Countrywide/BAC Foreclosures

Congratulations to Dr. Perry for once again posting an incredible picture, one that speaks volumes. Less than a year ago, Countrywide/BAC held 21,500 homes for resale. Seventy-two percent of these homes are no longer on the books!

It may be that many of them have been purchased by private investors who are holding them for resale, but the bank write downs have been taken and bank balance sheets are mending. Homes held by private investors for resale were...

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Jobless Claims Fall

The charts (posted by Dr. Mark J. Perry) show that the current recovery pace from recession is "normal". As during every recession, some jobs are lost temporarily and others are gone forever. As in every recovery, it takes time for the rapid growth in "the new" to result in large numbers of new jobs.

However, those who are working (91% of all who desire to work) have the opportunity to buy assets at deeply discounted prices. Big money is being made in stocks and residential real estate and bargains galore are available in commercial real estate. Extended unemployment insurance is helping others stay out of the poor house. Many families with one working and one unemployed are getting by better because of the decline in prices in many goods. Being out of a job is no fun, but the focus on this lagging indicator causes consumers to be pessimistic when good times are being enjoyed by the majority! I dare say that more than 50% of the workforce will make more this year than they did last year or the year before!
in reference to: CARPE DIEM: Jobless Claims (4Wk. Avg.) Fall to Lowest Level in 37 Weeks, Down 119,000 (-18%) From April Peak (view on Google Sidewiki)

9.8% Unemployment in September

The Obama administration has fallen victim to the broken window fallacy (the belief that an economy can be stimulated by breaking all the retail shop windows so that money must be spent to repair them).

The cash for clunkers program was a classic example of the fallacy. In this case, our government spent an average of $4,285 for 700,000 cars before destroying them. The 3 billion spent on cars was nothing but "pork barrel spending", yet another bail out for the auto industry and its union workers. The stimulus was temporary as future car sales were pushed forward.

The basic argument made in support of such programs is ...

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