For a minute there I thought I had to get off my couch, when all the while the fact is we don't have to do anything much but keep things afloat for just a few decades more! In fact, we'd best shut up about PO, because if our offspring finds out we knew about it all along, they'll turn and wring our necks come 2036!
Posted: Fri May 16, 2008 3:52 pm Post subject: Re: Housing & Economic Collapse - In Progress - #2
FreddyH wrote:
The economic models reveal that consumer expenditures, a proxy for GDP, rises and falls with families' perception of their net worth. This Wealth Factor will not invite a Recession 'til the USA nat'l home price avg declines below the 2002 threshold. Such a paper loss will induce consumers to pull back on spending and confidence...
Joined: Jan 14, 2008 Posts: 321 Location: The Yukon
Posted: Fri May 16, 2008 4:43 pm Post subject: Re: Housing & Economic Collapse - In Progress - #2
Twilight wrote:
FreddyH wrote:
The economic models reveal that consumer expenditures, a proxy for GDP, rises and falls with families' perception of their net worth. This Wealth Factor will not invite a Recession 'til the USA nat'l home price avg declines below the 2002 threshold. Such a paper loss will induce consumers to pull back on spending and confidence...
How good are those models?
It seems those wealth perceptions have taken a knock kind of early. Maybe it's because grocery, transport, utility and medical bills are not where they were in 2002. Could rampant price inflation have stealthily raised that threshold and caused an "unexpectedly" early breach? It would come as no surprise to me.
"How good are the models?" Good enuf to successfully predict that a quadrupling of crude since Iraq2 has only raised the CPI to 4%. "Rampant inflation"? ... sorry, kids!
And GDP is still positive despite regardless of a bunch of losers going into foreclosure. Their influence on the total realty market is not significant. The fraud and gullibility evident in the sub prime mtg episode caused the bubble and the removal of those cancers from the market allows it to continue a post correction secular trend... _________________ www.TrendLines.ca/scenarios.htm Home of the Real Peak Date ... set by geologists (not pundits)
Posted: Fri May 16, 2008 4:53 pm Post subject: Re: Housing & Economic Collapse - In Progress - #2
This is not contained to subprime. I expect there to be a lot of collateral damage from this.
Interesting you mention CPI =/= "rampant inflation". Of course not. CPI has been discredited for the purpose of measuring price inflation. You can quote CPI to people all day, you will not make them feel more wealthy or spend like it. The wealth effect has broken early because it was always a fragile psychological trick and the illusion is being shattered. The models will have to take such changes into account if they are to stay relevant. _________________ "The American people are watching the numbers climb higher and higher at the pump and they're waiting to see what the Congress will do." - George W Bush
Joined: Jan 14, 2008 Posts: 321 Location: The Yukon
Posted: Fri May 16, 2008 5:43 pm Post subject: Re: Housing & Economic Collapse - In Progress - #2
Twilight wrote:
This is not contained to subprime. I expect there to be a lot of collateral damage from this.
Interesting you mention CPI =/= "rampant inflation". Of course not. CPI has been discredited for the purpose of measuring price inflation. You can quote CPI to people all day, you will not make them feel more wealthy or spend like it. The wealth effect has broken early because it was always a fragile psychological trick and the illusion is being shattered. The models will have to take such changes into account if they are to stay relevant.
Your anecdotal musings are meaningless.
off topic: breaking news - Canada's car sales up 18% in Q1.
note to self: what recession?
***************************************************
New vehicle sales post strongest gain since 1998 in first quarter
The Canadian Press, May 16 2008
OTTAWA — Sales of new motor vehicles closed the first quarter of 2008 with their strongest gain since 1998, despite a slight decline in March.
An exceptionally strong January powered a 9.1 per cent gain in unit sales in the first quarter compared with the fourth quarter of 2007 — the strongest growth rate since mid-1998.
Statistics Canada attributes the gains to lower prices, additional rebates and incentives, such as better financing, and a one percentage point reduction in the goods-and-services tax.
The quarterly increase was driven almost entirely by strong sales of new passenger cars, which were up 17.8 per cent, the largest increase since 1976.
Consumers bought 148,796 new vehicles in March, down 0.5 per cent from February.
Sales of new trucks — including minivans, sport-utility vehicles, light and heavy trucks, vans and buses — fell 0.6 per cent in March while passenger car sales slipped 0.3.
The agency says preliminary industry data for April suggests the number of new motor vehicles sold will remain relatively unchanged.
CTV News - G&M _________________ www.TrendLines.ca/scenarios.htm Home of the Real Peak Date ... set by geologists (not pundits)
Last edited by FreddyH on Fri May 16, 2008 6:41 pm; edited 2 times in total
Posted: Fri May 16, 2008 7:11 pm Post subject: Re: Housing & Economic Collapse - In Progress - #2
FreddyH wrote:
Your anecdotal musings are meaningless.
