Home on the bear market range – the United States will face a 10 to 15 year real estate bear market. Hard to believe but we are already 5 years into this economic trend. The failure of Quantitative Easing in Japan.
Can Americans cope with a 10 to 15 year bear market in real estate? On this front I have good news, and bad news. The bad news is that we are likely to face at least a 10 year bear market in real estate thanks to a lost decade in household income and the continued [...]
Federal Reserve silently grows balance sheet to approximately $2.75 trillion by a shadow bailout of residential real estate and commercial real estate. The continuing hidden CRE bailout imperils future economic growth.
The biggest silent financial bailout going on in the nation revolves around commercial real estate. Commercial real estate (CRE) values have plummeted $3 trillion from their peak in 2008. While residential real estate values peaked in 2006 CRE waited two more years before moving lower. The two year lagged occurred because many banks, especially local [...]
Why buying a home today makes little financial sense. 3 reasons why taking on a mortgage in today’s market is deep in speculation. Are homes still over valued? Tax benefit not as big as you would expect.
It is hard for many to believe that home prices in many of our largest cities are still overvalued. Part of this distortion has to come from living in a decade long housing bubble that has adjusted the perception of value and price. But in many areas home prices are still much too high relative [...]
Federal Reserve Paying Interest on Excess Reserves: Why Lend when you can Earn Interest for Holding on to Funds with Low Risk? The U.S. Treasury and Federal Reserve Walking a Tight Rope.
One tiny announcement made by the Federal Reserve back in October of 2008 is finally making some noise in the dark corners of the internet. What the Federal Reserve announced at the time was that it would begin paying interest on depository institutions’ excess reserve balances. Now why this is important is that it offers [...]
Stock Market Dollar Store: U.S. Dollar Down 12.5 Percent and S&P 500 Up 50 Percent since March. How the U.S. Treasury and Federal Reserve Juice the Stock Market.
Americans have missed one serious correction since the manic stock market took off in March. Since that time the value of the U.S. dollar, the bedrock of our economic system has fallen a stunning 12.5 percent. Currencies should not fluctuate this much especially the world’s reserve currency. Back in December, I talked about how the [...]
Tracking the Great Recession: Global Industrial Output and World Stock Markets Following the Great Depression.
How the investing world quickly forgets. If we go back into the distant future of March 2009, you would remember that on a panic filled day, the S&P 500 flirted with the 666 low. Since that day, the S&P 500 has rallied an astonishing 41 percent in only a 3-month period. Yet as astonishing as [...]
U.S. Dollar Only Down 2 Percent for the Year. Since the Crisis Started in August of 2007, the U.S. Dollar is Unchanged. Yet the Dollar is Down 33 Percent Since the Start of the Decade. The Currency Race to the Bottom.
People have a hard time grasping that given the tumultuous market of 2009 and all the liquidity being funneled into the market by the U.S. Treasury and Federal Reserve, that the U.S. Dollar has only fallen 2 percent for the year. What is even more surprising to many is the U.S. Dollar has remained unchanged [...]
Alan Greenspan on $100,000 White-collar Comedy Tour: Quantitative Easing and Changing our Economic and Financial Language.
Alan Greenspan continues his White-collar $100,000 speaking fee comedy tour in which he tells the audience that he had nothing to do with the housing bubble. Those expecting to see a mea culpa concert from the former Fed Chairman are going to be waiting for a very long time. According to the majestic maestro, a [...]
Following the Failed Japanese Economic Playbook: 10 Charts Comparing the Japanese Lost Decade to the United States.
Even as early as last year, anyone trying to compare the circumstances of the United States with the lost decade in Japan appeared to be out of line with mainstream economist and the media. Yet if this financial crisis has taught us anything, it is that the experts can be wrong by a wide margin. [...]
20,000 Americans Lose Their Job Each day but we Still Bailout Wall Street and Banks: 4 Charts Highlighting this Historical Financial Crisis. GDP, Inflation, Industrial Production, and Excess Reserves.
Four banks and one credit institution failed on Friday. This is now becoming a common Friday ritual. On February 13 four banks were also taken over by the FDIC. Multiple bank failures on one day are now growing in size. Yet the FDIC is quickly blazing through their insurance fund and soon, the taxpayer is [...]