Home Prices Sharply Down – Thanks Bush!
One of the hidden costs of this F’ed up Bush/Castle economy that has U.S. home prices falling 8.9 percent in the last quarter is that people who bought (or refinanced based on inflated home values) in the last five years are now basically trapped in their homes.
No mobility. No seeking new opportunities in other parts of the country. No energetic and free wheeling capitalism. No getting out of your current suck ass job.
It is “hunker down” time and ride this shit out OR take a HUGE loss.
h/t Atrios Again
What cracks me up (on a local level) is the over-extended developers who blame the nation-wide housing crisis on Levy Court.
I guess if you lost millions, its more comfortable to blame someone else.
Jason,
Just now I wrote a report almost five years ago and I did everything in my power to stop this from happening in Delaware. I compared the housing markets in Delaware to those in New Jersey circa 1885. The same trend was at play until 1921, and then again until 1933. But at the time people were riding so high, I was met with crickets and disbelief. Not Mr. Disbeleif who posts here but the real thing.
To quote a bombastic world leader: “Mr. Danger in the casa blanca did not care.”
Just now I was thinking….sorry typing too fast. I have a grant to work on.
Did Brian just say I’m not the real thang?
hahaha….No I said not Mr. Disbelief. I was met with disbeleif….
I don’t think this is a bad thing. The housing market was freaking out of hand.
My wife and I bought our first house in New Castle for $100K. We sold it a few years ago for $135K. A nice profit which I enjoyed. 🙂
However, before the market when bust, houses on my old street (Garden Lane, it dead-ends onto 295) where going for $200K and up. That was and is ridiculous. If the market kept on sky-rocketing how would our children afford a starter house?
Nemski this is different from an isolated bust cycle in the housing market in that it affects credit and the system of expanding credit that the chicago school of economics needs to create new economic growth.
Okay, Brian, you’ll need to explain to me the difference. Pretend that I’m not smarter than a 5th grader.
GDP is 70% consumer spending. That means you and me going to the store and buying crap.
US investors have their money in those stores and the factories that supply them. As long as you keep buying the crap, the stores and the factories keep sending money back to the investors. But if your budget gets tight and you stop buying the crap, investors run to government to “put more money in consumers’ hands.” (didja get your check yet?)
But for a long time, nobody has really made enough money to buy all the crap. So other investors dangled junk credit so you could buy more crap. First it was credit cards. Then Greenspan allowed an equities bubble to form, so people could tap that and feel rich so they could buy more crap. Then Greenspan (and Mike Castle) allowed a housing bubble to form, so people could tap that for more crap.
All that credit was bought by investors all over the world who thought you would be able to pay it back. Suckers! They forgot that all that debt was built on bubbles. And they forgot that others in the business community were fighting to keep your wages down so you could never repay those debts. Now the investors who bought your debt are screwed.
anon hit it on the nose. Unfortunately, a lot of the investors who bought our debt were foreign, meaning we fucked a lot of outside investors in the US economy, which caused the rest of the world to invest in more stable economies and currency than the US and US dollar respectively.
I’d love to hear a college course 30 years from now about what Bush did to our country.
Anon expressed it the way I would. Without expanding credit you cannot build more bubbles, and guess what….you cannot repay debts without the capital to do so and cannot get the capital unless wages expand in proportion to debt.
“I’d love to hear a college course 30 years from now about what Bush did to our country.”
Moral of the story: you cannot run a country like a ponzi scheme and expect it to work.
we also cannot by crap because of runaway hyper inflation in health care, energy, food, and education. To cheer you up even more, the rate of inflation on all the above is increasing month by month. They may need that border fence to keep us in.
Inflation is running high becuase of supply and demand problems, around the world it has gotten as high as 23% in some places but with a devalued dollar it could go much higher. I really hope we have a good plan to overcome that in Delaware. I hate my bearish forecasting but I hate inaction even more it makes me profoundly nervous. So, I would argue the state the business community and all of us should get together and start overcoming it by changing our economic model to another one; basically using Adam Smith and John Nash’s revision would be a great first step to avert a real disaster.
We also cannot buy crap because of runaway inflation in health care, energy, food, and higher education. And just to cheer you up even more, the rate of inflation is rising on all 4 of the above. They may need that border fence to keep americans in . Somebody save me a spot on the beach in Costa Rico. I want to at least die warm.
Well Ray, please save me a spot in Costa Rica. There are lots of Quakers there.
Brian we might want to leave tonight, the price of a bushel of wheat rose 25% in one day today. this is real German Wiemer republic stuff. If you dont know what that is google it and be afraid, be very afraid!!!!!!!!!!
Ray I know all about that and have been writing about it since 1999. And been ignored for it since then, but I saw it coming. You can read about it in my book. But also, it is truly profoundly dangerous we need to switch over to John Nash’s rveision of Adam Smith to avert the disaster within this year. Once we get to 09′ if no action is taken things are going to get worse then we have ever seen. Worse then 1932. Pan Americanisn could save us from that.
If you do not know what that is, google it Brian; We might want to leave tonight. The price of a bushel of wheat rose 25% in one day this afternoon. This is real Wiemer republic inflation.
Got tickets Ray? Costa Rica is not faring much better is she? If she is, let’s go. It’ll be fun.
And if my Pan American vision comes true it’ll be part of the larger economic American Union with North and South America.
Ray if you have the tickets tell me where to meet you.
Brian; You are leaving out one important factor in inflation, stupid stupid ethanol. Putting the worlds food supply in our gas guzzlers, proving to be a diasaster.
Yes I complained about this some years ago too. Corn ethanol is not effective and and I recommended sugar and cellulose that they use in Brazil for 85% of consumptiuon. Corn and Rice and Beans lead to mass starvation. I wanred about that but again the ears of the casa blanca were stuffed with pate capers and champaigne.
So what time do we leave for Costa Rica? I know the quakers there so we can have a nice place to stay and work. Also you buy my ticket and I get you set up….we meet and fly before the end of the week ok?
Ray and Brian, why are you stopping at Costa Rica? Why not head for the moon, where you can fight the little green men in your head?
Thanks no, I would like to sit on the beach. Ray suggested it to a world travleller so I am always ready to travel. Also It would give us time to watch it unfold objectivly on a beach with a pina coloda…..rather than getting swept up in it. We are in a hyper-inflation defealtionary trend. Read about them please….
The only green man I know comes out of my nose once a day….thanks Whiz.
Brian; if I was a younger man and did not have children and grandchildren here I would meet you tonight. I can not convince them of the seriousness of the situation. I to have seen this coming for a long while, but it so hard to make americans realize that this can and will happen here. We are headed for another great deppression that will last for DECADES. Every day we lose discretionary income to health care , energy, food, and higher education. It does not take a degree in economics to see the train wreak we are headed for.
So, when are we leaving? Right now I am little handicapped financially as everyone else in my generation but if you find a good price, I’ll make the arranegments….you can look up the friends society there and it is quite nice. give me your e-mail.
Brian, what is “your book” that you referred to above?
Delaware in the Great Depression at Borders.
Brian or anybody else who would like to know the reality of our economic situation. e mail me at raymond.krauss@yahoo.com I will only debate people with facts . No faith healers please!
Cassandra,
The shame is you can’t get my “Zen and the Art of Constitutional Warwfare : How to win the War on Terror and End Terrorism” Beucase it ticked Kristol and the neo-cons off.
You can always self-publish…..I am a very big fan of First Editions!
Thanks Cassandra this one is being blocked becuase it calls on a startegy where all Americans become soliders and get up to speed in the GWOT and Kristol and the nwo-cons want an elite class of soliders like Sparta to keep us helots and all the terrorists under control. My book is like another called “Unrestricted Warfare” those neo-cons have not offered any alternative other than the elitism described.
Sorry for the misspellings it is like 5:30….I need coffee.