Present data, future projections
“The U.S. economy remains mired in a recession, prospects for next year are weak and home prices may resume declines, Harvard University economics professor Martin Feldstein said.” That is a pretty clear statement. “Feldstein said the Obama administration’s effort to revive the housing market is a failure and home prices will continue to decline. “It was just not well enough designed,” Feldstein said. “They ended up failing.” That suggests the housing slump will “continue to push down house prices,” he said.
This is confirmed in South Florida, where the jobless rate continues to climb. November’s rate is 11.5%, the highest since May 1975, and means that that 1.06 million residents are out of work.
As a result, the dominoes continue to fall; Sun Cruz casinos have cancelled their daily ocean going gambling boat cruises, laying off another 300 workers. They are in arrears over $300,000 in port fees, and had no comment about future operations.
It is getting so bad in Utah that residents are being charged for police protection, separate from their regular taxes. The tax revenue has dropped so far that the county Sheriffs office cannot afford to provide services to some areas.
“Residents and businesses in unincorporated Salt Lake County soon will see a new bill in the mail. Starting Jan. 1, the new Unified Police Department will replace the Salt Lake County Sheriff’s Office.” “You’ll get a bill like you get your gas or electric bill in the mail. We’d ask citizens in the unincorporated parts of Salt Lake County to recognize that is something they will need to pay,”Salt Lake County Mayor Peter Corroon says. “The new bill or “fee,” as it’s being called, will cost a single family home owner about $170 a year. An apartment resident will have a slightly higher bill, closer to $230 a year. That’s because the fee is not based on property value but how often police are called to an area.”
Sounds like another reason to move out of a bad neighborhood.
Maybe this is one of the reasons that Federal troops are gearing up for deployment within the US. “U.S. Northern Command (NORTHCOM) exercises to test preparedness to perform its homeland defense and civil support missions.”“The fact that the military — in this instance NORTHCOM — is being trained to operate with our borders should be setting off alarms throughout this nation.”
What else can we expect next year? Well some analysts predict that the global economic crisis has hit a tipping point. Government bankruptcies “will entail a double paradoxical event of increasing interest rates and the flight out of currencies towards gold. In the absence of an organised alternative to a weakening US Dollar and in order to find an alternative to the loss in value of treasury bonds (in particular US ones) all central banks will have, in part, to reconvert to gold, the old enemy of the US Federal Reserve, without being able to state the fact officially. The bet on recovery having been, at this point, totally lost by governments and central banks , this Spring 2010 tipping point is thus going to represent the beginning of the huge transfer of 20,000 billion USD of ghost assets.”
What is the result of all that? Fund manager John Hussman interprets the current data to mean an almost certain crash in 2010. “In my estimation, there is still close to an 80% probability (Bayes’ Rule) that a second market plunge and economic downturn will unfold during the coming year,” he says.
“People didn’t figure out that it was the Great Depression until two years after the worst point in the crisis in the 1930s; and why it took decades, not months, quarters or even years, for the complete transition to the next sustainable economic expansion and bull market,” said Gluskin Sheff chief economist David Rosenberg. ”“Mortgage applications for new home purchases hit a 12-year low in the middle of November (down 22% in the past month!), fully two weeks after the Administration said it was going to not only extend but expand the program to include higher-income trade-up buyers. Once again, there is minimal demand for autos and housing, and that is partly because the market is still saturated with both of these credit-sensitive big-ticket items after an unprecedented credit and consumer bubble that went absolutely parabolic in the seven years prior to the collapse in the financial markets an asset values. We are probably not even one-third of the way through this deleveraging cycle. Tread carefully.”
