Housing and Banking Deception: 23,000 to 28,000 Foreclosed Homes kept off the MLS or Public View in California each Month.
The math in California housing simply does not add up. Given the amount of sales and monthly foreclosures over the past few months, it would appear that banks are sitting back while a gigantic backlog of foreclosures grows. A few in the media are calling attention to this obvious fraud but not many. The California housing market is reeling from an epic mulit-decade long real estate bubble. For the past few months, foreclosures have been hitting at a record pace yet the official MLS inventory is falling lower and lower. I have pulled up data for the largest California counties with MLS data from March and compared it to July and what you will see is simply astonishing. I will compare this data with actual foreclosures and what you see is banks are taking homes back, failing to list them on the MLS, and basically sitting back probably hoping the government bails them out.
The Second Derivative: Employment and the Mounting Job Losses. Measuring the Velocity of Job Cuts in the Current Recession.
In addressing the unemployment situation it is important to look at the velocity of job losses. In January of 2009 we had a stunning 741,000 jobs lost in one month. This by far was the biggest one month cut during the current recession but it wasn’t the biggest one month change. The worst month came in November of 2008 when we saw a net increase of 217,000 more job cuts in one month from the previous month. With 26,000,000 Americans unemployed or underemployed it is important to understand how the job market data is calculated.
Underwater Mortgages: HUD Announces Eligibility for up to 125 Percent Loan to Value. Why This is Smoke and Mirrors Financial Theatre.
Only a few days ago HUD Secretary Shaun Donovan announced that mortgages with a 125 percent loan to value would now be eligible for the Home Affordable Refinance Program. I received a few e-mails from readers dismayed about this announcement since it would be troubling for the government to simply buy mortgages that are severely underwater. Initially the cap was set at 105 percent but this has done very little. So far, only 80,000 mortgages have refinanced under the program which is nothing given the millions of loans in trouble. The 125 percent is only for owner occupied first lien mortgages that are backed by Fannie Mae and Freddie Mac. So many concerned of big balance California non-agency mortgages have little to worry about (with this program at least).
Employment Situation: Job Anti-Growth – A Decade with Zero Net Added Jobs. 131 Million Nonfarm Payroll Employment in June of 2000. 131 Million Nonfarm Payroll Employment in June of 2009. 6,460,000 job losses since start of Recession.
The so-called second half recovery got off to a rocky start. The market was expecting 367,000 job losses for the month of June but instead got 100,000 more than expected. The market quickly turned sour as 26,000,000 Americans are now unemployed or underemployed in the job market. Yet what is even more troubling is the magnitude and severity of job losses hitting our economy. To put this into perspective, as of June 2009 we had 131.16 million Americans employed in “nonfarm” occupations. As of June 2000 that number was 131.83 million. That is, we are going to have a decade of no net job growth.