Republicans deny economic reality

Can you believe Republicans are actually trying to pin the blame on President Clinton for the drumbeat of bad economic news we hear day after day?

The U.S. credit-card industry may pull back well over $2 trillion of lines over the next 18 months due to risk aversion and regulatory changes, leading to sharp declines in consumer spending, prominent banking analyst Meredith Whitney said.

The credit card is the second key source of consumer liquidity, the first being jobs, the Oppenheimer & Co analyst noted.

Reminder: George Bush is the only president to ever preside over an economy that has lost jobs, and now the people who probably need that credit card so they can fill up their gas tanks to hunt for jobs may be cut off.

Obama can't come to our rescue fast enough. We desperately need jobs in this country. High unemployment numbers continue to strain borrowers, leading to more foreclosures and delinquencies.

"The unemployment rate is highly correlated to consumer defaults," says Arpitha Bykere, an analyst at RGEMonitor.com, an economic consulting and research firm.

Well, duh! That's pretty simple to understand. If people aren't making money, they can't pay their bills, especially the big ones like mortgages. And according to Calculated Risk via the WSJ: Delinquent mortgages are set to nearly double in 2009.

TransUnion LLC ... predicted that the proportion of consumers with mortgages that are 60 days or more past-due will hit 7.17% in the fourth quarter of 2009.

That would be the highest level reached since the Chicago credit bureau ... first started tracking these statistics in 1992. It compares with an expected delinquency rate of 4.67% at the end of 2008. [...]

"There are a lot more loans that will be resetting throughout 2009 through 2011," says Ezra Becker, principal consultant in TransUnion's financial-services group, who notes that rising unemployment and depreciating home values are other contributing factors. "There may be an ongoing flow of consumers who may now be able to pay their mortgage but may not be able to a year from now."

Republicans willfully ignored warnings about the financial meltdown and now we're all paying the price, but you won't get them to admit they screwed up. It's never their fault.

Fighting over crumbs

Here's something to ponder as you're filling up your gas tank or digging deep into your pocket to pay for groceries.



In case you're interested, the gentleman in the video has a blog:
The Hillbilly Report.

DeVos speaks, MIGOP listens

Why are state Republicans still listening to DeVos?

Republicans who control the state Senate got a pep talk Tuesday from GOP businessman and 2006 gubernatorial candidate Dick DeVos.

DeVos, who lost to Democratic Gov. Jennifer Granholm in the November election and is rumored to be eyeing another bid, spoke for 20 to 30 minutes during a Senate GOP caucus meeting at the start of session. [...]

DeVos said Republicans outside Lansing support the GOP's stance that significant structural changes in government must be made before there is any consideration of a tax increase.

I guess the party feels obligated because the man spent millions of dollars of his own money trying to unseat Gov. Granholm, but the fact that he was trounced should be a clue that the public finds him as irrelevant as George Bush.

Seriously. DeVos based his election on somewhat dubious, if not downright untruthful claims. He ran around crowing that, "49 other states are doing great. 49 other states are moving forward. 49 other states are adding jobs. And yet, Michigan is the only one lagging behind," and he placed the blame squarely on Gov. Granholm.

That's not how several papers saw it. As the Ludington News Daily said, "The near collapse of the Big Three is not the fault of the Legislature nor the governor. It’s in part the fault of the Big Three for failing to adapt to a global economy, work together with their unions to comply with that increased competition and changing consumer desires."

It wasn't how the voters saw it either. CNN reported that the economy nearly tied Iraq as the reason voters across the country came out to vote last November.

DeVos also ran a series of ads about our depressed housing market and the glut of homes on the market. The implication was that housing was doing great in 49 other states. Yeah, right. Foreclosures rates have been growing across the country since last spring, right about the time DeVos started running his first campaign ads.

From ABC News:

New data released this afternoon indicates that one in every 656 homes in the United States went into foreclosure during May. [...]

"The principal source of the slowdown in economic growth that began last spring has been the substantial correction in the housing market," said Fed Chairman Ben Bernanke in a speech in late March. [emphasis added]

Michigan currently ranks eighth among states, with one in every 448 homes in foreclosure, but we're certainly not alone in our misery like DeVos wanted us to believe.

Aside from the misleading and disingenuous twisting of facts, why are state Republicans listening to DeVos on taxes? He supports the GOP's stance that structural changes in government must be made before there is any consideration of a tax increase, yet he and his family are willing to let taxpayers help build a new stadium for their basketball team in Orlando. If they don't see this as a double standard, shame on them.

And what about the millions of taxpayer dollars that benefit his brother-in-law, Eric Prince, owner of Blackwater Security? I've never heard DeVos raise objections about that money, not even when it came to light that Rep. Henry Waxman wrote Sec. Donald Rumsfeld requesting answers as to why taxpayers paid exorbitant prices for Blackwater's services. Waxman is still waiting for those answers (and so is the public).

And why are state Republicans listening to DeVos when they should be questioning him and his family about Blackwater's lack of transparency and accountability: Blackwater Heavies Sue Families of Slain [Fallujah] Employees for $10 Million in Brutal Attempt to Suppress Their Story.

If taxpayer money provides funding for Blackwater Security, then taxpayers deserve to know if the company cut corners in order to maximize profit - and in the process jeopardized those mens' lives. Surely, Michigan's GOP believes in accountability and transparency, right?

Whatever their reason for listening to DeVos, there's an old adage they might want to consider: When you lie down with dogs, you get up with fleas. They need to ask themselves if that's a risk they're willing to take. It hasn't worked out so well for many Bush loyalists and it just might not work out so well for them either.

