Recovery: Here Today, Gone Tomorrow
This is how fragile--and foolish--the talk of recovery is. Yesterday, you may recall that I pointed out the record level of personal bankruptcies recorded in 2009--at the same time that some "analysts" were heralding a recovery based on some uptick in manufacturing (one would venture to guess that those same "analysts" were among those who predicted the Dow 30,000 or that housing prices had nowhere to go but up, up up). Well, never mind, cancel the recovery today:
The number of houses placed under contract fell sharply in November in the first drop in nearly a year, figures released Tuesday show. It was the clearest sign yet that predictions of another downturn in real estate may become a reality.
The National Association of Realtors said that its index of pending home sales plunged to 96 from a revised level of 114.3 in October. Analysts had predicted a drop, but nothing like that.
“We thought it would drop 2 percent,” said Jennifer Lee of BMO Capital Markets. “When you see 16 percent, the first thing you say is, what the heck happened here?”
The only thing surprising thing about Lee's surprise is...her surprise. People are hurting. They have exhausted their credit. They are out of work. Where do we think the money will come from to underwrite housing purchases?
Add to that the two following very worrying trends. First, states are on the precipice:



