Economic Update – March 9,2008

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  • Housing Foreclosures hit an all time high of 0.83% of all mortgages nationwide.

  • Over 5.8% of homeowners were behind in their mortgage payments, the largest number in more than two decades.

  • House prices lost a staggering 8.9% in 2007 – and they’re still dropping.

  • The supply of unsold houses rose to 4 million, or to over a 10 month’s supply.Homeowners’ equity fell below 50% for the first timesince 1945, hitting a new low of 47.9%. As Barry Ritholtz expressed, never before have banks and other various and sundry lenders owned more of the average American’s house than they do.

  • For February 2008 – the economy lost 63,000 jobs. That means 63,000 people lost their job in one month. Actually, the number was 101,000 people who lost their jobs in February, but the government hired 38,000 just to make the numbers look better.

  • In January 2008 – the consumer price index, the widely reported statistic used to measure inflation, rose 4.3% from January 2006.

  • According to John Williams of Shadow Government Statistics, he comes up with a reading of 11.8% inflation for the January CPI calculation. With oil at $106-a- barrel and every kind of commodity up 30% or more (aluminum, oats, silver-hit a 27 year high recently), and double-digit gains in other commodities such as, coffee, corn, wheat, zinc, etc. This just makes more sense than the economic statistics given to us by the government.

4 Responses

  1. Housing prices are even cheaper now. But it’s also harder to get a loan to pay for the house. Good for those with great credit.

    http://www.mycarauctionreview.com

  2. Hi,
    I like the way you write about Money, Finances and bank ..Its really different and interesting … keep the momentum going ..I hope this will really going to help me in future while making investments…I hate banks. They do nothing positive for anybody except take care of themselves. They’re first in with their fees and first out when there’s trouble.Central banks don’t have divine wisdom. They try to do the best analysis they can and must be prepared to stand or fall by the quality of that analysis..
    brilliant. .

  3. Banks are actually softening up. A client of mine (with 700+ FICO), negotiated a 50% reduction on a 2nd in order to sell her house. She knocked $20K off and brought $20K to closing. That was jaw-dropping.

  4. Do you think that due to media-hyping foreclosures banks are tougher to negotiate with?

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