Job One — Death of the Dream

June 3, 2011

“What has two thumbs, and don’t give a crap?
Bob Kelso”

I’ve got to stop watching Scrubs on Netflicks before going to bed (up to season six) as the show’s end music chimes in my brain while I drift to sleep.
And when awake, I have this compulsion to always want to slightly turn my head upwards to the right, look pensive and quickly float easily into a day-dream of some dumb-ass thing — especially for places far, far away and long, long ago.

(Illustration found here).

The housing report this week is beyond not good — it’s horrible.
From MonthlyReview:

The Case-Shiller 20-City index fell by 0.8 percent in March.
This represents somewhat of a slowing from the prior six months in which the rate of monthly decline averaged more than 1.0 percent.
Nonetheless, the drop pushed the index to a new post-bubble low.
In nominal terms, the March number is 0.8 percent below the previous post-bubble low hit in April 2009.
In real terms, the March number is 5.4 percent lower.

While the overall rate of price decline slowed somewhat in this report, it seems virtually certain that prices will continue to decline at least through the rest of the year.
The April data on pending home sales was extremely weak.
In addition, the mortgage applications index for purchase mortgages is hovering only slightly above the levels reached last May, following the end of the first-time buyers tax credit.
This suggests that home purchases are likely to be weak for the near-term future.

Furthermore, it is difficult to see any set of events that is likely to have much of a positive impact on the housing market.
The FHA has recently tightened its lending standards, which will further limit the demand side of the market. There is little hope of any sharp uptick in employment, and interest rates are unlikely to fall from current levels.
As a result, prices are almost certain to decline by double digits in 2011.

And in those US places where the housing bust wasn’t so bad in the beginning, are now hurting, too.
There seems to be no winning out there.

Paul Krugman envisions the mistakes of 1937 being made again.
From his NYT post this morning:

And the news has, indeed, been bad.
As the stimulus has faded out, so have hopes of strong economic recovery.
Yes, there has been some job creation — but at a pace barely keeping up with population growth.
The percentage of American adults with jobs, which plunged between 2007 and 2009, has barely budged since then.
And the latest numbers suggest that even this modest, inadequate job growth is sputtering out.
So, as I said, we have already repeated a version of the mistake of 1937, withdrawing fiscal support much too early and perpetuating high unemployment.
Yet worse things may soon happen.

Those who refuse to learn from history are condemned to repeat it; we did, and we are.
What we’re experiencing may not be a full replay of the Great Depression, but that’s little consolation for the millions of American families suffering from a slump that just goes on and on.

And an important jobs report is due  this morning, and from all indications, it won’t be pretty.

And oil prices are climbing back upwards again creating more shit at the gas pump.
Of course, this is where I tilt my head upward a little, look wistful and flashback to that pretty little girl in sixth grade — she just loved my penny loafers.

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