Oct 31 2011

The desert mirage of easy housing profits – Phoenix Arizona home prices on track for four consecutive years of year-over-year home price declines. 55 percent fall from peak and nominal home prices back to 2000 levels. What happens when investors dominate the market?

The foreclosure epidemic in states like Arizona and Nevada is breathtaking and incredibly disheartening.  Prices have cratered much more quickly than the methodical rise up in the last decade.  Home prices in Phoenix now sit precariously where they did in 2000 without adjusting for inflation.  These desert communities largely built on a dream, fast construction, […]

Oct 27 2011

The walking debt – U.S. public debt now surpasses $15 trillion. The financial sector has wreaked disaster in the American economy. Wall Street banks cause havoc in housing and student loans.

It can be argued that the world is suffering from an epidemic of chronic debt.  The financial sector loves to play on words and would rather call certain debt issues as a credit crisis as if it were a temporary thing like a mid-life crisis.  This is also similar to renaming junk bonds to something […]

Oct 24 2011

The glory of debt spending and casino financial markets. What is the typical income, tax situation, and household income for Americans? Americans claiming student loan deduction surges from 4 million to 10 million in roughly one decade. According to IRS AGI needs to be above $1 million to qualify for top one percent.

This weekend I spent time digging through IRS and Social Security data to get a better perspective on working and middle class Americans.  I find it amazing that in a consumer driven economy, meaning we live to spend in some respect that the media never even bothers to focus on household incomes.  Even on self […]

Oct 20 2011

Crossing the student debt point of no return – for-profit colleges have default rates now rivaling subprime mortgage debt. $1 trillion in student loan debt on the horizon while college graduate wages fall for the decade.

The student loan market is back in the news as it makes its unrelenting march to the $1 trillion mark.  This crippling figure comes in the face of a decade of lost wages for middle class Americans.  Just like the housing bubble people were supplementing a disappearing middle class with more debt.  The allure of […]

Oct 17 2011

The chastisement of the American saver – Federal Reserve offers a higher interest rate to banking reserves than too big to fail banks offer American savers.

Americans are facing a banking system that is largely designed to go against their best economic interest.  Even a decade ago people were able to find a savings account or a certificate of deposit that would keep up with the rate of inflation.  Today, most typical savings accounts at too big to fail banks offer […]

Oct 13 2011

Middle class do worse in current economic recovery – median household income falls faster during recovery than during recession. S&P 500 up 77 percent in recovery while home values are neutral or down in many areas.

Some incredibly disturbing data was released this week showing the continuing crushing body blow to the American middle class.  What was striking was that middle class incomes have fallen faster during the supposed recovery from June 2009 to June 2011 than they did in the actual recession from December 2007 to June 2009.  Why?  First, […]

Oct 10 2011

The wonder years – over 70 percent of GDP comes from personal consumption. For the past decade home equity and credit from other sources fueled growth because of falling household incomes. What happens when credit contracts and home equity evaporates?

In a debt based economy a credit crisis is similar to an uncontrollable virus spreading from house to house.  The slow infection hibernated for decades until it went into a pandemic.  It is troubling to see how the middle class is slowly being dismantled.  However there is one silver lining of the home price correction.  […]

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