Financial News

[Balta1701]

You mean like they punished FDR?

From when FDR started, unemployment kept going down, not up.

 

Until of course he listened to the deficit hawks in 1936 and cut back on the support programs.

[southsider2k5]

From when FDR started, unemployment kept going down, not up.

 

Until of course he listened to the deficit hawks in 1936 and cut back on the support programs.

 

And he still got re-elected twice, despite the big fall backs.

[NorthSideSox72]

Economic Conference Board tends to agree with what I've been saying for a few months - growth, but slow growth, in the first half of 2010, with unemployment as the wildcard. Double dip not indicated as of yet.

 

[southsider2k5]

There was also reports that fully 14% of mortgage holders were somewhere between late to foreclosure on their mortgage.

[NorthSideSox72]

There was also reports that fully 14% of mortgage holders were somewhere between late to foreclosure on their mortgage.

I think I linked in a story on foreclosure rates recently, the basics were that the rate is still very high, but that foreclosure notices have actually been going down, not up. The problem is, some of the decrease is due to a combination of mortgage rebuilds and foreclosure stalling programs. And only some of those will stick. Looking at all the indicators amalgamated, it appears to me we haven't peaked yet, but the rate of ascent has become very small, indicating a likelihood that it, like the rest of the housing sector, is moving the right direction.

 

But again, the key to this and really everything, is employment.

 

[southsider2k5]

I think I linked in a story on foreclosure rates recently, the basics were that the rate is still very high, but that foreclosure notices have actually been going down, not up. The problem is, some of the decrease is due to a combination of mortgage rebuilds and foreclosure stalling programs. And only some of those will stick. Looking at all the indicators amalgamated, it appears to me we haven't peaked yet, but the rate of ascent has become very small, indicating a likelihood that it, like the rest of the housing sector, is moving the right direction.

 

But again, the key to this and really everything, is employment.

 

The big reason for foreclosures now is unemployment, not bad loans. There has been a transition in this sector. By looking at the unemployment numbers, that means we are no where near ready to recover. We might be able to build a statistical falsehood here that shows "recovery", much like the 3.5% JUMP IN GDP last quarter. But there is nothing that shows any real growth yet.

[Cknolls]

I think I linked in a story on foreclosure rates recently, the basics were that the rate is still very high, but that foreclosure notices have actually been going down, not up. The problem is, some of the decrease is due to a combination of mortgage rebuilds and foreclosure stalling programs. And only some of those will stick. Looking at all the indicators amalgamated, it appears to me we haven't peaked yet, but the rate of ascent has become very small, indicating a likelihood that it, like the rest of the housing sector, is moving the right direction.

 

But again, the key to this and really everything, is employment.

 

 

Employment sucks and will for years. Ergo housing will have a second leg down. Period. And pretty soon the gov't will move to 100% of the mortgage mkt. We will be praying for only a double dip. Deflation is the biggest worry. And when "they " can't "stimulate" anymore, buckle up and strap it down, Hawk. It will get fugly.

[Balta1701]

Employment sucks and will for years. Ergo housing will have a second leg down. Period. And pretty soon the gov't will move to 100% of the mortgage mkt. We will be praying for only a double dip. Deflation is the biggest worry. And when "they " can't "stimulate" anymore, buckle up and strap it down, Hawk. It will get fugly.

This is contradictory. If deflation is the biggest worry then the government will have virtually infinite space for additional stimulus as long as they don't listen to the Hoover party.

[NorthSideSox72]

The big reason for foreclosures now is unemployment, not bad loans. There has been a transition in this sector. By looking at the unemployment numbers, that means we are no where near ready to recover. We might be able to build a statistical falsehood here that shows "recovery", much like the 3.5% JUMP IN GDP last quarter. But there is nothing that shows any real growth yet.

 

There is all kinds of growth going on, its just not sustainable, long term, steep growth like we'd want. I've shown all sorts of it in here. Its recovery growth, which some might call bounces, but that is how things start. If you ignore all these, you ignore the bigger picture. Overall, the growth is not that strong, but it is certainly there. The question is more about how sustainable it is, long term.

