The Federal Reserve Says the Economy Stinks. What Whiners
Reports from the twelve Federal Reserve Districts indicate that the pace of economic activity has been slow in most Districts. Many described business conditions as "weak," "soft," or "subdued." Cleveland and St. Louis reported some weakening since their last reports while Boston and New York noted signs of stabilization. Kansas City reported a slight improvement.Consumer spending was reported to be slow in most Districts, with purchasing concentrated on necessary items and retrenchment in discretionary spending. Districts reporting on auto sales described them as falling or steady at low levels. Tourism activity was mixed but received support from international visitors in several Districts, and the demand for services eased in most Districts. The transportation industry was also adversely affected by rising fuel costs. Manufacturing activity declined in most Districts but improved somewhat in Minneapolis and Kansas City. Most Districts reported that residential real estate markets remained soft. Commercial real estate activity was slow in most Districts, and some reported further slackening in demand for office and retail space. Most Districts reported easing loan demand, especially for residential mortgages and consumer loans; lending to businesses was mixed. Districts reporting on the agricultural sector noted some relief from drought conditions. Districts reporting on energy and mining activity recorded increased activity.
Almost all Districts continued to report price pressures from elevated costs of energy, food, and other commodities, although some noted that there have been declines or slower increases in prices for several industrial commodities and energy products. Business contacts in a number of Districts indicated that they had increased selling prices in response to the high costs for their inputs. Wage pressures were characterized as moderate by most Districts amid a general pullback in hiring, although several Districts noted continued strong demand for workers in the energy sector.
Note the words used to describe almost every economic area of activity -- soft, weak and declining. There is only one area of strength -- energy and mining. That alone should tell you a great deal about the current state of the economy.
Let's look a bit deeper into the report and the numbers:
Consumer spending
Consumer spending was slow in most Districts. Retail sales and other consumer spending was reported as mixed or little changed in Boston, Chicago, St. Louis, and Dallas and weak or declining in Philadelphia, Richmond, Minneapolis, and San Francisco. Sales were described as below expectations in Atlanta but on or close to plan in New York. Cleveland and Kansas City noted some improvement in retail sales since the last report. Several Districts reported that consumers were concentrating on food, staples, and other necessary items while reducing spending on discretionary items. Chicago, Dallas, and San Francisco reported noticeable declines in spending on apparel, electronics, and jewelry. Sales of furniture and household appliances were weak in most Districts. San Francisco described sales of this merchandise as exceptionally poor. A shift of consumer shopping patterns toward discount stores and lower-price brands and away from traditional department and specialty stores was observed in Philadelphia, Chicago, Dallas, and San Francisco. Sales of motor vehicles were reported to be weak or falling in all Districts, especially for larger, less fuel-efficient cars, SUVs, and trucks.
First of all, remember that consumer spending accounts for about 70% of US growth. So this perhaps the most important area of the report.
Given that, note things are not good for the US consumer. The sales pace is either, the same, mixed or declining. There was no talk of "robust" spending. Also note the consumer is concentrating his spending on staples rather than discretionary items. Durables goods (goods that will last longer than three years) are taking a hit as evidenced by the slow pace of furniture, household and automobiles. There is also a trend to discount stores, indicating further penny--pinching.
The bottom line is the US consumer is not very confident about the future.
To that end, here is a chart of personal consumption expenditures.
Note the year over year percentage change has been dropping for the last year.
Here is a chart of real (inflation-adjusted) retail sales
Note the year over year rate of change is now negative.
Non-financial services
Districts reporting on nonfinancial services generally indicated some slowing in activity since the last report, although New York reported stabilization after several months of decline. Boston, Cleveland, Atlanta, and Dallas noted falling demand for freight and transportation services, and firms in those industries reported higher fuel costs negatively affecting their margins. Dallas reported that airlines were reducing capacity. Demand for information technology services was reported to be flat in Boston and down in St. Louis. St. Louis and San Francisco noted less strength in the health care sector since the last report. Business and professional services activity was weakening in St. Louis and San Francisco. Dallas reported that business was steady at accounting firms but down at legal firms. Temporary staffing activity was reported to be mixed in Boston and Richmond and stable in Dallas.
