Feb 15 2014

When the housing market is owned by Fed banks: Federal Reserve went from holding zero in mortgage-backed securities to over $1.5 trillion.

There are significant consequences with the Fed continuing on course with Quantitative Easing.  On paper, it may seem that all is fine on the home front.  However, many regular Americans are finding it harder to purchase a home in spite of a low interest rate environment.  The Fed has created perverse incentives where big banks […]

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May 9 2013

Feeling rich through debt: Modern banking has replaced real economic prosperity with massive levels of debt. Housing affordability reaches multi-decade highs while household incomes retreat to 1990s levels.

One of the biggest headlines right now is how the housing market is pulling the entire market up.  Housing prices are soaring while the stock market is making record highs.  Yet a large portion of the housing run-up is being caused by easy money that has been created by the Federal Reserve.  Banks are out-bidding […]

Sep 24 2012

Deleveraging from one bubble to another – $6.2 trillion in mortgage debt was added between 2000 and 2008. Since the peak in 2008 $1.3 trillion in US household debt is gone but another bubble is brewing hidden under the rubble of the busted housing market.

There is some interesting data on the deleveraging that is occurring with the American household.  Since the peak in Q3 of 2008, US households have lowered their outstanding debt by $1.3 trillion.  It is important to understand how this deleveraging is occurring.  First of all, Americans are largely paying down existing debts much faster and […]

Jul 3 2012

The great deleveraging – US households see access to debt diminish. Housing affordability and reversion to the home price to family income ratio.

Households in the US continue to face a painfully slow process of austerity via debt deleveraging.  In a debt based system like the one we live in access to debt is viewed by many as access to money.  That is, your ability to finance a car, home, vacation, or even a college education is largely […]

Feb 20 2012

Cascading risk and economic headwinds – 5 charts examining the coming financial challenges for the American economy. Inflation is much higher than you would expect but Federal Reserve orchestrating greatest banking bailout in history.

The American economy appears on the rugged surface to be stabilizing but only if you fail to look under the hood.  Today, we have a record 46,000,000 Americans on food stamps.  Many of these people were once moving into the middle class but were launched off the economic treadmill.  The banking syndicate that caused the […]

Nov 14 2011

Crisis of generations – younger Americans moving back home in large numbers. Student loan default rates surging largely due to for-profit college expansion.

The United States has over 4,000 college institutions many which have been raising tuition and fees far faster than the overall rate of inflation.  Combine this with a younger and poorer population and you have a recipe for massive debt serfdom.  As the recession drags painfully on, being the deepest and longest economic contraction since […]

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, […]

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