Bankruptcies Jump 30% in March

April 7, 2008 7:00am by

Wow, this is pretty severe:

"The jump in March bankruptcy filings is another indication the U.S. economy is in recession, led by states where the housing boom turned to bust.

The more than 90,000 bankruptcy filings in March were the highest since insolvency laws became more restrictive in October 2005, according to statistics compiled from court records by Jupiter eSources LLC. At a daily rate, filings in March were 30 percent above the pace in 2007.

Rising bankruptcies, together with mounting foreclosures and fewer jobs, are further signs the biggest housing slump in a generation is hurting consumers and businesses. Federal Reserve Chairman Ben S. Bernanke this week for the first time acknowledged the economy may be facing a recession and vowed to act to cushion the slowdown."

If the national average increase is 30%, what must the numbers be like in Nevada, Southern California, and South Florida?

California = 42%
Florida = 35%
Nevada = 32%

And thats for the entire state. I surmise that the boom/bust areas are significantly worse . . .   

>

Source:
Bankruptcies Jump 30% in March, Led by Housing-Bust States
Bill Rochelle and Bob Willis
Bloomberg, April 5 2008
http://www.bloomberg.com/apps/news?pid=20601087&sid=aw8ifLmYMFlI&r

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What's been said:

Discussions found on the web:
  1. NOR commented on Apr 7

    Cool.
    Sounds like a bullish thing.
    Watch the dow up 3% today.
    News like this is apparently very good for the economy.
    The only way is up.
    Dow is on its way to 16.000.
    :)

  2. OkieLawyer commented on Apr 7

    Just a little note on the spike in March (and April and May): people use their tax refunds to pay for bankruptcy services as any tax refund received after the bankruptcy is filed is subject to be taken by the bankruptcy trustee.

    For the bankruptcy lawyer, Springtime is the season when filings go up traditionally, anyway.

  3. D commented on Apr 7

    Barry, no one cares, the market will go up and up and the bear case is totally history. I dont know why they invite bears on tv- just for ratings?

  4. Peter Stark commented on Apr 7

    following your blog entries for the last 4 weeks suggest to me that you are under invested …. is this correct ?
    The dollar and the mkt will go a lot higher the next 6 month, I hope you adjust your portfolio weightings.

    regards
    Peter

  5. Ross commented on Apr 7

    Bears on TV?

    It can’t be the bottom. I haven’t seen an interview with Elliott Prechter.

  6. technically speaking commented on Apr 7

    For you bulls out there, beware that the S&P 500 200 day moving average has changed direction only 4 times in the last 10 years.

    Most recently, it turned lower in mid january of this year. Since it takes so much effort to turn this moving average around, expect the downtrend to continue for probably another 6 -24 months.

    Any rally that takes the averages to/through the 200 day ma is an absolutely juicy place to take a short position…and the smart money knws this.

    The fundamentals for a bull move are just not there…and neither are the technicals. It is always better to become a bull late rather than early. Bulls are only catching a falling knife at this point.

  7. Bob G. commented on Apr 7

    On Saturday I attended a foreclosure home auction run by the Real Estate Disposition Corp. (REDC). I stayed long enough to observe the disposition of 49 of the more than 100 properties auctioned off. The average sales price was $129,000. The average “previously valued to” number was $234,000. This was a 45% haircut.

    I didn’t inspect any of the properties, but afterwards drove by several higher priced condos in Clearwater Beach that had been auctioned off. They were very nicely situated with water views and the building was only 2 years old. If you drive up and down Gulf Blvd. you’ll find numerous condos still being constructed.

    It looks like we’ve only seen the beginnings of the price declines yet to come.

  8. Joe Klein’s conscience commented on Apr 7

    NOR:
    It seems like the market loves the bad news out today. WaMu shareholders get diluted? Lets buy stocks!! Take over talk(however far fetched)? Great news!! Is “B-52” Ben the man behind the curtain?

  9. wnsrfr commented on Apr 7

    My cousin works as a low-end R.E. “authentic” flipper in the Clearwater area (buys a rundown place, fixes up for resale with real sweat equity).

    He will only buy a $234K property for $46K (20% on the dollar) because he knows he won’t be able to make any money on it otherwise. He isn’t finding anything to buy as of late, but is being patient.

  10. DavidB commented on Apr 7

    If bankruptcies go from 1% to 1.3% they are up 30%. Why is it the media will always use the 30% figure in their reporting?

  11. Pat G. commented on Apr 7

    “since insolvency laws became more restrictive in October 2005”

    Curious that occured before the mortgage crisis, don’t you think?

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