2005 Prediction That Housing Bubble Would End in an Economic Crisis, Follwed by Stock Market Crash; America Will Launch More Wars to Distract from Bad Economy
2005 Warning of an Impending Housing Crash and Financial Collapse Followed By Stock Market Crash
Originally Published on March 27, 2005Monk - The housing market is in a bubble that has resulted from extraordinary low interest rates and home buyers taking on overly aggressive and highly leveraged mortgages. To top it off, rampant use of home equity credit lines has reduced the nation's home equity while driving consumers deeply into debt.
- Consumers are not the only ones in trouble, says Rubino.
- He points out the poor position that state and local government finances are in.
- Additionally, he argues that excessive derivative use by banks has caused a huge and increasingly complex web of financial instruments.
- According to his statistics, $55 trillion worth of derivatives are in existence in the U.S. alone.
But Analysts are Screaming about the Housing Bubble, and no one cares
American's tapping off their lifeblood in home equity!
As interest rates have dropped and housing prices have soared, homeowners have found gold in home equity credit lines. These credit lines are a way for homeowners to borrow large sums of money backed by their home's equity. Sort of like a credit card, but in the form of a house. Basically, these credit lines increase the amount of mortgage the homeowner owes.
To make matters worse, 51 percent of this borrowed money is being spent on home improvements and consumer items. Now you can see why $70,000+ luxury car market is booming!
Home equity has diminished significantly as we are consuming our free cash rather than paying off our mortgages. Simply stated, frivolous consumers are maxed out on credit. Since 1995, national mortgage debt has risen from $4 trillion to $7 trillion! In just 2002, $820 billion was borrowed! If this isn't a sign of a housing bubble, than I don't know what is.
The United States, as a whole, is in debt by $32 trillion, of which the majority was added in the borrowing binge of the 1990's. The economy is so debt-ridden that we are now similar to a house of cards. It won't take much to topple this ever inflating housing bubble.
The housing bubble will start to deflate when interest rates rise. Furthermore, even a slight downturn in our already feeble economy will cause an increase in mortgage delinquencies as consumers buckle from their debts. Of course when this happens, credit card defaults will also rise, as will personal bankruptcies.
After the Housing Bubble Pops
After the housing bubble pops, prices will likely plummet for at least a decade, unfortunately. Too pessimistic? Consider this: After the 1989 Japanese housing bubble, housing prices tanked for 13 straight years! The Japanese housing bubble was a similar situation to what we are currently experiencing.
Even if the housing crash isn't nearly as drastic, it could still take at least 9 years to recover. This is precisely what occurred after 1988 as the United States housing boom ended. National housing prices finally reached previous 1988 levels in 1997!
From what we have seen, it is inevitable that we are in a housing bubble that will end in an economic crisis. The economy always finds a way to punish excess.
As housing prices have soared to nosebleed heights, homeowners have flocked to home equity credit lines. Basically, this allows you to use your house as an ATM machine. Consumers have been maxing out on credit and spending it on things like large SUV's, vacations and big screen TVs. Living above your means has never been easier, or as widespread! Of course this money is borrowed, and must be paid back.
To make matters worse, consumers aren't the only ones in debt up to their eyeballs. The Federal debt is valued at $7.2 trillion and growing by $1.71 billion per day! Much of this is fueled by deficit spending, which is in vogue in Washington.
The total national debt (combined government, business and household borrowing) has grown by $13 trillion, from 1990 to 2001, to $32 trillion! This type of massive debt growth is extremely risky, and most government officials have no idea how to pay it off.
How will this affect the stock market?
As interest rates move higher and higher, debtors will find it increasingly harder to pay interest. Many debtors will simply default or become bankrupt. The entire economy will be hit hard as many are unable to pay their debts.
This in turn affects the stock market in a multitude of ways. Consumers and businesses will diminish their spending and banks will become insolvent from bad loans. The credit bubble can pop in any number of ways, but each one will set up a chain reaction that will reverberate throughout the stock AND bond markets.
Consumer Spending Edges Up in July, Incomes Flat
August 28, 2009AP - Consumer spending edged up in July with help from the popular Cash for Clunkers program, but household incomes, the fuel for future spending increases, were flat.
Consumer spending is the big question mark as the economy struggles to emerge from the recession. Economists worry that households hurt by rising unemployment, weak income growth and depleted investments will not provide the support the economy needs to rebound to sustained growth.
