Wealth by photobucket
Why did President Barack Obama choose this week to bring up Israel and the 1967 borders as a basis for peace negotiations? It will raise a lot of hackles, but in the end it will become a tempest in a teapot. Israel will never give up one inch of ground under any circumstances, nor will the US pressure her to do so. This is a diversionary tactic, kicking the cat to cover the truth and the truth is bad. It is as bad as the truth can come.
Boston Globe- Nearly two years after the recession ended, the pace of construction is inching along at less than half the level considered healthy. Single- family home building, the bulk of the market has dropped 11 percent in that time. And there is no sign it will improve soon.
Builders are struggling to compete with waves of foreclosures that have forced down the price for previously occupied homes.
WASHINGTON (Market Watch) -- Resales of U.S. single-family homes and condos fell 0.8% to a seasonally adjusted annual rate of 5.05 million in April, the National Association of Realtors reported Thursday.
The drop came as a surprise to Wall Street. Economists surveyed by Market Watch had expected sales to rise to 5.25 million.
Home sales are within 100,000 units of 2008 figures. Home prices have fallen versus last year on average of 6 percent, or one half of one percent per month. This year home prices have fallen on average of over 1 percent per month. There is currently a back log of 5,050,000 homes for sale in the United States. Two million of those homes are in foreclosure and almost one million more are being held off of the market by the banks. The number of bank owned homes has doubled since 2007 while major banks expect several million more foreclosures in the years to come.
"It remains a heavy weight on the banking system," said Mark Zandi, chief economist of Moody's Analytics. "Housing prices are falling, and they are going to fall some more."
Housing prices have fallen steadily each month for over three and one half years. They have fallen longer and farther than they did during the Great Depression. Economists predict a three year back log just in foreclosed homes. Who is going to purchase those homes? You? Me?
John Stumpf CEO of Wells Fargo bank said, "While there are increasing signs of demand for loans from business customers, retail customers are still cleaning up their portfolios."
Is that what we're doing? We're cleaning up our portfolios!
The civilian non-institutional population has added 1.8 million workers to its ranks in a calendar year, but the number of employed Americans has only inched up by 300,000. The participation rate in this economy has dropped from 65.1 percent in April 2010 to 64.2 percent. The employment-population ratio has fallen from 58.7 percent to 58.4 percent, while the numbers of Americans no longer counted in the ranks of the employed has climbed by nearly two million citizens in barely twelve months.
Wages for the average American worker rose forty three cents an hour year to date or $17.20 per week before taxes. Those working in the retail trade saw their wages increase by miserly fourteen cents per hour, a paltry $5.60 cents per week.
Bloomberg- Fed funds, the U.S. overnight inter-bank lending rate, is projected to open in a range of 0.10 percent to 0.12 percent, within the Federal Reserve's target of zero to 0.25 percent.
The central bank will acquire Treasury notes due from August 2018 to May 2021 as part of its plan to purchase $600 billion more of Treasuries through June and reinvest its maturing mortgage holdings. The Fed expects to reinvest $250 billion to $300 billion from mortgage-backed debt and agency securities into treasuries during that time.
Or more simply, the Federal Reserve is inflating the money supply to cover the losses caused by falling Real Estate values. Workers wages can't keep up with fuel inflation, let alone inflation over all. Savers with money invested in bank CD's paying 2.14 percent can't keep up with inflation. There is seasonal growth in this economy, but there is no actual growth. The economy is foundering and even bank stocks are starting to slide. Even Wall Street, which has soared fueled by free money, is starting to stall out.
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