9 Years of Housing Backlog at Current Sales Pace; Chris Whalen on Troubled Banks "Bank of America is at Top of Restructuring List"

In a story that highlights just how severe and lingering the housing crisis is, the Wall Street Journal reports Number of the Week: 107 Months to Clear Banks� Housing Backlog

107: How many months it would take to sell banks� current and shadow inventory of foreclosed homes.

Banks� vast pile of foreclosed homes doesn�t appear to be diminishing. That�s a troubling sign for the future of the housing market.



Over the past six months, that number has actually risen. Banks managed to pare down the shadow inventory, but largely by taking possession of foreclosed homes. As of September, they owned nearly 994,000 foreclosed homes, up 21% from a year earlier. The shadow inventory stood at 5.2 million homes, down 7% from a year earlier. Grand total: 107 months of inventory.

Taking possession does not reduce shadow inventory since those are homes the banks will have to sell whether they are currently on the market or not. Regardless, the important number remains the same, a grand total of 107 months of inventory at the current sales pace.

Chris Whalen Video Discussing Bank Restructuring, Inventory



Select Quotes

• You can't prevent restructuring. It's going to happen. Bank of America is at the top of the list. The bondholders and shareholders are going to get a haircut.


• Barrack Obama is wearing Herbert Hoover's concrete booties.


• There is nobody in the Whitehouse today that understands where we are economically.


• The smaller banks in the US are actually getting better. We have 4 really big elephants and 4000 smaller banks that are getting better.


• The significant thing is the numeric amount of troubled banks is growing very dramatically. That's the big guys, Bank of America, etc.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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