Government policies were designed to increase homeownership. Affordable Mortgages, created to realize this goal, were responsible for the Housing Bubble and distorted the economy. The unwinding of these distortions will result in a Global Depression.
Monthly data depicting annual (12 month) price changes of the 10 City Case Shiller Price Index. Clearly illustrates timing and scale of the Boom, Bust, Stimulus Distortion, and ongoing Market Correction. << MORE >>
Today housing prices are plummeting and 13 of the 20 Case-Shiller markets have fallen below the index level which preceded the Obama distortion, leaving 3 years worth of home buyers (and many purchasers who would otherwise not have bought homes) unnecessarily underwater. << MORE >>
"We have tried federal stimulus spending, which yielded little more than a sugar high. We have tried propping up the stock market and home prices with record-low interest rates from the Federal Reserve, hurting savers as well as retirees and anyone else living on a fixed income." << MORE >>
After several hours of hunting, reporters found and photographed this sidewalk crack in Virginia (which may or may not have been caused by the earthquake). Until this devastation is fixed by a new National Infrastructure Bank, at a cost of a few hundred billion dollars, it is hard to imagine an economic recovery catalyzing anywhere near this particular piece of asphalt. << MORE >>
Instead of stabilizing the housing market, buyers who paid overvalued prices, courtesy of Federal subsidies, will contribute a new source of foreclosures to the backload of distressed properties resulting from the Housing Bubble, further extending The Affordable Mortgage Depression.
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While it is encouraging that the Fed has finally recognized that this persistent downturn will not be resolved until 2013, Bernanke continues to rely on policies which never had any chance of resolving the downturn, and have been proven to be ineffective over the past four years. << MORE >>
If the rating agencies are incompetent, then why aren't the ratings advocated by Moody’s and Fitch also being questioned? Is it not possible that Moody’s and Fitch are the ones getting it wrong? << MORE >>
"Now, gentlemen, we have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I am wrong, as far as I am concerned, somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises.
I say after eight years of this Administration we have just as much unemployment as when we started. And an enormous debt to boot!"
Henry Morgenthau, Jr. - May 9, 1939 << MORE >>
"Spending huge sums of money that we don’t have, burdening our economy with the liability of having to service and repay another trillion dollars of debt, all to create a few government dependent jobs which produce no real economic value will do nothing to alleviate any of the economy’s problems. What it will do is distort the economy further, obscure what is really transpiring, slow down the economy’s inevitable reset, deepen the economic crisis and threaten the US Government’s solvency and credit rating.” - 2/10/2009 << MORE >>
It is interesting that massive housing subsidies from the Stimulus Bill and Federal Reserve policies succeeded in temporarily propping-up overvalued prices, but have failed to stem the collapse of artificial homeownership. << MORE >>
The Government's rigid understanding of homeownership defied the dynamic nature of markets and the immutable laws of economics. By changing market conditions, increasing demand, triggering a rapid and accelerating rise in prices, and embracing so-called innovative, affordable mortgage characteristics, well intentioned politicians seeking to realize a social agenda fundamentally distorted the housing market. "Policy Makers Kill the Golden Goose of Homeownership" << MORE >>
It is the observation of this forum that, given the arbitrary definition of a "technical recession" employed by the National Bureau of Economic Research, the U.S. need never again experience one simply by engineering GDP growth every other quarter. Perpetual pretend prosperity brought to you through the magic of debt accumulation! << MORE >>