It is all over the news. The GDP grew by 3.5% in the third quarter putting an end to longest recession in recent history. Some experts are quick to point out that the "real" number might be even higher. Wow, it is finally over? Drink the koolaid while you can.
There are a few experts who are more cautious and who do worry that the good news may be a bit premature. They point to such factors as government spending and cash for clunkers. They also see other worrisome signs. Such as the fact that 1/20 houses in Las Vegas is in foreclosure. Or that the foreclosure wave is spreading to such far out places like Biloxi, MI, or Sioux Falls, SD, or Lincoln, NE. Should that worry you?
In Merced, CA, 1 in 27 properties is in foreclosure for a total of 3,092 units. Vegas has 40,408 units receiving a notice. Despite optimistic news from the nation's realtors, the negative amortization pay-as-you-go mortgages are still not factored in. Most of these are just starting to reset to their "real" monthly payments. These "real" payments are so far out of whack that we can expect that the vast majority of home-owners won't be able to pay them. Or they won't want to pay them now that their property is so far under water.
They certainly won't be able to pay if they are losing their jobs or have lost their jobs recently.
Unemployment is still rising and a new wave of big layoffs is coming. I am sure that will do wonders for foreclosures, and consumer spending. Christmas is coming and what a Christmas it will be!
Whatever the GDP might say, don't believe it. We are not out of the woods yet. Not by a long shot!
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