The Hunnish News Invasion: Inflation/Deflation + Housing + Environment
National Housing Survey and RE in a Bear Market
Link -Seeking Alpha
Felix Salmon laments the latest figures that suggest that Americans still overwhelmingly believe high levels of home ownerships are necessary for a vibrant economy. I feel his pain. I'd actually make the argument that home ownership in America not only creates problems such as the recent bubble, but also creates economic inefficiencies in an age where most people work outside of the home. It seems to me that specialists could more efficiently provide a lot of services that homeowners get stuck with.
Btw, I agree that the housing bear will last for several years. Most RE busts last at least 6 years and this was the mother of all RE bull markets, so this could be potentially even be an 8-10 year RE bear market. With Federal support slowly being withdrawn, a massive backlog of foreclosures, and rising interest rates (b/c they can't move downwards much more, can they?), I'd be surprised if housing bottomed before 2012 and it may take even longer than that. Houses are still expensive on a historical basis and people are still under the delusion that their houses' values will come back soon.
Housing and Cognitive Dissonance on Wall Street
Link - Seeking Alpha
Yet another excellent article on housing. I'd put this near the top of my recommendation list for financial readings this year.
Who Controls the Bank of Japan?
Link - Seeking Alpha
And speaking of "top recommendations", this article falls into that category, as well. The article deals with the Bank of Japan's Dilemma in the Aughts and how no matter how much liquidity they pumped into the system, the result was the same --- no significant inflation. The article really provides a sobering view of what the US could face over the next 5-10 years.
Inflation Low on List of Worries, Says Dallas Fed Chair
Link - Wall Street Journal
Chair of the Dallas Fed, who was critical of the Fed's relunctance to up interest rates during the 07-08 inflationary episode, talks about inflation and how he views it as an unlikely problem for the next few years.
Deflation on the Prowl
Link - The Telegraph
Another article suggesting that deflation is a bigger concern right now than inflation. The author also criticizes the Fed for eliminating the M3 money supply measure, which seemed to be a very prescient indicator of what was about-to-come back in '05 and '06. The Fed not only ignored the warning signal, but decided that M3 was an irrelevant measure, a big mistake according to the author. Now, M3 seems to suggest the exact opposite --- it's crashing downwards like a plane without any engines.
Taxes, GDP, and Over-Taxation
Link -Money Illusion
Excellent piece on the topics in the article title.
EPA Tightens Rules on Mountain-Top Removal Mining
Link - Smart Money
Good move by the EPA. I'd say we need to go a step further and gradually ban mountain-top removal. Not only are the environmental hazards tremendous (groundwater contamination is a *major* issue), but it basically is a wholesale destruction of objects of significant cultural value in the Appalachia region. For those who want to look at this from a market perspective, I'd argue that one of the major problems with this type of mining is that it passes tremendous costs onto the taxpayers, which means the miners profit at taxpayer expense. The miners should absolutely be subject to heavier regulation and higher costs to reimburse the taxpayers for their wanton destruction.
Mexico City's Air Quality Improves
Link - Washington Post
It's not all bad news on the environmental front as Mexico City's air quality has been improving over the past decade. China and India should consider modeling themselves more after Mexico City in this regard.
Interactive View of Unemployment Since 1948
Link - WSJ
Dan Quayle's Whiny Editorial
Link - Washington Post
Last, and almost certainly "least", is this editorial from Dan Quayle that appeared in the Washington Post recently. It's one of the most infuriating pieces of whining I've ever read and it reminds me why the two party system in America is so thoroughly broken.
Essentially, Quayle blames Perot voters for Clinton's election. This was f@#$ing 16 years ago --- get over it you whiny jacka@@! He claims he doesn't want Tea Party members to make the same mistake --- that is, abandon the sacred Republican Party. Let's just ignore the fact that the Republicans have been every bit as bad as the Democrats in the "big government" department over the last two decades and that the GOP is probably more to blame for our budgetary nightmare than the Democrats, as well.
No, I'm not happy with the Democrats, either, but I do find Quayle's editorial almost insulting. If anything, I think our nation missed a golden opportunity to displace the two party system and set ourselves on a more responsible pathway when Perot got relegated to 3rd Place in the 1992 election.
If anything, the lesson shouldn't be to mindlessly support the Republicans (or alternatively, the Democrats). Rather, the lesson should be to support a third party candidate with momentum even if they are trailing and it hurts your choice of "lesser of the two evils". There's a good chance that we wouldn't be in nearly as big of a mess if Perot had been elected for 8 years rather than Clinton (or the two Bushes).