US Housing Market Crash to result in the Second Great Depression
Economics /
Economic Depression
Feb 23, 2007 - 12:15 AM GMT
By: Mike_Whitney
This week’s data on the sagging real estate market leaves no doubt that the housing bubble is quickly crashing to earth and that hard times are on the way. “The slump in home prices from the end of 2005 to the end of 2006 was the biggest year over year drop since the National Association of Realtors started keeping track in 1982.” (New York Times) The Commerce Dept announced that the construction of new homes fell in January by a whopping 14.3%. Prices fell in half of the nation’s major markets and “existing home sales declined in 40 states”. Arizona, Florida, California, and Virginia have seen precipitous drops in sales.
The Commerce Department also reported that “the number of vacant homes increased by 34% in 2006 to 2.1 million at the end of the year, nearly double the long-term vacancy rate.” (Marketwatch)
“The US economy is in danger of a recession that will prove unusually long and severe. By any measure it is in far worse shape than in 2001-02 and the unraveling of the housing bubble is clearly at hand. It seems that the continuous buoyancy of the financial markets is again deluding many people about the gravity of the economic situation.”
Dr. Kurt Richebacher
“The history of all hitherto society is the history of class struggles.”
Karl Marx
The bottom line is that inventories are up, sales are down, profits are eroding, and the building industry is facing a steady downturn well into the foreseeable future.
The ripple effects of the housing crash will be felt throughout the overall economy; shrinking GDP, slowing consumer spending and putting more workers in the growing unemployment lines.
Congress is now looking into the shabby lending practices that shoehorned millions of people into homes that they clearly cannot afford. But their efforts will have no affect on the loans that are already in place. $1 trillion in ARMs (Adjustable Rate Mortgages) are due to reset in 2007 which guarantees that millions of over-leveraged homeowners will default on their mortgages putting pressure on the banks and sending the economy into a tailspin. We are at the beginning of a major shake-up and there’s going to be a lot more blood on the tracks before things settle down.
The banks and mortgage lenders are scrambling for creative ways to keep people in their homes but the subprime market is already teetering and foreclosures are on the rise.
There’s no doubt now, that Fed chairman Alan Greenspan’s plan to pump zillions of dollars into the system via “low interest rates” has created the biggest monster-bubble of all time and set the stage for a deep economic retrenchment. Greenspan’s inflationary policies were designed to expand the “wealth gap” and create greater economic polarization between the classes. By the time the housing bubble deflates, millions of working class Americans will be left to pay off loans that are considerably higher than the current value of their home. This will inevitably create deeper societal divisions and, very likely, a permanent underclass of mortgage-slaves.
A shrewd economist and student of history like Greenspan knew exactly what the consequences of his low interest rates would be. The trap was set to lure in unsuspecting borrowers who felt they could augment their stagnant wages by joining the housing gold rush. It was a great way to mask a deteriorating economy by expanding personal debt.
The meltdown in housing will soon be felt in the stock market which appears to be lagging the real estate market by about 6 months. Soon, reality will set in on Wall Street just as it has in the housing sector and the “loose money” that Greenspan generated with his mighty printing press will flee to foreign shores.
It looks as though this may already be happening even though the stock market is still flying high. On Friday, the government reported that net capital inflows reversed from the requisite $70 billion to AN OUTFLOW OF $11 BILLION!
The current account deficit (which includes the trade deficit) is running at roughly $800 billion per year, which means that the US must attract about $70 billion per month of foreign investment (US Treasuries or securities) to compensate for America’s extravagant spending. When foreign investment falters, as it did in December, it puts downward pressure on the greenback to make up for the imbalance. Everbank’s Chuck Butler put it like this:
“Not only did the buying stop in December by foreigners in December, but the outflows were huge! Domestic investors increased their buying of long-term overseas securities from $37 billion to a record $46 billion. This is a classic illustration of ‘lack of funding’. So, the question I asked the desk was… ‘Why isn’t the euro skyrocketing?’”
Why, indeed? Why would central banks hold onto their flaccid greenbacks when the foundation which keeps it propped up has been removed?
The answer is complex but, in essence, the rest of the world has loaned the US a pair of crutches to bolster the wobbly dollar while they prepare for the eventual meltdown. China and Japan are currently hold over $1.7 trillion in US currency and US-based assets and can hardly afford to have the ground cut out from below the dollar.
