Well, in case you either weren’t in the business at that time, or were hoping to erase the nightmare permanently, welcome to the early 1990s redeaux…almost! We’re getting there. FAST!!!

Back then we had a major recession, much more extreme than the one earlier this decade. It was a recession highlighted by high foreclosure levels, rampant job losses, inflation and high interest rates.

After last week’s disappointing employment report was released by the U.S. Labor Department, and Wall Street continued its downward spiral, a lot of factors seem to be pointing the nation’s economy further into the abyss. All very reminiscent of the early 90s — except for the high interest rate part.

Although, it is very curious that despite Mr. Bernanke’s  best intentions, the recent slashing of interest rates seem to be having no real effect on turning the economy around. Maybe it’s more of a feel good for the moment way of going about the whole economy mess. Who knows? One thing’s for certain. It seems obvious that Bernanke and his colleagues at the FOMC waited a little too long to decide to do something constructive about the foreclosure crisis and the recession he said probably wasn’t going to happen.

This blog has been talking about the housing sector leading the nation into recession for some time now. And we continue to believe that it will take a true recovery of the housing sector before the nation pulls out of the black hole it’s falling into thanks to seven years of poor financial planning in Washington and the too little too late kneejerk response of the Federal Reserve.

We have the high foreclosure levels being reported by RealtyTrac on a regular basis. It doesn’t matter whether you are talking about total foreclosure filings (defaults, auctions and REOs together) or the total number of unique properties being foreclosed on every month. Anyway you slice and dice it, the result is the same. 

Mr. Bernanke admitted to the nation’s community bankers last week that foreclosures are here to stay for the foreseeable future. Mr. Bush spoke out last week, trying to give hope to people that his economic stimulus package will ease the pain.

Governments at the national, state and local levels, plus numerous non-profit groups are busy scampering around looking for solutions to the foreclosure crisis, holding workshops, counseling sessions, opening hotlines, and getting the word out that something has to be done to stem the tide of foreclosures.

Even the AFL-CIO Executive Council came out with a prepared statement about affordable housing and foreclosures during its meeting last week.

“It is a crime that in the richest nation in the world, a full-time job no longer guarantees access to decent, affordable housing,” the statement said. “The Bush administration’s proposed month-long “Band-Aid” moratorium on mortgage foreclosures will not provide any real help and is an insult to Americans in distress.”

Later this week, 600 community leaders from around the nation are set to descend on Washington as the National Community Reinvestment Coalition (NCRC) holds its national conference titled, “Creating the Vision for a Fair Economy: Investing in People and Communities.”

Fed Chairman Bernanke and Sheila Bair, chairwoman of the Federal Deposit Insurance Committee (FDIC) are scheduled to deliver the keynote addresses.

ForeclosurePulse will report next week on the outcome of this meeting. In the meantime, foreclosures are a part of the national economic mix for the time being which is not necessarily a good thing for American consumers, retailers, and business overall. But it will allow time for the once overheated real estate industry to make the correction it needs desperately, and as a result people who want to get into owning a piece of the American Dream may have a chance to get into the market…legitimately…as either an investor or a homebuyer.