Posts under ‘Deflation’

US home values will collectively lose some 1.7 trillion in value this year, as foreclosures mount and the tax credits disappear a figure greater than the 1.05 trillion lost in 2009.

The mainstream media increasingly desperate to sell the don’t worry be happy borrow more money and go shopping routine to the general public.

Classic deflationary credit bust as one would expect, why the hyperinflationary gold bug crowd doesn’t see this and fails to include the credit creation part of the money printing equation into their forecasts is beyond me.

The graphs in the report go back to the 1st quarter of 1999 and show total debt at 4.6 Trillion the peak of 12.8 Trillion achieved in 2008 represents growth of 278% over a 9-year time frame.

Yesterday’s FOMC meeting announcement contained a number of surprises, the biggest of which was an acknowledgment from Fed Chair Ben Bernanke that the economic recovery was faltering. Not 10-days before he was telling everybody “don’t worry be happy”.

Out here in California average per capita nominal income fell 1.8% in 2009 or 2% including inflation for the 26 California MSA included in the report. The Top 5 income declines include San Jose –5.3%

With the recent revisions an average of 1.37% was subtracted form each year’s figure leaving real GDP at a -.2% from 2007 through 2009 as per the Bureau of Economic Analysis.

The ECRI Weekly Leading Index continues to slip as the smoothed annualized growth rate dropped to a recessionary –10.5% despite no change in index itself.

With the HAMP and related mortgage modification programs clear failures the recently ended state and federal tax credits can also be added to the list of failed attempts to correct the substantial imbalances in real estate.

The case also serves to illustrate that the mainstream media is essentially the PR department for big corporations and more than willing to discard facts and substitute opinion.