Oh, hi! You're back! I didn't see you coming! I was busy using my Chinese-made prybar to pull all those Chinese-made nails out of the Chinese-milled pine box into which I prematurely put Linda Ellerbee.
Sorry, Linda! That's no way to treat the co-anchor of the best written and most intelligent news program ever. That's what I get for using NBC-pedia for your bio! I should have used this instead. As I get to consuming my fresh crow, I'll Take Big Bites. And so it goes.
Speaking of goes, how about that party going on over on Wall Street? I've never seen such revelry over what should be sad news. While there is a momentary statistical glitch that suggests that new home sales are up, Mark Zandi of Moody's Economy.com told CNBC the real bad news is on the way. But after my gaffe believing NBC-pedia, why should Texas Trailer Trogs and Wall Street investors listen to Zandi? Let's try another tack.
How about this? Despite government officials and housing-industry executives insisting that a nationwide decline in the median price of American homes would never happen, it will become evident this week when the home-price index is released Thursday by the Office of Federal Housing Enterprise Oversight. Moody's reports that the national median price is not likely to return to its 2007 peak for more than a decade.
Toll Holdings, America's top builder of luxury homes so favored by the Havemores, revealed that construction cancellations are at an all-time high as the country's most affluent home buyers pull back from planned purchases. Even the working stiff is affected, with foreclosures of existing homes up 93% over last years' July figures.
Where's that loudly touted Bush economic boom? The consumer piggy bank is stuffed to the gills with Federal Reserve IOU Notes, leading Countrywide Financial Corp Chief Executive Angelo Mozilo to report the U.S. housing downturn was likely to lead the country into a recession. Could it be that he understands that the two billion Bank of America invested in his company was itself borrowed, and that at some point the piper must be paid? He will soon know himself, as Merrill Lynch & Co analyst Kenneth Bruce is of the opinion that Countrywide might face bankruptcy if market conditions worsen and downgraded Countrywide stock to "sell".
Article comments
1 - Dave Nalle
Realist, I have to say that I admire your persistence in the face of reality, and your stylish presentation of your lunatic propaganda. Way to go!
Nothing you say makes any sense at all, but you say it with such gusto that I have to admire you.
BTW, not that I want to afflict you with an understanding of the housing market, or anything, but at the same time we see this slowdown in home sales and reduction in home prices we see a parallell and even larger increase in rental construction and rise in rental prices.
The people who lose jobs in building houses will just move to jobs building apartments and office parks.
This isn't a real estate crisis, it's a problem with a few irresponsible banks getting what they deserve.
Dave
2 - Ruvy in Jerusalem
At some point, Dave, innocent people minding their own business get the shaft up the rear end. Wow, that can hurt, too!! Uff da!!
So, is it the employee of the loan company that gets the shaft? Or is it the employee of the bank? Or is it the employee of the insurance company that sold housing insurance on the housing developments? Or is it the employee of the distressed merchandise shop that attracted all the folks working at the bank, the loan company and insurance firm? Or is it the employee of the fast food joint that made its money off of the employees of the bank, loan company, insurance company and distressed merchandise store that all closed?
And so it goes - and goes - and goes...
Yeah, dumb kikes like me don't understand economics at all.
Heh...
3 - Dave Nalle
Actually, based on what the congress is trying to do with a proposed mortgage bailout it may be - as usual - the taxpayers who get the shaft.
Dave
4 - Baronius
I'm worried about the Bubble bubble.
We've had the S&L bubble, the dotcom bubble, now the housing bubble. There's a whole industry of doomsayers who live off the promise of future bubbles. What happens when everything goes well? There'll be a lot of experts without bubbles. The bubble industry and affiliated industries (wolfcrying and chicken-littling) will go into a tailspin.
I wonder, will they see it coming?
5 - Dr Dreadful
Bubble bubble, toil and trouble.
6 - Clavos
"Bubble bubble."
Heh. I like that, Baronius.
Very funny.
7 - Dave Nalle
Baronius, if everything went well it wouldn't be a real economy, it would be a command and control system where the state just made up how things were and told us.
Which, btw, is what I believe Realist is in favor of. There will be no good news until the state takes over the media if he has his way.
Dave
8 - Baronius
Exactly, Dave. The economy looks like a 5-year-old running, where every motion could topple him, but he somehow gets it done. There is no such thing as a market in equilibrium. (George Gilder wrote about this in Wealth and Poverty.) Look at how far the economy has run, despite the occasional burst bubble. You could never plan the successes we've had, because no one person would guess where they'd come from.
9 - bliffle
Actually, we do have an administered economy. When the president tells the head of the Fed Reserve to reduce interest rates he does it. Makes the pres look better in the polls and it's a big boon to payday for bankers.
Every tax break, every earmark, is The Hand Of the Government tilting the economic system one way or the other.
10 - Dave Nalle
True, Bliffle, but for now the government can't really come out and declare that stocks must go up and set wages and prices to a strict arbitrary standard. In fact, a lot of what the government does is incredibly ineffective. Raising and lowering rates has some impact, but not nearly as much as people sometimes make out. And government attempts to regulate the economy in any more detailed ways almost never work out well.
Dave
11 - bliffle
But such government actions ALWAYS benefit a small number of businesses and people who are In The Know.
12 - Clavos
Yep, and the do so everywhere and always will.
It pays to be in the know as much as your resources permit.
From the tone of many of your comments I infer that at some time you were stung pretty badly???
13 - bliffle
Anyone with a taste for honey is going to get stung, it's not surprising that it happens, only whence those stings come from. It makes one wary.
And right now what should make one wary is the highly leveraged nature of the US economy. The USA has about $550trillion of extrinsic paper value riding on $45trillion of intrinsic net assets, thus making it very unstable. Paul Volkers nightmare scenario of a relatively small rejection of, say, a $100million US bond issue by a junior asset manager in a minor nation could start a worldwide run on the dollar that would escalate precipitously. Our economic welfare depends mightily on foreigners continuing to drink the Koolaid.
Meanwhile, the administration, having no real faith in the idea of Free Markets that they always blither about, attempts to exercise tight control through the Fed and the Plunge Protection Team, but really all they do is store up more water behind a dam that will eventually collapse.