Fannie Mae, Freddie Mac, Bank of America, Kroger and Wal-Mart

CHICAGO--([ BUSINESS WIRE ])--Zacks.com Analyst Blog features: Fannie Mae (NYSE: [ FNM ]), Freddie Mac (NYSE: [ FRE ]), Bank of America (NYSE: [ BAC ]), Kroger (NYSE: [ KR ]) and Wal-Mart (NYSE: [ WMT ]).

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Here are highlights from Thursdaya�s Analyst Blog:

Jobless Claims Climb

Initial Claims for Unemployment Insurance rose by 12,000 to a seasonally adjusted 472,000. If one factors in the upward revision to last week's numbers, the increase is 16,000. The four-week moving average, which smoothes out some of the week-to-week volatility in the weekly numbers, was virtually unchanged, falling by 500 to 463,500.

The humanitarian hardship that the people who are losing even the extended benefits are facing is obvious.If you have been out of work for nearly two years, it is highly likely that you have already depleted your savings, probably even including your 401-K and IRA accounts (and paid taxes and penalties as a result). You have probably already run up your credit card debt.The extended benefit is your last source of income, and you have no other financial resources to fall back on.

In years gone by, if you were a homeowner you could have probably borrowed against the equity in your home. However with one in four houses (with mortgages) in the country already having mortgages that are greater than the value of the house, that is much less likely an option. A more common option is simply to stop paying on the mortgage and wait to be thrown out. Given the huge number of people doing this, the court system is absolutely clogged, and in many areas it is possible to live rent- and mortgage-free for well over a year (different states have different foreclosure laws, so the period can vary greatly).

While that option can help people survive and stretch the last remaining income they have, it is very bad news for the overall economy.For starters, it means that the mortgage is not worth very much, and that is a hit to the owner of the mortgage. More and more, that owner is Fannie Mae (NYSE: [ FNM ]) or Freddie Mac (NYSE: [ FRE ]), and since the government owns 80% of both of them, that means a hit for the taxpayers.

In other cases, the mortgages are owned (usually after they have been sliced and diced and turned into various forms of mortgage backed paper) by the big banks like Bank of America (NYSE: [ BAC ]). The loss they take is a hit to their capital and thus their ability to lend.

It also means that the house is part of the ashadow inventorya of houses.Eventually the house will be foreclosed on, and then put onto the market, further depressing home prices in that neighborhood, and pushing the value of the neighbors homes below the level of their mortgages.

Having no income also means an inability to shop. Even with no income, people still have to eat, but now they have to be on food stamps or rely on the local food banks, rather than going to Krogera�s (NYSE: [ KR ]) or even Wal-Mart (NYSE: [ WMT ]). Having millions of people with no income at all would severely crimp retail sales, and that would lead to more unemployment.Those people would first go to the state based claims, but eventually on to extended claims.

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Fannie Mae, Freddie Mac, Bank of America, Kroger and Wal-Mart