Prosperity just around the corner (again)
Economic recovery looking less rosy
The economic recovery is looking less rosy than earlier in the year, though the outlook remains positive with no double-dip recession according to NZIER’s survey of forecasts.
The consensus forecasts of ten groups, including the big banks, Treasury and the Reserve Bank shows on average that growth is expected to be 2.8 per cent in the year to March 2011. That has been pared back from 3.2 per cent forecast in the June survey.
"The outlook is a little less optimistic than in June," NZIER says
Me thinks it is a bloody lot less optimistic than that. The thing Allan Bollard is pegging his hopes on is a lift in the economies of our trading partners in China, Australia and the rest of Asia (not including Japan) early next year.
How believable is that? Well if you look at the America economy about to implode, Bollard seems to be wishing our trading partners will get better rather than any real evidence...
`The new poor': Poverty reaches historic levels
WASHINGTON -- The withering recession pushed the number of Americans who are living in poverty to a 51-year high in 2009 and left a record 50.7 million people without health insurance, the Census Bureau said Thursday.
The 43.6 million Americans who were poor last year -- up from 39.8 million the year before -- were the most since poverty estimates were first published in 1959. The national poverty rate of 14.3 percent, up from 13.2 percent in 2008, was the highest since 1994.
The bureau also found that median income -- the amount at which half of U.S. households earn more or less -- had fallen 4.2 percent by 2009 since the recession began in 2007.
...and much more troubling is the new prime mortgage market...
40% of subprime mortgages stand delinquent, can prime be next?
Prime loans, however, made it pass the housing bubble without much default or trouble because or they were not susceptible to price fluctuations. Fleming warned that the impact percentage of delinquent loans in the prime space have been masked because the volume is so huge. Compared to the less than 3.5 million subprime, there are about 40 million prime loans in the marketplace, 6.2% of which were 60 days delinquent in June 2010 and 3% of which were 90 days delinquent.
"If you're looking at delinquencies and foreclosures by data type you're comparing 16% versus 40%," said Fleming in an interview. "But that's 16% of 40 million loans (prime) versus 40% of only 2 million loans (subprime)," which equals 6,355,506 delinquent prime mortgages versus 950,448 delinquent subprime mortgages.
...I'm not sure wishing our trading partners get better is an economic plan.