Less than Meets the Eye
Courtesy of Michael Panzner at Financial Armageddon
To the rose-colored glasses set, all the "good" data we’ve been seeing lately is proof that economic recovery is at hand. But is that really the case?
Take the decline in initial and continuing jobless claims that has taken place over the past several months. In theory, that’s a sign that the worst may be over as far as unemployment is concerned.
There’s more to it than that, however. For one thing, the number of people claiming emergency unemployment benefits has surged nearly 500 percent since November of last year.
Moreover, the claims data fails to account for those who have exhausted their benefits, or who are ineligible because they still have one of the two or more low-paying jobs they need to survive.
The same can be said for other statistics that suggest the economy is stabilizing or even improving. In "Housing ‘Shadow Inventory’ Rises," The Economic Populist points to one example:
It was only last week that the real estate industry was celebrating the good news.
The number of home listings within 27 major U.S. metropolitan areas slipped 2.42 percent in November 2009, compared to a month prior, and is down 27.64 percent compared to a year ago, according to a monthly report of homes listed for sale on Multiple Listing Services (MLS) in the markets surveyed by ZipRealty, a national real estate brokerage.
Fewer homes for sale means the supply and demand dynamics have turned up, which means that the housing market is bottoming, right?
Not so fast.(Bloomberg) — The number of homes that may be in the pipeline for a sale because of foreclosure and delinquency climbed about 55 percent to 1.7 million at the end of September, according to estimates by First American CoreLogic.
The “shadow inventory” rose from 1.1 million a year earlier. Such properties include those taken over by banks and mortgage companies and those where the loans are at least 90 days delinquent, the Santa Ana, California-based research firm said in a report today.What is actually going on is that the homes that should be hitting the market in rock-bottom auction sales, are actually being held up in the pipeline because of HAMP, temporary state moratoriums on foreclosures, and already overwhelmed banks reluctant to take on more inventory.
