CHESSNOID

The stock markets closed up today and barely squeezed out a gain.  We were definitely oversold and when the leaked “Citicorp” fake memo came out stating they are profitable for the first 2 months even though they recently collected some bailout money, the investors were excited and started to do some major bargain shopping.  Today, investors started sobering up and realized yesterday didn’t signify the bottom of the market.

Tomorrow, the futures are already pointing down because of the housing reports that never seem to change.  We are in a severe recession turned depression that started with the collapse of the real estate markets.  The bubble burst and it isn’t finish deflating.

Currently, foreclosures  have increased 30% again even after moratoriums and government programs to modify loans have been put in place.  Bloomberg:

Foreclosure filings in the U.S. climbed 30 percent in February from a year earlier as the worsening economy thwarted efforts by the government and lenders to prevent homeowners from losing property, RealtyTrac Inc. said.

A total of 290,631 homes received a default or auction notice or were seized by the lender, the Irvine, California-based seller of default data said in a statement today. It was the third-highest monthly total in RealtyTrac records dating to 2005. February filings increased 6 percent from January.

“More people have lost their incomes or are underwater on their mortgages, so a new housing plan won’t change those facts by itself,” Barry Eichengreen, professor of economics at the University of California, Berkeley, said in an interview.

The U.S. housing crisis is deepening as President Barack Obama attempts a $275 billion rescue to help borrowers with sinking home values or unaffordable loans. Declining prices sapped $2.4 trillion in value from the nation’s residential market last year, according to First American CoreLogic. Prices in 20 U.S. cities have fallen every month since January 2007, the S&P/Case Shiller index shows.

Rising unemployment also is making it harder for homeowners to keep up with payments. The U.S. jobless rate rose to 8.1 percent in February, the highest in more than 25 years, according to the Labor Department.

These loans are not just the subprimes but every type out there. This is the origin of this economic mess and this is where it needs to be fixed before we get out of this Bush-Obama Depression. Our government has wasted trillions of dollars on fraudulent bailouts that have no effects on helping these bankrupt companies. That is why AIG, Fannie Mae, Freddie Mac, GM, Citicorp and these other companies keep coming back and asking for billions of more dollars.

As far as the recent Obama plan to help those in foreclosure trouble, it is a nice effort but flawed at conception. Reuters:

President Barack Obama late last month unveiled a $275 billion housing stimulus plan, but the housing market is still contending with dire employment conditions and falling house prices.

The administration’s housing rescue won’t be enough to fix the rapid rate of foreclosure, though it is by far the best-constructed program to date, he contended. Many borrowers in the hardest hit states have mortgages far exceeding the value of their homes, and thus don’t meet the criteria to refinance under the new federal program.

It is already common knowledge that many homeowners are underwater.  There has already been 20-60% drops in different areas of the housing market in the past 2 years which would have eaten most of the homeowners’ equity. Why bother to create a plan to help the  minority vs the majority when you are already spending $275 billion?

At this point, I know I am criticizing the Obama administration as much as the Bush administration.  Unfortunately, Obama doesn’t have the same strong economy Bush had when he started his term.  The economy is so weak that Obama  making  rookie errors will have a more devastating impact.  I will no longer accept excuses that “I didn’t create this economy I inherited” since he is the person who claimed could fix our economy.

The way I see it these continued fraudulent bailouts on top of massive government deficit spending is like throwing gasoline on a fire.