There are, however, limits to the “generosity of strangers” and foreign banks will undoubtedly be pressed to take more extreme measures as it becomes apparent that Team Bush plans to produce as much red ink as humanly possible.
December’s figures indicate that foreign investment is drying up and the world is no longer eager to purchase America’s lavish debt. The only thing the Federal Reserve can do is raise interest rates to attract foreign capital or let the dollar fall in value. The problem, of course, is that if the Fed raises rates, the real estate market will collapse even faster which will strangle consumer spending and shrivel GDP. In other words, we are at the brink of two separate but related crises; an economic crisis and a currency crisis. That means that the unsuspecting American people are likely to be ground between the two mill-wheels of hyperinflation and shrinking growth.
In real terms, the economy is already in recession. The growth numbers are regularly massaged by the Commerce Department to put a smiley face on an underperforming economy. Industrial output continues to flag (In January it was down by another .5%) while millions good paying factory jobs are being air-mailed to China where labor is a mere fraction of the cost in the USA. Also, automobile inventories are up while factory production is in freefall.
In addition, new jobless claims soared to 357,000 in the week ending February 10. 44,000 more desperate workers have been given their pink slips so they can join the huddled masses in Bush’s Weimar Dystopia.
December’s net capital inflows are a grim snapshot of the looming disaster ahead. As the housing bubble loses steam, maxxed-out American consumers will face increasing job losses and mounting debt. At the same time, foreign investment will move to more promising markets in Asia and Europe causing a steep rise in interest rates. This is bound to be a stunning blow to the banks which are low on reserves ($44 billion) but have generated $4.5 trillion in shaky mortgage debt in the last 6 years.
It’s all bad news. The global liquidity bubble is limping towards the reef and when it hits it’ll send shock-waves through the global economic system.
Is it any wonder why the foreign central banks are so skittish about dumping the dollar? No one really relishes the idea of a quick slide into a global recession followed by years of agonizing recovery.
Maybe that’s why Secretary of Treasury Hank Paulson has reassembled the Plunge Protection Team and installed a hotline to his Chinese counterpart so he can quickly respond to sudden gyrations in the stock market or a freefalling greenback; two of the calamities he could be facing in the very near future.
Greenspan has successfully piloted the nation into virtual insolvency. In fact, the parallels between our present situation and the period preceding the Great Depression are striking. Just as massive debt was accumulating in the market from the purchase of stocks “on margin”, so too, mortgage debt between 2000 and 2006 soared from $4.8 trillion to $9.5 trillion. In both cases the “wealth effect” spawned a spending spree which looked like growth but was really the steady, insidious expansion of debt which generated economic activity. In both periods wages were either flat or declining and the gap between rich and working class was growing more extreme by the year. As Paul Alexander Gusmorino said in his article, “Main Causes of the Great Depression”:
"Many factors played a role in bringing about the depression; however, the main cause for the Great Depression was the combination of the greatly unequal distribution of wealth throughout the 1920's, and the extensive stock market speculation that took place during the latter part that same decade".
The same factors are at work today except that the speculation is in real estate rather than stocks. Just as in the 1920’s the equity bubble was not created by wages keeping pace with productivity (the healthy formula for growth) but by the expansion of personal debt. Also, one could buy stocks without the money to purchase them, just as one can buy a $600,000 or $700,000 house today with zero-down and no monthly payment on the principle for years to come. The current account deficit ($800 billion) could also weigh heavily in any economic shake-up that may be forthcoming. Bob Chapman of The International Forecaster made this shocking calculation about America’s out-of-control trade deficit:
"US debt was up 10.1% to $4.085 trillion and accounts for 58.8% of all the credit issued globally last year. That means the US expanded credit at a much faster rate than the economy grew. This was borrowing to maintain a higher standard of living and attempt to pay for it tomorrow."
Think about that; the US sucked up nearly 60% of ALL GLOBAL CREDIT in one year alone. That is truly astonishing.
There are many similarities between the pre-Depression era and our own. Paul Alexander Gusmorino says:
"The Great Depression was the worst economic slump ever in U.S. history, and one which spread to virtually all of the industrialized world. The depression began in late 1929 and lasted for about a decade....The excessive speculation in the late 1920's kept the stock market artificially high, but eventually lead to large market crashes. These market crashes, combined with the misdistribution of wealth, caused the American economy to capsize.
