Manny Mondays: Elephants & Canaries Wild Life Edition

Morning all! Because I was forced to cancel my gold tee time due to a stormy afternoon, I spent much of the afternoon getting caught up on current events. As I sit here pondering the next move for both the markets and our so-called economic "recovery", a couple of thoughts and related posts stood out for me as the real "elephants in the room" or "canary(ies) in the coalmine" for me, and ones that are likely to rear their ugly heads in some meaningful fashion if not this year, then during next year's election circus year and possibly beyond:

(1) The "99ers" and the long-term unemployed
(2) The continued weak and ever-declining housing market

In my afternoon reading, I came across a couple of really illimunating posts on these topics stood out for me as ones that should at least give us pause on the true legitimacy and life span of our so-called "economic recovery". What happens when unemployment benefits, retirement accounts and other savings run dry for more of these people? What happens when more and more people who are vastly underwater on primary and multiple homes decide to walk away from a depreciating asset that is quickly becoming more of a liability? I believe that our fearless leaders ignore or dimiss these issues at their (and our) peril.

Here is the first one:

99ers and the Long-term Unemployed Are the Elephants in the Economic Recovery Room

There are several startling facts in the article but a few key excerpts stuck out for me:

The job market is admittedly improving for some, but it’s not improving quickly enough for millions of jobless, especially the long-term unemployed. In April, the ranks of the unemployed who have been out of work for 99 weeks or more increased by 21,000 to a record 1,920,000. That equates to 14.5% of all unemployed.

Other long-term unemployed fared a little better in April compared to March. Those out of work for 26 weeks or more decreased from 5.839 million from 6.122 million in March. But their percentage of the overall unemployment rate remained elevated at a near record level of 43.2%. The percentage of those out of work for more and 52 weeks increased from 31.5% to 32.8% of all unemployed.

What is being done legislatively to address this elephant in the room? To date, nothing. The GOP controlled House has been busy attempting to cut the deficit, repealing healthcare funding, and restarting offshore oil drilling. The Republicans, with the help of some Democrats, are working to weaken Wall Street regulation legislation, end net neutrality, and are arguing the Defense of Marriage Act. They are pandering to their base, acquiescing to their corporate overlords and obliging their big-wallet campaign contributors.

Congressional leaders are more concerned with ideology than reality. They have not presented a jobs bill or employment training legislation, conducted investigations on how to solve long-term unemployment, or offered tax incentives for companies to hire the long-term unemployed. They have ignored legislation, such as Rep. Barbara Lee’s H.R. 589, that would help millions of long-term unemployed, the 99ers, who have exhausted all unemployment benefits. While most of the blame can be placed at the door of the GOP controlled House, the Democratic controlled Senate and Obama have been suspiciously silent about the long-term unemployment problem.

The second one appeared last last week over at BR's The Big Picture blog where he cites 20 Startling Facts About the US Housing Market courtesy of Zillow, the Mortgage Bankers Association and other relevant sources.

All of these points are indeed startling but the last five were maybe the most jarring for me to read:

15. According to the Mortgage Bankers Association, at least 8 million Americans are currently at least one month behind on their mortgage payments.

16. In September 2008, 33% of Americans knew someone who had been foreclosed upon or who was facing the threat of foreclosure. Today that number has risen to 48 percent.

17. During the first quarter of 2011, less new homes were sold in the U.S. than in any three month period ever recorded.

18According to a recent census report, 13% of all homes in the United States are currently sitting empty.

19. In 1996, 89% of Americans believed that it was better to own a home than to rent one. Today that number has fallen to 63 percent.

20. According to Zillow, the United States has been in a “housing recession” for 57 straight months without an end in sight.