In the midst of preparing a talk for a recession workshop next Tuesday morning, I came across an updated factoid that made my stomach turn. Never one to keep pain to myself, I had to share with all y'all.
My friends at the Mortgage Bankers Association (okay, they're not really friends, especially lately, but I'm trying to be nice here) track seriously delinquent loans as a percentage of total loans outstanding. Even through early 2007 the percentage was right around 2%. Unfortunately, then it decided that it wasn't afraid of heights. The number as of the end of the year (it's a delayed but quarterly release) is... sit down... 6.3%.
I could say more, but do I really have to? Okay, if you insist. Can I remind you of this graph that shows how many ugly loans still have to be worked through over the next year or two? Okay. Now I'm done with that.
I was never a cheerleader in school. It just wasn't me. At all. (Those of you who knew me will say "duh.") So I still have a problem with excessive enthusiasm, especially when it's totally misplaced ... and I don't care if it's a bad football team or an even worse economy. So you can imagine my joy as I watch the rah-rah antics of the current administration.
Larry Summers was quoted today saying "It is modestly encouraging that since it began to take shape, consumer spending in the United States, which was collapsing during the holiday season, appears, according to a number of indicators, to have stabilized." Ummm, dude, it didn't fall as much as expected, but it did fall. And the consumer is so far in debt that they shouldn't be spending at all!
President Obama was waving his pom-poms today too. "If we are keeping focused on all of the fundamentally sound aspects of our economy, all the outstanding companies, workers, all of the innovation and dynamism in this economy then we're going to get through this. I'm very confident about that."
And if I hear one more talking head blather about how wonderful it is for the market that Uncle Ben is going to be on 60 Minutes this Sunday, I'm going to burn somebody's pom-poms in protest.
It all kind of reminds me of this quote:
"I am convinced we have now passed the worst and with continued unity of effort we shall rapidly recover. There is one certainty of the future of a people of the resources, intelligence and character of the people of the United States—that is, prosperity."
Who said that last bit of verbosity?
Oh, that was just Herbert Hoover in May of 1930.