WHY THE NBER HASN'T DECLARED "IT" TO BE OVER"It", of course, is the recession that began in December 2007....By now, if this was a normal recession followed by a normal recovery, as opposed to a debt-deleveraging-depression, real GDP would already be back at a new high. But here we are, 31 months after the recession began, and the level of real GDP is still -1.1% below its prior high.There are two other critical factors preventing NBER from declaring the all-clear signal. First, despite the dramatic rebound in the equity market in 2009, personal income fell in 49 of the 52 U.S. cities of a million population or more....Second... the rapid decline in the employment-to-population ratio. This is a far more informative measure regarding labour market performance than the traditional unemployment rate, especially at a time when discouraged workers are withdrawing from the labour force at such an alarming clip.The employment rate has declined now for three months in a row, back to where it was at the start of the year, and smartalecks who see this recovery as anything but disturbing don't realize that this employment rate, at 58.4%, is down from 64.0% at the 2007 high. This was the largest drop in the post-war era and what it means is that the economy is 12 million jobs shy of being at full employment.
"It", of course, is the recession that began in December 2007....By now, if this was a normal recession followed by a normal recovery, as opposed to a debt-deleveraging-depression, real GDP would already be back at a new high. But here we are, 31 months after the recession began, and the level of real GDP is still -1.1% below its prior high.
There are two other critical factors preventing NBER from declaring the all-clear signal. First, despite the dramatic rebound in the equity market in 2009, personal income fell in 49 of the 52 U.S. cities of a million population or more....Second... the rapid decline in the employment-to-population ratio. This is a far more informative measure regarding labour market performance than the traditional unemployment rate, especially at a time when discouraged workers are withdrawing from the labour force at such an alarming clip.
The employment rate has declined now for three months in a row, back to where it was at the start of the year, and smartalecks who see this recovery as anything but disturbing don't realize that this employment rate, at 58.4%, is down from 64.0% at the 2007 high. This was the largest drop in the post-war era and what it means is that the economy is 12 million jobs shy of being at full employment.
The Obama Administration today announced additional support to help homeowners struggling with unemployment through two targeted foreclosure-prevention programs. Through the existing Housing Finance Agency (HFA) Innovation Fund for the Hardest Hit Housing Markets (the Hardest Hit Fund), the U.S. Department of the Treasury will make $2 billion of additional assistance available for HFA programs for homeowners struggling to make their mortgage payments due to unemployment. Additionally, the U.S. Department of Housing and Urban Development (HUD) will soon launch a complementary $1 billion Emergency Homeowners Loan Program to provide assistance - for up to 24 months - to homeowners who are at risk of foreclosure and have experienced a substantial reduction in income due to involuntary unemployment, underemployment, or a medical condition.... The program will work through a variety of state and non-profit entities and will offer a declining balance, deferred payment "bridge loan" (zero percent interest, non-recourse, subordinate loan) for up to $50,000 to assist eligible borrowers with payments on their mortgage principal, interest, mortgage insurance, taxes and hazard insurance for up to 24 months. Under the program, eligible borrowers must: Be at least three months delinquent in their payments and have a reasonable likelihood of being able to resume repayment of their mortgage payments and related housing expenses within two years; Have a mortgage property that is the principal residence of the borrower, and eligible borrowers may not own a second home; Demonstrate a good payment record prior to the event that produced the reduction of income. Read more...
The program will work through a variety of state and non-profit entities and will offer a declining balance, deferred payment "bridge loan" (zero percent interest, non-recourse, subordinate loan) for up to $50,000 to assist eligible borrowers with payments on their mortgage principal, interest, mortgage insurance, taxes and hazard insurance for up to 24 months.
Under the program, eligible borrowers must:
ht CR Diversity is the key to economic and political evolution.