Like the retail sales report, notice the adjectives used to describe overall activity. Activity is "slowing", demand is "falling", airlines are "reducing capacity", demand is "flat". Accounting firms are steady, but Dallas legal firms are down. There is no talk of expanding services or increases in employment to meet rising demand. Overall, the service sector is treading water. Here is a chart of the ISM service index:
Note activity is right around 50 which is the line the report uses to delineate between expansion and contraction.
manufacturing
Manufacturing activity was weak or declining in most Districts but improved in others. New York reported some stabilization after months of decline, Kansas City reported a rebound after a weakening in June, and Minneapolis and San Francisco have made gains since the last report. A number of Districts reported that export orders were bolstering manufacturing activity, but manufacturers in several of those Districts have noted some recent slowing in growth from this source. Boston, Philadelphia, Cleveland, Richmond, Chicago, and Dallas reported continuing declines in demand for housing-related products and construction materials. Boston reported declining output of aircraft and other transportation parts and equipment, but San Francisco reported a high rate of aircraft production.
Manufacturing has been a mixed bag for awhile now. While domestic demand has been slowing (see points made above) exports have been doing extremely well. In fact, they are one of the only bright spots for the US economy. In last week's GDP report, they were the primary reason for the 3.3% growth rate (along with an incredibly fortuitous mathematical anomaly) However, overall manufacturing activity is still hanging between expansion and contraction:
The ISM manufacturing index is hovering around the 50 level -- between expansion and contraction.
The year over year rate of industrial production has been dropping for about a year
The the Philadelphia Fed and the Empire States (New York Fed) manufacturing index have been very weak for the last 6 months or so.
Housing
Residential real estate conditions weakened or remained soft in all Districts, except Kansas City, which reported a modest increase in sales since the last report. Demand for housing was reported to be still moving down in Boston, New York, Chicago, St. Louis, and San Francisco. Residential real estate activity was sluggish in Philadelphia, Cleveland, Richmond, Atlanta, Minneapolis, and Dallas. New York reported low levels of single-family construction but a brisk pace of multi-family construction after an increase in permits in June occasioned by a change in the New York building code effective July 1. Chicago reported a faster rate of decline in residential construction since the last report as well as delays and cancellations in residential building projects. Richmond and Kansas City reported that lower and mid-price houses were selling at a better rate than more expensive houses. Atlanta and Dallas reported that inventories of unsold new houses were edging down.
Here's the bottom line with housing. Inventory of existing homes is at a record in both absolute (total number available) and months of supply. As a result, prices are still dropping at a high year over year levels. On top of that, the US consumer is pulling in his spending ways, adding further pressure to the market. Finally, credit is tightening. Massive inventory + depressed consumer + tighter credit = a real estate market that isn't going to recover anytime soon.
Employment
The report does not have a separate employment section, but I wanted to add the following information:
The year over year rate of employment growth has been declining for almost two years and is now moving into negative territory, and
The unemployment rate has been increasing for about a year and a half.
The bottom line is simple: the economy is in terrible shape.
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"First of all, remember that consumer spending accounts for about 70% of US growth."
I think we have just found the mother of all problems. Somebody call in an air strike, the Republican solution to everything. Or was that a tax cut? I don't remember any more.
:-)
What's the Democratic solution? Tax increases and trade protectionism? Go after the evil "rich" people and the evil "corporations?"
You may want to check the democratic platform ther dugan
there is nothing about trade protectionism in it. In fact it is little different than the pro- globalist platform of the republicans
It does discuss things like increasing social safety nets and ending tax loopholes for outsourcers - but that is pretty much it. mere speedbumps in the race to the bottom - needed speed bumps, but aren't more than bandaids to the structural problems
The democratic platform is also actually more lenient on additional immigration and H1B's than the republicans - pretty bad idea at a time of decrease job availability and rising unemployment for US citizens.
No one is suggeting we should end trade. What we are suggesting is revamp trade to be smarter and fairer - of more benefit to US workers rather than mutlination corporations and third world dicatorships and human rights violators
i agree!! over here people are psyched to "buy, buy and buy"!!
from where I come from, You are told from childhood to "save, save and save"!!
The middle class needs an income raise to boost their disposable income.
Until that happens, things are not going to improve a whole lot.
But since most of the middle class kids now work as stackers at the mall, we first need an increase in consumer spending to give them a raise... for which we need to increase productivi
:-)
Maybe if the tax cuts went to them instead of the upper 1% we would not be here? Nah, liar loans are never the right way to get people into houses.
Exactly, it was not hard to figure out if you don't pay the people how can they spend? Bush thought
his measly $ 600 would fix the problem LOL but it all went into the gas tank. For years the
income has shrunk, the only benefitting were the robber CEOs, they got their share, and then
broke the companies.
