The end game of global leveraged debt – double-digit percentage point market declines in Europe and Japan and the danger of refinancing debt with longer term debt.
There is a painful realization that shifting debt around like a game of musical chairs has little merit unless real production is achieved as an end result. May was a disappointing month for markets in general. While the S&P 500 certainly fell, markets in Japan and Europe took double-digit declines. The massive amount of leverage [...]
The great deleveraging event – household debt has fallen 4 percent since recession hit. Household debt has fallen dramatically from the peak when household debt aligned itself with annual GDP.
The debt bubble bursting has jammed the bottom line of American households. Debt and money are synonymous for many households in our current economy. The ability to spend, or buying capacity, is looked at in the same light as savings from many in the financial sector. This is why data recently released shows the balance [...]
How Wall Street and the media forgot about the middle class – 10 incredible charts highlighting the problems facing the middle class. China labor costs, debt ratios, Euro-zone finances, and balance sheet disequilibrium.
The mainstream press and ego driven politicians have completely forgotten about the middle class in this country, pretending as if ignoring the cacophony of discontent would simply make it go away. Both parties are simply doing the bidding of the financial upper-crust and that is why you rarely hear about household income being discussed in [...]
The giant gamble in the desert – how Las Vegas bet big on commercial and residential real estate and lost big. Home prices in Las Vegas now down 60 percent from their peak and nearly 1 out of every 5 mortgages is in foreclosure.
Las Vegas is an economic enigma. A gambling and resort paradise planted in the middle of the barren Southwest desert like an electrical oasis. Very few areas witnessed such a large boom in both residential and commercial real estate rolled into one. In a city known for big wins and even bigger defeats the real [...]
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 [...]
The covert bailing out of the commercial real estate industry by the Federal Reserve. How the Fed bails out ritzy hotels and empty shopping malls on the back of taxpayer dollars.
Part of the success that the Federal Reserve has achieved with boosting up large banks stems from its secretive ability to forge shadow bailouts of residential and commercial real estate loans. The more secretive of the previous two comes from the commercial real estate (CRE) industry. During the height of the housing mania in the [...]
Meet the new financial boss, same as the old financial boss – Commercial real estate bailout implicates Federal Reserve as Fed balance sheet balloons to $2.7 trillion. CRE values down $3 trillion from their 2008 peak.
Commercial real estate (CRE) is still benefitting from a large shadow bailout by the Federal Reserve. This isn’t some secretive move since the Fed actually publishes data on this and is available to anyone in the public with a desire to shuffle through the mounds of information. There has been virtually no media coverage on [...]
The financial elixir that is falling home prices – Lower home prices good for the economy – Median U.S. home price down to $157,000 taking up 3 times the annual household income instead of the bubble peak of 5. Adding jobs while home prices move lower? Banks big winners when home prices remain inflated.
It is interesting that in the short-term horizon of our economy falling home prices are occurring while jobs are being added. The banking sector during the early days of the crisis made it abundantly clear that falling home prices would lead to economic collapse. Yet the opposite is occurring. Why? First, inflated home prices eat [...]
Banking Mammoths – Top 10 U.S. banks have $11 trillion of the $13 trillion in total banking assets. The problem? We have over 7,650 banks. The banking oligopoly leads to a concentration of wealth at the top.
The too big to fail problem is still an issue that needs to be dealt with even though many would like to ignore it like a big dark secret. The FDIC is holding up a system with $5.4 trillion in deposits and no deposit insurance fund. I know a lot of Americans have a hard [...]
Collective financial insanity – FDIC backing $5.4 trillion in total deposits on pure faith – US banking operating with negative deposit insurance fund and massive debt leverage. The greatest Ponzi scheme known in the financial world.
People psychologically are programmed to believe in financial realities that benefit their own cause even if they have no merit in empirical data. Many also forget that banks, especially the investment kind have a notorious track record of running amok when allowed to. The FDIC and US banking is a perfect example of a system [...]