The Commerce Department said Friday that consumer spending rose 0.2 percent in July, matching economists' expectations. Personal incomes were unchanged last month, a weaker showing than the expected 0.2 percent gain.
With incomes flat in July as spending rose, the personal savings rate dipped slightly to 4.2 percent from 4.5 percent in June. The savings rate was 2.6 percent a year ago. Economists expect the savings rate to rise in coming months to around 6 percent as workers try to rebuild depleted nest eggs. The process of rebuilding savings is one of the factors expected to depress consumer spending and weaken the broader recovery.
The modest rise in spending last month followed a 0.6 percent jump in June, a gain driven by a surge in gasoline prices. Adjusting for inflation, spending rose 0.2 percent in July, and 0.1 percent in June.
The slight rise in spending reflected a 1.3 percent jump in purchases of durable goods such as cars, a gain propelled by the clunkers program that started at the end of July. Purchases of nondurable goods such as clothing actually fell 0.3 percent last month.
The unchanged reading for personal incomes followed large swings in the previous two months that reflected payments to individuals from the government's $787 billion economic stimulus program. Those payments pushed incomes up 1.4 percent in May and their absence in June caused incomes to fall 1.1 percent.
Incomes have taken a beating during the recession as employers slashed payrolls and forced workers to take unpaid days off to hold down wage costs. In addition, households with sufficient income to hit the shopping malls have trimmed their purchases and boosted savings to cope with a severe financial crisis which sent the stock market into a nosedive last year.
The concern is that consumer spending, which accounts for 70 percent of economic activity, may not be strong enough to propel a sustained recovery from the longest recession since World War II...
The government reported Thursday that the overall economy, as measured by the gross domestic product, fell at an annual rate of 1 percent in the April-June quarter. It marked the fourth consecutive decline in GDP, the longest stretch on records that go back more than six decades.
Many economists believe GDP in the current July-September quarter will rebound to growth above 3 percent and remain at that level in the fourth quarter. The economic growth likely will reflect a boost from the highly successful clunkers program to boost car sales and other government stimulus efforts.
But the fear is that economic growth will slip back in the early part of 2010 as the impact of the government programs fade and unemployment rises. The 9.4 percent jobless rate in July is expected to edge up to 9.5 percent in August and keep rising until it tops 10 percent. That will be a tough environment to see strong gains in consumer spending.
Some analysts worry that the country could be headed for a double-dip recession in which the economy resumes growing for a brief period only to fall back into a downturn.
The troubles consumers face have meant tough times for the nation's retailers. A survey of big retail chains showed that shoppers remained tightfisted in July, a development that raised worries about back-to-school sales and the holiday shopping season later this year.
In July, mall-based apparel stores fared the worst with Macy's Inc. and teen retailers Abercrombie & Fitch Co. and Wet Seal Inc. reporting disappointing results. However, apparel discounters like Ross Stores Inc. and TJX Cos. both reported sales gains that exceeded Wall Street estimates. TJX operates the T.J. Maxx and Marshalls chains.
U.S. National Debt Will Nearly Double Over the Next 10 Years
August 25, 2009Reuters - The U.S. national debt will nearly double over the next 10 years, government forecasts showed on Tuesday, challenging President Barack Obama's economic and healthcare overhaul agenda.
The White House midsession budget forecast and the non-partisan Congressional Budget Office both forecast that government revenues will be crimped by a slow recovery from the worst recession since the 1930s Great Depression, while spending on retirement and medical benefits soars.
The White House projected a cumulative $9 trillion deficit between 2010 and 2019, while the CBO pegged the total at $7.1 trillion because it assumed higher revenues as tax cuts expire.
The spending blitz could push the national debt, now more than $11 trillion, to close to $20 trillion. The debt is the total sum the government owes, while the deficit is the yearly gap between revenues and spending.
"If anyone had any doubts that this burden on future generations is unsustainable, they're gone," said Senate Republican leader Mitch McConnell, adding that economic stimulus funds should be diverted to pay down U.S. debt...
A Recovery Foundation Built on Sand
August 17, 2009PrudentBear - Instead of allowing a cathartic and reconciling recession to run its course, the Federal Reserve (Fed) decided last year to again bail out the economy by greatly expanding the money supply.
In this latest case of artificial intervention, the expansion in the monetary base was a record-breaking trillion dollars, but that intervention has abated in the last few months. What should become clear fairly soon is that the apparent recovery in the markets and the economy has been built primarily on the devaluation of the U.S. dollar, not from a healing of the economy’s fundamentals. That clarity will become evident once the dollar begins to make a brief rebound.
