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POPSThe Success of Savage Capitalism is the Failure of our Society
Consider these three articles puzzling over the US Economy. The dollar is in free-fall but the GDP is growing. The credit bubble is bursting, but production is up. American companies are making money hand over fist but the wealth gap is staggering. So the question is: has the Regan/Bush agenda of Savage Anything-Goes Global Capitalism worked? Is America a better nation because of it? The answer is no. We are not developing our economy, we are just generating wealth for the top 1%. We aren't improving our country so much as optimizing it for de facto feudalism. Some one needs to give a real good answer as to why this surreal economic nightmare is a success story, or we need to finally admit that Savage Capitalism is motivated by nothing more than greed and wistful thinking. It's time to get real about our country and our economy. Unless we can save the middle class, then we will be nothing but a crude fiefdom of modern Robber Barons.
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POPSHousing Price data I didn't realize this data was made publicly available. Very interesting to see exactly how the market is performing in various cities.
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POPSHousing is falling much faster than reported Even as a little as a few months ago, the deniers were still out in full force, saying that everything was going to be just fine. Now even the NAR is owning up to the trouble they've helped cause, and it's probably a lot worse than they're saying.
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POPSSpain Reeling On July 4, Zapatero said: “To be optimistic is something more than a rational act, it is a moral requirement, an act of decency and, if I may say so, elegance.” Imagine that quote from a Leftist.
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POPSWho Will Pay For The Politicians Promises? Because of onerous regulations, it has been 30-plus years since a new refinery has been built. Similar regulations also explain why the U.S. nuclear energy production is a fraction of what it might be. Congress' solution to our energy supply problems is not to relax supply restrictions, but to enact the Energy Independence and Security Act of 2007 that mandates that oil companies increase the amount of ethanol mixed with gasoline. Anyone with an ounce of brains would have realized that diverting crops from food to fuel use would raise the prices of a host of corn-related foods, such as corn-fed meat and dairy products. Wheat and soybeans prices have also risen as a result of fewer acres being planted in favor of corn. Congress' proposed "solutions" to the energy and food mess it has created include a windfall profits tax on oil companies, food stamps, etc. These measures will not solve the problem, but will create new problems.
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POPSThe Housing Bubble The chart on House-Price-to-Rental Ratio is one of the best illustrations I have seen of the current housing bubble. In many places it is now substantially cheaper to rent then own. In fact, in many places the cost of ownership is more then 150 percent of the cost of renting after calculating in the tax benefits. Comments?
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POPSThe Global Warming Bubble Finally, there's the global-cooling spell. The world hasn't been warming since 1998, and an article in the journal Nature says warming won't pick up again until 2015. Since global warming is a long-term trend, a decade-long or more stall in temperatures doesn't mean much -- except that environmentalists have banked so much politically on whipping up hysteria based on imminent catastrophe. The stall in temperatures shows how little we know about global warming. No matter what the price of gas is, the most sensible policy in the U.S. is to avoid costly schemes to fight global warming. If our economy keeps growing, we will be better positioned -- richer, and more technologically proficient -- to help others mitigate its effects decades from now. Senate Majority Leader Harry Reid huffs that global warming is "the most critical issue of our time." Really? More critical than energy prices? Than health care? Than wages? Than terrorism? Than nuclear proliferation?
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POPSHousing troubles go global The boom went around the world, it's no surprise that the bubble is following it. What surprises me is that it seems to catch everyone off-guard.
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POPSIs your house bubblicious? It took a while for reality to sink in, but things are happening fast now. The question on everyone's mind seems to be "how bad will it be?"
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POPSA headache awaits when the credit party fizzles out Metacomment - If we put a small sample of Clips together, a picture of the future is emerging alarmingly fast. Bankers have always behaved like lemmings, it is the nature of interest -- money for nothing -- which drives them to it. So there is little surprise there. The same might be said for middleclass consumers all over the world creating the biggest house price bubble in history. The questions which need to be asked are can the financial system survive? If not, are there any alternatives: e.g. local currencies, barter schemes etc. See also 'Housing is falling much faster than reported' (ericskiff on Clipmarks) and http://trendmonitor2.wordpress.com/tag/economy/ .
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POPSHome prices drop 15.3% year over year I began watching this whole mess play out in about 2004, and was aghast as prices continued to fly out of control. By the end of 2005, the housing fever was breaking and the "housing boom" was being seen for the bubble it was. Now, to look at the chart of prices even for the so-far relatively insulated New York, there's no mistaking which direction prices are headed. Not only that, it's heading ever faster in that direction. This "record" of 15.3% year over year drop won't stand very long. I'd be very surprised if we don't break it next month.
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POPSA history of Home Valuies The unprecedented near vertical assent started in 2000 when the cheap money floodgates were opened in response to the bursting of the Web 1.0 bubble.
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POPSUpstate NY feels the foreclosure crunch I've talked with many people upstate over the past few years who said "it won't happen here." Risky lending practices are biting both the borrowers and the lenders in Upstate NY hard.
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POPSIs Bernanke Worse Than Greenspan?
"right" interest rate, which is a fool's errand. When he'd pick a rate that was too wrong, we'd wind up with a misallocation of capital, and he would come back and try to rescue it with more easy money. There's lots of evidence of his willingness to cut rates but reticence to take back those cuts. The consequence was an epic stock bubble. When that burst, it took 13 rate cuts and three tax cuts to get us going again a bigger housing bubble that's more dangerous. So how do you square criticism of Greenspan with unprecedented economic growth during his tenure? You have to weigh the gains with the fallout. If you're taking steroids and do really well, but three years later you get cancer, was it worth it? That's why in the stock mania, I said it would lead to problems, and people laughed at me before the Nasdaq dropped 70 percent. It's the same in the housing bubble. If we are a year from now mired in the worst recession of the last 30 to 40 years, will it have........
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POPSHousing flippers are upside-down As the market turns sour, many folks are left with mortgages for more than what they can sell their house for... if they can sell it at all! This blog tracks houses on the market and how much the flippers would lose at their current asking price. Ouch!
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POPSMcMansion-maker Kara folds as housing market turns sour I've been watching this bubble for a long time, and it's frightening to see how blind these builders were going into the downturn. I've heard horror stories of buyers with $150,000 deposits that are vanishing before their eyes as Kara files chapter 11. Everyone owed money by Kara from contractors to banks and investors is similarly screwed. Kara is the first, but will certainly not be the last as the housing bubble backlash hits.
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