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 few short years. Many Americans who are already struggling with the decade long stagnation in incomes are now seeing their largest asset plummeting. Each market has a unique story resembling a Greek Tragedy and the desert is seeing its fair share of problems. The market in Phoenix Arizona is experiencing price declines that have never been witnessed. Home prices in Phoenix are now back to levels last seen in the 1990s. Phoenix is unique in the sense that it had its own internal bubble with local speculators buying homes but also rampant money flowing from the California housing bubble. It is no coincidence that these markets that experienced the biggest benefits from the housing boom are now suffering in its collapse.
The systematic financial pillaging of the middle class – Millionaires don’t feel rich unless they have $7.5 million while 45 million Americans live on food stamps. Another 50 percent cannot come up with $2,000 in the next 30 days.
For over 30 years the debilitating shrinkage of the middle class has been papered over with access and use of debt. Debt in every form; mortgage debt, credit card debt, auto loans, and student loans. Yet debt is not wealth. Americans are facing a financially nightmare where 1 out of 3 has no savings. This should come as a little surprise since the per capita income in the country is $25,000. Many workers are simply getting enough out of their stagnant paychecks to pay the monthly bills. Of course much of the real wealth has been systematically looted through bailouts and crony capitalism. There was a time when the government and even Wall Street benefitted by a growing U.S. middle class. Now all you hear from banking executives is how much cheaper it is to outsource American jobs at the same time their pay keeps soaring. Why don’t we outsource their job? The problem of course is a deep capture of our political system and a perfect fusing of Wall Street and the government. The middle class is slowly floating away as inflation created by the Fed bailouts of the too big to fail banks causes more and more financial pain.
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 which has caused hundreds of banks to fail. The Federal Reserve has purposely hidden assets backed by commercial real estate deep in the underbelly of its balance sheet trying to protect the banking system from facing reality. In short the Fed has initiated a shadow bailout of the banking system, every wart and scar included, without even running it by the U.S. taxpayer. Keep in mind that the Fed balance sheet has empty shopping malls, run down motels, and other items including luxury hotels. This correction in CRE has been going on for a few years so it should come as no surprise to you that CRE values are now at a post-bubble burst low.
The destruction of the middle class will not be televised – 56 percent of American workers have less than $25,000 saved. Even worse 60 percent of retirees have less than $50,000 saved. 45 million on food stamps and the consequences of peak debt.
The disappearance of the middle class will not be televised. Don’t expect your favorite talking head to relay this information to you. At the core of our economy we have become a consumption nation. This necessarily isn’t negative if we were to balance out the opposite side of the equation with adequate savings. It would be one thing if the working and middle class were consuming with money that they had earned. Instead for over a decade many Americans have used massive amounts of debt in mortgages, credit cards, and student loans to finance things they simply could not afford. Unfortunately this game is up and many are now feeling the financial pangs of a country where the working and middle class are marginalized and government policy is geared to exaggerating the inequality especially in the financial sector. Recent data shows that of current retirees, 60 percent have $49,999 or less saved up in retirement plans. This coincides with other data showing that the average per capita worker makes $25,000. You have those that can save and those that will rely purely on Social Security when they retire.