Article: Foreclosures: Worst Three Months of All Time

[Kimbly]

But, we aren't in a depression, right?


Foreclosures hit record in third quarter 2009 - Oct. 15, 2009

[davephx]

No actually most agree the economy probably rebounded in 3rd quarter and will continue to slowly recover. While the jobs and of course housing and very bad commercial real estate situation is terrible, the overall economy has survived the long deep recession without any feared depression.

Even consumer spending ticked up in the latest report a few days ago, if exclude big decline in auto sales after the clunker program ended.

But there are still many millions of victims of the deep recession, the job losses which we know sadly will get worse before it gets better. But we are now in economic recovery but it will be slow and painful for many of us that had so much wealth destroyed especially in real estate.

The market has had a sharp rebound but real estate will take many years to recover and the worst may not be over.

[Kimbly]

Originally Posted by davephx

The market has had a sharp rebound but real estate will take many years to recover and the worst may not be over.

I have to respectfully disagree with you. I think that we ARE in a depression and our country is bankrupt. While the majority of average citizens ARE feeling this depression, those in power are not and just continue to spend, spend, spend.

Sure the economy had a boost from those first time homebuyers getting 'good' deals on houses (we could debate that, too) and they went out and spent some money on consumer goods. I also think many of us walking away are now able to spend a little $ on dinner or maybe a new pair of socks since we aren't paying our mortgages.

Look around you, Dave. We are in a depression. Foreclosures continue to be on the rise; unemployment is continuing to increase in most areas of the country; we have hundreds of thousands of people living in campgrounds; food banks are out of food. Our deficit has reached an epic level and your kids kids kids will be paying for it. Our dollar continues to weaken.

I hope you're right.... but I don't think you are. Time will certainly tell.

[davephx]

You seem to have your own definition of depression.

The economy is on the upswing. The U.S. debt is relatively low compared to many large economies and we have had between a 2.5 and 3 to one coverage ratio on buying new Treasury debt. That means 2.5-3 times more money bidding on new U.S. debt that is issued each week or so.

3rd quarter earnings reports are now starting to flow in mostly "fabulous" numbers many beating expectations by a wide margin.

While certainly much of "Main Street", you, me and many here are in a personal depression lets not make up definitions of the overall U.S. economy.

The dollar weakening is actually helpful to the economy since it encourages more exports.

The best part of the corporate earnings upside surprises is there is also strong revenue growth so its not all coming from cost cutting (sadly lots of job cuts).

This is part of a normal business cycle in early recovery phase. We want strong corporate profits and revenue growth because that is what will stop job losses and rehiring as the economy slowly slowly turns back up over the next few years.

But obviously there is a lot of pain out there that you, I and most folks here are in and so many desperate to save their homes.

The "big bad government" via Treasury/HAMP has a very good program for what it was intended to be based on the funds allocated. It is the servicers for the most part that are screwing things up. But now under huge pressure to get trails into mods.

Unemployment benefits are being extended again. There are proposals by Treasury/FDIC etc to spend another $40 billion to help unemployed save homes. But the Republicans will most likely block any more spending sadly.

There is talk of the $40 billion coming from existing TARP funds, since there has been a lot repaid by the big banks with a huge profit to the Treasury which has also reduced U.S. borrowing needs.

[caldwellb02]

Dave - I have great respect for your knowledge in this area. Differences may be in perspective. Just what does "depression" mean? In Wall Street's eyes we are coming out of a depression, but in main street's eyes we are not. The divide between the "haves" and the "have-nots" just got wider and is getting wider all the time. I just had a visualization of an old movie I saw about the French Revolution. Marie Antoinette et al. were eating their whatevers and the people were starving. Eventually they stormed the castle and most of us remember from our school days reading about what happened next. Okay so the middle class have nots are not starving - not most of us - not yet. But there are more of us than there are of them and if this thing doesn't change all He!! may break loose.

[davephx]

I agree the divide between the rich and poor is well documented much of it due to the Bush/Republican tax policies on tax cuts for the wealthy even when we have such low tax rates vs most of the world and historically.

But there is no economic depression when talking about the U.S. economy in fact we should see some economic growth in 3rd quarter by most economist estimate. This is of course different from personal situations which are very much hurting for millions.

[Chased around and around]

When your national debt is more than your GDP, you are in a depression, plain and simple:

U.S. National Debt Clock : Real Time

[davephx]

=Chased around and around;138533]When your national debt is more than your GDP, you are in a depression, plain and simple:

No one recognizes that silly definition. Sorry that is your opinion of what a "depression" is and the debt ratio is relatively small vs many other countries that are not in "depression".

[SillyWorld]

Look Peeps....The US Dreams are mostly GONE.... If your Family is not in the Elete Group where they can give you handouts till your on your Feet, then your like us others that have less than $18.00HR jobs, this is not enopugh so survive anylonger and almost impossible to get any longer, even the college grads that have no Mommy, Daddy Operations to take over after Grad, and they are not in Medical Field they are too at a loss of income.

Food, Utillities, Clothing, ETC.... All had Major increases over the last 8years, and Salaries had very little Gain, In the Clinton and BUSH days we had lots of OT that helped greatly...Now those days are mostly Gone, have to budjet on mostly 40hr week (loss income) not Feesable..

Now the NEW Bomba Green Bill will increase all utilities and other related bills and incomes will remain low due to Corprate cut backs and they are enjoying it there profits are WAY up in Stock of course.. Us lucky ones that retained our Jobs for now still are and will continue to struggle just to get to work pay bills, and on and on.....