Michigan Has Foreclosure Misery Company

Readers are increasingly turning to the Web for their news and abandoning print media. I can't speak for everyone else, but I read my news online because 75% of the time an article will leave me with unanswered questions and I end up searching the internet for answers. For example, this was a lead story in today's Freep:

Home foreclosure filings surged to record levels across metro Detroit in 2006, adding to the misery of a region already suffering the effects of a sagging job market, plant closures and layoffs. [...]

It's the repercussions of a bad economy -- and in stark contrast to other parts of the country that are growing," said Dana Johnson, chief economist for Comerica Bank in Ann Arbor. "It's unfortunate, but it's not surprising."

Ouch! Are we really alone in our single-state misery as the article implied? I did a quick search and soon found that Michigan has lots of company in foreclosure misery. From Yahoo [emphasis added]:

[T]he leading online marketplace for foreclosure properties, today released year-end data from its 2006 U.S. Foreclosure Market Report, which shows more than 1.2 million foreclosure filings were reported nationwide during the year, up 42 percent from 2005 and a foreclosure rate of one foreclosure filing for every 92 U.S. households. [...]

Colorado documented the nation's highest state foreclosure rate for the year, one foreclosure filing for every 33 households... an 85 percent increase from 2005 and the eighth highest total among all the states.

Georgia and Nevada both reported one foreclosure filing for every 41 households in 2006, but Georgia edged out Nevada with a slightly higher percentage of households in foreclosure... Georgia reported a total of 75,975 foreclosure filings during the year, the sixth most of any state and a 67 percent year-over-year increase. Nevada foreclosures surged in fourth quarter, pushing the state's total for the year to 21,045 -- nearly three times the number reported in 2005.

Other states with foreclosure rates among the nation's 10 highest included Texas, Michigan, Indiana, Florida, Ohio, Utah and Tennessee.

Texas reported 156,876 foreclosure filings for the year, the most of any state and nearly 13 percent of the national total. The state consistently reported big foreclosure numbers throughout 2006... -- giving the state the nation's fourth highest state foreclosure rate.

Rising foreclosure activity in the fourth quarter pushed California's 2006 foreclosure total to second highest among the states. The state reported 142,429 foreclosure filings during the year, more than twice the number reported in 2005 and accounting for more than 11 percent of the national total. [...]

Florida foreclosure activity remained relatively flat in 2006, up just 2 percent from 2005, but the state's foreclosure total still placed third highest among all the states. [...]

Other states with 2006 foreclosure totals among the nation's 10 highest included Ohio, Michigan, Georgia, Illinois, Colorado, New York and Indiana.

Detroit, Atlanta, Indianapolis report highest metro foreclosure rates

With an average of more than 10,000 foreclosure filings in each quarter, Detroit documented the highest annual foreclosure rate among the nation's 100 largest metropolitan statistical areas. Foreclosure filings in the city represented 4.9 percent of all households -- or one foreclosure filing for every 21 households. The city's foreclosure rate was 4.5 times the national average.

Atlanta's 2006 foreclosure total of 63,737 represented 4.4 percent of the city's households -- second highest among the top 100 MSAs and more than four times the national average. [...]

Indianapolis foreclosures decreased in the second, third and fourth quarters, but the city still documented the nation's third highest metro foreclosure rate -- with total foreclosure filings representing 4.3 percent of all households.

Other cities with foreclosure rates among the nation's 10 highest were Denver, Dallas, Fort Worth, Las Vegas, Memphis, Fort Lauderdale and Miami.

All of that information came from one article, but there were plenty more to choose from:

Foreclosures climbed a whopping 64.6 percent in the nation's Northeast in 2006, fueled by a fourth-quarter filings scramble in metropolitan areas of New York and Boston, and across northern New Jersey.

Colorado had more foreclosure filings per household in 2006 than any other state, RealtyTrac, a California provider of foreclosure data, will report today.

Foreclosures in Fresno County more than quadrupled in the fourth quarter from last year... Statewide, the number of default notices — the first step in the foreclosure process — climbed a whopping 145% in the fourth quarter of 2006 from a year earlier to the highest level in eight years, according to DataQuick Information Systems, a real estate tracking service.

Mississippi ranks low nationally in foreclosures, but homeowners unable to pay their mortgages are on the rise. ... Mississippi foreclosure rates increased about 50 percent from the previous month and 130 percent from the previous year.

Mortgage defaults in California more than doubled on an annual basis in the last quarter of 2006.

"It's the economy, stupid." James Carville's famous slogan from the 1992 presidential election also explains why Kentucky's mortgage foreclosure rate is the fifth highest in the nation, economists and mortgage bankers say.

From the Cincinnati area: While Swain's circumstances are especially dire, similar foreclosure notices were tacked to the front doors of more than 10,000 homeowners in almost every neighborhood of Greater Cincinnati and Northern Kentucky last year. For the seventh straight year, foreclosure filings hit record highs not only here but in all of Ohio and Kentucky.

Florida chimes in: Foreclosures put added burden on association-run communities..."We're seeing a 100 percent increase in the number of files turned over to us [by associations] for lien and foreclosure," said Gary Poliakoff, whose Fort Lauderdale-based law firm, Becker & Poliakoff, represents 4,200 associations in Florida.

As long as newspapers continue to do only half their job, I'll continue to read my news online where it's more convenient to search for the rest of the story.