Bill McBride, the brilliant blogger at Calculated Risk, is one of OS's heroes. He is so dispassionate, so laconic, and he knows how to do simple math so as to (as Ricky Ricardo would say..)
'splain things to us Looocey.
Today, Bill 'splains a small bit of the reality of the real economy. The economy we, who do not work on The Street or in D.C. or have Ivy League MBA's or permanent sinecures at universities or state gubbermint bureaucracies, live in. The real economy.
The delinquency rate for mortgage loans on one-to-four-unit residential
properties increased to a seasonally adjusted rate of 7.58 percent of
all loans outstanding as of the end of the second quarter of 2012, an
increase of 18 basis points from the first quarter, but a decrease of 86
basis points from one year ago, according to the Mortgage Bankers
Association’s (MBA) National Delinquency Survey.
The delinquency rate includes loans that are at least one payment past
due but does not include loans in the process of foreclosure. The
percentage of loans on which foreclosure actions were started during the
second quarter was 0.96 percent, unchanged from last quarter and from
one year ago. The percentage of loans in the foreclosure process at the
end of the second quarter was 4.27 percent, down 12 basis points from
the first quarter and 16 basis points lower than one year ago. The
serious delinquency rate, the percentage of loans that are 90 days or
more past due or in the process of foreclosure, was 7.31 percent, a
decrease of 13 basis points from last quarter and a decrease of 54 basis
points from one year ago.
OK, fair enough, makes the eyes glaze over a bit. Then McBride does his simple math:
7.58% (SA) and 4.27% equals 11.85%
That is to say, 11.85% of all mortgages are in serious trouble. That's just short of 12%.
So, OS decided to do a bit of his own simple math, remembering the days when stock quotes were reported in 'eighths'--the old traders could do math in their heads, and keep it all straight under that system.
100 divided by 12 comes up to 8.3. As in, one in eight mortgages in the United States is in trouble.
Here, in the real economy, this is trouble.
Official unemployment is 8.3%. Real unemployment is close to 20%, in the aggregate. That comes out to one in five. For young black men, it may be double that. An entire generation is in danger of being lost to the streets and the justice system, because in order to have a job, a person must have basic literacy in place, basic social skills in place, some sort of marketable skill to offer the world. We have college graduates fixing coffees at Starbucks, lots of them. Fifteen-year-olds can make coffee, as sophomores in high school. Where do they go for those first jobs if those slots are filled by twenty-five-year-olds with B.A.'s?
Here, in the real economy, this is trouble.
Tossing Obama and his posse will be a good and necessary start to getting back on our feet. OS knows, even if we do that, and almost everything goes right as we go forward, we are probably 5-10 years away from really being back in the saddle.
So, someone please explain to OS why Harry Reid is obsessed with Mitt's tax returns?
