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From Investors.com (H/T Blogs for Victory):
Skyrocketing growth in loans from the Federal Housing Administration and Ginnie Mae have helped support the mortgage market — but could leave taxpayers on the hook for massive new losses. FHA-insured loans have more than tripled from 530,000 in fiscal year 2007 to 1.7 million thus far in 2009. The Government National Mortgage Association, which securitizes FHA loans, has boosted its mortgage-related issuance to $287 billion from $85 billion. Yet during that same period, the FHA’s loan delinquency rate has climbed to 14.4% in Q2 from 12.6% two years earlier.
All the bad money Fannie and Freddie and the large banks won’t loan? The FHA is loaning it for them. Look for a crash in that area in the near future. Not only have the Japanese elections unsettled the state of the US debt, there’s also a bit of growing concern from China. From the Times Online (UK, H/T Blogs for Victory):
Cheng Siwei, former vice-chairman of the Standing Committee and now head of China’s green energy drive, said Beijing was dismayed by the Fed’s recourse to “credit easing”. “We hope there will be a change in monetary policy as soon as they have positive growth again,” he said at the Ambrosetti Workshop, a policy gathering on Lake Como. “If they keep printing money to buy bonds it will lead to inflation, and after a year or two the dollar will fall hard. Most of our foreign reserves are in US bonds and this is very difficult to change, so we will diversify incremental reserves into euros, yen, and other currencies,” he said.
And on the jobs front, the news isn’t so good, either. From Heritage:
The unemployment rate is already one-fifth higher than the Administration predicted. It is now expected that the peak of unemployment rate will be one-fourth higher than their predictions. Even worse, the promised job creation that was expected to lower the unemployment rate in the upcoming months has not materialized. According to Bureau of Labor Statistics data, jobs continued to disappear in August with the unemployment rate increasing to 9.7 percent, the highest level since the summer of 1983. The unemployment rate for men was 10.1 percent, far exceeding the 7.6 percent unemployment rate for women. While 216,000 people lost jobs, this was the least amount of lost jobs of the year, an indication that the rate of job losses has greatly slowed.
The following chart from the Market Ticker summarizes the situation.
Notice the serious rise in consumer debt, compared to income, and now the serious dive we’re seeing. There’s no way to get things back into balance until the income and debt lines a lot closer together. Howard Davidowitz argues we can’t ever come out of this to the point where we were before in this YouTube clip.
David Walker, former Comptroller of the US, argues in this Wall Street Journal article that the US Government is out of control on their end, as well, and there’s little chance of any positive result to the current debt boom. Pete Morin, at the American Thinker, asks the unthinkable question: Is the US Government bankrupt?
Years ago, two liberals wrote an article in The Nation detailing a strategy which would force a revolution in the US, a revolution those on the left felt comfortable controlling to result in a communist/authoritarian regime. The strategy is called the Cloward-Pivens strategy, and it’s detailed in many places on the ‘Net, including here. Are we seeing the results of this strategy in full bloom?
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