Housing starts see biggest drop since 1984

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EDITOR’S NOTE: That we have ANY housing starts is nearly preposterous considering the number of homes that are unoccupied — mostly because the banks don’t want to report on the financial outcome of selling them. In truth, the banks are taking these homes with “credit bids” which is to say that they are buying the home at auction with a fabricated piece of paper instead of cash. It is a net gain to them for whatever the home is worth. THEY GET THE FREE HOUSE.

But the way they have reported it, for purposes of establishing the level of capital they in reserves, you would think that they own the homes, when in fact, they don’t. Worse yet, they are showing the homes at “principal due” on the defective notes that were used at closings with borrowers, when the real value, if the notes were real, would be a small fraction of the amount on the books of the bank. So the sale would require them to report a loss that never really occurred, while in truth they realized a gain.

If you read this article a couple of times, it will dawn on you that the TARP and other bailout programs totaling more than $7 trillion had nothing to do with bad mortgages. But by making it appear as though they had those losses, they were able to play the Chicken Little game and the US Treasury and the Federal Reserve fell for it, intentionally or not, hook, line and sinker. All that money legally, ethically and morally should be back in play IN the U.S. economy and not in the pockets of Wall Street. Our current policy is the equivalent of providing safe haven and encouragement to terrorists.

Biggest Drop in 27 years may be followed by larger declines

WASHINGTON (Reuters) – Housing starts posted their biggest decline in 27 years in February while building permits dropped to their lowest level on record, suggesting the beleaguered real estate sector has yet to rebound from its deepest slump in modern history.

Groundbreaking on new construction dropped 22.5 percent last month to an annual rate of 479,000 units, according to Commerce Department data released on Wednesday. This was just above a record low set in April 2009 and way below the estimates of economists, who had been looking for a smaller drop to 570,000.

January’s figure was revised up to 618,000 units from 596,000. But that did not change the tenor of the report, which confirmed that the sector is failing to recover despite interest rates near record lows.

Building permits, a hint of future construction demand, fell to a record low of 517,000 units from a revised 563,000, and were down by about 20 percent from levels seen in February 2010.

Housing was at the epicenter of the financial crisis of 2007-2009.

One key impediment to the sector’s recovery is a vast backlog of unsold inventory, while a shaky job market has also made consumers reluctant to embark on any major new financial commitments. Making matters worse, a glut of foreclosures, stalled in recent months by revelations of improper loan documentation, is depressing the market.

(Reporting by Pedro Nicolaci da Costa, Editing by Chizu Nomiyama)