Today, we're
not being told of how things are getting better, despite the reality that another 650,000+/- will be unemployed as we'll hear from the U.S. Labor Department's Bureau of Labor Statistics in upcoming days.
Today, we're not being told about an uptick in consumer sentiment, despite the reality that industrial production's still declining, so all those diminishing inventories we're hearing about aren't being replaced with more manufacturing (activity); that's because there's no demand (small detail). Yes, those little details about deflationary spirals, they'll get you every time.
Today, we're not being told about green shoots and better days ahead, while real estate prices keep tanking--they're just tanking more slowly and that's supposed to be cause for optimism.
Today, we're
not being told about how things are getting so much better, even bonuses are returning to Wall Street (like they ever left in the first place).
Today, we're not being told about how all 19 of the banks that undertook the stress test passed it. Pathetic. (More like a couple hundred billion--above and beyond the trillions we've already spent--will be needed to enable the banks to pass regulatory muster. That should hold 'em for another few days, anyhow.)
Today, we're being told of a "new normal."
Starting off the week in grand fashion, there are two stories running at the top of the business wires right now which dovetail in such a way that they should make any sane resident of Main Street just want to...scream.
Here they are:
"`Great Recession' Will Redefine Full Employment as Jobs Vanish"
"U.S. Home Prices May Be Lost for a Generation"
Yes, folks, things will soon be getting back to "normal," as long as you don't remember what life was like 10 minutes ago.
The "new normal" means that unemployment will regularly be somewhere around 7%, not 4.5% or 5%, as it was for....ever?
The "new normal" means that the price of your home won't be returning to it's 2006 market value until about...a generation from now?
Yes, that's what we're being told today, as far as unemployment's concerned, `Great Recession' Will Redefine Full Employment as Jobs Vanish:
`Great Recession' Will Redefine Full Employment as Jobs Vanish
By Matthew Benjamin and Rich Miller
May 4 (Bloomberg) -- Post-recession America may be saddled with high unemployment even after good times finally return.
Hundreds of thousands of jobs have vanished forever in industries such as auto manufacturing and financial services. Millions of people who were fired or laid off will find it harder to get hired again and for years may have to accept lower earnings than they enjoyed before the slump.
This restructuring -- in what former Federal Reserve Chairman Paul Volcker calls "the Great Recession" -- is causing some economists to reconsider what might be the "natural" rate of unemployment: a level that neither accelerates nor decelerates inflation. This state of equilibrium is often described as "full" employment.
Fallout from the recession implies a "markedly higher" natural rate of unemployment, says Edmund Phelps, a professor at Columbia University in New York and winner of the 2006 Nobel Prize in economics. "It was 5.5 percent; maybe it will be 6.5 percent, maybe 7 percent..."
And, that's what we're being told today, as far as the value of your home's concerned, too, U.S. Home Prices May Be Lost for a Generation:
U.S. Home Prices May Be Lost for a Generation
Commentary by John F. Wasik
May 4 (Bloomberg) -- We might be looking at a lost generation for U.S. home values.
Far too many analysts are calling a bottom to the housing market after home prices in 20 metropolitan areas declined at a slower pace in February, according to the Standard & Poor's/Case-Shiller Index.
Don't be blinded by the glint of optimism in headlines about rising consumer confidence and slowing price declines. Demographic and market realities tell a more sobering story.
You won't see a widespread housing rebound in an economy in which 600,000 jobs a month are lost and foreclosures ravage the most overleveraged areas. These are just the visible barriers to a recovery.
Mortgage lending has also been an unusually tightfisted process of late. Lenders are demanding a 20 percent deposit for home purchases, and want impeccable credit ratings. About 45 percent of U.S. banks surveyed by the Federal Reserve said they had "tightened their lending standards on prime mortgages." I suspect that number is much higher.
Then there's the reality that the market is glutted with homes. A record 19 million homes stood empty at the end of 2008.
What you can't see in the most recent housing numbers is the least-visible driver of home prices today: demographics...
Yep, I can see that everything's going to be returning to normal anyday now.
It's just around the corner...just make a left up at Delusion Street, and go one block over to Denial Avenue. It's right there...Status Quo Boulevard. Home Sweet Home.