freddie

The Bottom's Within Sight - Barron's

I was about to write something in reaction until I read eddie64's comments. Now no need.

I'll just add that many moon ago when I was living in Argentina, I read an article in Marcha, a left-wing Urugayan weekly, by James Petras, a leftist academic sociologist and specialist in Latin America. It was on the riots in the US in response to the assasinations in 1968. It was titled El Saqueo como Politica, y La Politica como Saqueo, which means Looting as Politics and the Politics of Looting. Petras noted that the rage of the disenfranchissed was directed to looting longed for commodities instead of in any organized political organizing. Decades later, the LA Riots in reaction to sanctioned police brutality were directed at massive looting. Just imagine what will happen in our urban areas once commodity consuption is restricted by no credit and increasing unemployment. The religion of America is consumption - you are what you wear, you are what you drive, or you are nothing. After 911, our Decider declared, "shop"!

The US is bankrupt, and the credit bubble cannot be duplicated in the short term. Massive inflation is the only way to buy time, and massive public works and maybe a real physical green revolution can provide productive investment, but that means progressive decoupling from the world economy. But this is a violent country, and I fear you haven't seen nothing yet while you all await "the bottom" to try to make a few devalued bucks.

Hitting the Reset Button On Home Mortgages

I don't want to sound cold, but judging by the TV interviews of folk being forclosed or walking, and the few I know here in California that were speculating with no money down deals, I have no sympathy.

The majority went in with eyes open hoping for the bubble to continue and to get out in two to five years with tax advantaged big capital gains. They gambled and lost, tough luck and good luck next time. In any case, the bailout is for the lenders, and if interest rates continue to be lowered, maybe another bubble down the road. I lived in Argentina, a nation in almost perpetual stagflation, and every time the housing bubble busted, it revived again a few years later when other speculative outlets dried up. The Argentines were flipping years before the US bubble. But all you stock market fanatics should look to property price recoveries and rents for the long term (think in 10 year periods) by getting started now. I bought residential and a little industrial in the early 1990s downturn in CA and would be a sad sack today if I had just depended on my gambling in equities for my retirement.