RUTHFULLY YOURS

Time for another dose of economic reality:

Sales of previously owned homes in January stumbled considerably for the second consecutive month. The National Assn. of Realtors in Washington said Friday that sales fell 7.2%. . . .
Economists said that last month’s sales drop from December was another sign the market is critically weak and unlikely to recover robustly this year as the potential for more foreclosures looms.
Friday’s report follows news this week that sales of newly built homes hit a record low in January and that mortgage applications plunged to their lowest level in nearly 13 years. . . .

Fannie Mae is begging for another bailout:

Battered by the housing crisis, mortgage finance company Fannie Mae said Friday that it needs another $15.3 billion in bailout money from the federal government. . . .
Continuing problems with Fannie Mae’s mortgage portfolio are still straining its finances. Some 5.38% of its single-family loans were more than 90 days delinquent, up from 2.42% a year earlier.
Total nonperforming loans were $216.5 billion at year-end, compared with $198.3 billion in the prior quarter and $119.2 billion in the prior year-end.

Just eight weeks into 2010, the FDIC has already shut down 21 banks:

Regulators seized a small bank in Nevada on Friday, bringing the year total to 21 as small institutions continue to struggle with bad loans.
The Federal Deposit Insurance Corp said Carson River Community Bank in Carson City, Nevada was closed, and its deposits were assumed by Heritage Bank of Nevada, from Reno, Nevada.
The agency said earlier this week that the number of “problem” U.S. banks jumped 27 percent during the fourth quarter of 2009 to 702, the highest level since 1993 and a sign that the industry’s recovery remains uneven.

“Uneven” is putting things rather mildly, I’d say. There’s nothing but more bad news on the horizon:

A Congressional panel charged with monitoring the health of the nation’s financial system is warning that a wave of commercial real estate loan failures could wreck the banking system over the next four years much as the residential real estate collapse did in 2008.
In its February 2010 report, “Commercial Real Estate Losses and the Threat to Financial Stability,” the Congressional Oversight Panel notes that $1.4 trillion in commercial real estate loans will expire between 2011 and 2014. Most of these loans will require refinancing. Almost half of these, the report says, are already “underwater” — owing more than the property is currently worth, thanks to a 40 percent drop in commercial property values since 2007. Falling rents and rising vacancy rates put further downward pressure on those values.

The worst of this crisis is yet to come. Take it from someone who predicted the failure of Obamanomics: