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Daily Digest - Dec 20

Saturday, December 20, 2008, 7:11 AM

A long and detailed look at the housing crisis, Schiff vs. Krugman, mall vacancies grow, unpaid leave for CA workers, congress gets a raise,  state tax revenues (chart), Biden says economy in worse shape than thought, second half of TARP requested, CSFB pays bonuses using illiquid assets, hedge funds gain access to public money, immigration, and municipal property tax financing.


Albert Bartlett on Growth

Friday, December 19, 2008, 3:33 PM

Albert Barlett is a man I hold in very high esteem.

First, for his ability to speak in clear, concise language, which is the hallmark of someone who has mastered their material.

Second, because he sees the obvious and dares to point it out.  Let me reframe that:  He sees things that are incredibly obvious to others once he points them out.  But because these things are most often "hidden in plain view," they are actually noticed by very few.

His work on growth and population deserves the widest attention possible.

Recently, I had a nice email exchange with Dr. Bartlett, and he closed with this:


Daily Digest - Dec 19

Friday, December 19, 2008, 6:54 AM

Fiat economy,  Fed's attempts lead to refi activity mainly, a bearish interview, Bay area home prices sink, the disorderly bankruptcy option, a huge current account deficit,  personal income (chart), the 'flation battle, where your looted money went.


Mortgage rate blowout - a new bubble in the making?

Thursday, December 18, 2008, 9:45 PM

Between 2002 aand 2005, Alan Greenspan dropped interest rates too low for too long.  This created a property bubble which was really no surprise at all to anybody who follows such matters.

In fact, there are reams of papers written by PhD Fed staffers that explore the unusually tight correlation between real estate and mortgage interest rates. There's really not a lot of mystery as to why this is the case.

To make an extreme example of it (and leaving the principal payments out of it), if you can afford $12,000 per year towards mortgage payments, at 10% interest you'd be able to afford a $120,000 mortgage whereas at a 1% rate of interest you'd be able to afford a $1,200,000 mortgage.


Bill Sharon podcast

Thursday, December 18, 2008, 11:31 AM


I was on Bill Sharon's show "What Needs To Go Right" Thursday, 12/18/08.

You can listen to the recorded podcast by following this link.

Note:  Bill had a few technical difficulties and the podcast really begins at about the 9 minute mark.



Daily Digest - Dec 18

Thursday, December 18, 2008, 7:04 AM

Four scenarios, Peak coal?, Chrysler shuts down for a month, mortgage aid a failure,  federal deficit soars, "helicopter Ben", dollar 'safe haven' status questioned, Citibank computers down, and a list a landlord doesn't want to be on.


New Martenson Report ready

Wednesday, December 17, 2008, 12:44 PM

The Zero Bound

Executive summary: This report looks at the latest move by the Fed to drop interest rates to zero and to print massive amounts of money as part of a quantitative easing effort. It looks at the most recent Fed statement that accompanied the rate decision in some detail and closes with an exploration of what this could mean to the dollar (hint: not good) and our financial future. I offer my view on the dollar, stocks, bonds, gold, and real estate.


Daily Digest - Dec 17

Wednesday, December 17, 2008, 6:15 AM

NY state 'solves' budget crisis with large and sweeping tax increases, survival panic, IRS to help homeowners to sell homes (what?), Yale endowment plunges, Paulson declares victory, The Madoff affair, Facebook as process server, Canadian official declares a depression is 'possible',  charts of housing and oil exploration and CFO optimism, households struggle with bills, and skeptics emerge on Obama's infrastructure stimulus plan.


Fed cuts rate to less than 0.25% - promises to flood the world with money

Tuesday, December 16, 2008, 2:22 PM

Well, folks, history was made today. The US now has an official "range" of between 0% and 0.25% for the Fed Funds interest rate.

Of course this is no different than what the effective interest rate has been for a while (so the Fed is, as always, merely following the market), but now it's official.  

Perhaps our fellow readers from Japan can tell us what comes next.


Daily Digest - Dec 16

Tuesday, December 16, 2008, 8:08 AM

Fed readies to trash balance sheet further, ALT-A mortgages deteriorating "faster than expected" (edit: not by me), mortgage racket, Financial Sense energy roundtable, big oil project in jeopardy, Russia devalues Ruble (let the games begin!).