Christmas sales are finally in, so we can gauge the nature as to whether a bona fide recovery is indeed taking place. Of course, there is bad news and good news.
The bad news is that the so-called recovery is much weaker than originally reported. Third quarter GDP or Gross Domestic Product was first reported at 3.5%. It has since been revised downward twice to 2.2%.
Of course, the revisions are courtesy of the Bureau of Labor and Statistics, an entity known for "juicing" the real numbers. If you follow Shadowstats.com you get an entirely different picture. According to them, GDP currently is tracking at MINUS 3%!
According to Reuters, online spending ROSE 5% from the beginining of November through December Activity tracked by SpendingPulse, a unit of MasterCard Advisors, showed retail sales ROSE 3.6 % in the period from November 1 through Christmas Eve on December 24.
The Wall St. Journal has weighed in on home sales. The Case-Shiller index of home prices for 20 cities increased a seasonally adjusted 0.4% from September, the fifth consecutive monthly increase. Before the seasonal adjustment, the index was unchanged. Home prices are 7.3% lower than a year ago..
Furthermore, the situation for mortgage redefaults has improved. Some 18.7% of loans modified in the second quarter of 2009 were at least 60 days past due three months later, according to the report, by the Office of Comptroller of the Currency and the Office of Thrift Supervision. That compares with a redefault rate of 30% or more after three months for loans modified in the previous four quarters.
"Net net" it's still impossible to formulate a definitive conclusion. What we do know for now is that some signs of recovery are present. Yet, we still don't know to what extent. As Confuscious once said "I'm confused"!
If you think you know the answer to the question at hand, PLEASE hit me with your best shot. Fire away!
There is a comment section below in case my constant repetition of the existence of such a section somehow escaped you!
Tomorrow we'll return to another "California Crisis Deepens Series"