Housing Doom

It’s election day, and I’ve decided to try being a poll worker this year.  I’ll be at the polls until closing, so if anything looks interesting, please leave a comment and let us know.  Consider this an open thread.

My thanks to John for keeping the wheels turning around here and keeping Igor in line the last while.  He’s been pulling more than his share.  Things will mostly be in his and Igor’s capable hands (and claws) for the next couple of days.  I’m off to the Big Apple to visit family.

Consider this an open thread.  Please help us keep abreast of things.

Cheers,

Twist

John M. Berry, a guest columnist for Reuters last Wednesday, outlined why he believes that Ben Bernanke should be reappointed as chairman of the Federal Reserve:

A failure to reappoint Bernanke would only embolden the small-minded members of Congress who don’t like what the Bernanke Fed has done, or the $700 billion TARP, or this year’s stimulus bill.

Those critics, like Senator Richard Shelby of Alabama, the ranking Republican on the Senate Banking Committee, seem not to understand how much worse financial markets and the economy would be if all those actions hadn’t been taken.

One has to wonder though, how much better it might have been if we had had a Federal Reserve chairman who could have seen the problems coming in the first place and headed them off. [Preferably starting back in the days of Alan Greenspan.] Here’s how Bernanke viewed the future back in 2005-2007:

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We’ve tallked about people being hurt by rising foreclosures and even pets, but there’s another population that’s being hurt by a declining housing market- horses are hurting too. That’s putting a real strain on horse rescue groups.  According to today’s Austin Statesman:

Area horse rescue groups are reporting a growing number of neglected and abandoned horses in Central Texas, a troubling trend fed by the twin ravages of recession and drought.

"It’s frightening," said Jennifer Williams, president of Bluebonnet. "If people have lost their jobs or are having trouble making ends meet, sometimes they are put in an impossible position."

Other horse rescue operations in Texas agree that the situation is becoming dire. "In the last year, we’ve been getting strays on a regular basis," said Melanie DeAeth, president of True Blue Animal Rescue in Brenham. "We’re getting more and more calls from people who are losing their homes and going through foreclosure."

Here’s how this is affecting one rescue group the Bluebonnet Equine Humane Society. (BEHS)

Bluebonnet, which is headquartered in College Station but takes in horses throughout Central Texas, has reached capacity and no longer has room among its various volunteers to place additional horses. The rescue group has taken in 76 horses this year and is on pace to nearly double the 86 horses it rescued last year. True Blue has rescued 32 horses this year, already doubling its total of 16 for 2008.

Many of the horses that end up with rescue groups are the result of seizures by local sheriff’s departments — including several this year in Central Texas — as well as voluntary surrenders by individuals who realize they’ve gotten in over their heads.

I thought I’d put in a shameless plug and disclosure here-

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I’m sorry guys, but it’s just too tough to post this morning.  My lovely dog Sage, who has laid at my feet while I have blogged for the past several years, passed away yesterday  at the age of 13.  We’ve been together since she was two months old, and I’m feeling just a little lost.

Sage was something special.  She was obedient, intelligent and beautiful.  She was an Australian Shepherd with a strong herding instinct.  My children were her sheep and she dedicated her life to watching over them.  She was a Mama’s girl though, and when the kids were gone, she was my shadow.

She will be missed.

Sage

January 13, 1996 - July 7, 2009

It’s Monday, and I’m on vacation- sort of.  I’m in New York helping some family move, and the new place is without internet until Friday.

If there’s anything that we should know, drop us a line or feel free to post a comment here.  This is an open thread. In the meantime, I’ve got to figure out where I left the packing tape- I’ve got a bunch of boxes to pack!

It’s Mother’s Day, and with luck, I’m getting breakfast in bed, some handmade cards, and perhaps something made out of popsicle sticks.

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While I support protecting the environment, I don’t think the federal government needs to seize private property to do it: [Hat tip Freedom's Phoenix!]

The excuse for this seizure is:

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‘[The sky] was sullen, streaked and livid, and [Arthur Dent] reflected that it was the sort of sky that the Four Horsemen of the Apocalypse wouldn’t feel like a bunch of complete idiots riding out of’

Click the pic to go to the CBC photo gallery of the recent Halifax Wildfires.  Above is a detail of photo 2 — "The fire lights up the Halifax skyline in this photo taken from the Mic Mac Mall April 30.  (Submitted by Cathy Murray)"

Meanwhile, swine flu continues to be an issue in Nova Scotia and the Halifax area.[1] Weirdly, Doom’s stale post on the issue continues to be a top choice for Google searches on AH1N1.

When I first came to Housing Doom in mid-’06, my main concern was accounting rule SFAS 140, which allowed Fannie Mae and Freddie Mac to hide much of their accounting risk in off-balance-sheet "QSPEs."  Recent events [2] have made a mockery of this, because the two big GSEs have been effectively (if you’ll pardon the expression) nationalized.  Just look at our NY Fed H.4.1 topic and you’ll see a thoroughly unnatural constant level of foreign central bank holdings of Agency Debt extending back over a third of a year.

With American mortgage finance now subject to control from a command economy in Washington, most of the topics that I came here to blog about have effectively (there’s that word again) evaporated.  In retrospect, I think September 18, 2008 sent us into the next Kondratiev phase, and the topics I had been following basically left current events and became history.

I’m going beyond housing now, into studies some of which were strongly inspired by my experience here but, as an astute Doomer recently communicated to us, go well beyond our present mandate.  The gang at the Castle has enthusiastically supported my housing blogging efforts, and I owe a debt of gratitude to Doom commenters, especially the tough ones.  Beyond Doom, my blogging colleagues have been a great inspiration.  Several of them were important supporters.  Of these, the one I would like to single out is the late Doris Dungey, with whom I exchanged only a precious few e-mails, but who generously mentored this entire blogging sector.  You others still with us know who you are, and thank-you very much.  Of course it’s to twist and the members of her family, who do such wonderful work behind the scenes of this page, to whom I again owe a great debt of gratitude.  It’s been a blast

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Mike made the point [13] that most people in developing countries are more exploited and miserable than the typical American, mortgage crisis or not. He has a point. I know just what it means to be able to buy bananas for 69 cents/lb at the local supermarket. It’s just that this level of exploitation seems to be slowly creeping into the middle class of the heartland. There is a famous story about the "boiling frog". The allegorical moral [11] is that if you put a frog into hot water it will hop out, but if you heat the water slowly it will never take alarm and you can boil it. For years it’s been clear (at least to me) that a similar process was at work with the steadily rising levels of debt in the U.S. The inexorable pressure on families is mostly happening quietly and in private, one payment, one notice at a time. Hopefully Doom can help people see their own stories as part of a larger pattern.

FIRST POSTED WEDNESDAY SEPTEMBER 13, 2006

During the course of a Wednesday morning radio interview [1] with Twist, host Charles Goyette [2] made an interesting remark. "It’s the buyer’s fault, after all," he said, implying that home buyers, whether investors or homeowners, are grownups and responsible for the obligations they enter into. Regular reader "Mike" made a similar point [3] earlier when he took me to task for using the "S" word (slavery) [4] late last month to describe the likely fate of many middle class borrowers should they actually have to pay the principal and interest on the loans they are saddled with now that the bubble has burst. Although my analysis is still very sketchy, I feel the situation for Joe Sixpack is sufficiently serious that the word slavery is not out of the question. Be warned that what follows is going to read more like a sermon than an argument. That the distressed borrowers and their families must not be called to account beyond a certain point, laying aside the practicalities, is simply an aspect of certain "bleeding heart" [5] tendencies that I will also try to justify.

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