(The income disparity) between the rich and the middle class grew throughout the 1920's. While the disposable income per capita rose 9% from 1920 to 1929, those with income within the top 1% enjoyed a stupendous 75% increase in per capita disposable income…A major reason for this large and growing gap between the rich and the working-class people was the increased manufacturing output throughout this period. From 1923-1929 the average output per worker increased 32% in manufacturing8. During that same period of time average wages for manufacturing jobs increased only 8% (This ultimately causes a decrease in demand and leads to growth in credit spending)
The federal government also contributed to the growing gap between the rich and middle-class. Calvin Coolidge's (pro business) administration passed the Revenue Act of 1926, which reduced federal income and inheritance taxes dramatically…(At the same time) the Supreme Court ruled minimum-wage legislation unconstitutional.
The bottom three quarters of the population had an aggregate income of less than 45% of the combined national income; while the top 25% of the population took in more than 55% of the national income...Between 1925 and 1929 the total credit more than doubled from $1.38 billion to around $3 billion”. (Just like now, the growing wage gap has spawned massive speculative bubbles as well as a steady up-tick in credit spending. Wage stagnation forces workers to seek other opportunities for getting ahead. When wages fail to keep pace with productivity then demand naturally decreases and business begins to flag. The only way to spur more buying is by easing interest rates or expanding personal credit, and that is when equity bubbles begin to appear. That's what happened to the stock market before 1929 as well as to the real estate market in 2007. The availability of credit has kept the housing market afloat but, ultimately, the resultwill be the same.
On Monday October 21, 1929, the over-valued stock market began its downward plunge. It managed a brief mid-week comeback, but 7 days later on Black Tuesday it plummeted again; 16 million shares were dumped and there were no buyers.
The game was over.
Confidence evaporated overnight. People stopped buying on credit, the bubble-economy collapsed, and the mighty locomotive for growth, the American consumer, hobbled into the Great Depression. Tariffs were thrown up, foreigners stopped buying American goods; banks closed, business went bust, and unemployment skyrocketed. Tens years later the country was still reeling from the implosion.
Now, 77 years later, Greenspan has led us sheep-like to the same precipice. The economic dilemma we’re facing could have been avoided if the expansion of personal credit had been curtailed by prudent monetary policy at the Federal Reserve and if wealth was more evenly distributed as it was in the ‘60s and ‘70s. But that’s not the case; so we’re headed for hard times.
By Mike Whitney
Email: fergiewhitney@msn.com
Mike is a well respected freelance writer living in Washington state, interested in politics and economics from a libertarian perspective.
© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.
Comments
Don Gillette
12 May 07, 22:13
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Elimination of Middle Class
Right on Mike: I agree that a financial collapse is on the way and our government or should I say world government wants it to happen. Mainly to institute a new financial system regulated and conducted by the upper monetary elite. Also I believe it also time that the powers to be, want to have universal identification implants on all citizens, what a better way to control lives than to control what they buy. Imagine going into a store and seeing what you can afford before purchasing? I see this desire in part with the corrupt management of large famous corporations and politicians in our government.. Don
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Jim Lemmen
23 May 07, 23:29
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The bigger boom ahead
Sorry Mike but the real story is that there is still a huge portion of our population (baby boomers) who are becoming empty nesters and will continue to spend more money over the next few years until retirement creating a huge boom for business, but then they will retire...
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Tim
17 Jun 07, 03:04
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Australia is in the same boat
The Australian economy will be the first to go down the Gurgler just like in 1929 and 1987. We do love our debt down here. Sydney is already seeing massive forclosures in the outer suburbs. The only thing keeping our economy going is iron sales to China. The asset rich are spending all their incomes on debt repayment and have no choice but to catch the bus to work and go to the Salvation army for their meals. Its a strange vibe - there is a creeping stillness defusing through the economy. We all know that this time it wont be a simple recession.
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Dave Wyant
30 Jun 07, 07:29
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M3 - Cause and Effect
When the US eliminated the M3 the hedge funds could run amuck and not show as expansion of overall currency. China and Japan have a major problem with this because their currencies could be eroding and it would take a while to get a grip on a devaluation. The investors in hedge fund products are of the mindset " I don't want a crash I just want my money out now" therefore precipitating a crash. Look to GMAC they have 48 billion of subprime junk which equates to 76% of their portfolio. If they crash and burn there goes the weak shot GM had of salvation and the domino effect will move swiftly throughout the world markets.
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Greg L.
