Posts Tagged 'economy'

US Consumer Confidence Drops in June

From the Financial Times:

Confidence among US consumers dropped in June after two months of building optimism, surprising economists and knocking the wind from stock markets.

The Confidence Board, an industry group, said its index of consumer confidence dropped to 49.3 this month from a revised 54.8 in May. Economists had expected a figure of around 55, but consumers are feeling worse about the current state of the economy and about where they expect it to be in six months’ time.

Confidence built over the spring amid talk of “green shoots” in the economy and a rising stock market, but this month people say business conditions are worse and jobs are becoming harder to find.

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Debate Video: Krugman vs. Taylor

Paul Krugman and John B. Taylor debated the origins of the financial crisis and President Obama’s proposed health care plan.

Real Estate Rebound

Mark Perry proves “why” the latest real estate numbers are positive:

MP: That’s one way to look at it. Here are some alternative views:

1. The April to May increases in median home prices (3.84%) and mean home prices (3.26%) were the largest monthly price increases in more than a year (data here).

2. The monthly May increase in both median home prices (3.84%) and homes sold (2.36%) was only the second time in at least a year that both prices and unit sales increased in the same month.

3. The back-to-back increase in home sales in both April and May is the first time in at least a year of two consecutive monthly increases.

4. The most recent two-month increase in sales of 4.84% is the largest since April 2004 (source).

5. The 9.6 months supply of inventory in May is below last year’s May level of 10.9 months by more than five weeks, and is at the second-lowest level in the last year.

Lender-Owned Properties at a Low

From Carpe Diem:

Below are charts for the individual states that had some of the worst foreclosure problems (CA, AZ, FL and NV), showing significantly reduced levels of lender-owned (REO) properties in June 2009. Click the above link for U.S. and other state charts.

California-REO-Inventory

When will Americans’ Wealth Return to Normal

U.S. wealth is dropping:

The nation’s households have now seen their net worth shrink for seven straight quarters. Family net worth had hit an all-time high of $64.4 trillion in the second quarter of 2007, thanks to the housing bubble and a strong stock market.

Paul Volker believes our recovery will be a long and slow one:

Paul Volcker, Chairman of U.S. President Barack Obama’s Economic Recovery Advisory Board, said Thursday it is reasonable to expect that economic growth will resume in the U.S. late this year, but warned that a strong recovery is unlikely.

Addressing a financial forum in Beijing, the former Chairman of the U.S. Federal Reserve said that the U.S. faces “a long slog, with continuing high levels of unemployment.”

Why California will not Declare Bankruptcy

From Fortune:

California has to choose a way to erase its $24 billion budget deficit. But unlike recent examples in corporate America, default and bankruptcy can’t be on the table. Stiffing state bondholders would only destroy the state’s fragile credit and intensify future budget trouble. The Golden State’s only real option is to make big cuts now and balance its books.

Some residents have proposed that the state should declare bankruptcy a la General Motors (GMGMQ), allowing it to cut fat more easily. But there’s no bankruptcy protection available for states. Chapter 11 is for companies, and the more relevant Chapter 9 is only for municipalities and other sub-state entities.

With all the cuts that have already happened, California is still one of the highest taxed states one could live in. Now with all the budget cuts, we will be a state with the lowest benefit levels. How can the 8th largest economy in the world survive like this? I keep thinking, after the government is cut back with budget cuts, we will look like a small government state. This is ironic because the population has more democrats than republicans.

60% of Bankruptcies are Caused by Medical Issues

An argument for health care reform:

Medical bills are involved in more than 60 percent of U.S. personal bankruptcies, an increase of 50 percent in just six years, U.S. researchers reported on Thursday.

More than 75 percent of these bankrupt families had health insurance but still were overwhelmed by their medical debts, the team at Harvard Law School, Harvard Medical School and Ohio University reported in the American Journal of Medicine.

“Using a conservative definition, 62.1 percent of all bankruptcies in 2007 were medical; 92 percent of these medical debtors had medical debts over $5,000, or 10 percent of pretax family income,” the researchers wrote.