It is better to do something about it now, however bad, than to wait and until the consequences will be twice as bad (all the while letting other countries tell the U.S. what to do because they hold so much U.S. debt).

Yes, it would hurt now to stop this mess of debt dead in its tracks. It would hurt a heck of a lot. But it would only hurt more, threaten the very survival (economic) of the U.S. even more, to wait. Think of it like a cancer – sure it hurts to go into surgery and get it taken care of, but do you think it will be any better if we sit back and wait while it grows and grows? Cause that’s all we are doing right now, and it sure ain’t going away.

By the way, get a load this recent mainstream media (CMBC) message on China and the U.S. debt/currency problem:
“A lot of people like to say, uh, scaremonger about China, right? A lot of politicians, and I know you talk about that issue all the time. I think people should be careful what they wish for on China. Ya know, if China were to revalue it’s currency or China is to start making say, toys that don’t have lead in them or food that isn’t poisonous, their costs of production are going to go up and that means prices at Wal-Mart here in the United States are going to go up too.”

http://www.crooksandliars.com/2007/08/12/cnbcs-erin-burnett-we-need-chinas-toxic-food-and-lead-coated-toys-to-keep-economy-strong/

Can you believe that crap? I suppose that “analyst” thinks I should be thanking whatever deity I worship every day for the chance to get cheap, but lead-paint-laden or poison-laden toys and food???

Un.Believable. I’m definitely sticking to the internet for my news and “analysis”. On the internet at least I have a virtually unlimited selection of news sources to choose from anytime; on the internet I am not limited to only a couple of dozen billionaire-owned networks that I am subsidizing every month to eport garbage like that!

Just let me know when to fire up the spreadsheets again. : )

Speaking of graphs, the last two weeks of foreign central banks buying treasuries vs agencies (since you last graphed the series) have been dramatic, but I’ve got no clue what it means.

Have you ever noticed how few graphs you actually see out there? Obviously allowing people to draw their own conclusions is not a priority of these guys. They want to spoon-feed consumers the conclusions- which is tougher to do when have enough data to see the trends.

I think they should just send you the numbers for you to plug into your cool little Excel graphing function and let everyone draw their own opinion…but we clearly live in a world where cheerleading is deemed necessary, and, specifically in this case, pick your daddy:

1) The State of Arizona
2) Phoenix Chamber of Commerce
3) Pulte/Centex/Lennar/Toll (oops, I almost wrote “Tool”)
4) The ASU “higher learning” monopoly

- Ag “Publish or Perish” Nostic

If he taught the kind of analysis where a 12% MOM drop isn’t considered close, where margin of error was reported as well as methodology, I’d encourage people to sign up for his class. That is obviously not the case.

I don’t care how good an analyst you are, like a good chef, presentation is everything. I use his numbers because they are the best available to me, but I have consistently been disappointed in his reporting methods.

1) They’re Euros, not Eurodollars.

2) Someday, I’m not predicting when, the Euro will fly apart when the members of the EU realize that there can’t be a common currency without common political goals. I’m not saying the Euro is a worse fraud than the US Dollar, but if you analyze the British argument for staying out of the Maastricht accords, you’ll see what I’m talking about.

3) Otherwise, please continue with your rationalization. There is no mention of the USA or anything resembling the USA because, uh, the minions who wrote the books of the bible and their catholic masters were unaware of three-quarters of the world’s existence at the time.

(“I am not going to engage in this debate.”
“I am not going to engage in this debate.”
“I am not going to engage in this debate.”)

I shouldn’t have implied “is,” but rather “will be,” based on this really “Good Book” I’ve been reading.

My ways are certainly not His, but I was thinking, “What would it take for EU to become one of the superpowers eluded to?”

The quickest and simplest scenario is that the Eurodollar becomes the new trade base for oil & energy around the world.

If that happened, then it really wouldn’t matter if it was a true economic power, a military power, or a religious power.

The EU would gain significant worldly influence, and in very short order.

Hey, after all, it’s been working for the US and the US Dollar, hasn’t it!?!?!

PS: I love what you’ve done with the Mongolian BBQ restaurant theme!
Always fresh & hot, with just the right ingredients and sauces! Tasty!

If the EU is a superpower, then I am Genghis Khan.

Very truly yours,

Ag

I am just so sick of BS positive spin, but I guess I blame the press for their lack of objectivity in this matter more than I blame an employee of an institution that relies upon growth for its continued well-being (wow, that sounds like it could cover the Repugnant as well as ASU).

Anybody think we’re going to wake up Monday to a Business section headline of “Housing Continues Decline” over a Catherine Reagor byline?

I don’t know Butler’s salary, but here is the information that ASU posts on him in their directory.  I note that he teaches Real Estate Analysis and Real Estate Investment in the Fall, should anyone be interested.  [I think I'll just keep my amateur standing, myself.]

I think somebody asked, somewhere, about why ASU would have an interest in the housing market. Easy. The more people who believe the market always goes up, the more people move here, the more kids can be on the 6-year graduation plan.

Speaking only for myself, I’d sooner hire any Iowa, Minnesota, or Wisconsin high school graduate than an ASU grad. I’m curious how ASU grads who leave the state compare salary-wise with other public universities? President Crow? Governor Napolitano?

And NVMike, no disrespect, but you have it wrong. TRUTH is the first victim of war.

all i can say at this point is i hope whoever these people are that have transacted in this market over the past month are not first-time buyers. first-time buyers buying into this mess are in for a lot of pain unless they are ready for a significant period in that house.

In other words, regardless of the banter regarding which govt. or central bank organization wants to or will do what… and for what motivation they would take that action… one of the historic responses to kick start economies again are wars.