30 Jun 07, 15:30
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Don't Fret
Well as I see it, instead of complaining about it, I will be apportioning 30% of my current income in gold and also another 30% to my debts of under $5000 to eventual debt free status and then re-adjust my gold buying to what I see fit. Point being, there is value in precious metals and when the dollar goes down it goes up. Simple. We need a president who understands this like Ron Paul by the way.
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Deco
31 Jul 07, 11:35
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Economic policy failures
We are seeing the build up of excess as a result of a 'persistent postponement of economic policy remedy'. In effect there are serious problems with several large developed economics. In the English-speaking countries (excluding Canada) there is excessive reliance on asset inflation to keep public deficits down, and private consumption behaviour exhuberant. In continental Europe there is excessive control/influence of public policy by large public sector salaried employees who are completely clueless about the needs of the private sector and who are persistently pushing up taxation and using state policy to address market failures. This "malaise" (...France is the country with the most excessive state bureacracy) has been apprehended in Germany mainly due to the fear of Germany losing it's private sector funds to London, and memories of lavish, silly state employment practices in the DDR, before 1990. Public sector nonsense is responsible for French youth unemployment, the riots in the Parisian banlieues, the fiasco at Airbus, the pension crisis in Italy, the Spanish trade deficit, and the Irish property collapse. Finally we have the East Asian concept of competitiveness which depends on hard work (good idea) and soft currencies (bad idea). Tokyo, Beijing, and Soeul have a mountain of paper that they cannot get rid off, accumulated from efforts to maintain maximum economic growth, in an effort to sustain societies where everybody thinks they are getting rich. This excessive build up of problems is not going to go away. Eventually it has to be reckoned with. Bernanke will probably get blamed regardless of what he does. The media will probably find other scapegoats. Trichet, for example gets criticism from the French Public sector unions despite their members incapability to see that the world has changed as a result of globalization and the economic resurgence of Asia. The whole things is being sustained by the willingness of the Chinese Central Bank ( a body answerable to the Chinese Communist Party leadership) to keep buying US dollars. The crux point moves from one danger point to another. From Commodity prices, Financials, Tech stocks, Real Estate, Bonds, Junk bonds, Euro / Dollar, to Euro /Gold, Dollar / Oil, Yuan / Dollar, Swiss Franc / Dollar, Yen /Dollar, etc... But eventually there will emerge a crisis that cannot be diluted, and then all the problems will merge into a massive contagion. What it will be like is anybody's guess. But one thing is now clear - around 1998, the US stepping in to prevent a world economic crisis has resulted in a series of policy fixes that have merely postponed the inevitable and necessary corrections. Now things will e infintely worse.
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Norwegian guy
02 Aug 07, 06:36
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America tanking...
The average american has no clue what is going on and would rather hear about celebs and sports then real world issues like their economy, pollution, world opinion, peak oil and so fourth. The U.S at this point is just as decadent as any great empire before its fall. An american can tell you the amount of calories in your food, the latest gossip about their favourite celebs, sports results and the latest movies. Ask an american what he thinks about the economy, enviroment or name a country that starts with the letter u and he will look at you with open mouth like a question mark. I used to be a fan of the united states. They have the potential to do well. They have a lot of smart people. These are some of the problems that need to be corrected for america to get back on its feet and head for greatness again. 1: get rid of the lobbyist from the large corporations running the nation. 2: get Bush out of office and put someone in who can read, think and breathe at the same time. 3: take the power to print money away from the Fed. 4: start producing goods again. 5: sell you're SUV's and buy fuel efficient cars. 6: live close to your work place. (bicycle length) There is just so many problems and so little time to do anything about them, i feel for you i really do but you brought this on yourselves.
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SOUTHCASH
06 Aug 07, 14:36
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THE GOVERNMENT WANTS TO CONTROL US PERIOD
OUR GOVERNMENT IS TAKING US FOR A LONG LONG RIDE ..... IN THE END THERE WILL BE NO MORE MIDDLE CLASS ONLY THE RICH AND THE POOR.
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Norwegian guy.
08 Aug 07, 11:32
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Blame the Fed NOT the Government
It's not the goverment. It is an elite of bankers and buisness men controling the federal reserve that has set in motion these events. Did you know that the "federal" reserve is a privately owned bank that nobody knows who owns? also... bush gave this "federal" bank license to print money at such a rate that the greenback will be used for toilet paper and burned for heat in a relative short amount of time.
