For many, it is getting worse:
The foreclosure plague is not going away — it’s only getting worse.
A record 1.53 million properties were in the foreclosure process — default notices, auction sale notices and bank repossessions — during the first six months of 2009. That was 9% more than the previous six months and 15% more than the same period of 2008, according to a report released Thursday by RealtyTrac.
There were a total of 1.91 million filings resulting in 1 out of every 84 U.S. properties receiving at least filing in the first half of the year. Banks repossessed 386,800 properties.
“What this means is, despite the intensity of the efforts on the part of government and lenders we don’t have a handle on foreclosures yet,” said Rick Sharga, a spokesman for RealtyTrac.
Remember the freakout over the handful of billions to be spent fighting the foreclosure disaster? In other news:
The Federal Reserve expects the economy this year will sink at a slower pace than it previously thought, but that unemployment will top 10 percent and remain high for the next few years, according to a new forecast released Wednesday.
The Fed now predicts the economy will shrink between 1 and 1.5 percent this year, an improvement from its old forecast issued in May. At that time, the Fed projected the economy would contract between 1.3 and 2 percent.
The upgrade — which helped major stock indicators jump about 3 percent and the Dow Jones industrial average to add 257 points — comes from the expectation that the economy’s downhill slide in the first half of 2009 wasn’t as bad as previously thought. The Fed said the economy should start growing again in the second half of this year, although the pace is likely to be plodding.
On the other hand, if you spend trillions propping up an industry, they can survive and thrive:
Even as it weathers the worst economic downturn in decades, J.P. Morgan Chase on Thursday announced a $2.7 billion second-quarter profit from stellar trading and investment banking results.
The strong showing may put to rest some worries that the bank was allowed to pay back its $25 billion taxpayer investment too early, after it passed the U.S. government’s stress test in May. But along with Goldman Sachs, its quick resurgence is bound to raise fresh concerns about soaring pay levels and growing clout in Washington.
Priorities.
Earl
I would say that it’s time for class war, but that’s already over, according to Warren.
Ty Lookwell
I don’t know… I used to think that people in the US would rise up in populist anger and force progressive change, but lately I’ve been thinking – especially after news of Goldman Sach’s latest profit and bonus round was announced, with a sigh of ‘return to business as usual’ – that we’ve become a country of whipped dogs, desperate, scared and resigned.
bob h
I’m in relatively good financial shape, and recently refinanced a small mortage to save about $200 a month. It involved an avalanche of paper work, and an IRS audit-quality approval process, going right down to the deadline. If a simple, no-brainer refinance involves that much trouble these days, how do more complicated situations get done? They don’t.
Dennis-SGMM
So I was listening to NPR while walking the dog and they dropped the little nugget that the top 1% of earners in this country is making 20% of the money. Damn, one fifth of the money is going to one one-hundredth of the population. Nonetheless, the RW Noise Machine will very publicly rail against the surtax on millionaires to pay for health care.
A Mom Anon
I honestly think the only thing that would stop this is a few CEOs being”disappeared”. I know,that’s very naughty of me,but they’re DARING somebody to stop them at this point. I don’t think jail would work(even if all this was illegal,and appearently it’s not),and of course just appealing to their sense of humanity(bwahahaha)is senseless. This shit won’t stop until there are consequences,substantial ones.
El Cid
Talking about stuff like this makes you a dirty fringe extremist ultra-left liberal so shut up and let everything just work itself out at its own speed and cross your fingers and also Paul Krugman pisses some people off because he talks about stuff like this.
Fulcanelli
@A Mom Anon: It’s only a matter of time. I think I’ll set my watch ahead…
I’ve seen various estimates over the last few years regarding the ratio of population versus control of wealth. One was something like around 3% of the population possesses around 50% of the wealth. Of what was once the richest country on the planet. Nice work if you can get it.
Then you get the broke-ass right wing douchebags that complain how the wealthiest people pay all the taxes! Tax cuts! Herein lies the problem. Maybe because they have all the fucking money, you assholes, seems to fall on deaf ears because Rush didn’t say it. Suckers.
/self employed and keeping a lot of my money off the books and in the Sealy National Bank from now on.
El Cid
Regarding matters of concentration of wealth and power, sociologist G. William Domhoff releases a new, updated 6th edition of Who Rules America? Challenges to Corporate and Class Dominance.
