Some Recovery: 50% of Americans Made Less Than $28,000 In 2013 (U6 Unemployment Still Above 11% Over 5 Years After Recession Ended)

The Federal Reserve utters platitudes about moderate growth in the economy while media pundits talk about the improving labor market.

Really?

According to the Social Security Administration, 50% of Americans made less than $28,000 in 2013.

The “raw” average wage, computed as net compensation divided by the number of wage earners, is $6,704,657,596,370.41 divided by 155,772,341, or $43,041.39. Based on data in the table below, about 66.9 percent of wage earners had net compensation less than or equal to the $43,041.39 raw average wage. By definition, 50 percent of wage earners had net compensation less than or equal to the median wage, which is estimated to be $28,031.02 for 2013.

foodstampers

As you can see, the U3 (full-time) and U6 unemployment (full-time and marginally attached workers) does NOT reflect a “back to normal” labor market. In addition, mortgage purchase applications and M2 Money Velocity continue to fall/stagnate.

uempvincome

Bear in mind that it has been more than 5 years since the NBER declared that the recession ended.

Is it any wonder that the fastest growing credit in the US is student and auto loans?

debtddd

Particularly “subprime” auto loans.

autoloanorgi

But at least Federal Reserve policies are helping to push asset prices up again … for those who actually own assets like stocks, housing, commercial real estate, etc. Just not wages and real income.

assetsfed

walkingdeadus2 From Jesse’s Cafe Americain.

Sustainable Housing? ‘Uninhabitable’ Palo Alto Home On Market For $1.8M

Housing prices are rising (again) with income growth in the toilet at the national level along with mortgage purchase applications.

mbapsalt101514

But at the local level, San Francisco, Los Angeles and San Diego are cooking!

How unaffordable is the San Francisco housing market? An “uninhabitable” home in Palo Alto is on the market for $1.8 million.

junker

But it is Palo Alto with Stanford University, Google and Apple Computers nearby.

I wonder how Vince Vaughn and Owen Wilson could afford housing while interning at Google in “The Internship”?

internship

I hope they make a pile of money when it costs $1.8 million for a Palo Alto junker!

September New Home Sales Flat After August Downward Revision, Median Price Down 10% (Sales Remain At 1982 Levels)

New home sales were flat in September after being revised downwards for August. And remain at 1982 levels.

Oct. 24 (Bloomberg) — Purchases of new homes in the U.S. were little changed in September after the prior month was revised down, showing an uneven recovery that will limit how much residential real estate contributes to growth.

Sales rose 0.2 percent to a 467,000 annualized pace from a 466,000 rate in August that was 7.5 percent weaker than previously estimated, Commerce Department data showed today in Washington.

The big gainer? The midwest where the Lebron James effect came roaring back as the NBA preseason began. The big loser? The West where is was announced that 40 year old Laker guard Jim Nash is out for the year with a bad back.

nhstable102414

And median new home sales price was down 10%.

Graphically, you can see the big decline in new home sales as real median household income and average wage growth crashed.

nhs102414

The same wage declines is also putting a hurt on renters with rising home and apartment prices/rents.

rentrecovery

For those of you who want to celebrate, how about THIS chart? New home sales since 2011.

nhs2011

Celebrate, celebrate, dance to the music!

celebraterussianstyle

Another Fine Mess: US Rents Outpace Household’s Ability To Pay

This is another fine mess! The ability of American households to pay rents for apartments/housing is declining as rents rise and wage growth is flat.

rentrecovery

And apartment prices are soaring along with The Federal Reserve’s Balance Sheet.

zptmfed

Well, Ben and Janet. This is another mess that you’ve gotten us into.

anotherfinemess

October’s Wild Ride: Treasury MOVE, VIX and V2X All Spike Then Subside (30Y Mortgage Rate Below 4%, Mortgage Purchase Apps “Pining for the Fjords”)

October has been a wild ride in the Treasury, Equity and Mortgage Markets. The Treasury MOVE Index, the CBOE VIX and the EuroSTOXX V2X all spiked last week, but have returned to “normal.”

vola

Normal, that is, for a bond market dominated by Central Bank tinkering.

Bankrate’s 30 year mortgage rate has now broken through the 4% barrier.

br30gt100314

Even with the decline in the Treasury 10 year yield and mortgage rates, mortgage purchases applications remain “pining for the Fjords.”

mbapfed

Mortgage purchase applications are the new “Norwegian Blue” parrot.

dead_parrot

Financial Repression: Jobless Claims Rise To 283K As Fed Creates Financial Repression And Wages Stagnate (Chinese Investors To Rescue!!)

I can’t bring myself to turn on CNBC or Fox Business and listen to apologists try to sugar coat the dismal jobs recovery in the USA (Mark Zandi, can you hear me now?)

First, the good news. Initial jobless claims rose to 283,000. But that remains far below the peak in March 2009 of 665,000.

Now for the bad news. Despite the improvement in initial jobless claims, real median household income and average wage growth remain lower than in 2007.

ijcfed

And to top if off, The Federal Reserve through it’s policies have driven short-term rates to near zero, punishing savers. This of course is an attempt to encourage Americans to take on more risk and invest in risky assets.

Now, while America’s middle class is lagging in terms of wage and income growth, The Federal Reserve is pumping air into real estate prices and the stock market.

assettrain

So now you can understand Fed Chair Janet Yellen’s plea for folks to “get on the asset train!”

That is, until it crashes and burns.

AP_canada_train_derailment_jt_130707_16x9_992

But not to worry. As long as Chinese investors pump up Irvine and Arcadia home prices in the Los Angeles area and continue to purchase New York commercial property, what can go wrong?

US states China investments

Since December 2007, Texas Employment UP 1.32 Million Jobs, All Other States DOWN 1 Million

This is an economic recovery?

Texas employment since December 2007, up 1.32 million jobs. All other states lost 1 million jobs.

texasjobs-600x393

This disparity between Texas and the other 49 states make the following chart even more ominous … for the other 49 states.

mbapsal102214

To quote Ray Wylie Hubbard. Texas is a state of mind.

ray-wylie-hubbard-snake-farm