Temporary sanity
For the last few months, the Fed has temporarily halted its assault on the greenback in the mistaken belief that the economic crisis has ended. Therefore, the most likely result will be a major correction in the market and a resumption of economic deterioration. Unfortunately, that should eventually cause the Fed to resume its misguided efforts to bolster growth by wrecking the currency.
The Fed’s conundrum is this: whether he is aware of it or not, Fed Chairman Ben Bernanke needs to defend the dollar and raise interest rates to provide for a viable and long-lasting recovery. But the short-term effect would be a devastating recession which is, of course, politically untenable.
Negative correlation between dollar and markets
The basis for the perceived healing has been a Fed-induced 12% drop in the U.S. dollar since March alone, which has caused the S&P 500 to rally 50% and copper to increase 80% in the same time period. It’s just not a coincidence when the dollar goes down, stocks and especially commodities go up. But remember monetary policy works with a lag. The Fed has since halted the increase in the monetary base, which reached $1.77 trillion in May of this year, and has now reduced it to $1.64 trillion today.
The result has been a sharp decrease in the rate of increase for all monetary aggregates. The monetary base is up 93% year-over-year but is down 4.2% since the beginning of the year. M2 is still up 8% from last year but up just 3.5% from January. And perhaps most importantly, the four-week compounded annual rate of change in the monetary base is actually negative 26.3%!
What this means is that at least on a short-term basis, the dollar may be oversold and commodities and stocks overbought. We can hope that Ben Bernanke will not acquiesce to the desire to be reappointed and maintain this brief period of monetary sanity. If he behaves like Paul Volker and doesn’t care about being liked, he will drain the excess liquidity and allow the severe economic contraction to run its course.
However as mentioned earlier, the most likely outcome will be for the Fed to rebuild the base in an effort to stem the coming slide in markets and the economy. That’s because we just haven’t yet acknowledged the reality of our addiction to debt and inflation as the basis for economic activity. What I find most amazing about all this is how most in Washington and Wall Street fail to recognize what caused the crisis in the first place.
The problem never was that there wasn’t enough borrowing, consuming and cheap money around. The problem was that the level of debt in the country had become unsustainable. In fact, as a country, we are still actually increasing our level of debt. Therefore, all our perceived healing was predicated on the devaluing of the dollar, not from the paying down of our obligations or a repudiation of our past behavior.
We just can’t escape the day of reckoning. The country will most likely go through a devastating bought of inflation to avoid a strengthening dollar and further erosion in asset prices. However, a protracted period of deleveraging is still needed as a nation. What we need is to return to real economy based on a sound currency and reduced debt. That will certainly be painful in the short term, but the only way to provide a long lasting and healthy economy.
Stocks Could Pull Back as Earnings End
August 16, 2009Reuters – U.S. stocks could extend last week's retreat after a four-week advance as the earnings season winds down and investors search for signs that consumer spending will help sustain an economic recovery.
The recent evidence suggests consumers have not been a source of strength for improved growth. Reports last week showed weak consumer sentiment in August and an unexpected decline in July retail sales.
"The markets are going to be looking at what kind of signal we're getting on the consumer sector. Because of high unemployment and the high savings rate, there are (worries) that consumer spending is going to be weak," said John Praveen, chief investment strategist at Prudential International Investments Advisers LLC in Newark, New Jersey.
Economic data this week will include reports on housing, manufacturing and inflation...
The TARP Time Bomb the Media Missed
August 12, 2009Mother Jones - Over at Politics Daily, MoJo’s DC bureau chief, David Corn, points out that all the fuss over death panels and granny-killing government health care has overshadowed some very disturbing economic news.
The congressional oversight panel monitoring the bank bailout, or Troubled Assets Relief Program (TARP), released a report Tuesday on the toxic assets that helped suck the country into an economic vortex.
And, as David writes, the panel found that "the Treasury Department has not used its TARP billions to purchase this junk—which includes both lousy commercial and residential mortgages and securities based on lousy mortgages—and that billions of dollars of toxic assets remain on the books, threatening the security of numerous financial institutions."
So far, David observes, the news that TARP’s billions have not been used as intended, and that the economy remains at real risk, has barely registered on the media’s radar...
An Economic Time-Bomb Being Mishandled by the Obama Administration?
Politics Daily
August 12, 2009
Is there a ticking time-bomb for the US economy? And is the Obama administration, Congress, and the media not paying it sufficient attention? That seems to be the message of a government report released this week that drew not as much notice as it deserves.