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suzy q
12 Aug 07, 18:09
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the coming crash
Any suggestions? I am one of those Baby Boomers and not quite into retirement yet! I have tried to save and keep debts low, but have invested in a couple of properties in the last few years that are rented. My concern is not selling to make myself rich, but to prepare to take care of me and my extended family should it get bad... In the Depression, many lived on farms and could raise food etc. What would happen now? I have a mortgage. If the bank takes my house, where will I live and what will I do?
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b. luv
13 Aug 07, 02:19
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the coming crash
I got news for you kids. That spending bubble also helped to pull out some support walls in our worldwide ecosystem. The health of the capitalist economy depends on endless exploitation of resources, and I hate to rub it in, but we're dependent on the health of this ecosystem. (assuming that everyone here needs to breathe oxygen) It's not in any way acceptable to sacrifice it for endless economic growth.
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christian rosencrutz
16 Aug 07, 14:42
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Change
crashs are like revolutions , how unhealthy can it be for the property bubble to burst, here in england thousands of young couples cannot afford to procure a home ,if and when this bubble bursts it would be like a long awaited rain for these folk , if a crash were to happen on the scale of 1920s (a long heavy decline ) the general mentality would shift from material wealth concious culture, where the poor admire the rich and the rich ignore there responsibilities to the poor ,if each house hold couldnt afford that extra car how much less fossil fuel would be used, If and when the fall happens with it falls the morality of its time and we know that capitalism is a beast without a conscience.although im a realist i dont believe in fairy tales whatever replaces this flagging system will inhibit our freedoms 100 times more than at present
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Broke
17 Aug 07, 06:50
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The overlooked
America is like a chain you are only as stong as your weakest link. The rich have assets and power to hold them over and all else will snap under the pressure of not having. This system is not going to work because of GREED and no one in power is going to do anything about it because it would cost them billions. So don't fret just prepare.
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Curt
18 Aug 07, 16:27
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Getting Back To Basics
Turmoil in the economy will continue to worsen. We cannot rely on the US Government to contain it. However we can make some changes to improve our own personal security. 1. Plan a monthly budget and stick to it. 2. Save a set precentage of income. 3. Live within your means. This is nothing new, but it is something we must do ourselves
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Foucalt
22 Aug 07, 01:36
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Boom Bust - Not necessarily so
Many of us over 40 have seen a number of boom and bust cycles which naturally color our expectations. But I am not sure history need always repeat itself. Globalisation has made us acutely aware of the interdependency of every economy. Developed economies throughout the world have left behind their state based myopia. In other words, no economy is an island. I suggest that decisions made in Shanghai, London or Berlin may influence the US economy as much, perhaps occassionally more, than the US administration or the fed. That does not mean the us or any country can behave recklessly without consequence. It does mean that even now investors from around the world are looking to purchase cheap residential property in the US.
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06 Sep 07, 00:55
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The crime rate
If a depression hits,which i think is inevitable,imagine the ammount of crime that we will have.As it stands we have crime spiraling out of control.The armies of the destitute and desperate people will turn to robbery and murder to survive.Also the governments will slash police budgets to survive.There will be anarchy,it's going to come
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Hannah
04 Feb 08, 12:26
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The Housing Markets take a crash
I totally agree, our economy is coming way down because the housing markets are WAY low right now. But I really dont think that that should stop buyers. it can be helpful o those who are buying the houses, bu sooner or later, they have to sell their other house right?
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Dave O
22 Mar 08, 19:55
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The 2nd Great Depression
What I've read makes very good common sense and is stated in a manner that a layman can understand. The problems identified....now what's the solution? Also, the babyboomers have a problem, but the boomer's kids have a bigger problem...most of these people have unsecured debit (credit cards) and can hardly make the monthly minimum payments. Hopefully these people are smart enough to be saving.
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Mike
06 Apr 08, 23:18
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The second great depression
Economic growth is dependent on the consumer to go out and spent. Most americans have'nt two nickles left to rub against each other. Houses are upside down and credit card and house payments both delinquent. These are the hard facts that cannot be diputed. Amerincans are in over their heads and we should all be preparing for the next depression. There is no money left to spent and salaries have lagged far behind to long.
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George
07 Apr 08, 15:22
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The Great Depression II
The problems lie with all the fools who borrowed too much to buy their SUVs, McMansions and flat screen HD teevees, and forgot they would have to pay the money back at some point. They also made a mistake in thinking their house prices could go on rising forever and that the government would bail them out if they couldn't afford it all. It's a shame they'll be out on the streets with no home but at least I'll be able to buy knocked down SUVs, McMansions and flat screen HD teevees for cents on the dollar when they sell for the price of a loaf of bread!
