Mark in SF

U.S. Housing: A False Dawn Recovery in 2009?

@Bornstein

What are you suggesting? I bail out Alt-A borrowers?

Why will losing their homes mean losing their jobs? You're not making any sense.

In your report did you mention how many people LIED on their Alt-A loan applications?

U.S. Housing: A False Dawn Recovery in 2009?

@kunst
"We wouldn't stiff the rest of the world like that, would we? "

you are forgetting that most debt is owed to other (rich) Americans. The US goverment debt is just a small part of overall debt.

Those rich folk are not so keen on high inflation, I guarantee, as it means their wealth (and the common man's debt) goes away.

U.S. Housing: A False Dawn Recovery in 2009?

"compared to $140k at the beginning of the decade before the bubble began to inflate."


I disagree. This thing got started in 1996. Mid 00's was just when things got really, really frothy. There was plenty of speculation, assuming property always went up, interest only ARMS, etc before that.

Time To Bail Out WaMu?

"Washington Mutual has enough cash to buy all of it's stocks itself..."

What good is borrowed cash? It's all about the assets minus liabilities.

Oil: The Inconvenient Truth

Brian, you reference some article slamming Gore written by somebody that clearly has no clue about science?

"Let me illustrate. I estimate that this square in front of my face contains 100,000 molecules of atmosphere. Of those 100,000 only 38 are CO2; 38 out of a hundred thousand. That makes it a trace component. Let me ask a key question: how can this tiny trace upset the entire balance of the climate of Earth? It can’t. That’s all there is to it; it can’t."

Please pick up an introductory geology or meteorology textbook. Without that 380ppm trace CO2 the earth would be a big ball of ice. (C02 used to be 25% less before the industrial revolution, something the author conveniently ignores)

Roubini Now Says House Prices to Fall 30%

I'll buy a house when it makes sense to: when it's no longer much cheaper to rent. Homeownership has it advantages, but I'm sorry... at 50%+ premium like we *still* have in San Francisco is just not worth it, no matter what euphoria the NAR is trying to push on us. Half my friends want to 'buy on the dip' with new jumbo limits as a 'once in lifetime opportunity'. Amazing how many people are still smoking the crack.

The Fed Is Leaning Hard Into a Headwind

I'm guessing Purl Gurl is a homeowner? Yes of course rising *real* wages would be a good thing, and we can all cheer on measures taken to encourage that. That does not mean housing has sufficiently corrected. Home prices are not a matter of public policy, and any policy that seeks to prop up their value does NOTHING to promote real wealth or real increase in wages. I do share some of your outrage though about the greed being allowed free reign in our system.

The Fed Is Leaning Hard Into a Headwind

"If an agreement can be reached (the borrower receives some skin in the game, the lender doesn’t take too much of a hit), then both side will be better off"

'Receives' some skin in the game? LOL. I tend to think of 'skin in the game' as equity that was EARNED by actual work or investment, not a handout from a lender. Skin the game is what keeps people from taking too much risk for fear of loss. A hand out from a lender is just the opposite! It's rewarding taking on too much risk by getting a hand out! 'Receives skin in the game?!?' I'll have to remember that one.

Time To Short the British Pound?

Or do forex. Don't have to tie up lots of capital that way.

Reconsidering the Deflation Risk

<i>In an economy in which 2/3 of GDP depends on “buy now,” the Fed will do everything in its power to prevent this from happening.</i>

Yeah, but the fed does not have much power to prevent the inevitable. Remember pushing on a string? That takes a long long time to work, and it's not working at all right now. But they time it does a deflationary mindset will have set in pretty well. The only thing the fed can do to inflate over this debt mess is start actully printing lots of money (none of this swap/repo stuff), and flirt with the death of the USD. Not going to happen IMO.

Why I Don't Own Commodities

SD, deecee,
Just to be clear, the fed and other central banks are categorically *not* printing up lots of money. The commodities boom may have gotten a bit of a speculative kick from recent fed easing - maybe, but the rational for the commodities boom has very little to do with monetary debasement. It's just good old supply and demand.

The Fed is Deflating: 10 Reasons Why

This is a great article. I've been trying to explain to people why commodity prices increases, and the prices of items that are heavily dependent on commodities, does not constitute inflation - at least not the kind we associate with a y/y percentage like in the 70's. Also been trying to explain that the fed is NOT printing money (at least yet). I will refer them to this article, which does a better job of explaining than I've been able to do.