Funniest Headline ever: "Bernanke confident on recovery"

Here's why I find it so very, very funny...
Federal Reserve Chairman Ben Bernanke told Congress Wednesday that he has confidence the unfolding economic recovery will have staying power

"Addressing the country's fiscal problems will require difficult choices, but postponing them will only make them more difficult," he warned.

On the economy, Bernanke seemed slightly more optimistic that the fledgling recovery will keep on going after massive government stimulus fades later this year. Incoming economic barometers suggest that growth in demand by consumers and businesses "will be sufficient to promote a moderate economic recovery in coming quarters," he said.

Now let me tell you whats wrong with that statement...
Lender Processing Services just put out its "Mortgage Monitor Report," and we have a new record:

The nation's foreclosure inventories reached record highs. February's foreclosure rate of 3.31 percent represented a 51.1 percent year-over-year increase. The percentage of new problem loans also remains at a five-year high. The total number of non-current first-lien mortgages and REO properties is now more than 7.9 million loans. Furthermore, the percentage of new problem loans is also at its highest level in five years. More than 1.1 million loans that were current at the beginning of January 2010 were already at least 30 days delinquent or in foreclosure by February 2010 month-end.

so 7.9 million Americans are not paying their mortgages. Is Ben Bernanke really thinking about the implications of that? are we just waiting for another bubble to burst?

A couple days ago Diana Olick wrote a story - Mortgage Defaults May Be Driving Consumer Spending... she writes

"The nation's foreclosure inventories have reached record highs. The percentage of new problem loans also remains at a five-year high. The total number of non-current first-lien mortgages and REO properties is now more than 7.9 million loans. Furthermore, the percentage of new problem loans is also at its highest level in five years. Okay, so 7.9 million Americans are not paying their mortgages. Are we really thinking about the implications of that? Americans are now far more likely to pay their other bills first before their mortgage (which is a big turnaround historically speaking.) That means they pay off their credit cards, cable bills, car loans in place of their home loans. Paul Jackson, publisher of Housingwire.com, cites an older stat of 7.4 million delinquent loans. He describes a case study of someone who applied for the government's Home Affordable Modification Program.

The person had an $1,880.00 monthly mortgage payment on which they'd defaulted, but said person's monthly bank statement showed payments to a tanning salon, nail spa, liquor stores, DirecTV bill with premium charges, and $1,700.00 in retail purchases from The Gap, Old Navy, Home Depot, Sears, etc. Writes Jackson: Even if you assume that just half of the current 7.4 million currently delinquent mortgages fit this sort of ’spending profile’ (that is, they are spending their mortgage) and you assume a $1,000 median monthly mortgage payment for most U.S. homeowners — you get a $3.7 billion boost per month to consumer spending. It’s certainly enough spending to matter in the overall scheme of things. Other studies have shown that borrowers are more likely to default on loans if they have friends or neighbors who have. On top of that, the rate at which formerly current borrowers are defaulting now is rising. I guess it's just another, innovative way of using your home as your ATM. It currently takes well over a year, in some cases nearly two years, to go from missing a payment to being chucked out of your home."

Maybe Ben Bernanke missed the memo where 1 in 5 Americans is currently unemployed? someones need to tap him on the shoulder and remind him most of those new jobs created in the last couple months were temporary and likely to vanish just as quick...
Some 200,000 families a month are being added to the foreclosure rolls. Unemployment benefits are running out for millions but no one needs worry
because today Federal Reserve Chairman Ben Bernanke told Congress that he has confidence the unfolding economic recovery will have staying power...

Now thats what I call funny!!!

[edit on 14-4-2010 by DaddyBare]

to be fair, the recession does seem to have leveled off. A lot of places are hiring now, unemployment is going down, and fewer jobs are being lost.

Dow = 11,000

crossing 11,000 would be psychologically important, Detrick says. A rally that lifts the Dow above 11,000 could become a self-fulfilling prophecy if it encourages retail investors to move money back into the market

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[atsimg]http://files.abovetopsecret.com/images/member/72f3898eaf70.jpg[/atsimg]

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[atsimg]http://files.abovetopsecret.com/images/member/cd8bbc824e45.jpg[/atsimg]

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U.S. Economy: Consumer Confidence, Home Prices Rise

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EVERYTHING I am seeing leads me to believe we are turning the corner. I suppose I agree with Bernanke. I am personally witnessing it in my own small business.


[edit on 15-4-2010 by kinda kurious]