Ilyce Glink WSB Radio Show Notes – August 15, 2010
Unemployment, Foreclosures Up, Stock Market and Mortgage Interest Rates Down
This was another wacky week in the world of financial news:
First-time filings for unemployment rose to a level not seen since February, surprising many analysts. People are still losing their jobs, which just goes to prove that the economy isn’t close to healing.
Bernanke & Company admitted as much this week, as the Federal Reserve said it would begin buying back Treasuries using the cash generated from the mortgage-backed securities it already holds. so, instead of shrinking its balance sheet from $2.3 trillion, the Fed will sustain it.
That news spooked Wall Street, and stocks dropped 3.5 percent this week, down 350 points as investors wondered whether the U.S actually was in a recovery or not. The Fed went out on a limb and suggested that the recovery is more “modest” than expected and would continue at an extremely “modest” pace.
What’s with the word modest? Really, second quarter GDP growth was downgraded to somewhere around 1.3 percent, from 2.4 percent, which is anemic. And, now economists are suggesting we might see a contraction in this third quarter. That’s not modest, that’s the beginning of a double-dip recession. And, it would explain why more people are being laid off, causing the unemployment numbers to rise.
I said this morning on the air that it seems as though the Federal Reserve decided its policy should be to just tell everyone that things are fine. If you work on the consumer psyche, the thinking must go, and you can get people to feel more positively about themselves, their prospects, and the economy, it will become a self-fulfilling prophecy.
That might work for awhile, and then pretty soon folks begin to realize they don’t have a job, they’ve lost income, they’re losing benefits, their companies that they retired from are going out of business and the health insurance benefits they earned from a lifetime of working are going up in smoke.
In other words, it’s hard to feel positive about the economy when you’re choosing between putting food on the table, paying the electric bill, or buying the medicine you need to stay alive.
If these are your choices, and truly there are millions of Americans in this exact circumstance right now (no matter what the Fed says), you know that the recovery isn’t just modest – it isn’t there at all.
You can’t just have a recovery on Wall Street, and if President Obama hasn’t figured out yet that Wall Street financial institutions don’t vote – the folks who live on Main Street do, he’ll find out in November.
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Scroll down for today’s calls and show notes.
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Today’s Show Notes
Ann is the executor of her mom’s estate. Her mom basically owned a lovely, historic house in a nice neighborhood of Atlanta and nothing else. Ann is thinking about hiring an auction company and wanted to know the pros and cons.
I’ve written quite a bit about auction companies. Auctioning a house can work very well, because it concentrates the attention on a particular piece of real estate at a particular point in time. Click here to get to the ThinkGlink topic page on Auctions. And, here are links to other stories on auctions:
Several callers wanted more information about credit card debts and paying down their debts. The place I always recommend you go is Consumer Credit Counseling Service of Greater Atlanta, which is now known by the name Credability.org.