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EDITOR’S COMMENT: EXPECTATIONS? Yes, well if anyone had expectations of good news for the economy it is because they are on drugs, alcohol or just suffering from delusion. Who could ever think that things are getting better when everywhere you look they are getting worse. Retail is crashing, housing is coming in (2 days from now) at a lower level than the crash, joblessness is still almost as high as the Great Depression when you take into account ALL the people effected, credit is dead, consumers have no savings, and what they did have was wiped out by the banks in the mortgage fraud scheme, bankruptcies persist at all-time highs, stores are closing, shopping centers are becoming ghost towns, like the residential developments next to them, and somehow some group of “smart” economists came to the conclusion that the numbers would somehow still show improvement?


The Numbers Are Grim

A month ago, when an initial gauge of first-quarter economic growth came in surprisingly weak, many policy makers and economists expected the bad news to prove fleeting. But when revised data were released last week, the growth estimate remained stuck at an annual rate of 1.8 percent, compared with 3.1 percent at the end of last year.

More troubling in the latest figures, consumer spending — the largest component of the economy — was especially slow. Stagnant wages and higher prices for gas and food are squeezing family budgets, while falling home equity hurts consumer confidence. That suggests more bad news to come.

When consumers are constrained, so is hiring, because without customers, employers are hard pressed to retain workers or make new hires. A recent Labor Department report showed a greater-than-expected rise in the number of people claiming jobless benefits even as private-sector economic forecasts are being revised downward — both very bad omens for continued job growth.

Republican lawmakers have responded to renewed signs of weakness with a jobs plan that prescribes more of the same “fixes” that Republicans always recommend no matter the problem: mainly high-end tax cuts, deregulation, more domestic oil drilling and federal spending cuts.

The White House has offered sounder ideas, including job retraining, plans to boost educational achievement and tax increases to help cover needed spending. But its economic team is mainly focused on negotiations to raise the debt limit, presumably parrying Republican demands for deep spending cuts that could weaken the economy further while still reaching an agreement on the necessary increase.

The grim numbers tell an unavoidable truth: The economy is not growing nearly fast enough to dent unemployment. Unfortunately, no one in Washington is pushing policies to promote stronger growth now.

The sinkholes in the economy should be obvious. Most prominently, the housing market is still awful, and state and local government budgets are still a mess. Conditions apparently have to get worse before deficit-obsessed policy makers will be ready to address them, including with bolstered foreclosure relief and more fiscal aid to states. More delay would only imperil the recovery, such as it is. And without a strong recovery, it will be even harder to repair the budget. Continued hard times means low tax revenues and high safety-net spending.

If Washington won’t do what is needed to make things better, there are still things that can be done to try to keep the economy from getting worse.

The administration could work to ease the rules for refinancing mortgages owned by Fannie Mae and Freddie Mac, the government-run mortgage giants. Easier refinancings would lower monthly payments for potentially hundreds of thousands of borrowers in good standing, and in that way, free up spending money to boost the economy.

The Federal Reserve, for its part, must be prepared to continue measures to bolster the economy as needed, even if that means looser policy for longer than it originally planned. Democrats in Congress must lay the groundwork for an inevitable fight over extending federal unemployment benefits, which expire at the end of this year.

There’s a long way to go before the economy will thrive without government help.

15 Responses

  1. A direct result of rampant, pervasive corruption—not getting better anytime soon—thanks so much, Mr. President!!!

  2. check this out:

    KEEP ‘EM COMING!!!!!!

  3. California Homeowners Please Sign Our Petition.

    “California homeowners have been exposed to fraud and crime at every step of the mortgage process,” said Attorney General Harris. “Justice demands we come to their aid and a key step in that is to investigate robosigning and the potential for inaccurate or unjust foreclosures.”

    Our Goal is to Stop All Foreclosures in California until The State Attorney General has completed her investigation!

    Help us Spread The Word!

  4. Available on Netflix watch instantly and Amazon video on demand is: “Plunder: The Crime Of Our Time”, a well done 2010 documentary that cuts to the chase. A good film.

  5. Refinancing with no equity means bringing money to the table which no one has. That’s probably the only thing holding anyone back.
    You could suggest they use some of that bailout money to provide refinancing but we’d soon be reading articles where they still attached fees to the back end of the loan.

    Speaking of equity, like the one lawyer I spoke to in Calif. about predatory lending. His question asked, “Was there any equity? Because if you don’t have any equity then you don’t have damages.”

    Well if you didn’t call out financial crisis and slam the housing values then maybe I’d had some equity!

  6. @ E. Tolle

    There’s our problem.notice the address you posted. P.O. Box, since when a large financial institution like B of A would use a P.O. Box to received complaint from their customer.Never in the past I’ve heard such address to forward any complaint or for payment.

  7. Here is the article about Obama’s friends in Egypt

  8. With friends like Obama who needs enemies.
    Both Gadaffi and Assad and the banksters are still in power. In Egypt the same military who backed Mobarak is still in power. Checking to see if the politically jailed women are virgins.

    Recontrustco (BoA) is conducting 20 to 28 foreclosures in Los angeles County a day.

  9. What a JOKE—Standard & Poor’s Chairman of the INDEX CMTE—David Blitzer— commented today re. housing sales’ “double dip”:

    “…we’re wondering if people just don’t want to own houses anymore…”

    Talk about being TOTALLY OUT OF TOUCH with the reality of what is really going on…absolutely sickening.

  10. Tiffany’s is doing well.

  11. My favorite is when they tell you the unemployment rate has dropped once again,these morons are to stuck on stupid to see that the only reason the rates have dropped is because people have used up thier claim and now have to be on welfare or on the streets.Goon for me hard.


    They gambled with our “loans”—with NO DISCLOSURE—


  13. Bank Of America
    Attn: Correspondence
    P.O. Box 5170
    Simi Valley, CA 93062-5170


  15. […] Source: Livinglies’s Weblog […]

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