From the accompanying website (there are lots of charts and graphs there too):
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In the United States, wealth is highly concentrated in a relatively few hands. As of 2004, the top 1% of households (the upper class) owned 34.3% of all privately held wealth, and the next 19% (the managerial, professional, and small business stratum) had 50.3%, which means that just 20% of the people owned a remarkable 85%, leaving only 15% of the wealth for the bottom 80% (wage and salary workers). In terms of financial wealth (total net worth minus the value of one’s home), the top 1% of households had an even greater share: 42.2%…
…In terms of types of financial wealth, the top one percent of households have 36.7% of all privately held stock, 63.8% of financial securities, and 61.9% of business equity. The top 10% have 85% to 90% of stock, bonds, trust funds, and business equity, and over 75% of non-home real estate. Since financial wealth is what counts as far as the control of income-producing assets, we can say that just 10% of the people own the United States of America…
…According to a study published by the Federal Reserve Bank of Cleveland, only 1.6% of Americans receive $100,000 or more in inheritance. Another 1.1% receive $50,000 to $100,000. On the other hand, 91.9% receive nothing (Kotlikoff & Gokhale, 2000). Thus, the attempt by ultra-conservatives to eliminate inheritance taxes — which they always call “death taxes” for P.R. reasons — would take a huge bite out of government revenues for the benefit of less than 1% of the population.
[And finally:]
…Here are some dramatic facts that sum up how the wealth distribution became even more concentrated between 1983 and 2004, in good part due to the tax cuts for the wealthy and the defeat of labor unions:
Of all the new financial wealth created by the American economy in that 21-year-period, fully 42% of it went to the top 1%. A whopping 94% went to the top 20%, which of course means that the bottom 80% received only 6% of all the new financial wealth generated in the United States during the ’80s, ’90s, and early 2000s (Wolff, 2007).
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There’s also a great review (based on archival historical research and not by talking to crazy ideologues like Amity Schlaes or whatever or doing a doting biography on a single individual) on how Social Security actually got started in this country — based largely in the policy preferences of the then super-rich corporate classes of the 1920s, and why those types then turned against their own creation during 30 years of NuRight Reaganism.
DougJ
Obama should have fought harder for cramdown, IHMO.
Herb
I’m taking credit for Chase doing well. Not only have I not missed a mortgage payment, I’ve been paying extra to chip away at the principal. I know, I know…I’m the weird one.
El Cid
Dean Baker, economist, wants to make those who get outraged about government spending under Democrats cry:
Punchy
Hope you have a great smoke alarm and excellent fire extinguisher near the bed….Would otherwise love to see that homeowner’s insurance claim: “Bed Replacement Cost–Frame, $200; Mattress — $90,345.11”
PeakVT
I would say that it’s time for class war, but that’s already over
I think Buffett said the rich are winning, which is true. Universal health care funded by a surtax would slow their progress significantly, but it will take putting capital gains and dividend income back on the same schedule as wages to reverse the trend.
Johnny B. Guud
I’m tired of using the stock market as a barometer of economic health already. Yeah my 401(k) might have seen a 10% move higher since March, but that’s after it dropped 70% over the previous six months. Wall Street is an alternate universe as far as I’m concerned.
For pete’s sake, I know people whose teeth are falling out because they have to choose between seeing the periodontist and paying for their children’s day care, and I have to read about some Goldman banker making $1million this year? GAHHHHH………
/rant
someguy
The foreclosure crisis is comprised primarily of three states, with a strong push from two – California, Florida, and Nevada, and Utah and Georgia (Thanks, Hotlanta!) are pushing into their neighborhood but the big three are worse by an order of magnitude. Foreclosures all over are up a bit, but the actual numbers are relatively small compared to historical numbers. You have to figure if this was really a national crisis, other states with desirable places to live would be similarly bad. They aren’t even close. States have a lot to do with regulating their own banking industry and real estate is almost entirely regulated at the state level. Nobody wants to talk about the three, maybe five states at ground zero in the crisis and ask what the f*** they intend to do about it.
gex
@Fulcanelli: That’s the beauty of the ignorant rump of the GOP though. When “pundits” list the percentage of taxes the wealthy make, it does look like they pay more than their share. Of course, they never include their percentage of income. Because by doing that, you would realize that they pay much less than their share. Nevermind the fact that if you add in state and local taxes our taxation in this country becomes regressive…
Nope, the rump is to lazy to get the information, more than willing to believe whatever the con-men who belong to their tribe say, and willing to vote to perpetuate the system that will lead them to serfdom.
someguy
That fact alone tells you that the tax rate on the top 20% should be much, much higher, and that we should consider a one time wealth surcharge, say 10% or 20% of all assets. That would stand a pretty good chance of knocking the national debt down to reasonable levels. The 80th percentile starts at $65k / household, so everything about that ought to be fair game. Honestly, if we just voted our economic interests, every election would be a landslide in favor of redistributive policy.
Not like it’s going to happen though, with Goldman – Sachs running both parties.
Zifnab
Unpossible. I have been informed specifically and repeatedly that the nine worst words in the English language are “I’m from the government and I’m here to help”. There’s no way all the bailouts and free money saved these institutions. They must have benefited on grit and common sense and free market capitalist freedoms and liberties and God Bless America prayer ponies freedom again.
The government only makes things worse. Without the bailout, these companies would have posted ten times as much profit.
