Bankruptcy Stats Point to Economy in the Future and the Past

Obama is getting it from Conservatives (not th ebright ones mind you). They are lampooning him for not doing enough to save/help the economy. It's important to inform current policy on the economy, but it's quite another to expect a miracle.

Here's what I'm thinking after taking a look at some bankruptcy stats the other day for the state of California.

Bankruptcy stats do two things, they show the past and the future.

The show the past, as in the data is a reflection of the health of the economy today as a result of everything that's been going on prior.

BUt they also point to the future, filing stats are an indicator of problems to come.

So take for example the period between 2007-2010, or even before. If you chart data for say San Diego you notice that there was 5-10% increase every quarter every month years prior to the 2008 economic collapse.

People were having major troubles with their homes years before the crash occurred. The stats reflect that in the number of filings.

However, the numbesr didn't slow (no recovery yet). Only now, end of 2010, are the numbers tapering off, but Chapter 7 and 13 filings (what you and I would file for) are still hitting record highs.

Check out this graph:



All this to say that to expect Obama to fix 8 years of Bush problems in two years is asking a bit much. But, what do see, that in fact in two years we ARE seeing improvement, and by 2011 end we'll likely see a reversal of bankruptcy claims (although that could be that nobody has a house anymore......)

Let's keep things in perspective and honestly asess what's working in our economy before throwing ideas under the bus.

Bankruptcy stats from San Diego Bankruptcy Attorney C. Chen.