Henry Ford demand side economics. If you want to create markets for your goods and services yu must pay people enough to afford those goods and services
The difference between today's robber barons and the robber barons of old is that the old timers actually created jobs, industries, infrtstructure, inventions and new technologies - built factories and railroads in their quests for power and money.
Today's robber barons enrich themselves from closing, downsizing, offshoring, cutting jobs, slashing budgets, extorting communities and local governments.
They ran out of wealth to consolidate and now comes the pouting because the "Free Market" is a darwinist reality show and only the most cunning corporate criminals are making it into the "Finals", the remaining 98% are slaves like the rest of us.
If you are a Christian, you can imagine Milton Friedman is desperately looking for ice cubes right now.
Bondad, it's SO enjoyable watching you come over to the dark side....LO
"The bottom line is simple: the economy is in terrible shape."
How true.
And it's only just begun. Be it McCain or Obama, It's a tough road ahead.
I'll take my chance on the latter.
We need more "innovators" and below is part of the problem:
".... 55 percent of engineering master’s degrees awarded by Texas universities go to foreign citizens, while 75 percent of engineering doctorate degrees go to foreigners.
“These same skilled immigrants must wait up to 10 years for a green card ... While the U.S. is turning away the best and brightest other governments are thinking proactively to take more of them in. Australia recently announced it will increase its pool of skilled foreign workers by 30 percent,” he said. We need an immigration policy that encourages the cream of the crop of foreigners to stay here and help us build our economy.
Texas has surpassed California as the country’s top exporting state in areas such as high-tech products and semiconductors, and particularly in industrial engineering, medical and construction services. Services sector exports now account for nearly 50 percent of the country’s total exports, which reached $1.1 trillion in 2007, buoyed by the depressed value of the U.S. dollar."
This is all happening at the same time that the US prison population continues to reach all time highs, high school drop out rates continue to be high in many cities and rural areas, and people tend not to pursue technical degrees because of lack of interest.
Students tend to not pursue technical degrees because there is no demand
who wants to study for five years, go deep into debt to hqave to compete withg lower wafe foreign workers for jobs that are being outsourced
There has to be demand for engineers if you want to encourage new entrants into the field. when i was in engineering school enrollment swelled because there was real demand pages and pages of jobs and the starting pays reflected the demand, not today - employers give laundry lists of qualifications they want but only offer low ball wages
many schools are dropping or scaling back their technical programs due to lack of demand.
This is yet another supply side fallacy - that a supply of skilled workers somehow magically creates demand for them. If that were true Michigan wiould have the lowest unemployment rate rather than the highest, since it has the highest per capita concentration of engineers in the country
Most of the Texas "miracle" of which you speak is largely based on the transport and distribution of goods coming in from latin america
texas has lost manufacturing jobs on the same level as most mfg states over the last 7 years
John and Cindy want "everyone" to be rich. John describes rich as an annual income of $5million. Assume 100 million working families in the country times $5million net income each and you get a total annual income (this is much less than gdp) of... $500 trillion!
And this guy, John McCain with his girl the Pitbull is a serious contender to become President.
The American economy was at one time based on our productive capacities, our work ethics, our resources and a basically honest system. The first three have been with us from the outset while the last was made possible by New Deal reforms in the financial and labor sectors. The basis of any market is the belief by all participants that they will receive fair dealings. The basis for the unparalleled growth since World War II has been the increased earnings of Middle Class Americans. They were both the producers and consumers of prosperity.
This all began to change in the 1980s led by the anti Government/anti labor views of the Republican Party. Financial deregulation ended 50 years of stable banking and cost hundreds of billions to repair. Corporate written trade pacts in the 1990s and an end run on commodities regulations planted the seeds of an eventual avalanche of miseries. This decade has been characterized by Greenspan’s Libertarian see nothing hear nothing do nothing financial “guidance”. Bush’s non enforcement of securities laws and the laws against hiring millions of illegal immigrants has wrecked havoc from top to bottom. His tax cuts have provided only 4 trillion in debt in 8 years with growth being half that of the previous 8 years.
Now CEOs, other corporate officers and many in the financial industry receive several hundred times the pay of their employees or the average worker.
"a basically honest system" ... for some. While the New Deal pushed labor unions on industry, unions had a bias against black workers, who couldn't join. So good intentions led to 100,000 black workers being disemployed.
