Does anyone think that the 2009 recovery was real?
As early as 2008, government an business leaders were pointing out signs that the Great Depression II was ending. There was talk of “green shoots” of recovery, stabilizing of the economy, and predictions of improved home sales, employment, and retail sales.
In 2009, any remotely positive move in any economic figure was a sure sign that everything was fine. The slightest upward blip on the radar screen magically erased all of the disaster of the past 5 years.
So how has this worked out. Well, for one thing it got consumers spending more money. Consumer spending was up in January, according to government figures.
” …consumer spending rose 0.5% to a seasonally adjusted annual rate of $10.3 trillion for the first month of 2010….”
But was this a good thing? During this same period, incomes actually fell.
“…..after-tax incomes fell 0.6% on the month, It was the largest decline in real disposable incomes since July, just after a one-time stimulus payment to seniors…….”
So while consumers had less money, they spent more. Isn’t this what got the economy into the whole mess to begin with?
So what about the the real estate market? It is improving, right? Well, maybe it was for a few seconds. Mortgage delinquencies are back on the upswing after a brief pause. According to Equifax, more homeowners are falling behind on their mortgages, jeopardizing the nascent housing recovery and raising the possibility that home prices have not found their bottom but could instead fall further.”Did we just see a headfake?” Equifax President Dann Adams asked. “Things looked really promising, but the January numbers say wait, there’s more to this story.” “This wasn’t just a small uptick,” More than 8 percent of homeowners were behind 30 days or more on their mortgage loans, up 4.4 percent from December 2009 and 21 percent from last January.
“The number of homeowners who are at least 90 or 120 days late on their mortgages also continues to rise, Adams said. ”There’s more foreclosures in the wings.” “There is a large segment of homes that are going to enter foreclosure in the next 3 to 6 months, which then puts more pressure on home prices”
Let’s see how the next batch of employment numbers looks.