Not sure if they actually work or not, but that seems to be credited for “pulling us out of the Great Depression” of the 30′s.

I also keep reminding myself that the 4 great superpowers referenced in Daniel, Isaiah, Revelation, etc… are:

1. The Kings (plural) of Asia
2. The revived Roman empire (E.U.)
3. Russia
4. The descendants of Ishmael

(and of course, Israel, but not as a “super power” in their own strength)

No mention of the USA or anything resembling it as a free standing, autonomous economic or military super power at all.

Frankly, I’m thankful for this blog and the information that all of the very well informed and articulate contributors share!

Somedays, however, I can’t help but think that we’re all discussing how the “Captain” might choose to arrange the deck chairs on the Titanic.

Perhaps a “sister blog” named NationDoom is in order?

I honestly don’t think Bernacke will save the housing market. He will look at it this way renters will become owners and vice versa with overall inflation dropping due to lower housing costs. The banks will crash but will be bought at the bottom by savvy investors and life will go on. This will of course be after a 3-5 year Recession,depression, or DEPRESSION. Whatever form it takes that is better than a bailout.

As for hyperinflation it may happen but will not last because everyone is in the same boat. The USA may be in the Bow and going down first but the Stern is going to join the party at the bottom. The Europeans have a housing bubble and retirement problem at least as big as ours. The Asians will not have a market for their crap.

If this thing is allowed to play out like it should maybe made in the USA will become a priority for consumers again.

Your comments mirror my own situation and gut feeling on this economic environment. Despite doing seemingly everything a fiscally responsible individual should do, we risk being derailed by macroeconomic factors beyond our control. The fact that we are responsible will allow us to weather the storm where some people may not, but it still creates new challenges nonetheless.

MikeC -

Nice find with those articles. I had always suspected we are becoming puppets of the emerging Chinese superpower, but it’s not an issue a lot of Americans are willing to look in the eye. At the very fundamental level you can see it everytime you flip over any manufactured product and see the “Made in China” sticker. The extent to which we are their lackeys is the scary part, and we are already in way too far to do anything about it.

Hate to say it but I doubt the government is going to let the housing market tank much further. I think pumping the money into the market last week is just the beginning.

The credit and housing makets are distinct, thought intertwined. The worldwide cash infusions last week were for the credit markets, not housing.

I don’t think a housing bailout stands a chance in this climate.

George Bush is against it (I finally have a reason to like him again). Richard Syron publicly opposed it in the NY Times last week.

And, most importantly, the majority of the American people who are paying their mortgages using credit responsibly and controlling their spending are overwhelmingly against the idea.

The new capchas are courtesy of our Admin, who was muttering something like, Housing is Doomed! DOOMED! as he changed them. : )

With 4,330 recorded sales in July 2007, the activity was close to June’s 4,910 recorded sales and was well below last year’s 5,545 transactions. While the current level of activity brings much needed stability…

Hahaha. Stable?! I don’t think so! It’s true: Language is the first casualty of every war.

Make no mistake, this is war for those people who: a) make their living either directly or indirectly from real estate or credit and b) have overextended their finances to the brink of collapse.

Be warned! They will do and say anything to try to reinflate this bubble and save themselves.

You must remain informed to be able to separate their propaganda from the actual facts and data.

Thank goodness for blogs like this one, helping to keep its readers informed. Keep up the good work, t and JM.

PS: twist, love the new capchas. Eg: “nuclear” … perfect!

Let me tell you it was like peeling an onion, the more I read the more layers I found. The part that confounded me the most were the people who bought houses with these RISKY loans. When I purchased my house I was intimidated by the thought of signing a 30 year debt mortgage. I wanted to make sure I could really afford the monthly nut. I knew I had a great price on the house and it was within my means, but I was still nervous. I am utterly baffled that people would use ARM’s and interest only’s to buy houses they can’t afford.

My take currently, the FED should not do a thing to save the housing market. The government should not do a thing to save the housing market. Let the bubble correct itself, any attempts to control the bubble will only exacerbate and prolong the inevitable outcome.

My biggest concern now is the economy. I do not think the economy is as strong as the pundit’s say, more likely it is as weak as they say it is strong. I see a bumpy ride ahead and it really angers me.

I have tried to do everything right and because of irresponsible lending, bad fiscal policy from the FED and the Government and stupidity and greed of the people who signed these trash loans we are all going to pay the price.

Sorry for the rant, I am just frustrated that we are at this crossroad. It did not have to be this way and the people who created this fiasco need to be held accountable.

Regards,
Entropy

I remember back in the 1980s when a wealthy Japan seemed to be buying up lots of prime real estate in Hawaii, Los Angeles, New York, etc. Prices fell after that, both here and in Japan, and a lot of companies ended up burned.

The Chinese have a lot invested here- which means they could end up big losers here. My gut feeling is that we are more likely to bring them down with us than end up being owned by them.

We have Japan’s example before us now. Bernanke has to be smart enough to know that even if he slashes interest rates to nothing- it won’t reinflate the bubble.

Bubbles are about perceptions- that “irrational exuberance” the drives a market beyond the fundamentals. Even if you got enough exuberance going to say increase home sales 25%- [which strikes me as unlikely] a 25% increase wouldn’t be enough to reinflate the bubble- things would just be slightly less lousy.

So far the signs from Bernanke, from Lockhart and from Bush indicate a real unwillingness to interfere in the markets. I’m really hoping they stick to their guns.

Igor is suspicious of anyone with more than one link in a comment. [Even John and I.]

He was dragging it around the dungeon, but I got it away from him.