Almost there Orange County! Almost There!

Today a gallon of gasoline in Lake Forest, CA was priced at $4.41!

Man, we are a few nanoliters away from that $5.00 per gallon milestone.

Just remember that once we reach that summit, we'll all have to remember who to thank.

By the way, just who should we thank?

Economic Snapshot for June 2007

Dr. Christian Weller, Senior Fellow of the Center for American Progress and the Economic Policy Institute, certainly doesn't pull any punches when laying down the economic outlook from June 2007.

Jesus, are things really this bad? Here are some of Dr. Weller's sobering observations:

Wage growth is weak . Factoring in inflation, hourly wages were 2.3% higher and weekly wages were 1.5% higher in April 2007 than in March 2001.

Benefits are disappearing. The share of private sector workers with a pension dropped from 50.3% in 2000 to 45.0% in 2005, the last year for which data are available, and the share of people with employer-provided health insurance dropped from 63.6% to 59.5%.

Family debt is on the rise. In the first quarter of 2007, household
debt fell relative to disposable income for the first time in five years, but
still stayed at a comparatively high 130.7%, the third highest on record. In the fourth quarter of 2006, families spent 14.5% of their disposable income to service their debt—the largest share since 1980.

Families feel the pressure. The share of new mortgages entering
foreclosure was 0.5% in the fourth quarter of 2006, the highest level on record since 1979. The default rate on credit cards grew to 3.9% in the first quarter, an increase of 29.5% over the first quarter of 2006. And the personal bankruptcy rate, measured as bankruptcy cases relative to the U.S. population, grew by 51.5% from the first to the fourth quarter of 2006.

Housing market slows. New home sales increased in April 2007, spurred by an unprecedented decline in prices. The median price of new homes sold dropped by 11.1%, the largest one-month drop since the Census first recorded these data in 1963.

Gas prices rise sharply. In the first week of June, gasoline prices
averaged $3.15 per gallon. In inflation-adjusted terms, gasoline was at its highest level since June 1981 and it was 91.9% more expensive than in March 2001.

Savings plummet. The personal savings rate of -0.8% in the first
quarter of 2007 marked the eight quarter in a row with a negative personal savings rate.

Already weak job growth slows. Monthly job growth since March 2001 has averaged an annualized 0.6%. Over the past 12 months, the average monthly job growth was 160,400 jobs, compared to 213,400 in the preceding 12 months.

Poverty climbs. The poverty rate increased to 12.6% in 2005, the last year for which data are available, from 11.3% in 2000.

The government’s finances deteriorated. In 2001, the CBO anticipated that the government balance between 2002 and 2011 would be in the black to the tune of $5.6 trillion. Today, the CBO projects deficits between 2002 and 2011 of $2.9 trillion. This constitutes a deterioration for the period 2002 to 2011 of $8.5 trillion.

These deficits won’t shrink: Between 2007 and 2016, the CBO predicts cumulative deficits of $1.8 trillion. If AMT reform and permanent tax cuts for the wealthy are included, the total deficit for the next decade would come to $3.5 trillion—even if the costs for the wars in Iraq and Afghanistan drop below current projections in a few years.

This endangers our economic independence. Foreign investors bought 82% of new Treasury debt and the share of U.S. foreign-held debt grew to 46% from 32% from March 2001 to March 2007. The quarterly interest payments from the federal government to foreigners rose to $38 billion in the fourth quarter of 2006 from $21 billion in the first quarter of 2001.

Trade deficit remains high despite strong export growth. In the first quarter of 2006, the trade deficit rose slightly to 5.3% of gross domestic product from 5.2% in the fourth quarter of 2006. Yet these last trade deficits are still larger than any trade deficit since the Great Depression recorded before the third quarter of 2004.

Following last week's approval ratings for President George W. Bush (Only 19% of Americans consider the country to be "on the right track"? Are we sure he's taking pointers on economic policy from the Almighty?), these economic findings just add more fuel to the fire.

Read the full report here.

Mr. Lawrence Yun of the N.A.R. Weighs In Again

Mr. David Lereah was the Chief Economist of the National Association of Realtors (N.A.R.). Now that Lereah is pulling the ripcord and escaping the N.A.R. before the house literally burns down, Mr. Lawrence Yun, the Senior Economist of the N.A.R. steps up in his new flame-retardant suit.

He's not just a "senior economist". He's the freaking Managing Director of Quantititative Research for the National Association of Realtors.

OK, but who is this Mr. Yun really?

Does he have some fresh or even forthright comments about the state of the American housing market?

Will he come clean about the N.A.R. being a cartel driven by realtor sales commission earnings and sales strategies, not consumer education, market principles, business ethics, and operating as "trusted advisor"?

The answer is a resounding no.

Mr. Yun is a Lereah lacky. In February of 2007, he echoed Lereah's comments about the true state of the American market. If one were to follow this N.A.R. quantitative propeller head around all day, he'd have real estate consumers believing that the market bottom was hit 4 months ago and that everyone should get ready for a recovery later in the year:

"Sales will recover gradually over the second half of the year and prices will begin to edge up again"

Mr. Yun was wrong in February. He and the N.A.R. are wrong again now.

The U.S. economy is slowing down significantly, the U.S. dollar is approaching an all-time low in value versus the Euro and the British Pound, U.S. inflation remains completely unchecked by the United States Federal Reserve Commission, fuel prices in the United States are approaching unchartered territory at almost $4.00 per gallon in California, a jaw-dropping number of mortgage lenders have been completely or partially destroyed, surviving lenders have restricted their lending standards substantially, HELOC loans are down by 20% year to date and subprime and Alt-A loan foreclosures are rocking the entire industry - and we haven't even explored the probabilities that prime loans may also weigh in badly before the year is out.

To Mr. Yun and members of the National Association of Realtors: It's time for someone from your decrepit organization to step up to the plate and tell it like it is.