What you are referring to is the Davis-Bacon act of 1931 (pre New Deal) which required that "prevailing wages" be paid on all Federal Contracts. This came from a practice whereby contractors recruited Blacks, paid them substandard wages and underbid other contractors. The net result was that contractors using Union workers got the bids. And yes, the Unions were discriminatory in their hiring practices. It took another 40 or 50 years and an Act of Congress to rectify this situation.
The "basically honest system" applies to banking and securities reforms that worked well until the Republicans removed them. It also applied to the way corporations could deal with labor. One example was they couldn't call the Governor and have troops sent out to machine gun the strikers (see Ludlow massacre).
50 years of stable banking? There have been far fewer bank failures this decade than in any decade over the past 150 years. Also don't forget that industrial production reached all time highs throughout 2005, 2006, and 2007, and real disposable income remained strong throughout President Bush's term. What is the "end run of commodities regulations" mean?
The stable 50 years were prior to Reagan's Savings & Loan debacle where 1200 financial institutions failed costing, with interest, about 600 billion. This was the greatest number of bank failures since the Depression. It was in all the papers at the time. Oh, they didn't have Fox news then, but they wouldn't have reported it anyway. Manufacturing employment is now below where it was in 1947 when the population was half of today's population. As to real disposable incomes being strong, perhaps you missed Bonddad's previous fact laden post stating otherwise. Also, the Government pabulum that bespeaks this rosy scenario is sophomoric in quality. It is intrinsically obvious to even the most casual observer that the inflation data routinely reported is not realistic. Other data is similarly askew. Thus garbage in garbage out.
The "end run of commodities regulations" was Phil Gramm's commodities deregulation bill that had been previously rejected by the then Republican Congress. It was attached to a vital appropriations bill (as is pork) and passed into law. This is the "Enron Loophole" that allows trading without oversight. Phil Gramm's wife, Wendy, was a member of Enron's Board. The "electricity crisis" was the result of traders (including Enron) using this loophole. Many experts have stated that the current run up in energy prices is a direct result of this lack of transparency. Interestingly, Carly Fiorina at the RNC called for more transparency in the financial markets. Gramm is still McCain's go to guy for economic policy.
If your numbers are correct, it is probably due to there being less banks around to fail because of all the mergers. But give it a year, they'll be folding.
I'm sure he's refering to the rampant speculation in oil that has driven the price up so high, so fast unleashed by the Gramm short-sighted deregulation measure
Maybe because in this age of mega-merger banks there are fewer banks.
Isn't the FDIC's struggling bank "watch list" up to like 110 now?
Expansion financed by massive debt is not "growth".
Massive Government debt began with Reagan. I have pointed out in other posts that the growth during his tenure did not cover his debt. Massive personal debt expoded under Bush and his no billionaire left behind policies.
No expansion is not "growth" either. People seem take "growth" for granted here in the United States. Most don't realize that Japan saw virtually no growth in the entire decade of the 1990s and that Western Europe saw little to no growth for the better part of 15 years until recently.
In most companies the CEO makes 50% more than corporate officers who have approx. twice the income of senior employees in leading positions who again make 20-30% more than the members of their teams. And those have roughly twice the income of blue collar workers.
So it boils down to a disparity of approx. 5-10 times the income for a CEO over the blue collar worker. The several hundred times figure results from excesses in some of the largest corporations with weak boards.
Is that good? Maybe not. But it is not nearly as bad as most people think.
Little side note: there are plenty of places in the US where even the average CEO has a hard time to finance a home that is commensurate to his position. It takes an IPO or extraordinary business success for even CEOs to get truly rich these days.
Continued:
Their rate of remuneration is 10 times that of their foreign counterparts; this irrespective of their performance. Typically their pay is structured to receive additional tax preferences yielding rates lower than many wage earners. The financial system has been looted to the extent that major players cannot even do business because of a lack of fiduciary trust. The securities they hold are thus worthless. They only survive because the Government they despise is now propping them up.
The purchasing power of the lowest on the totem pole is near an all time low. Indeed, the minimum wage of 40 years ago would purchase 5 gallons of gas now it won’t even buy 2. The earnings of Middle Class Americans have been eroded and for the first time since the Depression our overall standard of living is falling. The appearance of prosperity has only been possible by many accepting ruinous levels of debt.
So now our productive capacities and work ethics are not being rewarded. Rewards are reserved for the underhanded and undeserving. The Government that was once the bulwark of fair dealings is now the handmaiden of corporate sloth and financial malfeasance.
