Ilargi: I know I wrote about it yesterday, but I have no choice, I must again. The upbeat messages coming from the guys I labeled the Three Stooges, Summers, Obama and Bernanke and Geithner can be their D'Artagnan) were this morning put into a very bright light, and a clear focus, by the arguably worst overall economic numbers to come out of the downturn to date. I would strongly suggest that when they try that again, they take the opportunity to address these numbers while they're at it.
Political capital is not something that is based on, or derived from, rational evaluations. The majority of Obama's popularity doesn't seem to come from people who do much if any analysis of his economic policies; they are simply under his spell or his wife's, daughters' or dog's). What I personally probably like least of all is that the president himself, through his refusal to come clean on economic realities, and to be open to the people about the miserable state the country is in, lends credibility to these asinine tea parties sprouting up, which have as much to do with reality as the commander-in-chief's recent speeches. The more lies and half-truths the White House spreads, the more they empower the forces lining up against them. If you don't tell the truth, Mr. President, they don't need to either. Here's the crunching:
That distant rumbling is no longer far away
- Sam Zell, who made billions in the field, says US commercial real estate values are already down 30%. That is at a time when just about everyone still tries not to talk even mention CRE.
Deflation is officially here
- The US consumer price index fell at an annual rate of 0.4% in March, the first time since August 1955 prices have decreased on a year-over-year basis.
- March retail sales fell 1.1% since February, while wholesale prices fell 1.2%.
US industrial output dropped most since 1945
Tax revenues vanish into thin air
- March output for factories, mines and utilities fell 1.5% in the past month. Industrial production is down 13.3% since the recession began in December 2007 and 12.8% since March 2008.
- Output fell at a 20% annualized rate during the first quarter of 2009.
- Factory production dropped 1.7% in March; it has fallen 15.7% since December 2007, and 15% in the past 12 months.
- Vehicle output is down 34.5% in the past year.
- Production of high-tech equipment fell 3.1% for the second month in a row, for a cumulative drop of 22.6% in the past year.
- As of March - or halfway through fiscal year 2009 - federal tax revenue is 14%, or $160 billion, lower than last year, the Congressional Budget Office reported.
- Individual income tax receipts dropped 15% while those for businesses fell a whopping 57%.
- Revenue from miscellaneous taxes and fees has fallen by $10 billion, or 12%.
A pinch of irony, anyone?
Spend spend faster faster
- Local tax collections rose 3.2%, as gains in property taxes (!!) offset falling sales taxes.
- David Walker, former comptroller general of the United States, warns taxes will double.
Home sweet home
- Government spending levels midway through the fiscal year rose by $480 billion, or 33 percent.
- Large increases in how much the federal government spent on Medicaid (up 17%) and "other activities" (up 21%) like unemployment benefits.
- The CBO estimates that the annual deficit will spike to between $1.67 trillion and $1.85 trillion. That's nearly four times last year's then-record $455 billion deficit.
- Foreclosure sales had dropped in the second half of 2008 as mortgage companies delayed taking action against delinquent borrowers.
- But foreclosure-related filings increased by nearly 6% in February from the month earlier, and were up almost 30% from February 2008.
- More than 2.1 million homes will be lost this year because borrowers can't meet their loan payments, up from about 1.7 million in 2008, according to Moody's Economy.com.
And finally, a warning for anyone thinking of applying for Obama's refinance plans:
- Ronald Temple, co-director of research at Lazard Asset Management, expects home prices to fall 22% to 27% from their January levels.
Before you sign those papers, ask yourself what the numbers are going to look like once your home has lost another 25%-30% in value. Will it still be worth it to refinance? Don't ever forget that refinancing takes away your right to walk away, forever. It changes non-recourse mortgages into recourse loans. Be very careful with that, it can make you a debt slave for the rest of your life.
I can't wait for the next clown to claim the "shallow recession" is over. Anybody keeping tabs on who says what when about what point in the future? It'll be a gas....
As always, the rest of the posts for today at TAE are worth a read. And don't forget the comments. There's often lots of good stuff there, as well.