Back in 1924, when the Detroit Art Museum opened, Detroit had grand ambitions that matched its grandeur as not just an American city but a global city known as Paris of the West. The art collection was revolutionary, assembled by William Valentiner, the German art director that ran operations from 1924 to 1944. His effort, along with subsequent art directors, resulted in a gem standing as the glitter and grandeur of yesteryear but it has turned into burnt amber and faded glory.
The museum's collection is consider among the top six in the United States, boasting the first Van Gogh purchased for a museum collection in America along with the famous fresco by Diego Rivera (my favorite Socialist artist). Lawyers handling Detroit's bankruptcy proceedings have hired Christie's for $200,000 to assess the value of the collection. Some say the value is priceless.
For the citizens of Detroit and America the lessons are priceless.
Banks Loosening Purse Strings
After years of claiming there wasn't much change in demand for home loans, the Federal Reserve Survey of Senior Loan Officers points to a surge in people to own the American Dream. Still, banks aren't saying there is a "substantial" increase in demand for loans to purchase a primary residence.
So, demand is higher, but what about the actual loans? Banks are easing their lending standards but ever so slightly and not nearly in lockstep with increases in demand.
It's been pretty easy to get auto loans these days even that dude from Weekend at Bernie's could qualify and yet loan terms continue to ease. Subprime loans are leading the way big time, but there's no concern about these loans being repackaged and sold around the world as AAA paper.
White House Moves In...
Today, President Obama is taking another disingenuous victory lap - this time on housing. The rebound was delayed because of all the gimmicks to reward people that put the least amount of economic skin into their homes while ignoring those that struggled, but did the right thing. Housing has begun to rebound but it's not a Main Street phenomenon. Instead professional investors including a lot of foreigners have been able to buy low as first time buyers remain reluctant or shut out. The speech today in Arizona proposes to lay out a scheme to help the recovery (groan).
There will be five steps that focus on government extending loans of five percent down payments. President Obama will say people that recently returned to the job market should qualify for loans and that banks should carry the risk of those loans. Taking the Middle Class argument as something of a birthright, the idea will be to shake down banks to make the American Dream possible for everyone. It all dovetails back to the notion banks and corporations are really part of the public domain and responsible for fulfilling the pursuit of happiness of the masses instead of concentrating on (excessive) profits and risk.
I think the housing market is beginning to turn via the data from banks and any attempt to hijack this tepid recovery will backfire miserably.