The Country needs strong leadership that is unafraid to take on the powers that have so devastated the majority of Americans, brought us senseless War and mocked our system of governance. Instead, we have Nancy Pelosi and Harry Reid.
Expect no meaningful trade and economic reform as long as we have DLC "free" traders like Pelosi, Reid, Emanuel, Hoyer, Rangel et all in "leadership" positions
Everywhere one looks debt and indebtedness is the significant fact, Those with money are fools to loan more money. The money now lent has the debt holders nonplused and frightened. Municipal bonds are traded at big discounts. Why? College graduates have no income to begin paying off college loans making plain to the informed that a College Education in America is a bad investment. Revenue bonds including toll road, stadium and other debt paid back by usage are shaky investments as unemployed and inflation battered consumers are unable to use or consume. Municipal bonds are being floated to to pay for continuing operations. That means that the city government is spending beyond its means and taxes being collected.
The debt is so overwhelming that it can never be repaid in full. Therefore, the Feds should give up the ghost and let the whole bankrupted system collapse. Any other approach is subject to favoritism and unfairness while endangering our dangerously over extended currency. If we destroy our currency, we destroy our government. then we will really be in trouble.
Municipal bonds depend on the assessed value of real estate for tax assessments that are the projected cash flow to service and retire the Municipal Bonds. With assessed values dropping, the "projected cash flow" will diminish causing some question about the ability to service the indenture. Ergo the flight from and drop in value ot Muni.
Federal Reserve say economy is terrible--today's stock market losing 344 points and the NASDAQ losing 74 points is not good news for all those invested. With the galactic federal debt looming, now at nearly 10 trillion dollars, galactic personal debt, energy costs thru the roof, unemployment up, retail purchasing down, credit market in serious trouble, social security and medicare problems on the horizon, infrastructure problems ignored, endless war robbing the treasury, heavy borrowing in the trillions from abroad, current accounts deficits in Bush's budget, heavy trade imbalance, housing foreclosures, the republicans want four more years of the same misery to offer the American people in the form of McCain/Palin. A once viab le economy has been trashed in just 8 short years.
The national debt is about the same as a percentage of GDP as it was in 1997-1998. The "household debt service ratio as a percentage of disposable income" is still very high but has been declining since the 4th quarter of 2006 - the vast majority of people are still paying their bills every month and getting their debt down. I'm not saying things are good by any means, but just putting some info into context. Other notes, the trade imbalance has come down sharply in the last two years. The non-petro trade balance was the lowest it's been since 2001 in the most recent data. Exports have been up significantly and imports have been down. The idea of "infrastructure" is also very misleading as the vast majority of infrastructure is funded by private sources or by state and local governments -- vice the federal government. Do we need added investment? Of course. Is the federal government the answer these problems? Not really. Last, note that it's very unlikely the budget deficit will come down under a Democratic administration considering they have huge spending increases in the pipe, claim to want to reduce taxes on middle income folks, and claim to only want to increase taxes on the top bracket, cap gains, and dividends which will only raise about $50 or so billion a year, a drop in the bucket relative to the budget. I believe the deficit could go much higher, especially considering we'll probably need another stimulus plan.
Merely handing out stimulous checks is a band - aid solution. most folks are paying down debt (which is good) or filling up their gas tanks and paying their utility bills with them.
So what is essentially we are borrowing money from china to buy more imported goods, and more from the saudis to buy more oil.
hardly any kind of lasting stimulous, unlike infrastructure investment would be.
Actually the center for tax policy has said that obama's plan for fxing the deficit is more fiscally responsible than McCane's, which pretty much just continues the wild spending of the Bush admin, with less earmarks - but of course you would be hard pressed to find anyone who would suggest that elininating earmarks would be anything more than a miniscule drop in the bucket
As Bonddad has shown in past articles, no matter who ends up being president they will not be able avoid having to raise taxes in some form or another to get a handle on the deficit.
Many folks including a few former free traders are floating the idea of increased tariffs and/or VATS to get revenues up, as was once one of the govt's chief sources of revenue prior to the era of the IRS
The reason we consumers arent confident is because we arent getting raises at all or if so, not close to the rate of increase in fuel and utilities.
The reason we are spending on essentials is because thats all we can buy, not "afford" buy, we cant afford essentials either.
Why doesnt anyone ask the oil companies how much more volume they are producing these days vs, 2001 to back up their claims that they arent makin a huge percentage profit, they are just making it off Extreme higher demand than ever before.
