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Posts Tagged ‘Pace’

Repudiation: 79% Think Obama Has Mishandled Financial Crisis

Wednesday, March 24th, 2010

President Obama Faces a Repudiation of his Economic Policies by Large Majorities of Americans

Common sense in the United States of America in March of 2010 appears to be that the Obama Administration has mishandled the ongoing attempts to fix the root causes of September 2008’s meltdown. Only a rump 18% agree with Obama that he has taken “enough action” while 79% think Obama has failed to properly address the root causes of the meltdown, with 42% saying Obama “has gone too far and taken action that will be harmful down the road” and the other 37% saying Obama “has taken too little action”. Here’s the exact wording of the question and the results:

When President Obama took office, he said he was determined to address the roots of the financial crisis so that another meltdown would not happen. Do you believe the government has taken enough action to fix what was wrong in the financial industry, has taken too little action, or do you think the government has gone too far and taken action that will be harmful down the road?

18% Has taken enough action

37% Has taken too little action

42% Has gone too far and taken action that will be harmful down the road

The complete repudiation of the Obama economic program by the American public is further reinforced by the similar finding that Americans say by a 2-1 margin that the economy has worsened under the Obama Administration:

By an almost 2-to-1 margin Americans believe the economy has worsened rather than improved during the past year, according to a Bloomberg National Poll conducted March 19-22. Among those who own stocks, bonds or mutual funds, only three of 10 people say the value of their portfolio has risen since a year ago.

During that period, a bull market has driven up the benchmark Standard & Poor’s 500 Index more than 73 percent since its low on March 9, 2009. The economy grew at a 5.9 percent annual pace during last year’s fourth quarter.

“It’s very difficult to turn perceptions around once you’ve been through the proverbial economic wringer,” says Mark Zandi, chief economist for Moody’s “Everything is colored by the fact that unemployment is near 10 percent. It doesn’t really matter what you ask, you’re going to get the same answer.”

Zandi says the poor performance people report on their investments “is very telling. It’s just a fact that everyone’s stock portfolio is up, or nearly everyone’s.”

Obama’s oft-repeated claim that increased government action is necessary to save the economy is also explicitly repudiated by most Americans, with an overwhelming 78% saying that the “expansion of the government’s role in the economy” is either a “high” or “medium” threat to “economic performance in the U.S. over the next two years” and only 19% saying government economic incursions are a “low” threat. Only 3% say they are not sure of the level of threat to the economy, showing the level of engagement by Americans in economic issues.

Such findings appear to be the end result of the Obama Administration’s 14 month long (and counting), obsessive focus on pushing through the 2407-page Obamacare package and the resultant lack of sustained, substantive focus on creating reasonable, bipartisan, centrist reforms to address the root causes of the September 2008 financial crisis. Indeed, 72% of Americans see economic issues (31% economy, 22% government spending/deficit, 19% unemployment) as the most important facing the country right now, while only 22% feel the that way about health care:

Which of the following do you see as the most important issue facing the country right now?

31% Economy

22% Health Care

22% Government spending / deficit

19% Unemployment

5% Afghanistan

These findings certainly explain why Obama’s strategists have attempted to wrap the Obamacare package in very questionable rhetoric regarding deficit reduction, job creation and general economic well-being. Americans also have little confidence in Obama’s Stimulus package, with just 37% thinking it has done any good at all:

The Obama Administration has made no progress over the past three months convincing the public that the $787 billion stimulus package passed last year either helped the economy or prevented greater deterioration. Only 37 percent of the public say they see positive effects, the same portion who said so in a December poll.

Despite the entire country’s demand for a more effective and sustained focus on economic issues by the Obama Administration, Americans also are so uncomfortable with the Obamacare package that 62% want the GOP to continue fighting Obama and the Democrats on Obamacare (see chart).

Taken together, the desire of Americans to both see the GOP keep fighting Obamacare while also wanting the Obama Administration to improve its performance and focus more on economic issues creates a truly “toxic” political environment for President Obama as we approach the 2010 elections. The GOP will clearly be emboldened by the large majority egging them on to keep fighting, and Obama will be forced to respond, and such continued health care infighting will in turn also disappoint Americans who want Obama to improve and increase his focus on economic policy. Finally, the newly-filed multistate litigation by State Attorneys General, which is sure to last for months at a minimum, may also act as a wildcard in the national political scene that carries the risk for Obama of incurring a crushing Supreme Court ruling finding Obamacare unconstitutional.

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New Home Sales “Unexpectedly” Fall 2.2% To 302,000 Units, Lowest Since 1963

Wednesday, March 24th, 2010

New Home Sales Fell to a Fresh Record Low of 302,000 Units in February 2010, a decrease of 2.2%

In another distressing example of the weakness of the US economy, Reuters just reported that “New Home Sales Unexpectedly Fell in February”, declining another 2.2% in February 2010 to 302,000 units, a fourth straight month of declines and a fresh all-time low since records began in 1963:

Sales of newly built U.S. single-family homes fell for a fourth straight month to a record low in February, a government report showed on Wednesday, heightening fears of renewed weakness in the housing market.

The Commerce Department said sales fell 2.2 percent to a 308,000 unit annual rate from an upwardly revised 315,000 units in January.

Analysts polled by Reuters had expected new home sales to edge up to a 320,000 unit annual pace from January’s previously reported 309,000 units.

The data came on the heels of report on Tuesday showing existing home sales fell for a third straight month in February and a jump in the supply of houses on the market.

Sales have barely responded to the extension and expansion of a popular tax credit, which boosted purchases in the second half of 2009, raising concerns over the fragile housing market’s recovery just as a key pillar of support is being dismantled.

The vaunted crew of American “economists”, as polled by Reuters, “expected” a 3.6% increase, as noted by AP:

The Dow rallied to its highest level since September 2008 on Tuesday after the National Association of Realtors said a drop in sales of existing homes last month wasn’t as big as forecast. The housing market will be in focus again Wednesday when the Commerce Department reports on new home sales.

The housing report is expected to show that sales rose 3.6 percent to a seasonally adjusted annual rate of 320,000 last month, bouncing off a record low seen in January, according to economists polled by Thomson Reuters. The report is due out at 10 a.m. EDT.

A recovery in the sector has been slow and uneven. Reports showing improvement or stabilization in the housing market have regularly been met with buying on Wall Street, such as Tuesday’s big gains.

It appears the prognostication powers of the average American economist is falling fast and one could perhaps be better off guessing about the direction of the housing market than listening to the economists with the fancy PHD’s. One certainty is that the American housing market continues to spiral downward, despite the many interventions of the Obama Administration into the market, and the overall supply of housing on the market continues to rise because of foreclosures:

The number of new homes on the market last month increased 1.3 percent to 236,000 units. February’s weak sales pace left the supply of homes available for sale at 9.2 months’ worth, the highest since May, from 8.9 months in January.

All told, the housing market continues to look like a slow motion train wreck, with no end in sight.  With continued high unemployment leading to another surge in foreclosures, the housing market looks certain to continue to stumble until new job creation returns to the United States.  Considering the uncertainty and concern that many small and big business managers are feeling regarding the Democratic agenda in Washington, DC, the timing of any return of substantial job creation in this country is an open question.

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