The mortgage foreclosure crisis has even hit members of Congress. That should some indication that things are getting really bad. You need to worry:
California Rep. Laura Richardson claimed Friday that her Sacramento home was sold into foreclosure without her knowledge and contrary to an agreement with her lender.
She said she is like any other American suffering in the mortgage crisis and wants to testify to Congress about her experience as lawmakers craft a foreclosure-prevention bill.
In a lengthy interview Friday night with The Associated Press, the Southern California Democrat struck back against several days of negative publicity over reports she defaulted on her mortgage, allowing the house to be sold at auction.
And it isn't just housing that is a problem. There is also the gas crisis:
At a time when gas prices are at an all-time high, Americans have curtailed their driving at a historic rate.
The Department of Transportation said figures from March show the steepest decrease in driving ever recorded.
Compared with March a year earlier, Americans drove an estimated 4.3 percent less -- that's 11 billion fewer miles, the DOT's Federal Highway Administration said Monday, calling it "the sharpest yearly drop for any month in FHWA history." Records have been kept since 1942.
According to AAA, for the first time since 2002, Americans said they were planning to drive less over the Memorial Day weekend than they did the year before.
And oil prices just keep going through the roof:
Retail gas prices hit record highs for the 20th day in a row, motorist group AAA's Web site showed Tuesday.
The nationwide average for a gallon of regular unleaded rose to $3.937, up slightly from $3.936 the previous day.
The climb in gas prices, which have steadily risen over the past three weeks, comes amid the start of the summer driving season, which unofficially kicked off over the Memorial Day weekend.
The AAA survey shows gas prices are up about 9% from a month ago and nearly 23% higher from year-ago levels. The average price for gas has passed the $4 a gallon mark in 11 states, as well as in Washington, D.C.
The most expensive state for buying gas is Alaska, where a gallon of regular unleaded costs an average of $4.201. The second most expensive state is Connecticut, where a gallon of gas costs $4.196, according to AAA.
Is there any doubt that a recession is either here or coming:
Former Fed chief Alan Greenspan thinks the United States will have a recession, though he doesn’t expect it to be “severe.” In an interview with the Financial Times, Greenspan says he believes there is a better than 50% chance that the American economy will suffer a contraction this year. Greenspan sees a “tug of war” between the loss-soaked financial sector and strong profit gains among nonfinancial companies, and concedes he can’t predict how that will play out. “No one knows how this tug of war will end – specifically, whether the financial crisis will end before it drags down the real economy,” Greenspan tells the FT.
Greenspan says recent economic data suggest the economy is stabilizing, but it’s too early to say whether the worst of the financial crisis is over, as he expects further declines in house prices. In the meantime, he is keeping an eye on rising household savings. While rising savings are surely a good thing in the long run, the danger now is they could further depress consumer spending - and deepen any recession that comes to pass.
Update. Just in:
Prices of single-family homes declined a record 14.1 percent in the first quarter from a year earlier, marking a pace five times faster than the last housing recession, according to the Standard & Poor’s/Case Shiller national home price index reported on Tuesday.
The S.&P./Case Shiller composite index of 20 metropolitan areas fell 2.2 percent in March from February and fell 14.4 percent from March 2007.
Economists expected prices for the 20-city index to fall 2.0 percent on month and 14 percent from a year earlier, according to a median in a Reuters survey.
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