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This news came out last Friday that Rep. Barney Frank, chairman of the House Financial Services Committee, was considering eliminating Fannie Mae and Freddie Mac: “The remedy here is…as I believe this committee will be recommending, abolishing Fannie Mae and Freddie Mac in their current form and coming up with a whole new system of housing [...] This has been a phenomenal year for the economy. There have been major, fundamental changes that will affect our lives for many years to come. I don’t see these changes as a good thing for the short or long term. These changes are generational in that they don’t occur often and they will radically impact the [...] By Jeff Harding. Since the biggest financial collapse in world history was built on credit related to housing, it is pretty obvious that we should be paying very close attention to that market. The reasons are complex, but a recovery must be based on the liquidation of bad debt. The sooner that happens the quicker a recovery [...] By Jeff Harding. The Commerce Department announced Thursday that GDP grew 3.5% in Q3 2009. This is the “Third Quarter Bump” I had been expecting. Economists and the news media are jumping on the “It’s Over!” bandwagon. Their conclusion is based on the premise that government spending (“stimulus”) will actually create real economic growth. It won’t and never [...] By Jeff Harding. As readers of this blog know, I am a big fan of Nassim Nicholas Taleb, author of Black Swan and Fooled By Randomness. He is an independent thinker and he has enlightened us on some basic epistemological issues about investment risk. He seems to embrace the Hayekian-Misean concepts of the fallacies [...] By Jeff Harding. I get research data from McKinsey and they had this neat chart on the global housing cycle which I thought was interesting. You can see why the UK, Ireland, and Spain are in such bad shape. It seems that housing bubbles are one of our chief exports. Here are a couple of conclusions from McKinsey’s [...] By Jeff Harding The Case-Shiller 20 cities index showed home prices in April fell on a seasonally adjusted basis about 0.9%, or at a rate of about 10% per year. There has been an 18% decrease in home prices for 2009, and the decline is about 33% since the peak in 2006. This is [...] Why don’t they just say that they are guessing and really don’t know what’s going to happen I like to listen to some of the market reports and interviews on CNBC because they have interesting interviews with economists and investors. Almost to a man they all recommend, even clamor for, a federal bailout. I [...] Another Example of the Law of Unintended Consequences I listened to the well meaning Republican senator Mitch McConnell of Kentucky propose government mortgage lending to homeowners at below market interest rates. Like many Republicans he advocates “curing” the housing market as the way to revive the economy. “Most people recognize that housing is at the root of the [...] Declining Housing Inventory May Mean Something One of the keys to recovery will be a stabilization of housing prices evidenced by a reduction in the supply of homes for sale. There are many elements to this recession but [...] |
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