The Future of U.S. Housing – Projections of Household Formation, Loan Modification Data, 500,000 Option ARMs Still Active, and a Decade of Stagnation.
Take what you knew about projecting housing for the last fifty years and throw it out the window. The big problem with using models post-World War II is that they base growth on a baby boomer population that was the largest affluent middle class cohort known to the world. That model is now disappearing. Some point back to the Great Depression but forget to mention that life expectancies in the first half of the 1900s weren’t that fantastic. So you had a population that was constantly churning and emptying out homes that many had paid down. Yet after World War II the Levittown model of housing took hold with suburban life being the driving force of future home building. When linked up to cheap oil and 30 year fixed mortgages this seemed to be a good balance for entry into the middle class. Those days are seemingly no longer here.
Stock Market Hustle – Three Ways Wall Street has Created a New American Serfdom. The Overly Expensive Mortgage Deduction, Wall Street Pseudo-Rally, and Attacking the Poor.
Last week the S&P 500 almost reached an impressive 80 percent gain from the red abyss seen in March of 2009. This puts this stock market rally up in the ranks of the strongest and fastest market turnarounds in history. Yet on Friday news of Goldman Sachs betting on toxic mortgages sold to clients brought the market down as the SEC has finally decided to bring a civil suit forward. Only took a full 27 months of the obvious. The case against Goldman Sachs is a good representation of what our stock market has become especially when it comes to financial institutions and their gaming of the system. Here you have a firm pushing toxic mortgage securities to their own clients yet at the same time, another division of the institutions is betting against the pool of securities because they know that it is junk. This is the story of the current financial system. What use is this really providing the market except enriching the most corrupt and elite financial institutions in the world?
The Great American Bank Heist – On the Day we Reach a Monthly Foreclosure Filing Record Banks Announce Record Profits and the Stock Market is up 80 Percent.
It is rather fitting that on the day we hear about banks reaching record profits once again, because after all it is so difficult to borrow at zero percent and gamble in the stock market and make a gain, that we also find out that March was the highest month of foreclosure filings ever (and we’ve had some bad months). If there was ever a more clear indication between the split from Main Street and Wall Street this is probably the strongest indicator so far. I’ll include the charts below but being blunt about the situation, the bailouts worked. If we define “worked†as boosting banking profits once again while 40,000,000 Americans are on food stamps and 17 percent remain underemployed then all is well again in the economy. Yet this isn’t what the American people bargained for in the bailouts. In fact, they didn’t want the bailouts if you remember the massive anger from both aisles calling their representatives. But the cronies didn’t listen since they receive millions in lobbying dollars and $13 trillion went to Wall Street in the biggest wealth transfer witnessed by the disgruntled American public.
The Invisible Recovery – 40,000,000 Americans Receiving Food Stamp Assistance – Since 2000 23 Million Americans have been added to the Food Assistance Program.
The latest food stamp data for January of 2010 shows that 39,430,724 Americans are receiving food stamps or are part of the supplemental nutritional assistance program (SNAP). If you make the acronym and name long enough and with a neutral undertone average Americans won’t fret that 40 million of their fellow neighbors are one government debit card away from being unable to eat. Yet this is the new corporate funded recovery and somehow things don’t seem to be improving for the middle class and definitely not for those at the lower rung of the socio-economic ladder. In fact, we may have more than 40 million on food assistance today. Since the start of the recession in December of 2007, we’ve added on average 474,000 people each month to SNAP. Since the data lags a bit and we only have January 2010 data, it is likely we now have between 40 million and 41 million Americans on food assistance.