The Words Speak for Themselves – Just Not Necessarily for Reality

“You’ve heard of mental depression; this is a mental recession…We may have a recession; we haven’t had one yet…We have sort of become a nation of whiners…You just hear this constant whining…Misery sells newspapers…Thank God the economy is not as bad as you read in the newspaper every day.”

Phil Gramm – former Senator, vice-chairman UBS – US, economic advisor to Sen. McCain – Washington Times – 9 July 08

U.S. foreclosure filings rose 53 percent in June from a year earlier and bank repossessions rose the most on record as deteriorating property values and higher rates on adjustable mortgages forced more people to give up their homes…Bank seizures rose 171 percent, the most since the Irvine, California-based company began tracking statistics on default notices, warnings of a scheduled auction and repossessions in January 2005…”The foreclosure problem is getting worse and will stay with us well into the next decade,” Mark Zandi, chief economist for Moody’s Economy.com…”…Foreclosure activity is the highest since the Great Depression of the 1930s, said Rick Sharga, RealtyTrac’s vice president of marketing…”We’ll have 1 million bank-owned properties by the end of the year,” Sharga said…That will represent between one-fourth and one-third of all home sales.”…About 53 percent of borrowers with subprime loans, those with poor or incomplete credit histories, will have negative equity in their homes at the end of the year, and the number will rise to 63 percent in 2009, New York-based analysts at Credit Suisse led by Rod Dubitsky said in an April 23 report….Credit Suisse said…About 2.7 million subprime borrowers will go into foreclosures by the end of 2012, with a peak of new foreclosures in the third quarter this year…About $3.5 trillion in homeowner equity has been wiped out since the spring of 2006, when housing prices were at their peak, Zandi said.

Foreclosures Rose 53% in June, Bank Seizures Triple – Bloomberg.com – Dan Levy – 9 July 08

Sales of new homes, like those of existing homes, have also moved sideways in the last couple of months. They might fall again, though probably not by very much…In other words, the worst is behind us.

Worst of Housing Crisis Is Behind Us — Really – Bloomberg.com – John M. Berry – 10 July 08 via Economist’sView