The media has been following the script given them by mainstream economists and politicians. The mantra has gone from "green shoots" to "welcome to the recovery." Meanwhile, those that were really paying attention recognized that the positive spin was either based on ignorance or deceit. There are two pieces of bad news today that have surprised some, but again, those paying attention saw this coming.
Item Number 1:
The sales of existing homes in July are the lowest on record. June was a really bad month, but July was even worse. Look at the drop in the graph below between June and July.
That is a startling drop. The first-time home buyer tax credit is now history. Those that were thinking about buying a home have likely already bought one in order to take advantage of the tax rebate. Prices have remained more or less stable--likely due to the tax rebate that bidders used to bid against one another.
Take a look at this graph as well, which shows the "Total Loan Balance That Will Experience Payshock." It is clear in this graph that things are only going to get worse from here. There may be a lull in a few months, but come next summer things will become disastrous.
report. The news about the housing sector is bad enough, but add this to the realization of what Item Number 2 will bring...
Item Number 2:
Check out this article about the three-headed tax monster that will assault America on January 1st. The lowest tax bracket currently at 10% will go up to 15% and each subsequent bracket will go up by 3%, with the top tax bracket going up 4.6% to 39.6%.
Perhaps the biggest shock will be to your W-2 at the end of the year when your taxable income will include your employer's medical expenses on your behalf.
Those that talk of a double-dip recession fail to grasp that there has been no recovery nor will there be for at least two years. 2011 will likely be devastating for a large portion of American population. Those on the margins after the initial economic shock will fall into bankruptcy and financial despondency. Those that have struggled to keep up with their mortgage payments the last few years will likely be forced to walk away as many before them. The housing market will be in disarray for years, and the American economy will be in shambles until the political class is replaced by men and women of integrity and wisdom.
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