Alternative Reality

According to the head of America's largest and most profitable bank, it's onward and upward for the U.S. economy:

"JPMorgan’s Dimon Says U.S. No Longer Faces Risk of Recession" (Bloomberg)

JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon said the U.S. may no longer be at risk of another recession and the housing market is nearing the bottom.

Huh? Were there any facts involved in that assessment? Take, for example, Mr. Dimon's initial remark that "the U.S. may no longer be at risk of another recession." The following chart indicates otherwise:

(Hat tip to Business Insider.)

Then there is Mr. Dimon's claim that "the housing market is nearing the bottom." According to the real estate site Trulia, that is likely far from the truth:

"Are We There Yet? Trulia’s Housing Barometer" (Trulia Trends)

Trulia's Chief Economist takes a monthly look at new construction starts, existing-home sales and the delinquency-plus-foreclosure rate to see how far away we are from a normal housing market.

On the long road of housing recovery, we’re all kids in the back seat wondering: are we there yet? After years of bad news about the housing market, it’s hard to remember what “normal” looks like.

This month Trulia kicks off the Housing Barometer, a quick review of three key monthly indicators of housing recovery: new construction starts (Census), existing-home sales (NAR), and the delinquency-plus-foreclosure rate (LPS). For each indicator, we checked how bad the numbers got at their worst, and then looked even further back in time, before the bubble, to remind ourselves what “normal” looked like. We’re not trying to predict what the new normal will be in the future – we’re just eyeballing the past in order to put this month’s housing data into context.

Here’s what the February data, released last week, show:

— Construction starts: 22% of the way back from their low in Apr 2009 toward their normal level.

— Existing home sales: 47% of the way back from their low in Nov 2008 toward normal.

— Delinquency + foreclosure rate: 32% of the way back from their high in Jan 2010 toward normal.

To get to a single number that’s easy to remember and track over time, we just average these three percentages together. If all three indicators were at their worst, the barometer would be at 0%; if all were back to normal, the barometer would be at 100%. The February 2012 data puts us at 34%: in other words, the housing market is one-third of the way back to normal.

So, are we there yet? No. We still have a long way to go. How long will it take us to get there? Using the same method and measures, one year ago the market was 16% of the way back to normal, which means we’ve ticked up 18 points in the past year. If we continue to drive at this same pace of 18 points a year, we’ll get from 34% today to 100% in late 2015. Kids, sit tight…it’s going to be awhile.

No need to be concerned about reality, I guess, when you are a member of the TBTF contingent.

Comments

[Tom]

i just love the way these supposedly "bright" people (like Dimon) see everything in terms of what they WANT to be the case. Prognosticators always seem to introduce some sort of bias like this to their predictions and fail to see how there are so many variables to the underlying assumption (that the economy could tank again, for example) that they are made to look totally ignorant when something goes wrong. Here are just a few things he didn't consider:
1. climate change effects - for example the current wildfires sweeping Colorado and fire season hasn't even started yet; the late winter tornadoes that wiped out entire towns and tornado and hurricane season are both still ahead; earthquakes are WAY up this year globally, but here in the U.S. too.
Notice i didn't even mention flooding or drought (like the one that plagued Texas last year) which could also have an effect on things like how much food there is!
2. the fall of the dollar as the global reserve currency - it's looking more and more like the dollar is going to fall by the wayside, but i can't tell you what will replace it (http://disquietreservations.blogspot.ca/2012/03/die-is-cast-end-of-dollars-tyranny-is.html). Just recently there have been articles on the BRIC nations looking to start their own currency or trade in local ones (http://www.hurriyetdailynews.com/default.aspx?pageid=438&n=bric-nations-oppose-us-on-currency-control-2010-10-08 and http://www.bloggingstocks.com/2010/04/16/bric-nations-pledge-to-trade-in-local-currencies/).
3. environmental degradation coming back to haunt us - like this (just 1 example): http://www.terradaily.com/reports/Oil_from_Deepwater_Horizon_disaster_entered_food_chain_in_the_Gulf_of_Mexico_999.html
there's also GM foods (untested and still being used) and a plethora of other problems due to our continuing pollution of the biosphere. If there is a shortage of food, believe me, the economy will take a nose-dive. If fracking causes groundwater to be toxic (as it does), there's bound to be severe problems to humans, which effects the economy.
4. where are the jobs? - all the happy talk about recovery is empty rhetoric and only seems to apply to the stock market (fantasy-land) and corporations (awash in accounting fraud). Until well-paying jobs come back the economy will stagnate.
5. ever higher gas prices (as you point out) will bring about more and more retail bankruptcy as people have less and less money to spend (since wages aren't keeping up).

i could go on, but this is enough to prove that Dimon is full of shit and spewing propaganda.