This is all about those toxic assets–now euphemistically referred to by the US government as "legacy assets"–that were at the core of the economic meltdown. Though some economic news of late has been not so bad–economic contraction slowing, job losses leveling off, banks passing stress tests–these toxic assets still pollute the nation’s financial system and endanger it.
On Tuesday, the Congressional Oversight Panel, which was set up to monitor the $700 billion Troubled Assets Relief Program (aka the Big Bank Bailout), put out another of its monthly reports, and this one notes that the Treasury Department has not used its TARP billions to purchase this junk–which includes both lousy commercial and residential mortgages and securities based on lousy mortgages–and that billions of dollars of toxic assets remain on the books, threatening the security of numerous financial institutions.
In other words, whoops.
What’s happened is that accounting changes have made it easier for banks to contend with these assets. But this bad stuff hasn’t gone anywhere. It’s literally been papered over. And it still has the potential to wreak havoc...
Marc Faber Says America Will Launch More Wars to Distract from Bad Economy
August 12, 2009Washington’s Blog - The claim that America would launch more wars to the help the economy is outrageous, right?
Certainly.
But leading economist Marc Faber has repeatedly said that the American government will start new wars in response to the economic crisis:
“The next thing the government will do to distract the attention of the people on bad economic conditions is they’ll start a war somewhere.”Is Faber crazy?
“If the global economy doesn’t recover, usually people go to war.”
Maybe. But top trend forecaster Gerald Calente agrees.
As Antiwar’s Justin Raimondo writes:
As Gerald Celente, one of the few economic forecasters who predicted the ‘08 crash, put it the other day, “Governments seem to be emboldened by their failures.”What the late Gen. William E. Odom trenchantly described as “the worst strategic disaster in American military history” – the invasion of Iraq – is being followed up by a far larger military operation, one that will burden us for many years to come. This certainly seems like evidence in support of the Celente thesis, and the man who predicted the 1987 stock market crash, the fall of the Soviet Union, the dot-com bust, the gold bull market, the 2001 recession, the real estate bubble, the “Panic of ‘08,” and now is talking about the inevitable popping of the “bailout bubble,” has more bad news:
“Given the pattern of governments to parlay egregious failures into mega-failures, the classic trend they follow, when all else fails, is to take their nation to war.”As the economic crisis escalates and the debt-based central banking system shows it can no longer re-inflate the bubble by creating assets out of thin air, an economic and political rationale for war is easy to come by; for if the Keynesian doctrine that government spending is the only way to lift us out of an economic depression is true, then surely military expenditures are the quickest way to inject “life” into a failing system. This doesn’t work, economically, since the crisis is only masked by the wartime atmosphere of emergency and “temporary” privation. Politically, however, it is a lifesaver for our ruling elite, which is at pains to deflect blame away from itself and on to some “foreign” target.
It’s the oldest trick in the book, and it’s being played out right before our eyes, as the U.S. prepares to send even more troops to the Afghan front and is threatening Iran with draconian economic sanctions, a step or two away from outright war.
A looming economic depression and the horrific prospect of another major war – the worst-case scenario seems to be unfolding, like a recurring nightmare...
For Cost-Cutting States, Next Year Could Be Bleaker Still
August 10, 2009The Washington Post - As states across the country grapple with the worst economy in decades, most have cut services, forced workers to take unpaid days off, shut offices several days a month, and scrambled to find new sources of revenue.
The good news is that much of the pain this year has been cushioned by billions of dollars of federal stimulus money that has allowed states and localities to avoid laying off teachers, prison guards, police officers and firefighters.
The bad news is that for the next fiscal year, beginning July 2010, the picture looks even more bleak. Revenue is expected to remain depressed, even if the national economy improves. There will be only half as much federal stimulus aid available, and many states have already used up their emergency reserves...
CIT Suspends Preferred Dividends
August 7, 2009Reuters - Troubled lender CIT Group on Friday said it is suspending payment of dividends on its preferred stock to preserve capital during its restructuring effort.
In an update on its progress, CIT also said it has met conditions for a planned tender offer for its $1 billion floating-rate notes due on August 17, 2009, after it passed the 58 percent mark for the minimum tender.
The lender, which is hoping to avoid bankruptcy by restructuring its debt, said it has received the final $1 billion of a $3 billion credit facility offered by major bondholders.
"CIT will use a substantial amount of the loan proceeds to support its small-business and middle-market customers," the company said in the statement.