 

But you are right about foreclosures, the continued large UE numbers are causing much of the foreclosure problem. Resets and bad loans are not so much the major factor anymore. No argument there.

 

 

Employment sucks and will for years. Ergo housing will have a second leg down. Period. And pretty soon the gov't will move to 100% of the mortgage mkt. We will be praying for only a double dip. Deflation is the biggest worry. And when "they " can't "stimulate" anymore, buckle up and strap it down, Hawk. It will get fugly.

 

You are like the chicken little of the markets. You have been in here for years predicting levels of doom that never happened, and according to most everyone expert I've read or spoken with, are extreme worst case scenarios. Like 4 or 5 SD out from probable. So forgive me if I take your posts on this with a gigantic grain of salt, when you say "period" about something many experts don't think will be the case.

 

 

This is contradictory. If deflation is the biggest worry then the government will have virtually infinite space for additional stimulus as long as they don't listen to the Hoover party.

 

Deflation isn't a concern, at least in the near term. Only way its a concern is if the economy not only dips again in the next few years, but dips well below the current levels across the board. Virtually no one is predicting that. If that corner case did happen, we'd obviously have massive problems.

 

[Balta1701]

Deflation isn't a concern, at least in the near term. Only way its a concern is if the economy not only dips again in the next few years, but dips well below the current levels across the board. Virtually no one is predicting that. If that corner case did happen, we'd obviously have massive problems.

I agree near-term deflation is no longer a concern, but it's no longer a concern because the government and the Fed have been printing money to make sure it isn't a concern. Hence my response to him; if it becomes a concern again, then that means that the threat of inflation will have decreased to even less than the very-close-to-nil it currently is sitting at, and thus the government can continue printing money.

[NorthSideSox72]

I agree near-term deflation is no longer a concern, but it's no longer a concern because the government and the Fed have been printing money to make sure it isn't a concern. Hence my response to him; if it becomes a concern again, then that means that the threat of inflation will have decreased to even less than the very-close-to-nil it currently is sitting at, and thus the government can continue printing money.

That's a monetary divergence that would lead to disaster. Our rate of printing money is already way, way, way too high, and even more importantly, we're not getting the bang for that buck that we should. If the economy super-tanks in the next few years, and we throw even larger sums of debt money at it, the divergence will eventually cause real economic collapse. Fortunately, this is not the path that anyone in charge of anything is suggesting. But there is definitely some risk there.

 

[southsider2k5]

That's a monetary divergence that would lead to disaster. Our rate of printing money is already way, way, way too high, and even more importantly, we're not getting the bang for that buck that we should. If the economy super-tanks in the next few years, and we throw even larger sums of debt money at it, the divergence will eventually cause real economic collapse. Fortunately, this is not the path that anyone in charge of anything is suggesting. But there is definitely some risk there.

 

Think post WWI Germany.

[mr_genius]

The big reason for foreclosures now is unemployment, not bad loans. There has been a transition in this sector. By looking at the unemployment numbers, that means we are no where near ready to recover. We might be able to build a statistical falsehood here that shows "recovery", much like the 3.5% JUMP IN GDP last quarter. But there is nothing that shows any real growth yet.

 

^^^

[Balta1701]

Think post WWI Germany.

Germany wasn't exactly dealing with the threat of deflation and there were some serious political issues at play (i.e. reparations) there driving that as well.

[Cknolls]

There is all kinds of growth going on, its just not sustainable, long term, steep growth like we'd want. I've shown all sorts of it in here. Its recovery growth, which some might call bounces, but that is how things start. If you ignore all these, you ignore the bigger picture. Overall, the growth is not that strong, but it is certainly there. The question is more about how sustainable it is, long term.

 

But you are right about foreclosures, the continued large UE numbers are causing much of the foreclosure problem. Resets and bad loans are not so much the major factor anymore. No argument there.

