First the bad news. According to CNN, despite rising home prices more than 30% of borrowers still owe more money on their mortgages than their homes are worth. That’s more than 16 million homeowners.
The Federal Housing Finance Agency reported on May 23, 2012 that national home prices increased a slight 0.6% during the first quarter of 2012, which represents the first price gain since 2007. Certainly not near enough to help homeowners who have “underwater mortgages.”
The danger is not that the homeowners will lose their homes, as 90% of the underwater borrowers, as they are referred to, continue to make their payments on time. But it hurts the economy as banks are going to make home equity loans on a home with negative equity. These loans are very popular with people as they use the funds to purchase cars, make home repairs and cover many other expenses. This is just one more example of how the economy, despite some good news, is still hindered by lack of growth. Continue reading
Banks are widely considered to be the safest place to keep money and even to make a little bit more of it. The investments that banks make are thought of to be so minimal and low risk that people think of these investments as completely harmless with no chance of losing their money.
Alas, this concept of security and trust is a mere dream. If financial safety exists, it is much less tangible than an average traditional bank. In the beginning of Mar of 2012, JP Morgan Chase lost more than $2 billion in investments from trading. Although their profits last year grazed the $19 billion dollar mark, they lost more than 10% of their profit. Continue reading
Ever since the economy receded and the aftereffects came into fruition, every common man and woman in the United States has been fixated on the 1%. This obsession is not because the 1% caused the turmoil but because it did not feel it, or at least the majority of the 1%. The 1% stands out because they were unaffected by a series of events that hurt the rest of the country.
Now that some time has passed and cultural colloquialisms have been introduced into the political vernacular, the definition, at least according to context, of the term “1%” has broadened. 1% is now a socio-political term to mean extremely rich. Continue reading
Recently, international news agency Reuter’s, along with every publication that has a vested stake in reporting on economic trends, analyzed and reported on the job growth in the month of April.
Throughout the month of March jobs growth was on the rise and jobs were being created amounting to an impressive figure of 75,000 new jobs. Unfortunately, in the month of April, only 40,000 new jobs were created. Continue reading