U.S. Tax Revenue Down Most Since 1932
August 4, 2009Providence Business News – The federal government’s tax revenue is on track to drop 18 percent this year, the biggest annual decline since the depths of the Great Depression, according to an analysis by The Associated Press.
Individual income tax revenue is down 22 percent and corporate income tax receipts have fallen 57 percent compared with 2008, according to the AP. Social Security tax revenue might have only its second year-over-year decline since 1940, and Medicare tax receipts could fall for only the third time since they started being collected in the 1960s.
Meanwhile, the federal deficit is projected to reach a record $1.8 trillion this year, as the national debt tops $11 trillion, the AP said.
Despite the eye-popping numbers, however, the nation can dig itself out of its fiscal hole if appropriate action is taken, according to William Gale, co-director of the Tax Policy Center at the Brookings Institution in Washington. “The numbers for 2009 are striking, head-snapping,” Gale told the AP. “But what really matters is what happens next.”
“If it’s just one year, then it’s a remarkable thing, but it’s totally manageable,” he continued. But “if the economy doesn’t recover soon, it doesn’t matter what your social, economic and political agenda is. There’s not going to be any revenue to pay for it.”
Separately, the Treasury Department said yesterday it now expects to borrow an estimated $406 billion in the third quarter, $109 billion less than it had originally estimated, after an influx of money from banks repaying government aid from the Troubled Asset Relief Program, The Wall Street Journal reported.
In addition, the Treasury borrowed $343 billion in the second quarter, less than its earlier estimate of $361 billion.
Alabama's Jefferson County Makes Massive Job Cuts
August 3, 2009Reuters - Alabama's debt-ridden Jefferson County laid off about two-thirds of its 3,600 employees on Monday because of plummeting revenues, a move that will sharply curtail services in areas ranging from roads to courthouses.
The cuts are just the latest blow to Jefferson, whose population of 660,000 includes Birmingham, the state's largest city and its economic powerhouse. They came after the county racked up around $4 billion in debt by using exotic financial instruments to fund a revamp of its sewer system.
The work-force cuts will hit the roads and transportation, revenue and security departments, and reductions will also affect the courthouse and information technology department as well as laborers paid on an hourly basis, according to a senior county official.
One senior county employee said his land development department was slashed from 29 employees to just eight but they were nevertheless adjusting, a process eased because there were fewer queries from the public on Monday.
"Our traffic has slowed (because) ... people are following the news. People did not take a chance by waiting until this week to do their business," said Bo Duncan, deputy director of land development at the county. "We are having to make do," he said.
Jefferson County has been forced to make drastic cuts because of a lawsuit questioning the legality of a county occupational tax, which raised $78 million annually and was vital to the county's operation.
Although the revenue is still being collected, it is being held in escrow under orders from an Alabama Supreme Court justice pending a decision on the tax case. Some members of the state Legislature hope to pass a new tax bill this month to raise revenue for Jefferson County.
County workers placed on administrative leave under the cuts will be entitled to unemployment and some health-care benefits and will be called back after 45 days, according to a senior county official.
This Depression Is Just Beginning
August 3, 2009Information Clearing House - The fact is the Net Wealth of US Households has “declined from a peak of $22 trillion to just under $12 trillion in early March.”
The problem is compounded by the fact that Total US Household debt, as of first quarter 2009, amounts to roughly $13 trillion, and has stayed within that range for the last 3 and a half years.
“From the end of 2007 through Q1 of 2009, household equity has declined by 94%. Is it surprising that today’s GDP number would have been a complete debacle if the consumer had been left alone to prop the U.S. economy, on whom 70% of the economy is reliant? Obama pulled a Hail Mary with the stimulus: without it there would be no debate America is in a depression right now.” - Zero HedgeWhat does all this mean?
It means the consumer is down-for-the-count. His credit lines have been cut, his home equity eviscerated, and his checking account swimming in red ink. That spells trouble for an economy that’s 70% dependent on consumer spending for growth….which brings us to another interesting point. The uptick in GDP last quarter was almost entirely the result of the surge in government spending; ie “fiscal and monetary stimulus.”
How long can that go on? How long will China keep slurping up US Treasuries rather than let their currency rise? Here’s a clip from the Wall Street Journal on Friday:
Shaky auctions of Treasury notes this week reignited concerns about whether the government can attract buyers from China and elsewhere to soak up trillions in new debt.
