Every horror movie comes with interludes in which the stalker appears to be dead, the demon exorcised, the vampire staked.
"Our business momentum is strong," Wells Fargo CEO John Stumpf said Thursday after the big banking company released an unexpectedly brilliant profit report.
"We're starting to see progress," President Barack Obama said Friday.
"U.S. Economy Could Recover Much Sooner Than Expected," said the headline from CNBC.com.
Slasher-film auteurs know exactly how to write the next scene. (Picture Treasury Secretary Timothy Geithner as the ingenue in Sorority Sister Slaughter.)
Not only isn't the recession over; neither is the financial crisis that caused it. A nation in which one out of five mortgages is "under water" - the debt is greater than the value of the house - will not get off this easy.
We'll emerge eventually. The hangdogs predicting a depression - another 30 percent drop in home prices and 15 percent unemployment - are mistaken. But a broad recovery will not come until late this year at the soonest. Meanwhile, expect new shocks and screechy music.
The report on underwater mortgages, published last month by California-based First American CoreLogic, is perhaps the best single X-ray into the core of the financial meltdown.
Not only were 20 percent of U.S. mortgages "upside down" in December; an additional 5 percent were on the verge of tipping over, the research firm said. That means it'll take only a further 5 percent decline in market values to wipe out the equity in 2 million more homes. (In Maryland, 13.1 percent of all mortgages were under water and 4.4 percent are on the edge.)
Not every upside-down homeowner will default and add to the enormous pile of losses. But many will, especially as unemployment rises.
No wonder the International Monetary Fund is about to bump up its estimate of the total cost of the crisis. In January, it said losses from bad mortgages and other toxic U.S. assets would equal a flabbergasting $2 trillion by the end of next year. Now it will increase the forecast of U.S. losses to $3 trillion and peg worldwide damage, including the United States, at $4 trillion, The Times of London reported this week.
So far, financial companies have acknowledged losses of not much more than $1 trillion.
