, rising rates AND home prices will result in lower housing affordability.
But the 800 pound gorilla in the room is The Federal Reserve. Will they jump to the rescue and do more Treasury and agency MBS purchases? Mortgage rates are so low by historic standards that the market can tolerate a rise in rates (but not Greek-style rates).
Mortgage refinancings will be harmed more than purchases with a rise in rates.
I’m sick of repeating myself, but I’m tired of the media covering it up. When I listen to the radio, “the housing market is doing great! NASDAQ is up! Unemployment is down!”
The propaganda spin is too much to take anymore.
WHAT economic recovery? Calling it an economic recovery is a farce. It presumes things are improving.
What does anyone expect from the worst _resident in modern history?
Now where did we put Germany’s Gold?
Of course....there isn’t a recovery. Unless you can call the patient waking up and coughing uncontrollably a recovery.
WHAT economic recovery!?????
What is so depressing that millions of Americans have no idea we are in a downfall and in the not too future a total collapse of our system and liberties. America is now building as a communists nation and an explosion is not too far off.
What recovery?
From Bloomberg: "The number of applications was estimated for California, Virginia and Hawaii because of the holiday-shortened week, the Labor Department spokesman also said."
In other words, upcoming revisions due to "holiday shortened" estimations and seasonal adjustments will be epic, but by then no algos will care. More to the point - the administration is literally throwing the kitchen sink to 'restore confidence' that Bernie is still alive and walking.
Ain't it real nice that we are learning all of this bad news some two months after the reelection of Emperor Obama instead of two months before! But then, this was obvious to any one with more than three functional brain cells a long time ago!
But then, those same people have known for a long time that almost everything that happens in side the Beltway is nothing more than kabuki theater designed to entertain the masses and keep them distracted.
The new motto that should be engraved over the entrance to every building in D.C. should be “Look! A squirrel!”
The U.S. Deficit/Debt Problem:
A Longer-Run Perspective
Daniel L. Thornton
The U.S. national debt now exceeds 100 percent of gross domestic product.
Given that a significant amount of this debt is the result of governmental
efforts to mitigate the effects of the financial crisis, the recession, and
the anemic recovery, it is tempting to think that the debt problem is a
recent phenomenon this article shows that the United States was on a
collision course with a major debt problem for nearly four decades before
the financial crisis. In particular, the debt problem began around 1970 when
the government decided to significantly increase spending without a
corresponding increase in revenue. The analysis suggests that the debt
problem cannot be permanently resolved without creating a mechanism to
prevent the government from running persistent deficits in the future.
(JEL E62, H62, H63) Federal Reserve Bank of St. Louis Review,
November/December 2012, 94(6), pp. 441-55.
[lots of graphs]
http://research.stlouisfed.org/publications/review/12/11/Thornton.pdf
[Do you mean we can’t borrow our way to prosperity? What a radical concept. You must hate people who are dependent upon government benefits.
Figure 9 on page 10 proves Hauser’s Law:
see: http://en.wikipedia.org/wiki/Hauser’s_law]
It feels GREAT to have no debt after paying off and destroying our credit cards! And it simplifies one’s life in a wonderful way. There is no impulse buying when you part with real cash to purchase something.
What recovery? Nothing’s getting better.
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