I said I have been in a Depression since OCT of 2007, when I saw prices go over the Hill, and OT down the road...

And again I received a letter from BOA few daysa ago informing me that my 13.99% Fixed LOAN just normal personal loan will be at 10.45% Variable as of 02/10/2010 this Means DANGERto me, if they start this with our FIXED Mortgage loans and they found a clause that can allow them to make these changes then we will all need to gather and MARCH in Washington these SICK peeps need fixed permanently

[davephx]

Many of us here are in a severe personal financial depression. But the U.S. economy isn't. That is my only point.

[SillyWorld]

Originally Posted by davephx

Many of us here are in a severe personal financial depression. But the U.S. economy isn't. That is my only point.

Yes and the Bankateers put this burdon on us....And it looks to only get Worse for the non elete..Just think about it...Mortgage companies pamper us and ask us to get late on our payments only to allow our other creditors to see we are late so they can increase our rates and make it all the worse I know the name of the Game is profit but come on this Silly Economy has 25% only of us upsidedown, the other 65% are loving it and will ignore us in the very near future The missing 10% are already homeless living in camgrounds, Jails, or Family Doubled up We wanted change and now we have some but look out 2010 biggest change any country could ever dream of

[wild-goose chase]

The U.S. economy is in shambles. Fundamentals have not changed. The stock market is going up only because the value of the dollar is sinking and because corporations are laying off workers and cutting salaries to the bone (so their profits are really savings from cost-cutting, not real profits). At some point corporate America will not be able to cut any more, and then we will see what revenues really are. This bull market is a false one: in a real bull market the value of the dollar rises along with stocks, and fundamentals are sound. The rise in the price of gold is another indicator of dollar devaluation--and impending inflation.

[wonthefight]

I completely agree with you wild-goose chase. The US government is up to its ears in debt as well as american citizens. How can this economy be in an "upswing" when so many jobs were lost and many more to come. These jobs are not going to be replaced because there really is no true need for them.

There are no jobs being replaced because america's economy is consumer driven. For so long we would spend and borrow on credit which propped up our economy. The US really does not have a product driven economy which produces jobs. Factories jobs and other related jobs were shipped overseas to increase corporate profit.

With middle america being squeezed with taxes, debt, and joblessness there is no way that we can continue to support this type of consumer driven economy. Middle america simply does not have the money to continue to spend at the rate we have been for years. The message has been for americans to spend to stimulate the economy but where is the money coming from? The majority of americans are broke and barely getting by.

[davephx]

The value of the dollar helps exports so as long as not a fall off the cliff decline can benefit the economy.

October 9, 2009 The United States trade deficit shrank in August as oil imports fell and American businesses sent more automobiles and industrial goods to foreign markets

US industrial output just had sharpest quarterly rise in 4 years.

We still face rising unemployment, foreclosures continuing and weak consumer spending. Yet most economists and the Fed believe we are now in the long awaited economic recovery. The economy is expected to return to slow growth for the rest of 2009 and pick up a bit but still be sluggish in 2010. Economic growth even if slow is better than the deep recession that began in December 2007.

The Dow 10,000 psychological milestone was reached after 3rd quarter earnings started coming in once again much better than expectations vs. the fear of disappointing results. Better yet many companies were seeing solid revenue growth not just profit growth due to cost cutting from layoffs.

“Rubber Band” Potential - Some analysts have suggested the “rubber band” potential. Many companies have lots of excess capacity and trimmed down employee costs. Increases in revenue go mostly to bottom line profits and earnings could potentially shoot up more rapidly than current estimates. Rehiring typically occurs once revenue growth is seen as sustainable and more workers are needed.

The S&P Index Service weekly consensus estimate for S&P500 2010 earnings keeps increasing. As of 10/13/09 it is at $73.55 - a 34% gain over 2009 earnings. The forward P/E ratio is a very reasonable 14.59. This supports the view that the market still has plenty of upside potential from both earnings growth and P/E expansion, especially in this early recovery stage.

Over the last year overall, actual earnings have consistently beat consensus estimates. For 2nd quarter 2009, 76% of S&P500 companies beat the estimates.

While those facing unemployment don't care about corporate profits, this is what is needed to get companies to rehire, especially revenue growth.

[WorldSucks]

They say as California goes, the rest of the country goes. And, we (Californians) are hurting.

We live in the Sacramento area where 100,000 residents work for the State of California. Forget the hype about the State's "high-paying jobs", the average salary in 2008 was approx. $64,000.That $64,000, after 3 paycuts, is now approx. $54,000, which is near poverty level for a family in CA. There are another 100,000+ State employees all over CA. State employees are now losing their homes at an alarming rate.

Downtown Sacramento businesses are struggling, due to the 3 furlough days per month that the State employees are not there to purchase their goods and services. The city is hurting due to the loss in revenue from parking meters. And on and on...

It is not getting better. The middle-class is becoming lower middle-class. Virtually everything has become more expensive. Forget going out to dinner, it's becoming difficult to stay home and make ends meet. Food, gas, clothing, paper products, homeowner's dues, taxes, nearly everything continues to go up, our kid's bus passes increased from $15/month to $40!

Whether your income has decreased, or stayed the same (who's getting raises these days?), you're sliding backwards economically.

The Cap & Trade (read "TAX") will destroy middle-class America. We simply cannot afford ANY new taxes.