The Stimulus Spending Bill has failed completely. Political Conclusion: Time for another Stimulus Spending Bill. << MORE >>

“I will prescribe regimens for the good of my patient according to my ability and my judgment and above all, do no harm to the economy.” << MORE >>

I have argued since 2006 (for a variety of reasons) that while an Affordable Mortgage Depression was inevitable, it would never get as bad as the Great Depression from the stand point of human suffering. For the first time, due solely to the Government's grossly mismanaged response to the economic downturn, I can imagine scenes from the Great Depression returning to our "modern" society. << MORE >>

Great news America! House prices only fell by 18.1% nationally in April. Isn’t that fantastic? Apparently the pace of the free-fall is declining giving newspapers and professional analysts nationwide something to sing about. According to the AP this demonstrates “newfound signs of stability in the housing market”. My local paper ran the headline “Home Price Drop Slowing”. << MORE >>

Six of the nineteen markets analyzed have fallen below inflation-adjusted, January 1997 levels. New York and Los Angeles remain the nation's most overvalued markets with a 37% decline necessary to reach real, pre-Housing Bubble valuations. << MORE >>

I can understand why “academic economists” would endorse “rental equivalence” as the CPI’s measure of housing costs. This makes perfect sense… if you live in a vacuum and ignore cultural values, social pressures, personal preference, rights-of-passage, the influence of marketing, pride, ego, the benefits of stability, the irrationality of consumers and a control premium which each influence the value of owning a home in excess of rental equivalence. << MORE >>

The stark reality is that the Government is consciously subsidizing speculative investments with taxpayer resources. Politicians might as well be paying investors to purchase stocks or pork bellies while committing taxpayers to cover any losses resulting from bear markets and bacon gluts. << MORE >>

The closest parallel to Cap-and-Trade legislation in U.S. history is not coincidentally The National Industrial Recovery Act (NIRA) of 1933. "The NIRA forced manufacturing industries into government mandated cartels and empowered a massive federal bureaucracy to dictate production and pricing standards. The Supreme Court eventually ruled the act unconstitutional, but the damage had been done. Industrial production dropped 25% in the six months after the law had passed." << MORE >>

Monthly U.S. Personal Savings Rate as a Percentage of Disposable Income - Post Housing Bubble Inception << MORE >>

Monthly U.S. Personal Savings Rate as a Percentage of Disposable Income - Since 1959 << MORE >>

The average American can engage in no more financially disastrous activity than borrowing a large sum of money to buy a depreciating asset in a highly leveraged transaction. << MORE >>

“The affordable housing goals that HUD set in retrospect were too high, and frankly caused them to do some things that they shouldn’t have done. Freddie for instance was a very big buyer of subprime, private label securities, because they got affordable housing goal credit for that.” << MORE >>

Barney Frank and New York Rep. Anthony Weiner have sent a letter to the heads of Fannie and Freddie exhorting them to lower lending standards for condo buyers. You read that right. After two years of telling us how lax lending standards drove up the market and led to loans that should never have been made, Mr. Frank wants Fannie and Freddie to take more risk in condo developments with high percentages of unsold units, high delinquency rates or high concentrations of ownership within the development. << MORE >>

May 17, 2007 "We believe the effect of the troubles in the subprime sector on the broader housing market will be limited and we do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system" << MORE >>

"Florida’s housing markets bottomed out in 2006 across most of the state,” says economist Hank Fishkind of Orlando-based Fishkind & Associates Inc. “However, the shape of the bottom varies widely across Florida’s metropolitan areas based on variations in the degree of speculative overbuilding that has occurred, the pace of household formation, and the changes in pricing.” << MORE >>

The current argument (11/6/08) for New York holding up is the demand from abroad for property due to the weak dollar. These people are the dumb money that steps into the breach falsely under the impression that just because something is on sale it is a good deal. << MORE >>

Given Obama’s enthusiasm for Government Activism and the inevitability of the economy’s erosion over the next 18 months, my guess is that Bernanke will be a sacrificial lamb for the Administration in 2010. << MORE >>

“We've never had a decline in housing prices on a nationwide basis.” Ben Bernanke, 2005 << MORE >>

It was inevitable that Fannie and Freddie would eventually collapse, but the timing was unknown and each might have obfuscated their mortal deterioration from the public markets for some time had Congress not intervened. << MORE >>

The worst way to eliminate Real Poverty is to focus society’s efforts instead on solving the perception of Relative Income Inequality. << MORE >>