[Help him help you]

Help Me Put Jon Corizine in Jail

Vote of No contains a section to send a message to all those members of the House of Representatives Oversight and Investigations Committee on Financial Services. For a change, we need them to start representing us instead of the large corporations. If we don't change their culture we will continue to be JPM's and Goldman's Bitch.. So I am in Bull Dog Mode today, help me by going to http://www.voteofno.com and vote your conscience.

http://youtu.be/BQFbXZkoyzQ

[roger,]

If you are concerned about reality...but cannot
understand or explain it,the alternative is to
invent a pleasing theory.
All believers are going to paradise,but none of
them are in a hurry to get there.
Back to reality, Best buy is closing 50 stores,
BRIC's is well on it's way to dump the US dollar
and set up it's own monetary policy,sales in
Europe contract for the 5th. month in a row
and China' world factory's are slamming the brakes
on the assembly lines.

[Will Jamie speak to this?]

MF Global's Collapse, Treasurer's Silence

March 29 (Bloomberg) -- Douglas Burns, a former federal prosecutor, and James Koutoulas, chief executive officer of Typhon Capital Management and president of the Commodity Customer Coalition, talk about the probe into MF Global Holdings Ltd.'s collapse. Edith O’Brien, assistant treasurer at MF's brokerage, invoked her constitutional right against self-incrimination yesterday at a congressional hearing. Burns and Koutoulas speak with Erik Schatzker and Stephanie Ruhle on Bloomberg Television's "InsideTrack." (Source: Bloomberg)

http://www.bloomberg.com/video/89212099/#ooid=A1NmdiNDrrq2IV05ePfQXKrdW5eecaCY&ootime=0m00s

[robert in london]

Jamie, the little boy CEO, is very well connected. He was just relieved to learn that a new and improved type of reality denying algorithm has been developed for the naked 'emperors' of Washington and Wall Street.

The march to Dow infinity must and will continue! The security of the nation ('s one tenth of one percent) depends upon it! Oh and Little Debbie's for all the rest of you.

[No justice]

Dept of Justice Won’t Return Koutoulas Phone Calls

The Department of Justice has not returned James Koutoulas CEO of (Commodity Customer Coalition) Phone calls even though he has 8000 MF Global clients and is privy to important information under attorney client privilege. James Koutoulas said on Bloomberg “The Department of Justice has not Returned his Calls.” Its clear that James has important information that people want to put under the rug which might include the possibility that JPM has much of the customers money or that Jon Corzine is in fact guilty. The Suit Monkeys in Congress are so embedded in that they are serving 7 terms and in some cases up to fifty years without challenge, inspection.. The same Congressmen that allowed Enron, LTCM, the Mortgage Crisis and Now MF Global suggest that they need to “prevent this from happening again.” For justice to happen these tools need to be out of the House and the Senate. In our Feckless country, not a single executive had the balls to say that Corzine is either guilty of neglect of his fiduciary responsibility or he was responsible directly through his instruction. Sooner or later one of these Rats at MF Global are going squeal in exchange for immunity. As it stands: 1) Edith O’Brien is set up to be the fall guy.. 2) Corzine is guilty if he signed off on the transfer 3) Corzine is guilty if he allowed his firm to transfer hundred of millions of dollars without oversight. MF Global is just a symptom of systemic failure which eventually gets expressed in the physical world. Waving my hands I talk about the connection of MF Global not only to your bank and stock accounts but also to the physical world in places such as Fukushima and Tokyo. What is the total human cost in terms of your life expectancy and that of your children.

http://youtu.be/X73iullZK0w

[Bring back Glass-Steagall]

Who Captured the Fed?

Future generations will look back and ask themselves, 'How could they not see what was happening? Were they blind?'

The Fed is not the only problem here, but a key enabler. White collar crimes and fraud flourished amongst the robber barons even in the days of the gold standard. It just was not as convenient, as easy, to defraud the people en masse through the debasement of the currency.

The Fed has merely proven to be as vulnerable as the regulators and the Congress to the power of the monied interests. If the political campaign process had not been corrupted by money, if the fairness doctrine in the media and Glass-Steagall in banking had not been overturned by the mindless impulse to cast aside the best of the laws, many of the problems we have today would not be so great.

http://jessescrossroadscafe.blogspot.com/2012/03/who-captured-fed.html