It is no secret that having failed repeatedly at the trickle down aspect of QE1, QE2, Op Twist 1, Op Twist 2 (and implicitly LTRO 1 and LTRO 2) as it pertains to the man in the street (if not the man in Wall Street, who was subject to 1-2 years of subpar bonuses which have since regained their upward trendline), the last effort the central planners of the world, and the administration, have is to furiously do everything in their power to reflate housing one more time, following what is already a triple dip in home prices ever since the December 2007 start of the Second Great Depression. Which is why month after month we get seasonally fudged, conflicted and outright manipulated data from various sources how housing has bottomed, for real this time, and things are finally looking up. Remember: with any con game, the key word is confidence, and the US consumers need to regain their confidence. Sadly, as the following very simple chart and accompanying explanation, the answer to the housing question is only one: there will be no housing recovery until much more debt is eliminated. $3.2 trillion to be precise. Everything else is merely fits and spurts of upward action predicated by easy money hitting the market either directly, or via the "REO-to-Rental" stimulus program du jour, which lasts for a few months then promptly evaporates.
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3 comments:
The unforunate reality is that the economy won't and can't recover until the housing industry gets back on it's feet. It covers the entire spectrum of jobs and services. The major contributing factor in both the implosion and now the reason for the stagnate recovery. No one wants to address this as the issue? Why?
The idiots in Washington said it has hit bottom.
The Obama administration likes to blame Bush for the economic collapse when in fact the Bush economy was record breaking with low unemployment and low gas prices. The issue was the sub-prime mortgage collapse that Bush warned about but we were reassured by the Democrats that Bush didn't know what he was talking about. Democrat policies including bank regulations which forced banks to make unethical loans caused this whole mess. Democrats had the nerve to blame the banks for the collapse which they forced them into.
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