Friday, 29 October 2010 14:03

The Trillion Dollar LIE? Housing Activity and Prices, Lending, Credit and Charge-offs Are All Getting Worse SINCE the Bailout!

Here is a presentation using readily available data from the Federal Reserve and BoomBustBlog illustrating what clearly shows we have not come anywhere near the peak of the economic downturn IF you believe that real asset prices, economic housing activity and bank lending and available credit are gauges of, and effect, economic health.

Since the loan peak of 7.3227 trillion for week ending 10-22-08, total loans and leases at banks have dropped over 500 billion dollars.  That big spike on April 1st was due to an FASB rule change that forced some 452 or so billion in off-balance sheet stuff back on their books.  Basically, this was not new lending, it was lending that was held off balance sheet. Despite the stimulus that was supposed to increase lending, the current total loans and leases is now at 6.7889 trillion.  This is a drop of $533.8 billion.  Not counting the +452 to 515 billion resulting from that rule change, the drop is ~1,000 billion.  In other words, we've had total loan retraction in the amount of nearly a trillion dollars since the bailout - green shoots, end of the recession, no chance of a double dip (because we never left the first one) and all. Unbelievable.

Let's put this in context by referencing "Are We In a “Banking” Depression?" Friday, October 1st, 2010

Next, we take a look at the REAL housing situation... Those Who Blindly Follow Housing Prices Without Taking Other Metrics Into Consideration Are Missing the Housing Depression of the New Millennium. Monday, October 4th, 2010

Enough of the free stuff. Subscribers (click here to subscribe), be sure to go through my housing models and bank analysis from the past month. Morgan Stanley, Wells Fargo and Sun Trust are up on tap. I will be releasing out proprietary foreclosure and shadow inventory report for professional and institutional subscribers by Monday, possibly over the weekend, as well advanced views of GS and JPM from a balance sheet perspective. This is very valuable information and analysis to plug into your bank assumptions.

Last modified on Friday, 29 October 2010 14:24


  • Comment Link Heather McConnell Monday, 01 November 2010 16:32 posted by Heather McConnell

    The US is at war with its own citizenry. Tax dollars given to the banks is being loaned to corps in Asia, where labor is cheaper and profits are, therefore, guaranteed to be higher. If you are not yet a millionaire, they suggest you invest in Asia - maybe that way you'll get some of your own money back - ? The circuitous, disingenuous thinking of our "real" government (on Wall St.) suggests that they have given up on the US and none of these statistics (so regularly reported in the financial news) matter, unless such announcements provide for more value on a given day in the markets, in which case quick profits and further looting of the misinformed taxpayers is always welcome. It appears that soon, there will be 24-hour food lines in the US, government sponsored, whereby you stand for your one meal and then return to the back of the line. That is, if you are lucky. See reports in ZeroHedge for WalMart at midnight. Magnify by a few hundred million.

  • Comment Link Nicholas Scholten Sunday, 31 October 2010 01:38 posted by Nicholas Scholten

    I too was in the real estate market as a developer in the state of Washington. The Seattle area is still seeing significant declines as it was a little later in the cycle. My comment is does the economy really need housing to recover as home owners are deleveraging and also living for free. I had a short sale on a $912,000 house and Chase countered at $935,000 after being in the short sale process for 10 months. The buyer didn't even counter. I now am living there and will wait until it goes back to the bank. The house will probably settle in the low to mid $700,000 before it has bottomed. Back to my point. Our economy has functioned in years past without housing being as significant. The consumer is doing the right thing even if the government/banks will not assist. It seems to me we surely have a slower ecomomy but perhaps we are stabalizing at a lower base until the bond market dictates otherwise.

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