How Americans go poor by spending money on housing and related expenses: Americans spend 33 percent of their income on housing-related items.
People tend to think that buying a home means only paying principal and interest. Most conveniently forget the other myriad of expenses associated with being a homeowner. As Americans find less disposable income in their bank account each month, less Americans are becoming homeowners. The middle class is moving away from the American dream because […]
Generation R – Millennials are largely living at home or opting to rent. What happens when homeownership is less accessible to younger Americans?
There is a big challenge when someone comes of age during an economic crisis. Millennials, the children of baby boomers born between 1982 and 2000 have largely grown into an economy that was fully in shambles. This is a generation that grew up with parents talking about the middle class as if it were a […]
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 […]
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 […]
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 […]
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 […]
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 […]