Jul 16 2012

Refinancing debt into prosperity – most mortgage activity for refinances with applications up 97 percent from last year and car sales are down by over 50 percent from 2001.

Shuffling papers around on your desk does not mean you are being productive but might give the appearance of activity.  Refinancing debt in countries in an insolvent position may feel good for the moment, but ultimately the position is unsustainable.  You buy yourself a window of opportunity.  With the Federal Reserve pushing mortgage rates to […]

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 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.  […]

Sep 23 2011

The coming failure of Operation Twist – The Federal Reserve resurrects a program from the 1960s named after the Twist Dance. Appropriate timing for a Dancing with the Stars nation.

The Federal Reserve has literally run out of ideas.  Operation Twist, a throwback to the 1961 action taken by the Fed named after the Twist Dance fad at the time, is now back in 2011.  This time the Fed plans to purchase $400 billion of bonds with 6 to 30 year maturities while selling bonds […]

Jun 24 2011

The desert heat melts Arizona home prices – Phoenix home prices now back to late 1990s levels while state tax collection drop to 1998 levels. The second lost decade in the desert.

The real estate crash is much deeper than the media is making it out to be.  Entire life savings are being wiped out in markets that are tanking like the Titanic.  What is troubling is that some markets are having depression like symptoms with home prices falling 50, 60, and even 70 percent in a […]

Jun 12 2011

Stealing from Americans via strip malls and raw land – Commercial real estate reaches a new post-bubble low. A lost decade in commercial real estate values.

The commercial real estate (CRE) bubble is popping with dire consequences.  It is not uncommon for people to be in the complete dark when it comes to CRE.  Just ask a friend or family member what they know about the CRE market.  The mainstream media has absolutely failed to report on this $3 trillion market […]

May 23 2011

Day of reckoning for commercial real estate in 2012 – largest amount of loans maturing next year as $150 billion in CRE debt comes due. Federal Reserve running out of options in hiding financially disastrous real estate loans.

The Federal Reserve has tried its best to hide the secrets of past banking blunders deep in its balance sheet.  Commercial real estate (CRE) loans made in haste during the real estate bubble are part of this national disgrace in banking folly.  As the Federal Reserve and U.S. Treasury digitally print the dollar into oblivion […]

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