The number of U.S. homes worth less than the debt owed on them reached almost 10.7 million, or 23 percent of all mortgaged properties, at the end of the third quarter, according to a report from First American CoreLogic.
An additional 2.3 million mortgages are approaching “negative equity” as loan defaults mount nationwide, the Santa Ana, California-based real estate research company said today.
The bulk of the so-called underwater borrowers financed their properties between 2005 and 2008, First American CoreLogic said. Forty percent of homeowners who borrowed in 2006 are underwater, the company said. Of those who took out mortgages in 2009, 11 percent are in negative equity and 5 percent are approaching it.
In Nevada, 65 percent of homeowners are in negative equity, the highest rate in the nation, according to the report. Arizona ranked second, at 48 percent, followed by Florida, Michigan and California.
These are the kinds of things that stress me out! LOL. And, I try to push my trading ability out of fear. But I think it's better to be aware than clueless. So, thanks for sharing your thoughts/concerns.
Anyway, I found some other articles that I thought might be thought provoking. I find that I'm trying to use the information to think of how to prepare for the worst but hope for the best. There is a part at the end of this first article that has suggestions. I think they might be valid: prepare for deflation for the short term (6mos-1yr -- and consider a possible quick shift into hyperinflation in the next while (maybe 1-3yrs).
America’s Coming Financial Vortex
6 predictions for 2009-2012
by Paul Mladjenovic |
It has been an incredible year loaded with surprises but I think that the next few years will surprise even more. Whenever I feel certain about something coming, I ‘m glad to put it in print. In 2004, I had successfully forecast many economic events such as the housing bubble popping and the credit crisis among other events. Current economic conditions and political outcomes have laid the groundwork for more events that we should be prepared for. All of these events combine to create a "Financial Vortex” that will hit us in the coming years. First of all, be aware of what current conditions will help lay the groundwork for this financial vortex. They are:
This next article was even more difficult to consider, but I thought he was an interesting enough source. And, the concept is fascinating. As if Things Weren't Bad Enough, Russian Professor Predicts End of U.S. - WSJ.com
For a decade, Russian academic Igor Panarin has been predicting the U.S. will fall apart in 2010. For most of that time, he admits, few took his argument -- that an economic and moral collapse will trigger a civil war and the eventual breakup of the U.S.
I think some of the info on this one is outdated at the top of the article, but the bottom was interesting again in just having a plan to consider in case things get really wierd: Financial Predictions 2009-2010 Financemoneybusiness’s Blog
1. Be aware of everything that is happening and make up your own mind about what is true. Check out your intuitive responses.
2. If you are prepared in your thinking, then you can prepare for yourself and your family. 3. Have some liquid funds outside of the banks or any financial institution – preferably about 6 months living expenses.
4. Buy some gold and silver as your insurance policy and also for trading and bartering should the need arise
5. Increase your personal security and if you can move to a quieter more rural area.
6. Be ready to be flexible and to change – volatility will increase and you may need to change your strategy according to the unfolding of events.
The following user says Thank You to goldilocks for this post:
Then, again, in the 80's, a few years before their country did a similar thing he's projecting for us, I did a paper on their country that suggested the same. And, I got laughed out of class, except by the professor, who asked if he could show it to some "other people."
I didn't put it out there to be entertaining. I personally think it's interesting to hear what others are thinking outside the country about us and to note and acknowledge their considerations and sentiment, even if I might not agree.
yes that's the link...I am interested in the labor statistics not the birther stuff...
The Labor Department is hurrying to correct inaccuracies in its monthly employment statistics that could cause the Obama administration big problems early next year.
Those corrections, however, will probably also eliminate the inevitable -- and unsubstantiated -- employment gains that come during springtime.
We now know that the job gains reported by Washington this past spring were an illusion.
Early in 2010 the Labor Department will subtract about 824,000 jobs from its official count in what is called a "benchmark revision" to more accurately reflect the jobs that weren't created this past spring.
Yet while the bigger-than-expected job gains that were reported from April through June of this year may have turned out to be bogus, those superior numbers did help change the mood on Wall Street.
The huge rally that occurred in the stock market is still going, although technical factors like the lack of other investment choices -- rather than fundamentals such as improving corporate outlooks -- are the true reasons for those gains. I've already warned readers about the employment report for January that will be released on Feb. 4. And I've said this figure will be a disaster unless someone intervenes to correct the statistical aberration that will occur.
