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"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.
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.
"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."
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