For anyone who's interested, Paul Krugman has an interesting blog post on why the Fed tracks core inflation rather than actual inflati...
Sabtu, 27 Februari 2010
Kamis, 25 Februari 2010
New home sales plunge anew
New home sales plunged to a record low in January—And yes, these are seasonally adjusted numbers:Sales of new homes plunged to a record low in January, government figures showed Wednesday, as the weak economy and a glut of foreclosed homes continue to weigh on the market.The seasonally adjusted annual rate of new home sales plummeted 11.2% to 309,000 last month, compared with a revised rate of 348,000 in December, the Census Bureau said. That's a decline 6.1% from January 2009.It was the lowest rate since the government began keeping records in...
Selasa, 23 Februari 2010
Kamis, 18 Februari 2010
The truth behind our financial system
Fed Chairman Ben Bernanke exposes the truth behind our entire financial system:The U.S. economy ceased to function this week after unexpected existential remarks by Federal Reserve chairman Ben Bernanke shocked Americans into realizing that money is, in fact, just a meaningless and intangible social construct.What began as a routine report before the Senate Finance Committee Tuesday ended with Bernanke passionately disavowing the entire concept of currency, and negating in an instant the very foundation of the world's largest economy."Though raising...
Selasa, 16 Februari 2010
5 threats to housing this year
Credit Suisse predicts a strong housing market this year, but warns of five threats to it:Tax credit expires.Mortgage rates rise.Foreclosures continue.FHA tightens lending.Jobs. There’s risk from a slow rebound in employment.Personally, I expect four of the five to be issues this year. The exception is #4. The FHA is losing money hand over fist, but is unlikely to tighten lending because as a government institution it has little incentive to act rationally.Also, the threat of item #2 is inversely related to the threat of item ...
Senin, 15 Februari 2010
Hank Paulson on housing
Former U.S. Treasury Secretary Hank Paulson is interviewed about housing:Sorry about the lack of blogging last week. I was out playing in the sn...
Sabtu, 06 Februari 2010
Housing bubble poetry
Now we know what Prof. Karl Case (of S&P/Case-Shiller) is doing with his free time since he retired.Hat tip: Greg Mank...
Jumat, 05 Februari 2010
January 2010 employment data
The official unemployment rate declined in January. It's still too early to tell for sure, but so far it looks like we're seeing the declining unemployment that occurs after a typical recession, rather than the "jobless recovery" of the previous two recessions. (The typical pattern after a recession is for the unemployment rate to decline. That pattern was broken by the previous two recessions when the unemployment rate rose for quite a while after...
Kamis, 04 Februari 2010
The danger of walking away
Apparently, thirty states—including Virginia—are recourse states. CNN Money has an interesting article about banks pursuing people who have lost their homes. If you walk away from your home, you better be poor:Sometimes lenders go after borrowers walking away from their homes if they have other assets, according to Florida real estate attorney Larry Tolchinsky."Banks are pulling credit reports to see if it's a strategic default," he said. "If you're behind on all your other payments, you're okay. But if you're not, they'll come after you."And:What...
Rabu, 03 Februari 2010
Dean Baker's take on walking away
Economist Dean Baker, one of the first people to publicly warn of the housing bubble, disagrees with me on ethics:Walking away from an underwater mortgage is one way in which normal homeowners may be able to both help themselves and the economy.The logic is straightforward. As many as 20 million people owe more than the current value of their homes. In most cases they have little hope of ever accruing equity in their home. There continues to be an enormous glut of housing. Nationwide, vacancy rates are at record highs. Rents are actually falling...
Selasa, 02 Februari 2010
FHA to encourage flipping
The Federal Housing Administration is behaving more and more like the financial institutions that got us into this mess:Starting today home "Flippers" are now welcome at the FHA.That's right, with a glut of foreclosures plaguing the nation's neighborhoods, the FHA is temporarily removing restrictions on investors who buy and sell homes within 90 days.It's just for one year, but Flippers are no longer persona non-grata with the government."FHA borrowers, because of the restrictions we are now lifting, have often been shut out from buying affordable...
Krugman: "Too big to fail" is not the problem
Paul Krugman argues that the Fed didn't cause the housing bubble and "too big to fail" isn't responsible for the financial crisis.Assuming Canada doesn't have a housing bubble, it would also invalidate Ben Bernanke's argument that the housing bubble was caused by a global savings glut. Of course, if the U.S. (and global) housing bubble was caused by a combination of factors, then low interest rates and high global savings could be necessary but not sufficient causes of the bubb...
Spammy spam spam
Note to readers: Due to intensified link spamming recently, I have turned on full comment moderation. Sorry, I hate comment moderation as much as you ...
The greater consequences of ignoring the housing bubble
Here's a look at the greater consequences of the Fed's decision to ignore the growing housing bubble in the early part of the previous deca...
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