The Labor Department apparently now understands. And it appears ready to step in.
Here's the crux of the issue:
Each month the Labor Department guesses at the number of jobs being created by companies which it thinks -- but can't prove -- are newly formed. The department calls this the birth/death model.
Last April, for instance, the government estimated that new companies created 226,000 jobs. In May, the guess was 220,000 and in June 185,000.
Even in the depths of winter, the government added 134,000 jobs during February that turned out to be non-existent.
Those estimates are mainly the reason why the Labor Department now needs to revise downward by 824,000 the number of jobs it believes exist.
But the real problem for the Obama administration -- and the financial markets -- is the January figure that will be released in early February.
January is the only month in which the birth/death model shifts to the "death" side.
For whatever reason the model suddenly thinks that more companies are quietly going out of business than are being formed outside the view of Labor Department surveyors.
And there is no reason to believe the "death" side of the model is any more accurate than the "birth" side.
Last January, for instance, 356,000 jobs were subtracted from that month's count by the Labor Department because of companies that it believed had "died."
Not surprisingly, this adjustment caused the overall employment figure for January to show an astonishing drop of 741,000 jobs -- much more than any expert predicted.
What happened next was even more disturbing.
The 741,000 cuts in January seemed to domino. After that, companies cut jobs more quickly in the subsequent months.
Despite the generous guesses in the birth/death model in February and March, the overall loss of jobs was still enormous.
The horrible job figures for these months are the ones President Obama likes to quote when he wants to prove that the economy is improving.
I've been following this birth/death model anomaly for years, so this column not only accurately predicted the employment statistic disaster last January but also the rebound that would occur in the stats during the spring.
If left alone, the birth/death model will cause the number of jobs that will be lost this coming January (and, as I said, to be reported on Feb. 4) to spike.
And it could lead to another surge in firings by companies which, not realizing that the statistics have gone haywire, will incorrectly assume that the economy is dipping again.
A source at the Labor Department confirmed that the birth/death model is being revamped because it seems to be mainly responsible for the 824,000 jobs that the govern ment thought had been pro duced this year but which really don't exist.
He said the model needs to be made "more sensitive to economic shocks" -- meaning, it must work better when the economy isn't operating normally.
The household survey conducted by the Labor Department, from which the unemployment rate is derived, will not be affected by the changes to the birth/death model.
But the unemployment rate, which the government announced last Friday dropped in November to 10 percent from 10.2 percent, may have problems of its own.
Absurd adjustments for the seasons could have been responsible not only for the big jump in the unemployment rate in October but also the surprising decline in November.
Wall Street, meanwhile, now seems to understand the failings of Washington's employment figures.
The loss of just 11,000 jobs in November -- far better than expected -- barely moved the stock market higher.
If investors had truly believed that figure, the market would have soared.
On the flip side, if Friday's employment report had been credible there would be a louder discussion of when -- not if -- the Federal Reserve would be raising interest rates.
Part of Wall Street's distrust of Friday's number was caused by a report earlier last week from ADP Employment Services which estimated that 169,000 jobs were lost in November, far worse than Wall Street was expecting and the polar opposite of what the Labor Department later announced.
It's sad when a private company like ADP can count payroll tax receipts and produce more accurate statistics than the government.
But maybe the Labor Department will finally correct its mistakes before they hurt someone.
Financial Deceptions of the Decade Have Nothing on the Fed
Enron? Bear Stearns? Bernie Madoff? They’re all big stories about big losses and have hurt a lot of employees and investors. But none come close to getting my vote for the decade’s most dastardly deception…
First came Enron, with $65.5 billion in assets, going belly-up and becoming the largest bankruptcy in U.S. history at that time. Chairman Kenneth Lay said that Enron’s decision to file bankruptcy would “stabilize the company,” but over the next five years the company was completely liquidated. The stock went from a high of $84.63 in December 2000 to a whopping 26¢ one year later.
I don't understand why everyone is so worried about ANOTHER downturn... In the last year, many bears were saying that the stock market crash would herald the end of the western economy and that we'd be entering a second great depression.
Guess what? It didn't happen. Governments all around the world started throwing money at the problem, and although it isn't necessarily fixed, it isn't as bad as all the bears were claiming it would be.
So what's going to stop the government from throwing even more money at the problem this time around?