I should be offended and perhaps in part that was the intent, but I understand you are only doing your job. I am no stranger to information placement or reinterpretation. More to the point, I understand why now and why here - people are inconveniently stirred to seek answers, professional media have no monopoly in this domain and ours cannot be the only voice they stumble upon. It is understandable that a debate, a lack of consensus the general public will find reassuring, needs to be contrived. It is also understandable that traditional sources are limited in what issues the existence of which they can be seen to be acknowledging. You are performing a necessary function. Remember though that it is only intended to serve as a delay. A tip of the hat then, and no hard feelings. _________________ "The American people are watching the numbers climb higher and higher at the pump and they're waiting to see what the Congress will do." - George W Bush
Posted: Fri May 16, 2008 7:14 pm Post subject: Re: Housing & Economic Collapse - In Progress - #2
Spring a bust for housing market
Quote:
Shaky confidence and falling home prices combine to snuff key selling season
BOSTON (MarketWatch) -- The hoped-for rebound in home sales failed to blossom this spring, with the housing market caught in a downward spiral as falling prices continue to sap consumer sentiment and keep would-be buyers on the sidelines.
The all-important sales season that unofficially kicks off after the Super Bowl again failed to lift the residential market out of its doldrums. Although a surprising jump in April housing starts was reported Friday by the Commerce Department, enthusiasm was tempered by the fact that the gain reflected a jump in multifamily units. Starts of single-family homes lost nearly 2% to the lowest rate since 1991.
There are other reasons why it's not yet time to break out the champagne to celebrate a bottom in the housing market. The sagging confidence of home builders points to more pain this summer. On Thursday, the National Association of Home Builders said that its sentiment index fell close to a historical low. "The housing market has shown no evidence of improvement thus far," said David Seiders, chief economist for the builder trade group.
The final nail in the coffin for the spring-selling period came this week after............
To put this into perceptive, according to Case Shiller, the decline in US home prices has destroyed wealth equal to 34% of the US GDP. This has occurred in a little over two years, and has occurred during a period of record price increases in food and energy.
Because of government manipulation of statistical numbers, in order to control government costs and protect the dollar, we do not have an accurate official number for our present inflation rate. Private analysts, like Shadow Government Statistics, have published numbers stating that it is in excess of 8%. It they are correct, and anyone who has to feed their household knows that the government figures are badly in error, home ownership will soon only be available to a select few!
Joined: Oct 15, 2004 Posts: 2082 Location: Arkansas
Posted: Fri May 16, 2008 7:17 pm Post subject: Re: Housing & Economic Collapse - In Progress - #2
FDIC tells Congress to prepare for 2nd Financial Tsunami, commerical loan defaults:
Quote:
FDIC sees another wave of U.S. credit stress coming
05.16.08, 10:19 AM ET
United States - WASHINGTON (Reuters) - The head of the Federal Deposit Insurance Corp. said on Friday another wave of U.S. credit stress was coming involving non-mortgage loans.
Bair, in prepared remarks for a Brookings Institution event, said delinquency rates were rising for construction and development lending as well as for commercial and consumer debt. However, U.S. banks are still healthy and in a much stronger position to weather the storm than they were during the savings and loan crisis of the 1980s.
Bair lauded efforts by Democrats and some Republicans in the U.S. Congress to draft a bill offering federal mortgage assistance but said "more proactive intervention" is needed to prevent home foreclosures. (Reporting by John Poirier; Editing by Tom Hals)
WASHINGTON (AP) -- Treasury Secretary Henry Paulson said Friday that financial markets are "considerably calmer" now than they were two months ago. He predicted the economy will be rebounding by the second half of this year.
quoting this for posterity!!!
This laughable statement has been interpreted to mean Paulson says the credit collapse is over. Apparently the PTB don't really think the economy is getting better. The Fed, FHLBB, and inter-central bank swap bailout is now in the vicinity of $1 trillion and climbing daily.
As shortonoil says, foreigners and US investors are fleeing the US dollar at a fast rate. They should be. With the US dollar more than 50% backed by junk debt of unknown value, the US dollar has now undergone its largest devaluation since the bottom of the 1930s depression. Back then, that lead to commodity prices rising about 80% in six months. We may be closing in on a similar gain now. So those huge price gains for energy and food won't be going away.
The question is - what happens next? I've said for months that the US economy will drfit down in a slow manner through most of the first half of 2008. After mid-year, ever rising energy prices are going to crush an economy already down on its knees.
Posted: Fri May 16, 2008 7:43 pm Post subject: Re: Housing & Economic Collapse - In Progress - #2
Twilight said:
Quote:
You are performing a necessary function. Remember though that it is only intended to serve as a delay. A tip of the hat then, and no hard feelings.
I view the intentional obfuscation of knowledge as a process that can only be performed by lower life forms. Being slightly above slime mold, they are creatures that can only deserve our disgust. Since they belong to a sub-mammalian species of undefined genus, they have no claim on the courtesy that we reserve for our fellow human.
