A Policy Junkie Food Stamps Extravaganza!

First, I’d like to preface this post by citing the most recent statistics for the federal food stamps program.

Currently, there are over 41 million food stamps recipients coming from over 19.4 million households resulting in a monthly cost of over $5.6 billion or just over $67 billion annually.

As many longtime Paper Economy readers know, I have been tracking these numbers since the summer of 2008 and in that time the rolls for both individual participants and households have nearly doubled!

NPR’s “On Point” segment yesterday was dedicated to the food stamps program and a recent initiative by NYC Mayor Bloomberg and NY Governor Paterson to petition the DOA in an effort to ban access to sugary soft drink items for area food stamps recipients.

Though this is a very comical NPR segment … nothing short of a melee of policy junkies lost in a vicious circle of cyclical logic and do-gooder nonsense... it should leave one with the sense that America’s future is far less then bright.

At one point, Ellen Vollinger (the Legal Director at the Washington DC based Food Research and Action Center… whatever that is), a policy junkie against the proposed ban on junk foods, suggested that there is a paradox in America, “many of the people that are hungry [in this country] are also people who have trouble with obesity”.

While I realize she could probably have added a bit more color to shore up her sentiment, that statement was truly a CLASSIC! ... Fantastic!

Meanwhile, no one on the panel was actually against the food stamps program in general, all being policy junkies of one ilk or another, they simply disagreed on the implementation and debated the merits of limiting access to junk foods or providing more education to recipients.

Even in the face of multiple callers offering eye witness testimony of food stamps being traded for cash, gasoline and even booze and drugs, the policy junkies didn’t waiver from their devotion to their religion.

Of course, NYC area recipients are mad… even furious… that they would be limited to using their Supplemental Nutritional Assistance Program (SNAP the fancy Washington name for the food stamps program) credits on actual nutrition... to them this is an issue of rights!

Readers, I can only think that we are nearing an end of sorts… something big is brewing and it can’t simply be a larger incarnation of the status quo.

No… I fear we are pushing ever closer to a critical breaking point.

The federal government is a disaster and the fact that in its largess it has spawned an industry of policy research institutions teeming with imbeciles just salivating at the chance to fritter away generations of wealth on wasteful illogical boondoggles while breeding immense classes of needy recipients (for one program or another) is a disgrace.

In the end this whole game will come down to simple math and crude economics…

Question of The Day - S&Ls To Collapse Next?

Will S&Ls meltdown next?

Why would they perform any better during this downturn than they did during the housing bust of late 80s and early 90s?

Aren’t we simply just now entering the period where supposedly “prime” mortgage portfolios will come under significant stress as rampant unemployment lays waste to the cash-strapped and largely insolvent middle-class?

Question(s) of The Day? - Submerging Markets?

The “Emerging Markets” are looking more like the “Submerging Markets” … anyone still buying this story?

The Brazil, Russia, India and China markets are all completely tanking… was the whole BRIC-“emerging markets” narrative real or just the final over-hyped financialized bubble in an era that has now given way to widespread and fundamental collapse?

What’s next for these once hot economies?

Collapsedachusetts Existing Home Sales Preview: May 2008

Sources inside the Massachusetts Association of Realtors (MAR) report that next week’s monthly existing home sales results will show that in May single family home sales dropped 10.1% on a year-over-year basis while condo sales collapsed a stunning 24.5% over the same period.

Further, the single family median home value declined a whopping 9.2% on a year-over-year basis to $322,500 while condo median prices declined 2.6% to $282,500.

It’s also important to note that the May single family home sales count was the lowest May count on record since 1992 and at 3491 units sold was 24.43% below the record May peak set in May 2004.

The following charts (click for larger) show the decline in single family home sales since 2005.

Notice that May 2008 is registering a home sales count well below even the 2007 level as well as indicating that the June’s results will likely be well below 5000 units, a significant decline.


After over two years of declining home sales, weakening home prices and now looming recession it appears that Massachusetts has just entered the price “free-fall” phase of the housing decline where home prices continuously drop even through the spring months which are typically strong in the region.

Stay tuned as next week the S&P/Case-Shiller home price index results will be available for Boston likely showing a continued decline even during the typically strong spring selling season.

Collapsedachusetts Existing Home Sales Preview: February 2008

Sources inside the Massachusetts Association of Realtors (MAR) report that next week’s monthly existing home sales results will show that February single family home sales crashed 22.9% on a year-over-year basis while condo sales collapsed 34.6% over the same period.

