Peeking Under The Government's Skirt....

I know we've strayed from the Real Estate chattering a bit lately but with these unprecedented economic happenings, let's call it a related conversation. We'll start by shining a light on the US Government's economic indicators


True Unemployment
Unemployment jumped to 8.1%, the highest since1983. But if part-time, discouraged workers and others are factored in, the current unemployment rate is actually 14.8 percent.
If the rate weres calculated under the same formula as during the Great Depression, unemployment would be 19%. (http://www.shadowstats.com/charts_republish#cpi)

True Inflation
Inflation (CPI) is officially 0.5%, which is basically nothing.
Yet if calculated under the original formula from Depression era, it would be 3.25% inflation. (http://www.shadowstats.com/charts_republish#cpi)
Remember, if your bank savings account isn't paying more than 3.25%, you are losing "money."

Food Stamps
The Government reports a record 31.8 million Americans on food stamps.
This includes an increase of 700,000 food stamp recipients in February.
The average food stamp benefit is $115 a month for individuals and $255 a month for families.
Try feeding a family on that budget.

Nero Fiddles
Five weeks into his tenure, Treasury Secretary Tim Geithner has yet to name a single top deputy or assistant secretary. This leaves Treasury with too few people authorized to make decisions or represent the department in meetings with stakeholders.

In other news, the Captain of the Titanic asked:
"Where the hell is all this water coming from?!"

Unemployment Shenanigans

There’s an old saying about how to find a good accountant:
Ask him what 1+1 equals.
If he says “Two,” – don’t hire him because he is too limited.
If he says “Three” – don’t hire him because he can’t add.
If he says “Whatever you want it to be,” – you have found yourself an accountant!

Calculation
The national unemployment rate is computed solely from the Current Population Survey (CPS) of about 60,000 households conducted by the Census Bureau. Residents of selected households are interviewed about their work experience. From these responses, the Bureau of Labor Statistics then estimates the size of the labor force and the number of people who are jobless. There are roughly 300 million people in the U.S.....

Toothless Tiger

Now the FDIC gets a bailout.
The dirty secret no one tells you is that even with additional borrowed funds, the FDIC is physically unable to guarantee all depositors. The bald fact is there is not enough money in the pot. Citibank alone would require over $1 Trillion dollars in a true run on the bank. BofA would need roughly $1 Trillion as well.

Let's not even mention the fact that the FDIC's new money will be borrowed from an insolvent institution...

$1Trillion "Stimulus"

Best estimates are that it will take FOUR generations of Americans to simply service the debt on the $1 trillion dollar "stimulus." Here's a simple breakdown of what your children's great-grandchildren will be covering:
http://online.wsj.com/public/resources/documents/STIMULUS_FINAL_0217.html

Renters Lose Edge On Homeowners

At the height of the housing bubble in 2006, mortgage payments averaged 66% more than rent payments. But now mortgage payments averaged just 14% more than rent payments, as mortgage rates continue lower. In other words, owning is only 14% more expensive than renting, if you can qualify for a mortgage...

No Brakes!

Mortgage delinquencies increased to 7.88% of all loans while loans in foreclosure rose to 3.30% - both all-time highs. The U.S. real estate market has lost $2.4T in value last year, and things continue to deteriorate.

TARP Road To C ya

US Bancorp (USB) and Northern Trust (NTRS) have announced they are giving back the TARP money. Apparently, they looked in the mirror while shaving this morning and saw C staring back at them...