Yet, they can continue to get away with the same amount of refining capacity they've had for 30 years...??
can we get a congressperson to make them lay all the number out on the table?
Cuz if the only big increase indemand is in China, why in the world are we paying for China's subsized greed for oil and cheap industry growth?
how is it a good national security policy to allow our nation to be devastated by high prices for essentials so some other nation can beat us to a pulp economically?
Wage increases this decade have averaged about 3.5%, not much less than in the 90s. The main difference between this decade and the last one is inflation, which is much higher now.
The problem is that wages have not kept pace with productivity gains
There is much more refining capacity now than 30 years ago. Refining capacity has increased in lock step with demand throughout this entire period. You can easily calculate refining margins by dividing the price of oil per barrel by 41 and subtracting from it the price per gallon of RBOB gasoline. If you have done this over the past few years you'd see that refining margins have been very small all year, down from about $25 a barrel in 06-07 to about $5 a barrel all year. Refiners have actually been struggling and have recently been reducing output to bring supply back in line with the reduced demand in the US.
Wow - I actually agree with Dugan on something
The popular meme is that there have been no new refineries. But as Dugan says , the existing refineries have increased capacity through expansions, increased efficienties and new technology
Refiners, particulary the smaller and independents runb on pretty slim margins. Some of the big names actually are a cost center
Americans have been spoiled since 1982, having seen only two minor recessions since that time. The economy grew dramatically in the 1980s, had a short six month recession in 1990, powered ahead for ten more years, had a year or so long downturn, then powered ahead for about six more years. Many Americans aren't old enough to remember what a real downturn is like. And guess what? We're not here yet. Production is still high, mostly due to exports and non-residential construction, and unemployment is still very low at 5.7%. When we see a negative GDP clip (and I think we will) and unemployment at 7%, there will be a real recession, like in the mid-70s and late 70s and early 80s.
According to Shadowstat
The measurement is counting "discouraged workers" who are out of the labor force. This is a bad measurement because the majority of those who used to work but have left the labor force are teenagers that have chose to stay in school, continue to go on in school (record college enrollments in last year), or don't think working is worth their time (having fast food experience on a resume is more negative than having nothing).
....and lets remember what powered those expansions: easy credit. When we see negative GDP, increasing unemployment, and all the other hallmarks this time, we will also be looking at a consumer in debt like never before, shoveling interes over to some of our richest, most despotic financiers.
And here is dugan right on cue with his free market free trade propaganda, misleading and misinterpreted data
I deal with it by ignoring the posts. Too much cherry picking of data.
The leading exports are raw materials and agricultural products - not finished or value added products
The leading import by far is oil, also a raw material. We also import a huge amount of agricultural goods too, like fruits and vegetables. Some of our biggest exports by the way are airplanes and vehicles. And many of our imports are from very low value-add commodity type businesses like auto-parts and textiles, and even in the tech space like many types of memory and PC assemblies.
What an amazing pair of glasses you have!
The problem with all this data is that it speaks in collective terms while each of us is an individual. And our individual circumstances may or may not have any characteristic similar to the whole. I mean that if 4% of home owners are foreclosed and made homeless then 96% of us, those who still read this entertainment, have no similar experience and wonder where all of this "failure" is occuring.
I listen to Little-George talk about "what the American People want" and wonder where he comes up with this emboldened phraseology. I, for one, very rarely agree with him yet he covers by including me in the phrase American People.
..."he covers by including me in the phrase American People." because he is a kleptomaniac.
He doesn't mean you he means the haves, his base! I see all kinds of for sale signs around my area but I don't know if they are forclosures or what. I won't be forclosed on.... yet, our business is doing well and we have a fixed rate mortgage that we actually had to qualify for. I just thank the lord I've not been personally affected .... yet. Watch your bank, you may need to apply to FDIC to get ur money soon.
I own my own home, but there are now three homes for sale on one block near mine. I've lived here 30 years and have never seen anything like this.
Homes were never on the market more than a month in my solidly middle class desireable good location neighborhood, now they sit for 9 months or more and usually get reduced several times. Some finally get auctioned with buyers desperate to sell
and this is not subprime - this is people losing jobs or forced to relocate for work.
The local realtors association says that our town has a record 11 months supply on the market - and that the sales volume is about half what it was two years ago
At the same time values have stagnated or even dropped somewhat AND property taxes have gone up 30%
And the problem is that since the industrial base has shrunk badly there is nothing to attract new residents, and the tax base has also shrunk shifting the burden of taxation onto the remaining homeowners
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