DZ
@Someguy:
The idea to have a wealth surcharge on people with incomes over 65K is perhaps the worst idea that I’ve heard. Income is not a measure of wealth, and your idea would cause major damage to people who are not wealthy.
I make a little more than twice your threshold, and I am not wealthy. My assets include my house (100 year old, 1400 sq ft bungalow in Portland), my 401K/retirement plan and maybe 50K in other savings and investments. I’m 62 years old. You tax my assets, you destroy my life for no value added. I’m a leftwing Democrat, but this is a loser.
Comrade Sock Puppet of the Great Satan
“Even as it weathers the worst economic downturn in decades, J.P. Morgan Chase on Thursday announced a $2.7 billion second-quarter profit from stellar trading and investment banking results.”
But does J.P. Morgan or Sachs donate any money to ACORN? ‘Cos that would really piss me off.
iluvsummr
@Herb:
Smart. My mom paid off her mortgage 10 years early by doing just that.
someguy
@ DZ,
So you’re okay with much higher taxes on the top 20%, as long as it’s a top 20% other than the one you are in.
Who is supposed to pay, then?
KXB
The part-time assistant I let go in February is still looking for work.
My sister, who graduated with a Master’s in Chemistry in April, is still looking for work.
My brother in-law took on a sales position, since the financial firm he worked for folded. Up until know, his whole career was in marketing. They were small fry, so no bailouts for them.
My dad is looking at coming out of retirement, since his 401K shrank by over a third in the fall of 2008. He also, unwisely, bet that oil would go up in 2008 – showing that following the advice of CNBC, when it was yelling from the rooftops at the increasing price for commodities, will lead to ruin.
My uncle/boss had to discontinue our company’s 401K program, because the costs of administering the program were an added insult to the shrinking value of our respective portfolios. We now have to shop around for an IRA to rollover.
But hey, Goldman scored record profits in a cartelized industry, so the good times must be back.
Fulcanelli
@Zifnab: Prayer Ponies? Neat!
The problem is that it’s not the amount of income people earn, it’s how earned.
People for who the bulk of their income is derived from labor, from the janitor to the doctor, (yeah doctors have stock portfolios too but they have a job first which drives it), are the ones getting hosed. We are the ones wresting with deductions and the tax brackets and so on. Wouldn’t it be nice to pay capital gains tax rates on your ordinary annual income. Then we’d all have fat portfolios and retirement accounts.
The statistics quoted above by ElCid say it all. Capital based income and those who earn it are overwhelmingly valued for obvious reasons by the sausage makers in government above labor based income and working people which is why fucking working people in all the tax brackets over has become such a lucrative cottage industry for Congress critters. Job security, bitches…
The economy we exist in is being held hostage by the wealthy. As long as the largest investors can make money on paper on wall street and avoid getting their hands dirty with the hassles of labor, environmental regulations and so forth, then that’s what they’ll do.
I don’t see greedy American big money investors saving the US economy. There will probably be a long, long lag time as new businesses start up and existing small companies grow to replace the jobs that have been lost or shipped out of the country for things to improve . It may never happen at all without serious involvement by all us to relentlessly pummel Congress into submission. By any means if necessary.
DZ
@Someguy:
I said nothing about taxation, just asset confiscation. I have no problem with higher taxation for people in my situation. I have donated all of my Bush windfall to charity. I accept the need for higher taxation, but asset confiscation is a completely different question.
josefina
For excellent info in the foreclosure situation, go to the Irvine Housing Blog. An economist uses specific houses in Irvine to illustrate exactly what happened and why, and what’s on the horizon. It’s mostly very readable, and easy to grasp (even for ignorami like me). He posts pictures of houses up for sale, along with the mortgage history for each. It’s both weirdly fascinating and extremely scary.
TenguPhule
And?
$65K is middle to poverty level class depending on the state.
There is wealthy and then there is just plain dickery.
someguy
@ Tenguphule
So what are you suggesting for drawing the line on tax hikes? We set tax rates based on cost of living in particular areas? If you make $65k in W.Va you get pounded, but if you make $65k in NYC, you get a subsidy?
Given the influence of small state senators (from places with low cost of living) I don’t know that you can change the unequal tax burden. Seriously – what do you think is the threshold at which a taxpayer should start paying a stiff surcharge? We need to generate serious money very quick, tax receipts are dropping way down.
tavella
@DougJ:
Fought for it? Are you kidding? He didn’t want it. Obama brought into the Wall Street-financials view of the crisis that just as long as you give us trillions and don’t regulate us, we’ll reinflate the bubble for you.
Hell, the regulation is going to be less; he’s turning it over to the goddamn Federal Reserve, which is actually and literally _owned by the banks.
Wile E. Quixote
@A Mom Anon
No kidding, start with Lloyd Blankfein, that bastard has done more to fuck up the US economy than anyone since Osama bin Laden. Anyone who works at GS should have a bounty on them by now.