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U.S. Housing and Butterflies

Here is what I think to be a neat fiction/analogy drawn by Reggie Middleton (BoomBustBlog) about a hedge fund manager who found a pretty caterpillar and tried to speed up the process of turning it into a butterfly.  Middleton's story is worth the price of admission.  Titled 'Did Bernanke Permanently Cripple the Butterfly That Is U.S. Housing? The Answer Is More Obvious Than Many Want To Believe', Middleton contends that "the 2008 market crash was cut short by the global machinations of a cadre of central bankers intent on somehow rewriting the rules of economics, investment physics and global finance".  The article goes on to analyze the current U.S. Housing situation and concludes the outlook is very bleak.  I suggest you take the time to read this article given what I think is the importance of U.S. Housing to U.S. consumer confidence, U.S. consumer spending, and the U.S. unemployment situation going forward.

In September, 2008 I thought the U.S. Government and Central Bankers were moving too fast, was acting with an element of desperation, and had little if any obvious strategy or end game other than provide some sort of immediate relief to what was clearly a bad situation.  You can read my then contemporaneous comments and predictions by reading 'Desperate People Do Desperate Things' - reading time 3 minutes (September 21, 2008), 'Update - Desperate People Do Desperate Things' - reading time 3 minutes (September 25, 2008), and 'Continued Saga - Desperate People Do Desperate Things' - reading time 2 minutes (September 29, 2008).