Saturday, July 31, 2010


There is one truism I have maintained these past two years.

In 2008 we experienced a deep financial earthquake whose repercussions we still do not fully understand or appreciate.

And those repercussions continue to reverberate.

There is still an astonishing amount of debt consolidation left to play itself out.

Further evidence of this are figures from Mark Zandi and Robert Shiller on the underwater equity statistics in the United States.

For those who think the recession is over and that we may be on the cusp of a recover, consider these observations from Zandi/Shiller that are making the rounds of the blogosphere:

  • 19%, or 14.748 million of the 77.570 million US households, are in negative equity
  • 30.6% of the 48.243 million of homeowners with first mortgages are in negative equity
  • 21.8% of the 67.578 million in owner-occupied single family homes are in negative equity
  • 4.133 million of the 14.748 million of underwater homeowners are underwater by 50%+, meaning the owe more than 50% more than their homes are worth
  • Of the 50%+ underwater category, the worst states are California (672K), Florida (423K), and Texas (344K)
  • Total Negative Equity in the US is currently estimated at $771.1 billion
  • California mortgages have $234 billion in negative equity, Florida mortgages have $79 billion in negative equity, Texas mortgages have $48 billion in negative equity
  • $2.4 trillion in total mortgage debt is impaired due to negative equity

Stunning figures to ponder.



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