 

 

 

 

You are like the chicken little of the markets. You have been in here for years predicting levels of doom that never happened, and according to most everyone expert I've read or spoken with, are extreme worst case scenarios. Like 4 or 5 SD out from probable. So forgive me if I take your posts on this with a gigantic grain of salt, when you say "period" about something many experts don't think will be the case.

 

 

 

 

Deflation isn't a concern, at least in the near term. Only way its a concern is if the economy not only dips again in the next few years, but dips well below the current levels across the board. Virtually no one is predicting that. If that corner case did happen, we'd obviously have massive problems.

 

 

Nothing is of concern near term. So when would deflation be a problem? What is near term? 2 years. Why haven't they reigned in the stimulus if deflation is not their concern?

[Cknolls]

The big reason for foreclosures now is unemployment, not bad loans. There has been a transition in this sector. By looking at the unemployment numbers, that means we are no where near ready to recover. We might be able to build a statistical falsehood here that shows "recovery", much like the 3.5% JUMP IN GDP last quarter. But there is nothing that shows any real growth yet.

 

 

This 3.5 % number is already going to be revised down to at least 2.5%.

[NorthSideSox72]

Nothing is of concern near term. So when would deflation be a problem? What is near term? 2 years. Why haven't they reigned in the stimulus if deflation is not their concern?

The stimulus was not primarily about deflation prevention, that was a secondary factor. Their decision whether or not to reign in stim spending will take that into consideration, but its not a one to one relationship as you hint here.

 

[southsider2k5]

Germany wasn't exactly dealing with the threat of deflation and there were some serious political issues at play (i.e. reparations) there driving that as well.

 

We are essentially performing the same functions in our economy if you really look at it deeply. And I am not talking about deflation, I am talking about massive inflation.

[Cknolls]

The stimulus was not primarily about deflation prevention, that was a secondary factor. Their decision whether or not to reign in stim spending will take that into consideration, but its not a one to one relationship as you hint here.

 

 

Bernanke's greatest fear in the world is deflation.

[Balta1701]

Bernanke's greatest fear in the world is deflation.

I think it's actually that Blankfein will decide to push the off button and have him shut down and decommissioned.

[NorthSideSox72]

Bernanke's greatest fear in the world is deflation.

There is a difference between your greatest fear, and what motivates policy, or what is even remotely likely. My greatest fear might be shark attack, but that doesn't stop me from taking trans-oceanic flights.

 

Also, Bernanke didn't write the stimulus bill.

 

[jasonxctf]

WITI-TV, MADISON - Wisconsin's unemployment rate dipped slightly in October to 7.6 percent, its lowest point so far this year. The state Department of Workforce Development reported Thursday that the rate was down just one-tenth of a percentage point from the previous month. However, compared to the same month a year ago the rate was 3.2 percentage points higher.

 

Unemployment in the state has been declining since June.

[Y2HH]

There is a difference between your greatest fear, and what motivates policy, or what is even remotely likely. My greatest fear might be shark attack, but that doesn't stop me from taking trans-oceanic flights.

 

Also, Bernanke didn't write the stimulus bill.

 

Well said.

 

And I don't know how many times I have to reiterate this, but while deflation may be feared -- it's NEVER going to happen -- especially when taking into account the flood of currency from the stimulus amongst many other factors at play, it's just NOT a reality at this time.

 

What they need to worry about, because it is a reality, is spiraling out of control inflation.

[NorthSideSox72]

Well said.

 

And I don't know how many times I have to reiterate this, but while deflation may be feared -- it's NEVER going to happen -- especially when taking into account the flood of currency from the stimulus amongst many other factors at play, it's just NOT a reality at this time.

 

What they need to worry about, because it is a reality, is spiraling out of control inflation.

Yes, when the economy does recover (and believe it or not, it will, at some point), inflation will be a big worry.

 

[Cknolls]

Just look at Japan. They are approaching 200 % DEBT/gdp. Fighting deflation working out great for them. WE have already lost one decade, I believe we are on our way to numero 2. Maybe if we say we don't have to worry about deflation, enough, it may come true.