A host of commentators are arguing that the current U.S. slowdown – the most severe in a quarter century – is far from over and in fact destined to get much worse. The argument usually invokes a parallel with the Japanese recession of 1990. In Japan in 1990, real estate prices fell sharply after rapid increases over the previous decade, the stock market fell dramatically, and most large banks became either insolvent or very short on capital – all similar to what the US has experienced. And Japan subsequently went through a great-depression style slowdown in economic growth from which they have still not fully recovered. (more…)
Archive for the ‘unemployment’ Category
The Federal Reserve Bank of New York has a fascinating and user-friendly way of presenting their data on mortgage financing, delinquencies, foreclosures and so forth across the nation for different types of mortgages. They have put together a point-and-click map of the US so you can see where the mortgage credit problems are hitting the hardest, with detail as fine as the county. Note that the places where the foreclosures and defaults are the largest are those places with high increases in house prices. The other main contributing factor is of course the economy and job losses. The Associated Press has a complementary figure that plots some mortgage outcomes data with unemployment data. Again, there is a large correlation between high unemployment in a county and high delinquency and foreclosure rates.