CHESSNOID

I keep hearing the experts state the recession has ended.  They continue to repeat the same information month after month.  Eventually, they will be right. For now they are simply wrong.

All you have to do to determine if the recession is over is to observe the economy in action.  Do we see growth in any industry?  The answer is either no or not yet.  All the recent reports that the stock markets have recently rallied from  point out things could have been worse, lucky for us things are only bad.  That really doesn’t make sense to have the optimism we see in the media.  There is definitely a disconnect to the realities of daily life.

Three basic areas that need improvement have not turned positive yet: housing, jobs, and banks.

We have a bunch of programs promoted by the Obama administration that are suppose to help modify loans or stop people from losing their homes.  There are some people getting help but they are the minority.

USA Today:

Details of the plan were unveiled in early March. The goal is to prevent up to 4 million foreclosures by having banks modify loans into more affordable monthly payments.

Since its debut, the plan has led to offers of more than 190,000 mortgage modifications with lower monthly payments, according to the Treasury Department. During that time, lenders either have started or advanced foreclosure proceedings against more than 1 million homes, according to RealtyTrac. About 20% of those were foreclosed upon and repossessed. The Center for Responsible Lending says 2.4 million Americans are at risk of foreclosure in 2009, and 8.1 million could be over the next four years.

Homeowners who apply for mortgage modifications are finding that banks typically are taking 45 to 60 days to respond to inquiries, according to a report this month by NeighborWorks America, a provider of foreclosure-prevention counseling.

Some homeowners who applied for mortgage modifications five months ago still have no answer on whether they will be able to arrange smaller monthly payments, leaving them uncertain whether they’ll keep their homes or lose them shortly.

As for jobs, the media also likes to put a positive spin on the numbers. The truth of the matter is it is getting worse. Only one state had a decline in unemployment.

NEW YORK (CNNMoney.com)

– Forty-eight states and the District of Columbia recorded unemployment rate increases in May, the government reported Friday. One state registered a rate decrease, and one state had no rate change.

Several states and regions posted their highest unemployment rate since the report debuted in 1976.

Over the year, jobless rates were higher in all 50 states and the District of Columbia.

Michigan once again led the nation with a 14.1% jobless rate, up from 12.9% a month earlier, followed again by Oregon at 12.4%, up from 12% in April. Thirteen states have rates above 10%.

Michigan’s 1.2 percentage point increase from April was also the largest jump in the country, followed by Rhode Island’s 1 percentage point hike. Both states are suffering from the devastation in the manufacturing sector. Michigan, in particular, was hit by Chrysler’s plant shutdown early in the month and a series of GM plant closings.

The California, Nevada, North Carolina, Oregon, Rhode Island, South Carolina, Florida and Georgia rates were the highest for those states since the report was first issued.

As for the banks, there are many that are insolvent. I would guess some of those banks paying back the TARP money are insolvent. They are not paying the money back because they have improved their balance sheets. On the contrary, they are worse off now and the main motivation is to allow their top executives and CEOs to be compensated without restrictions. Year to date, we have had 40 big banks close now under the FDIC.

NEW YORK (CNNMoney.com)

– Regional banks in North Carolina, Kansas and Georgia were closed by state regulators Friday, bringing the total number of failed banks this year to 40, the Federal Deposit Insurance Corporation said.

The 24 branches of Wilmington, N.C.-based Cooperative Bank will reopen Monday as branches of First Bank, which is based in Troy, N.C.

Cooperative bank had assets of $970 million and total deposits of approximately $774 million. First Bank will assume all of the failed bank’s deposits and agreed to purchase $942 million of its assets.

In Kansas, First National Bank of Anthony, which operated 6 branches – including two under the name of First National Bank of Johnson County – will be taken over by Bank of Kansas.

Bank of Kansas, which is based in South Hutchinson, acquired all of First National Bank of Anthony’s $156.9 million deposits. It also purchased the bulk of the failed bank’s $156.9 million worth of assets.

Meanwhile, the five branches of Southern Community Bank, which is based in Fayetteville Ga., will become part of United Community Bank of Blairsville. It was the seventh bank to fail in Georgia this year.

United Community Bank paid a premium of 1% to acquire all of the of the $307 million deposits held in the failed bank. It also agreed to purchase approximately $364 million of assets.

This is draining the FDIC resources as it keeps losing money taking over these failed banks.

I don’t see how the experts or the government can claim things are better or that the recession is over. The foreclosures haven’t receded, the joblessness is growing, and the banks are becoming weaker every month.