Posted: Sat May 17, 2008 5:29 am Post subject: Re: Housing & Economic Collapse - In Progress - #2
shortonoil wrote:
I view the intentional obfuscation of knowledge as a process that can only be performed by lower life forms. Being slightly above slime mold, they are creatures that can only deserve our disgust. Since they belong to a sub-mammalian species of undefined genus, they have no claim on the courtesy that we reserve for our fellow human.
I am no fan of the likes of Yergin either, but it does not surprise me that they do what they do. Their response is a necessary consequence of the system we have, a balancing mechanism which will only be stepped up as time goes on. It is natural for economic orthodoxy to react.
Posted: Sat May 17, 2008 8:08 am Post subject: Re: Housing & Economic Collapse - In Progress - #2
FreddyH wrote:
Twilight wrote:
This is not contained to subprime. I expect there to be a lot of collateral damage from this.
Interesting you mention CPI =/= "rampant inflation". Of course not. CPI has been discredited for the purpose of measuring price inflation. You can quote CPI to people all day, you will not make them feel more wealthy or spend like it. The wealth effect has broken early because it was always a fragile psychological trick and the illusion is being shattered. The models will have to take such changes into account if they are to stay relevant.
Your anecdotal musings are meaningless.
Anecdotal musings may be meaningless only if the same effect is not being felt in your part of the world. Statistics are meaningless when your "anecdotal" wealth is leaving you faster than your "anecdotal" wallet can keep up with. And people who were formerly "wealthy" have now realized how truly poor they are with credit expansion gone and rampant inflation. Yes, I said rampant. That may be a somewhat subjective assessment of the situation at hand, but despite what you believe about CPI, it's dawning on a lot of regular middle class folks that those are cooked numbers. Of course, it doesn't occur to most of us until it hits home personally. I suspect that whatever your psychological barrier to acceptance of this is is somehow related to your ability to absorb the cost now and your inability to look at anyone's situation other than your own. And you my friend, will be blindsided if you don't wake up.
And by the way, you aren't on my ignore list. You're interesting, if nothing else.
Posted: Sat May 17, 2008 9:03 am Post subject: Re: Housing & Economic Collapse - In Progress - #2
FreddyH wrote:
Quote:
Your anecdotal musings are meaningless.
Quote:
Blackstone Group LP, manager of the world's largest private-equity fund, said it had a loss of $66.5 million in the first quarter as leveraged buyouts evaporated and the value of companies it owns declined. Blackstone Group LP President Tony James said banks are mistaken if they think credit markets have begun a sustained recovery. ``It's not clear to me if it's a permanent upswing as I think many of the banks are saying or the eye of the hurricane,'' James told reporters on a conference call today.
Quote:
After stabilizing at 20 the past three months, the NAHB/Wells Fargo home builders' sentiment index fell back in May to 19, only one point above the record low of 18 set in December. Builders' assessment of current sales have never been gloomier in the 23-year history of the survey, with the sales index falling to 17 in May from the previous record low of 18 in April. The sales climate is so bad that the builders say that only a federal subsidy for home buyers will turn the market around.
Is this the type of anecdotal musing to which you are referring? Without an improvement in the credit markets people will continue to find their anecdotal incomes disappearing and their anecdotal life styles degrading. With the anecdotal reports we are receiving, that situation is not likely to soon be reversed.
Quote:
Foreign owners sold $48.2 billion in U.S. financial assets in March compared with net purchases of $48.9 billion in February, the Treasury Department reported Thursday. The U.S. must import about $60 billion in capital every month to finance the balance of payments deficit.
Here is an anecdotal report for you FreddyH --- THE WHEELS ARE FALLING OFF!
Joined: Oct 23, 2004 Posts: 5496 Location: New Jersey
Posted: Sat May 17, 2008 9:55 am Post subject: Re: Housing & Economic Collapse - In Progress - #2
shortonoil wrote:
Quote:
Foreign owners sold $48.2 billion in U.S. financial assets in March compared with net purchases of $48.9 billion in February, the Treasury Department reported Thursday. The U.S. must import about $60 billion in capital every month to finance the balance of payments deficit.
Here is an anecdotal report for you FreddyH --- THE WHEELS ARE FALLING OFF!
I explained here in 2005 in great detail that the US economy was rescued from the initial effects of rising energy prices by a rapidly rising trade deficit. This of course must be financed by capital inflows - which held up very well as Asian countries decided to reinvest dollars earned on trade back into the US.
However the trade deficit has leveled off the last year or so. Ironically what is usually considered good news actually means that the US will no longer be able to take more or more from the rest of the world - in the form of raw energy, or embedded energy in product imports.
If foreign capital no longer flows into the US, the US may not even be able to finance the existing level of imports.
So trade/capital flows indicate that the US economy has already stopped growing. Year to date oil imports and domestic oil production are down. HIgher oil prices mean that even less oil will be imported, and the economy will slow further.
I don't have time to explain all the feedback systems and how they will work, but bascially I am saying focus on real economic activity and not the financial markets to understand where the economy is heading.
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