Slideshow of 100 Abandoned Homes in Detroit

This is a view of disaster through an artistic lens. There are some downright gorgeous shots in here, every one of them representing a story of tragedy, loss, failure, and hurt. A sign of the times, Detroit has had as many headlines as any other city as a representation of the worst economic conditions in our nation in 'The Great Recession'.

Remember the mood only 6 months ago? While I think the recovery rally cries are a bit premature, it certainly does not feel as likely as it once did that we could see a full wide-scale meltdown or economic collapse.

We'll come back, and the beginning of that long process is underway. I'd love to see these same 100 photos updated in a few years.

Weekly Mortgage Interest Rate Survey on Mortgage-x

I participate in a weekly survey on mortgage-x. For the upcoming week, I said:

Vote: () () Over the next 30 days rates will decline slightly; over the next 90 days rates will decline slightly.

Comment by John C. Glynn: A second-guessing of the 'recovery' will put pressure downward on rates, but be careful about the implications of an unwinding Federal Reserve with their asset purchase programs designed to lower rates - they are coming to an end.

Find out what others are saying by clicking here. (hint, looks like I am running with the pack this week...).

Unemployed to US Economy: "Go on without me..."

I am concerned about the recent optimism in the financial markets. Sorry. Not cool to be a pessimist. But I am not - just trying to be a realistic optimist here.

We lost 245k jobs in the month of July. This made markets happy because it was less than expected (325k), and fewer than the prior month. Around January of this year, we were losing ~750k per month. So yeah, improving, but not exactly good.

Is this cause for optimism? How can we distinguish between optimism and an evaporation of pessimism? Are they the same thing?

(Source: Bureau of Labor Statistics)

What bothers me are the following details, below the headlines of the news release:

• the only growth in new jobs is among the 55 and up crowd - baby boomers who, under other circumstances, would no longer be in the job market.
• nearly 5MM people have been out of work for more than HALF OF A YEAR

The second point leads me to wonder, when does fatigue set in? The unemployment rate went down this period (9.4%) but this is expected to be anomalous in retrospect; unemployment is expected to break 10% within the year. Since the survey methodology only considers "unemployed" people to be those A) without work and B) actively looking for work, how many people have given up? How many are tired of sending resumes out multiple times a week, getting no replies, and simply focusing on other things until there are signs that jobs are available?

I love this analogy from Planet Money: The foot is on the pedal, and it's floored (Federal Funds rate @ 0% and other stimulus). The car (our economy) is rolling backward. But the speed at which we are rolling is slowing. And that's enough to get us where we're going? hmm...

I am not yet convinced. What say you?

Stevie Ray Vaughan Called; He Wants His Social Security Back

According to The Tax Foundation for 2007 (most recent data):

• the top 1% of tax filers paid 40.4% of all Federal taxes (up from 39.9%)
  
• the top 1% of tax filers made 22.8% of total reported adjusted gross income
• $410,100 income required to be considered top 1%
• top 5% paid 60.6% of all Federal taxes on 37.4% of adjusted gross income
• $160,000 income required to be considered top 5%
• top 10% paid 71.2% on 48% of all income
• $113,000 to be in the top 10%
• bottom 50% of all filers paid 2.9% of the total income tax bill

July Jobs Report to Mortgage Rates: "You can call me Susan if it makes you happy"

Today we saw release of the anxiously awaited July employment report, which turned out to have a few surprises, and a general portrayal of an economy that is continuing to struggle, but at a slower pace than before. The number of jobs (net nonfarm payrolls) lost over the month eased to 247,000, as against June’s loss of 443,000. Obviously, this is an improvement, and it is generally being read as indicative of a gradually healing jobs market.

It is important to recall, though, that this recession has seen the loss of 6.7 million jobs—and “less-worse” won’t make that number decline. And while the unemployment rate fell to 9.4% from 9.5%, there is a lot of indication that a primary reason reason was that people took themselves out of the jobs market, as they stopped actively look for a job. This is no improvement, and the unemployment rate is still expected to break 10%. When we see a greater number of people entering and re-entering the jobs market, it will signal an improvement to confidence in people’s ability to find a job. Improvements in the jobs market tend to follow improvements in other areas of the economy. It will be some time before we can say we’re in a recovery, not just moving toward one.

So how did mortgage rates respond to this news? Not so good. If you are on the fence about refinancing, or waiting for a better deal, it might feel like somebody's got a grip on your necktie right now, no clear sign of them letting go at the moment...

...For approved audiences, this clip is "Rated R". The butt-kicking in the bond market today reminded me of this...