May 16 2011

Scorching the desert housing markets – Arizona and Nevada real estate blossomed with cheap fuel and easy access to debt. For last two years 40 percent of buyers came from all cash purchases. What happens when the well runs dry in the financial desert?

The Arizona housing market is a perfect example of what happens when the housing religion spirals out of control and implodes in dramatic fashion pushing up against environmental limits.  I remember driving in the blistering summer heat through Arizona before all the housing mania launched out of control in the late 1990s and thinking that […]

May 13 2011

The endgame of the credit card nation – 40 year bull market in revolving debt expansion comes to a sudden halt. U.S. consumers on average have 4 credit cards with 1 out of 7 having 10 or more.

Credit cards are the gateway financial opiate of choice for many spenders.  Banks understand that if consumers begin mistaking debt for actual wealth then this would lead to more willingness to borrow on bigger ticket items like cars and homes as the appetite for credit expands.  This psychological gamble paid off multiple dividends over the […]

May 9 2011

The financial bubble that is still popping – Home prices enter a deep double dip because household incomes are still in a rut. Housing bubbles in Los Angeles and San Francisco persist while Miami and Phoenix metro areas face double digit annual price declines.

Some people are stunned that home prices continue to sink as if a lead weight was placed on the value of housing.  The mainstream press never sliced and diced the minor jump in prices we had last year because much of the increase occurred around tax credit gimmicks and the Federal Reserve using artificially low […]

May 6 2011

Banking in darkness – FDIC system insures over $7 trillion in deposits with a dwindling insurance fund. Americans are offered close to zero percent interest rates to stuff their money into this banking vortex.

The American banking system is based on pure faith.  Usually when the topic comes up in conversation I will ask someone if they know what backs the green cash in their wallet.  One of the common responses is “there is gold in Fort Knox” or another typical response is that it is backed by U.S. […]

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