More signs of stress in the economy

To follow up with my comments from yesterday, the economy is once again showing signs of stress.

First, distressed home sales--such as short sales--reach their highest levels since April 2009, as discussed here.  This suggests the real estate market still hasn't absorbed the backlog of excess homes and current sales are still driving down prices, or at least preventing them from rising.

Second, weekly initial unemployment claims, which reflects people applying for unemployment benefits for the first time, rose this past week by an estimated 18,000 additional claims, as discussed here.  This means more people are still losing their jobs, which is limiting growth.

Finally, there is an unconfirmed rumor that Bank of America, one of the nations largest mortgage lenders, is increasing the number of foreclosed homes it intends to place on the market, as discussed here.  Currently, B of A sells approximately 7,500 foreclosed homes per month across the nation.  The rumor claims they are going increase this amount to 45,000 per month!!!  While I doubt this is true because it would significantly drive down housing prices as the big banks try to dump their foreclosure inventory, it's a reminder that there are still a lot of foreclosed homes being held back.  In other words, the large banks are likely to steadily release these homes into the market, which will keep prices depressed for a considerable amount of time.

All in all, these events are happening as the Fed's and government's stimulus is being reduced.  Could these events be a sign that there is still a recession environment?  Probably.

ADDENDUM (4/14/2010):  The Washington Post had an article that said Bank of America was lowering the principal amount owed on 45,000 underwater mortgages.  I'm assuming that this is probably what the rumor mill was discussing, as opposed to releasing 45,000 foreclosed homes into the real estate market.