Stocks moved higher in choppy trade and enter the final hour with small gains. Benefiting from Toyota’s recent troubles GM and Ford posted sales gains in February as Ford surpassed GM in sales for the first time in nearly 12 years. Still auto sales remain weak and the comparison from a year ago at 9.143 million units annualized made it an easy number to improve upon.
Based on recent GDP data the argument that the recession is “officially” over is both a strong and popular one. The NBER or National Bureau of Economic Research is the outfit that officially designates when recessions start and end. The said the NBER likes to look at personal income less transfer payments, manufacturing, trade all on a real or adjusted for inflation basis and of course employment.
Income is still falling everything else has either turned the corner or stabilized. But the question is weather or not the recession is actually over. My take is that stimulus has indeed “ended” the recession, you can fix just about anything if you throw enough money at it. Absent stimulus of course and the recession will return with a vengeance and this level of stimulus is most certainly not sustainable.
Like the HAMP program that is being micro-managed to death and constantly modified in an attempt to make it work, so to is the FHFA program for mortgage modification as well or HARP. The bottom line with modification is a redefault rate of 50+%, the latest figures are closer to 70%. While the combination of creative financing to cash flow an investment that was actually a home enabling the buyer to purchase much more property than they could afford combined with falling prices and a lack of documentation on both sides has produced a toxic stew that really has no solution other than foreclosure and or bankruptcy because the underlying assumptions have proven to be incorrect as there is a substantial difference between a home buyer and a real estate consumer.
Hi and welcome to The Profit Motive, I’m your host Caleb Lawrence. Once upon a time in America the media acted as the watchdog of the corporations and the state. In the modern era it’s all about ratings and profits, opinion has been substituted for news and frequently is presented as fact. Much like my daily radio show on KPIG 107.5 FM in Santa Cruz California and KPYG FM 94.9 Cayucos/San Luis Obispo California. A thousand Blogs were able to spot the current problems and many began discussing it years before it reached crises proportions. While there were exceptions, and these exceptions are becoming more common, the mainstream media failed to get it and largely continue to do so.
