The happy talk continues, as otherwise reputable news outlets continue to spew nonsense about the recession ending. A quarter of a million jobs were lost last month and, since more losses were expected, this is taken as "good news." What was not roundly reported was the fact that hundreds of thousands more were simply dropped from the unemployment count because they gave up looking for work and joined millions of other "discouraged" workers out there. The news media obscenely characterized that pain as "people taking the summer off from their job search." They touted the official fudged U-3 unemployment stat dropping from 9.5 to 9.4 and called an official end to the recession. Yet nothing could be farther from the truth. In fact, I would go so far as to say that if you get your news from most major news outlets you are broadly misinformed. You cannot add a quarter million more job losses to 9.5% and have that number decrease to 9.4%. And the 9.5% is in itself a completly juryrigged number that in no way attempts to truly measure the real number of people who are out of work, as I explained here.
By the same token, "analysts" are also calling a bottom in the real estate crash. What they are seeing, however, is the trough between two waves. The first subprime wave was enough to topple half of Wall Street's most prominent investment houses, along with a raft of banks. That wave has broken, but behind it comes a wave of massive resets in ALT-A and Option Arm loans. It extends from now until 2012, and will continue to swamp the housing market and cause more and more defaults and foreclosures. In fact, 40% of all homes are already "underwater" from just the leading edge of this economic storm. There is more to come, particularly in the massive commercial real estate wave just off shore, a $6.7 trillion market that is crashing fast and dwarfs the subprime wave we have already endured. Consider these facts reported by "From the Wilderness:"
"Strip malls, neighborhood centers and regional malls are losing stores at the fastest pace in at least a decade, as a spending slump forces retailers to trim down to stay afloat.” In the first quarter of 2009, retail tenants “have vacated 8.7 million square feet of commercial space,” which “exceeds the 8.6 million square feet of retail space that was vacated in all of 2008.” Further, as CNN reported, “vacancy rates at malls rose 9.5% in the first quarter, outpacing the 8.9% vacancy rate registered in all of 2008.” Of significance for those that think and claim the crisis will be over by 2010, “mall vacancies [are expected] to exceed historical levels through 2011,” as for retailers, “it's only going to get worse.”
So, as job losses mount, consumer credit continues to shrink, small business loans are near non-existent, forclosure rates and defaults at all time highs, the news media is calling an end to the recession. Unfortunately they can't even get the name right. It's a depression, not a recession, and it is just beginning. The massive debt at every level of the "system" cannot be explained away by a cheery, misinformed newscaster. We have not even begun to face the real heart of the crisis that is now upon us, a reckoning and settling of accounts that have been decades past due.
The manipulation of bank profits, stock markets, the liquidity injections and quantitative easing, the phoney unemployment stats are all just false optimism and wishful thinking on a national scale. And like all illusions they will be stricken down by stubborn facts that newscasters simply cannot wish away.
By the same token, "analysts" are also calling a bottom in the real estate crash. What they are seeing, however, is the trough between two waves. The first subprime wave was enough to topple half of Wall Street's most prominent investment houses, along with a raft of banks. That wave has broken, but behind it comes a wave of massive resets in ALT-A and Option Arm loans. It extends from now until 2012, and will continue to swamp the housing market and cause more and more defaults and foreclosures. In fact, 40% of all homes are already "underwater" from just the leading edge of this economic storm. There is more to come, particularly in the massive commercial real estate wave just off shore, a $6.7 trillion market that is crashing fast and dwarfs the subprime wave we have already endured. Consider these facts reported by "From the Wilderness:"
"Strip malls, neighborhood centers and regional malls are losing stores at the fastest pace in at least a decade, as a spending slump forces retailers to trim down to stay afloat.” In the first quarter of 2009, retail tenants “have vacated 8.7 million square feet of commercial space,” which “exceeds the 8.6 million square feet of retail space that was vacated in all of 2008.” Further, as CNN reported, “vacancy rates at malls rose 9.5% in the first quarter, outpacing the 8.9% vacancy rate registered in all of 2008.” Of significance for those that think and claim the crisis will be over by 2010, “mall vacancies [are expected] to exceed historical levels through 2011,” as for retailers, “it's only going to get worse.”
So, as job losses mount, consumer credit continues to shrink, small business loans are near non-existent, forclosure rates and defaults at all time highs, the news media is calling an end to the recession. Unfortunately they can't even get the name right. It's a depression, not a recession, and it is just beginning. The massive debt at every level of the "system" cannot be explained away by a cheery, misinformed newscaster. We have not even begun to face the real heart of the crisis that is now upon us, a reckoning and settling of accounts that have been decades past due.
The manipulation of bank profits, stock markets, the liquidity injections and quantitative easing, the phoney unemployment stats are all just false optimism and wishful thinking on a national scale. And like all illusions they will be stricken down by stubborn facts that newscasters simply cannot wish away.
