How is a ban on housing evictions going to stop economic decline?? How about stopping the insane war and stop giving tax breaks for exporting jobs. In addition, put back in place the Glass/Stegall act of 1933 (strict lending standards), which would lower housing prices and greatly lower foreclosures, so there would be no need for so many evictions.

Ban housing evictions now. Said it before. Will say it again. The economy will CONTINUE TO DECLINE until a housing eviction ban is imposed. NOTHING ELSE will stop economic decline.

And by the way, read my book: The Eminent Domain Revolt (New York: Algora, 2006). What a cheap ad!

I had a friend who’s husband was a “conspiracy theory” type, and I generally discounted what he said. The one thing that [depressingly] he said that was right was: “No one owns property in this country- we just lease it from the government. If you believe otherwise, quit paying your taxes and see how long it is yours.”

If I worry about that one too much though, I’ll get started on other government abuses, which should be left for another forum. I’m hoping that one of the better effects of the housing bust though, will be that an overextended government has less money, and consequently less opportunity, to violate the rights of it’s citizens.

Igor says short
and I plan to.

I think “hope through reason” sums it up nicely. What is “doomed” is our current system of debt and the housing pyramid scheme– I’m hoping the ultimate outcame is a wiser, more frugal world.

I think WD II got baked into the pie when Nixon closed the gold window in ’71 and then we decided to wage perpetual war on a bunch of our erstwhile Cold War allies after ’91.

I don’t blame the financial engineering of securitization per se, but the use of SFAS 140 to juice yields by taking on insane amounts of hidden (off-balance-sheet) risk has turned an inevitable crisis into a looming catastrophe. Just this week FASB has realized to their horror what they have done, and now want to end QSPEs altogether. I’m still guessing that it was Tim Howard at Fannie who was the original innovator in this area, but it’s possible he wasn’t the first, or that a whole lot of people piled into Rule 140 as soon as it was promulgated. Whatever, it’s the $1.4+ trillion of senior F&F debt backed by the implicit guarantee that’s poised to crash down on Congress, smothering America’s monetary freedom of action for a generation.

All that being said, I did have fun recently linking some of those Wall Street geeks with a character out of W. H. Auden. WD I lasted less than a decade, so most of us should make it through the 21st Century version OK too (Igor says, “short” )

I agree that we have some very challenging years ahead of us reversing some very serious negative trends. But do you really think we’re over the edge…that it’s too late to do anything…that all hope is lost? Can a few Wall Street securitization geeks really have set the wheels in motion for Armageddon?

You might be right…but what I’m saying is we have a fighting chance if our eyes are truly open and we work together.

I think this blog helps us do that…it doesn’t really suggest “doom” as much as it suggests “hope through reason” to me.

1) Perpetual war

2) Fiat currency (now we learn money is a social contract)

3) Ghawar

4) Lake Mead

… sorry (codeword “doom”)

That was a very significant find. Mort happens to be one of the most powerful men in America, and perhaps the most powerful native Montrealer (although it’s possible Professor Tremblay is not on his Xmas card list ).

When Bill Kristol prints an article as detailed and concerned in The Weekly Standard I’ll know all the important grownups have correctly read the writing on the wall. There now remain very few key Americans who haven’t correctly spotted the financial tsunami on the horizon.

Fear not for the banks. The overwhelming majority of them are just fine with respect to subprime debt. A few small town banks have closed and a few of the big Wall Street banks are sucking wind, but they will be OK with respect to subprime. The real danger for all banks is a severe contraction in the credit markets. Most banks are contracting their balance sheets now because they are too afraid to lend. There is illiquidity in the secondary market and counter-party risk in many cases is unknown. This country has never gone into a recession (wich I think we are) from a position of such easy money and credit. It will be a new experience. For expample, everyone may want to take a look at their credit card interest rates that seem to be inching up by the month as easy money disappears. My own card that is always paid off every month was at 10.99% for most of 2000-2007 and just in the past three months went up to 21.99%. Nothing else has changed in my credit profile and the card is backed by a brokerage account with a minimum balance (i.e. it is supposed to have a low rate from low risk). Makes me wonder…

As an aside alcohol consuption does indeed go up during recessions. The reason that alcohol taxes drop is that people consume cheaper beverages such as beer and cheap wine which are taxed less.

(of course, we’ll need to consult a feng shui expert to help us arrange them all properly with the car tires & pink flamingos)

A very positve and and other side of the coin perspective. “Time for more hard work, less fear and lies, and more fellowship.”

Amen!!

Igor gave me “shrub” again

Yes, yes, there will be lots of folks experiencing another nightmare…but it will mainly be those who bought into the last nightmare, which has occurred already! Speculating into a housing ponzi scheme was an obvious mistake for all of us who backed away and watched. We watched as banks, rating agencies, agents, brokers, appraisers, investors, and especially flippers and buyers all drank the kool-aid together.

My wife and I are sitting here with lots of cash, a great marriage, with both of us in good, secure jobs because our investment has been in developing our skills, our networks, and always maintaining very strong work ethics.

We’re flat out rejoicing that reality is returning…the nightmare of a “fath-based economy and society” is almost over. Time for more hard work, less fear and lies, and more fellowship.

We’re excited about the future. And we think we’re in the majority of Americans- really good people at heart who’ve been marketed to the edge and can now come back to their senses.

I alternate between depression and hope as this impending demise looms. Part of me realizes that human frailty has gotten us into this mess and part of me wants to believe that human fortitude will be our salvation. I desperately think I’m just being overly pessimistic because no one wishes for the nightmare that awaits.

I’m okay with abolishing the HOA–

I may not like someone’s pink plastic flamingo and/or yard gnome, but will defend their right to have them in the front yard if they feel so inclined!

Interesting article. However, house depreciation cannot be stopped. Our leaders, big business and the people themselves created this monster. It is going to be painful, but the only way to restore balance will be for prices to dropped to fundamentally affordable prices.

Igor’s word shrub as in the shrub administration.

We need serious recommendations that include honestly renegotiating mortgages so folks with negative equity have a reason to hang on. You bet the banks will balk at this but the alternative is more folks just walking away.

We are staring at the abyss and our policy makers have no balls. This is a great read:

“The Worst is Just Beginning”

Henry Paulsen’s Wild Ride on the Economic Hindenberg

http://www.counterpunch.org/whitney02152008.html

I remember modest but nice houses circa 1999-2000 in the outer Phoenix suburbs retailing for $90K. For another 20 or 30 grand, the houses were pretty elaborate. Then I remember the cheapest of those houses selling for over $200K in late ’05, with the bulk of the “gains” occuring over the previous two years.

But asset deflation has certainly arrived. Not just for the 3,000-plus square foot stuff, but the modestly sized stuff as well.

BTW, there was stuff on the radio local news this morning about school enrollment down in many districts here in Arizona. The decrease was attributed to the children of illegals leaving the state since the new employment law took effect. Of course, both legal and illegal residents will find housing-related employment to be scarce.

Igor says spiral

We can fire up all the BBQ grills with Mr. & Mrs. Twists’ substantially sized family, and have “walking on the water” contests in the pools!

Although I doubt anyone who knows me would call me prejudiced, the simple practicality of an English speaking landscaper would be refreshing.

From what I’ve been reading about Scottsdale HOAs recently, I’m not sure mowing would be the biggest issue… maybe we’d want to abolish the HOA and let common sense or even majority vote rule.

I can’t afford many $ 80,000 light fixtures!
How many Euros is that, anyway?