A fuse was lit this week when traders noted China’s apparent absence from direct participation in two Treasury bond auctions. While China may have bought Treasurys just before the auctions, market participants read the country’s actions as a worrying sign that China and other foreign investors may be ratcheting back purchases at a time when the U.S. is seeking to fund a $1.8 trillion budget deficit...
Slice of Central U.S. Safe from Recession Shrinking
August 1, 2009AP (Torrington, Wyo.) – Carl Rupp and his neighbors follow the old rancher's creed: "Keep your money in your pocket." Rupp has farmed his whole life. He lives in Goshen County, a rural spot along the Nebraska line where cattle outnumber humans 16 to 1 and you can still see the ruts cut by wagons that hauled pioneers along the Oregon Trail. "We're very conservative," said Rupp, 62. "We don't go out too far on a limb."
That prudent financial bent, matched with the high prices paid for crops and energy in the past few years, has largely protected Goshen County and a core group of several hundred other counties in 10 states from the recession's chokehold. The Associated Press Economic Stress Index shows they make up a "safe zone" that covers a long swath of middle America, from the Great Plains south to Texas.
But the safe zone is shrinking. Energy production and prices are sliding, especially for coal and natural gas. Crop prices are dropping, too, as there's less demand in Asia for American wheat, corn and soybeans. There were 800 counties in the safe zone a year ago, a number that dropped to about 300 counties in May and slid further to 200 counties in June.
"To say that you're doing pretty well is just to say that it's the best-looking puppy in a pretty ugly litter," said Wyoming Gov. Dave Freudenthal, who recently imposed a 10 percent budget cut across his state's government in response to falling tax revenue from the energy sector.
The contiguous counties in the safe zone start in Montana and North Dakota, and cascade into Wyoming, South Dakota, Nebraska, Iowa, Kansas and Oklahoma, and end in northern Texas and eastern New Mexico. Those in the safe zone had an AP Economic Stress score under 5 in June, making them the economically healthiest in the United States.
The AP calculates a score from 1 to 100 based on each county's unemployment, foreclosure and bankruptcy rates. The higher the score, the higher the economic stress.
The safe zone is largely rural — all but a dozen of the counties have populations of less than 25,000 people, many of whom make a living in agriculture. As the rest of the nation was riding the mortgage bubble, many farmers and ranchers in the safe zone who suffered through the agriculture crisis of the 1980s took on comparatively little debt. And when the recession hit, it didn't dampen demand for the row crops grown on the Great Plains.
Consumption of food and feed grains has increased 3 to 4 percent annually in recent years, while a federal mandate that gasoline contain certain levels of ethanol has also kept demand for corn and soybeans high.
"The last few years, ag has been pretty good," said Rupp, who sells alfalfa to dairies and feedlots. "In the long run, if there is such a thing, it's more stable than being in a county with energy as a primary industry. We miss out on the booms and busts, but overall we're in pretty good shape."
But while not in a bust cycle, ag prices are still down enough from last summer's highs to worry Doug Goehring, North Dakota's agriculture commissioner. "If you really want to hurt the economy, beat the heck out of agriculture," Goehring said. "It is a primary sector in our economy. It is generating new wealth. You can't just rely on services to drive your economy."
Elsewhere in the safe zone, the business is energy, and the recession is starting to take a toll on a business that was booming. While oil prices have increased this summer, it's the price of natural gas and coal that matters most here. Natural gas that traded for nearly $13 per 1,000 cubic feet last summer is now available for less than $4. The spot price for coal is running around $9 a ton, down from about $13 last year.
The number of rigs in Wyoming drilling for coal bed methane dropped to zero in May, down from 19 the previous year, while the number of conventional rigs drilling for natural gas and oil is off by more than half. No coal mines have closed, but annual production could drop as much as 10 percent as the recession stalls the need for electricity nationwide.
"The prices of coal are down. Production is going to be down," said Marion Loomis, executive director of the Wyoming Mining Association. "So we're going to see a pretty significant reduction probably this year, and it's really just based on the amount of electricity that the country is using..."
Because of their small size, the AP index lacks foreclosure data for about half of the 200 counties that made up the safe zone in June; those with a population under 25,000 were assigned a foreclosure rate of zero. But there is widespread anecdotal evidence that real estate is an anchor in a place where many families proudly trace their land titles to homesteading ancestors who settled the frontier in the 1800s.
Aided by low interest rates, the value of farm and ranch land has grown by double digits this decade. Unlike California or Florida, there was no largely speculative housing bubble here...
Poor Little Timmy Geithner Can't Sell His House
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