2012 March 02 | timiacono.com

Labor Market Not As Rosy As it Appears?

Well, next Friday’s labor report should be interesting as more signs emerge that the U.S. economy is not as healthy as it looks due to an unusually warm winter and odd seasonal adjustment factors resulting from the 2008-2009 recession. The latest evidence comes in this Gallup unemployment survey that shows the jobless rate going back up in February.

The differences between the adjusted/unadjusted and Gallup/BLS data are all rather complicated, but, one thing seems certain – the jobless rate as reported by the Labor Department is not going to go down again from its level of 8.3 percent in January. It could jump just a few tenths of a percentage point or to as high as 9 percent.

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Negative Equity, Foreclosures in the News

Corelogic and RealtyTrac are really raining on the parade that is the U.S. economic recovery (and Secret Commerce Department Report Shows the Economy May be Faltering at the CEPR isn’t helping either) as both real estate data firms provided a sobering new look at the U.S. housing market that many analysts think is poised to rebound this year.

RealtyTrac released its final report on foreclosure activity in 2011 noting that distressed sales accounted for 24 percent of all sales in the fourth quarter, up from 20 percent in the third quarter, and that the average price of a foreclosure-related sale was 29 percent below non-foreclosure sales. Corelogic reported the latest data on negative equity below, a situation that is not likely to get any better with ongoing home price declines.

With nearly a third of all borrowers either in or near negative equity, we’ll be hearing a lot more on this subject during this election year as the banks’ foreclosure mills crank up again along with talk of (and a little action on) principal writedowns.

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Friday Morning Links

Brazil declares new ‘currency war’ – CNN
ECB Says Overnight Deposits Surge to Record – Bloomberg
The ECB’s Policies Are Anything But Harmless – Spiegel
Greek Swaps Headed Back to ISDA Committee – Bloomberg
Negative Equity Traps One Third of American Borrowers – CNBC
Secret Commerce Department Report Shows the Economy May be Faltering – CEPR
Bill O’Reilly is Misinforming Americans About Oil Supplies – The Oil Drum
Obama, chart in hand, presses his case on gas prices – LA Times
If Stockton Is Broke, Then Why Isn’t San Diego? – Bloomberg
Will Wall Street Ever Face Justice? – NY Times
Why the stock market rally won’t last – Fortune
Financial Crisis Amnesia – Geithner, WSJ

Oil below $108 after Saudi explosion report denied – AP
Gold inches up as buyers trickle back after selloff – Reuters
Israel to Begin Investing Reserves in U.S Equities Today – Bloomberg
Thoughts on Retirement with Dignity 2.0 – The Big Picture
Has There Ever Been a Better Time to Be an Investor? – WSJ
Why retail gasoline prices are nearing a record – MarketWatch
Dollar Going Out With A Whimper, Not A Bang — So Far – Dollar Collapse
Facing Sanctions, Iran to Sideline Dollar by Using Gold in Trade – New American
Reported 31 tonne sell order triggered gold and silver price collapse – Mineweb
Did Ben Bernanke kill the gold rally? – CNN/Money

Two Issues that Can Bring Down the Economy – Fiscal Times
Calling BS on ECRI’s recession call defense – Bonddad
Eurozone unemployment rate at 10.7% – CNN/Money
‘Hubrisk’ (hubris+risk) and the Greek crisis – voxeu
China state banks to boost selected property loans – Bloomberg
Germany May Support Euro Firewall Increase for Psychological Reasons – Spiegel
New home sales in Australia enter record slump – Sydney Morning Herald
Delinquent mortgage squatters predominate high-end properties – OC Housing News
Fitch outlines the hazards of principal reduction – Housing Wire
Quarter of all 4th Quarter Home Sales Were in Foreclosure – Housing Views
Fed’s Lockhart: Benefits of Low-Rate Policy Outweigh Costs – WSJ
Bernanke’s First Step Is Admitting There’s a Problem – RCM

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