Yep, and the news is not any improvement over yesterday.New home sales came out today for July, and they hit a 40-year low, and the price of a new home fell to a 7 year low.
When juxtaposed with the fact that , you can see how things get ugly.
And the consumer is continuing to deleverage, which is one reason why consumer credit card debt has fallen to an 8 year low, though part of this is the 2005 bankruptcy laws, which is driving people to default on their mortgages in favor of paying down credit card debt:
Changes to the US bankruptcy code, enacted in 2005, are coming back to haunt banks, according to Yra Harris, a veteran trader at Praxis Trading.Karma is a bitch.
Harris told CNBC that banks lobbied hard for changes to the bankruptcy code, but the legislation is now having the effect of encouraging consumers to do all they can to pay down their credit cards, while leaving their mortgage payments on the backburner.
In many states, mortgages are non-recourse loans, so once they have the house, they cannot go after the consumer, while in every state, credit card companies can attach wages, etc., so, rather unsurprisingly, consumers are running the numbers and making their choices.
Said consumers are not spending.
I'm beginning to think that absent a 20-40% devaluation in the value of the US dollar, we won't be out of this mess for a decade or more.
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