Update: US Credit Card Defaults hit record high; Stiglitz: No job growth for at least 2 years & Existing home sales and prices drop…

Update: More happy, happy, joy joy. As we said eons ago, okay in June, lol, we could not understand why the stress test results allowed CapitalOne to not raise reserves against credit card defaults. Well guess what? That ‘bottom’ they called in July, is broken, and we are at another new record and climbing on defaults:

The U.S. credit card charge-off rate rose to a record high in August, as more Americans lost their jobs, Moody’s Investors Service said on Wednesday, in another sign consumers remain under stress.The Moody’s credit card charge-off index — which measures credit card loans that banks do not expect to be repaid — rose to 11.49 percent in August from 10.52 percent in July.

The index resumed an upward trend after declining in July for the first time in almost a year, vanishing hopes of stabilization in the industry after record high credit losses…

Good news huh?! Recall this is Joseph Nobel Prize Stiglitz, another of the SOOPERGENIUSES who supported Obama.

In other happy happy talk, existing home sales dropped (which was a SHOCK to the talking heads but not to any average American, we know you cannot buy a home without a job, hello!!) and prices fell another 12%…

And that wave of foreclosures is coming to boost inventory...

(…)Ivy Zelman, chief executive of Zelman & Associates, a research firm based in Cleveland, believes three million to four million foreclosed homes will be put up for sale in the next few years. The question is whether the flow of these homes onto the market will resemble “a fire hose or a garden hose or a drip,” she says.

Analysts who track the shadow market have focused primarily on the gap between the number of seriously delinquent loans and the number of foreclosed homes for sale by mortgage companies. A loan is considered seriously delinquent, which typically means it is headed to foreclosure, if it is 90 days or more past due.

As of July, mortgage companies hadn’t begun the foreclosure process on 1.2 million loans that were at least 90 days past due, according to estimates prepared for The Wall Street Journal by LPS Applied Analytics, which collects and analyzes mortgage data. An additional 1.5 million seriously delinquent loans were somewhere in the foreclosure process, though the lender hadn’t yet acquired the property. The figures don’t include home-equity loans and other second mortgages

Moreover, there were 217,000 loans in July where the borrower hadn’t made a payment in at least a year but the lender hadn’t begun the foreclosure process. In other words, 17% of home mortgages that are at least 12 months overdue aren’t in foreclosure, up from 8% a year earlier….

Finally the economists have caught on to the OBVIOUS fact -no job no house payment- and Mark Zandi of Moody’s (the Dems fave to bring to the Hill and talk up stimulus spending) has chimed in:

The housing recovery remains weak and could take a turn for the worse if more Americans lose their jobs, analysts say.

Well no shxt Sherlocks!! Hey I have been saying this for over a year, where’s my Nobel Prize, huh??

“The market’s incredibly fragile,” says Mark Zandi, chief economist at Moodys. “As long as job losses are rising, the housing market is at risk of continuing along a decline. Any recent stability would be in danger.”The unexpected drop in existing home sales for August was the latest sign of just how tentative the recent signs of recovery are.

More NO SHXT analysis:

What has helped housing in recent months, analysts say, has been the first time homebuyer tax credit of $8,000. But that is scheduled to end on November 30th and should be extended, says Walter Maloney, spokesman for the National Association of Realtors.”The tax credit has really been a catalyst,” Walter Maloney says. “We’ve seen a sustained gain in sales in recent months because of it. We need to extend it for all home buyers–and even to commercial real estate.”

Again, MiM has been saying this FOR AGES! That the home buyer tax credit that ends in November, and Clunkers would give 3Q GDP boost and then a drop off when consumers who still dont have work, continue to well NOT SPEND WHAT THEY DONT HAVE. Gee maybe that’s why the government doesn’t undertand it, becuase they DO SPEND WHAT THEY DONT HAVE!

Well gee now that they are on board with the REALITIES we have been talking about on Main St for months now, what do they plan to do to fix it? Give people more government money of course!

Wisconsin School of Business professors produced a recommendation based on their recent study to the Obama administration regarding the grave condition of foreclosures across America…

Continues after the break:

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September 24, 2009. Tags: Credit Card defaults, deficit spending, Economy, existing home sales, Foreclosures, Happy Talk, Housing, housing vouchers, Joseph Stiglitz, mortgage modifications, Obama Administration, shadow housing inventory, South Pacific, Unemployment. Economy, Finance, Foreclosures, Housing, Obama Administration, Politics, Taxes, Unemployment Statistics, Wall St. 3 comments.