Further, the single family median home value declined 4.6% on a year-over-year basis to $310,000 while condo median prices decreased 6.7% to $252,000.

It’s also important to note that February’s single family home sales count was the lowest February count on record since 1996 and at 1857 units sold was 26.91% below the record peak set in February 1999 and 22.9% below the more recent peak of February 2007.

The following charts (click for larger) show the decline in single family home sales since 2005.

Notice that February 2008 is registering a home sales count well below even the 2007 level as well as indicating that the March’s results will likely be well below 3000 units, a significant decline.


After over two years of declining home sales, weakening home prices and now looming recession it appears that Massachusetts may have just entered the price “free-fall” phase of the housing decline where home prices continuously drop even through the spring months which are typically strong in the region.

Stay tuned as next week's S&P/Case-Shiller home price index results will be available for Boston likely showing the most significant decline in the last 12 months.

Crashachusetts Existing Home Sales and Prices: January 2008

Today, the Massachusetts Association of Realtors (MAR) released their Existing Home Sales Report for January 2008 and simultaneously Standard & Poor’s released their Case-Shiller Home Price Index for December 2007 both showing, perfectly clearly, the truly dire circumstances that have now befallen the Bay State’s housing market.

Whether it was a slow depression brought about by over two solid years of steadily declining home sales and prices, the credit crunch, a looming recession, a palpable increase in inflation of necessities like food and fuel or just simply a change in attitudes toward the notion of a house as a vehicle for wealth, the regions housing markets have now hit a dangerous tipping point.

It appears that we have entered the “price freefall” phase of the housing decline where mounting inventory, declining sales, and negative sentiment all combine to result in plunging home prices which, quite possibly, may continue to decline substantially even through the spring and summer months which are typically strong periods in any selling season.

Of course Massachusetts’s Realtor leader Susan Renfrew, who seems to find a silver lining in every storm, projects a sense of confidence and “opportunity” in part created as a result of the federal government bailout package.

“Sales in any given month are a result of buyer activity 60 to 90 days prior, and there is no question January reflects the anxiety people were feeling about the economy that last two months of 2007 … However, this continues to be a buyer’s market and there is opportunity. That combined with low interest rates and the economic stimulus package recently signed by President Bush, should help the market.”

These are troubling times indeed…

MAR reports that in January, single family home sales plummeted 27.7% as compared to January 2007 with an 8% increase in inventory translating to a truly massive 15.4 months of supply and a median selling price decline of 5.6% while condo sales plunged 33.7% with a 1% increase in inventory translating to a startling 16.6 months of supply and a median selling price increase of 3.5%.


The S&P/Case-Shiller Home Price Index for Boston, which is the most accurate indicator of the true price movement for single family homes, showed accelerating prices declines (prices are falling faster) with Boston declining 3.3% as compared to December 2006 leaving prices now 9.8% below the peak set in September 2005.

To better illustrate the drop-off in home prices and the potential length and depth of the current housing decline, I have compared BOTH the normalized price movement and peak percentage changes to the S&P/Case-Shiller home price index for Boston (BOXR) from the 80s-90s housing bust to today’s bust (ultra-hat tip to the great Massachusetts Housing Blog for the concept).


The “normalized” chart compares the normalized Boston price index from the peak of the 80s-90s bust to the peak of today’s bust.

Notice that during the 80s-90s bust prices took roughly 46 months (3.8 years) to bottom out but that the decline was not quite a sheer as what we are seeing today.

The “peak” chart compares the percentage change, comparing monthly Boston index values to the peak value seen just prior to the first declining month all the way through the downturn and the full recovery of home prices.

In this way, this chart captures ALL months of the downturn from the peak to trough to peak again.

As you can see the last downturn lasted 105 months (almost 9 years) peak to peak including 34 months of annual price declines during the heart of the downturn.

Notice that peak declines have been more significant to date and, keeping in mind that our current run-up was many times more magnificent than the 80s-90s run-up, it is not inconceivable that current decline will run deeper and last longer.

As in months past, be on the lookout for the inflation adjusted charts produced by BostonBubble.com for an even more accurate "real" view of the current market trend.

January’s Key MAR Statistics:

• Single family sales declined 27.7% as compared to January 2007
• Single family median price decreased 5.6% as compared to January 2007
• Condo sales declined 33.7% as compared to January 2007
• Condo median price increased 3.5% as compared to January 2007
• The number of months supply of single family homes stands at 15.4 months.
• The number of months supply of condos stands at 16.6 months.
• The average “days on market” for single family homes stands at 143 days.
• The average “days on market” for condos stands at 165 days.