Disconnected

As I write, it is a Thursday afternoon. The stock market is closed for the day, and the Dow ended the day at 10,322.44. It must be nice in their world.

Meanwhile, foreclosures are at a record high, with 14.41% of mortgages either in foreclosure or with at least one past due payment. Think about that a moment. Knock on 20 doors in an “average” community and 3 of them are likely somewhere on the road from “missed a payment” to “bank owned”. Needless to say, the rate is lower in most of the country, but higher in Florida, California, Arizona and Nevada.

In addition to residential mortgage loans being in a tough spot, industrial and commercial lending is down 20% year over year. At first, you might think “good, that means that banks are only lending to companies that are likely to pay it back.” In fact, this crash of lending means that firms which might otherwise had a short term liquidity problem will go bankrupt for lack of financing, putting more people out of work. In addition, it is clear that almost no loans are available for new and small businesses, which are now unable to take up their role creating jobs for the rest of us. Remember, SBA loans are government insured second mortgages; nobody has equity anymore, so just forget about it. The rest of the SBA’s functions are largely consulting.

Official unemployment — which is traditionally undercounted — is over 10%, more like 17% once you include people like “discouraged workers,” and over a million people are due to run out of unemployment benefits before the end of the year. Merry freakin Christmas.

Speaking of Christmas, I found out today about a family that all they really want for Christmas is electricity! Sure, I bet there’s someone like that in your neighborhood too. Help them out if you can, mmkay?

Roubini is right. We have two economies going on in this country right now: one for the top companies where everything is wonderful and bonuses all around; and one that you and I live in. I believe two radical things when it comes to economics. First, interest rates all by themselves don’t magically fix the economy. Second, there’s no such thing as a jobless recovery (and by extension, I think what we are now experiencing is still the 2001 recession).

Ok, a few quick items on health insurance reform: An economist tells you how he’d fix the problem; best and worst health care by state roughly correlates to political leanings; Ezra goes mining for silver linings in the Senate version of the reform bill; and one item of interest to everyone who even knows a woman in Nevada. Some idiots who believe that a fertilized but not yet implanted egg has the same rights I do — a grown woman and mother — wants to outlaw “pills that induce abortion.” However, due to sloppy writing and even sloppier understanding of biology, the amendment would also most likely make all hormonal birth control illegal. Get the word out, this could be a mess.

In Closing: Views of Mt. Fuji; short history of the internet; only 2 countries have failed to ratify an 20 year old international treaty on children’s rights — Somalia and the United States; Just Say No to plastic crap at Thanksgiving and the whole year through (seriously, don’t you have better things to spend money on??);  and finally, a hilarious Thanksgiving letter.