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kenny
18 Jun 08, 14:17
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Fiat Money System
it's a bit more complicated than that George. The people have played into the hands of a few elite (although my guess is that those elite will regret the shambles of society that they'll have to live in). Greed usually overrules long-term common sense. additionally, the fiat paper money system is a dishonest system. How is it fair that banks can be bailed out when the average person can't? meanwhile they get to keep all their past commissions earned based on their bad policies. The only way to fix this it to go back to a gold standard where currency value never changes, and supply and demand actually rules (it has not for many decades). This affects more than just the US. The US imports a hell of a lot of goods that won't be imported in the future. There goes quite a bit of income for many other countries. Further, there is a bigger problem for other countries; the banks' relationships are intertwined. They are all involved in complicated contracts that will go into default, and money will be printed in all of these countries. Inflation is already high everywhere, and the US is not the worst by a long shot! True global inflation is though to be around 10% (which is a little higher than what's thought to be right for the US, 7%). Have a look at shadowstats.com for true inflation rates meanwhile, all of you who read this, buy gold and silver now!!
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Robert Granger
12 Jul 08, 15:05
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US Housing market Depression is Here !
We are now in the housing market depression, the economy is fast following the housing market into an economic depression. The latest news of fannie mae and freddie mac on the verge of collapse is the last thing the housing market needs and just goes to show how dangerous things have become.
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Deborah Jensen
21 Jul 08, 13:47
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economy
out of the great depression of our time will emerge the one world government. 1. president bush's comments on the coming world order http://kiev.usembassy.gov/files/georgehwbush_speech_May04_eng.html http://conspiracyrealitytv.com/george-h-bush/ 2. Mr. Nixon knew of it in his time. http://www.presidency.ucsb.edu/ws/index.php?pid=3802 3. moving towards a cashless society http://curezone.com/art/read.asp?ID=146&db=1&C0=11 http://www.truthnews.us/?p=2238 http://www.independent.co.uk/news/business/news/cashless-society-by-2012-says-visa-chief-439676.html http://www.bis.org/review/r080407a.pdf http://www.youtube.com/watch?v=ybKSwuIHvL8 msnbc promises cashless society with implanted microchip by 2017 http://www.washingtonpost.com/wp-dyn/content/article/2007/06/20/AR2007062001867.html http://www.out-law.com/page-1262 singapore is already a cashless society http://www.efc.ca/pages/media/spectator.01oct97a.html canada is on the brink of a cashless society 4. setting up a police state http://www.globalresearch.ca/index.php?context=va&aid=9582 http://www.geocities.com/northstarzone/CUPPETT.html http://portland.indymedia.org/en/2004/02/281672.shtml http://onlinejournal.com/artman/publish/article_2964.shtml concentration camps in america http://www.sianews.com/modules.php?name=News&file=article&sid=2816 www.brusselstribunal.org/Meyer/MartialLaw.htm 5. who is behind the new world order http://www.nndb.com/org/514/000042388/ bilderberg group http://www.geocities.com/CapitolHill/8425/BILDER.HTM http://bilderbergbook.com/index.php?option=com_content&task=view&id=9&Itemid=1 http://en.wikipedia.org/wiki/Council_on_Foreign_Relations council on foreign relations http://en.wikipedia.org/wiki/Trilateral_Commission trilateral commission http://www.newswithviews.com/Wood/patrick20.htm projection of a north american union coming 2010 6. the role of the world council of churches http://www.time.com/time/magazine/article/0,9171,801396,00.html
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Dinesh
12 Feb 09, 17:36
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housing market crash
Offcource housing market will go down in US
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McMurtry
17 Jul 09, 21:20
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Greenspan is not entirely to blame
All very prophetic. However, the housing bubble wasn't all Greenspan's fault. Much of the blame must go to Bush and the House Democrats, who pressured banks to lower the down payment requirement to practically nothing in order to increase minority homeownership.
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richard
16 Feb 10, 01:52
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Australian Economy
Move to Perth Western Australia. I have left London, uk and cant believe this place. People here are savers but also live a great life. The people of Australia certainly kept their secret quiet. Resources and commodities boom here just starting to go off again.....they didnt even have a recession here in 2008-2009. China is going to feed the mother of all booms and we are in the middle of it. Get out of europe and the usa before the cards really do fall. These economies are broke and are still operating because life just has to continue. Life will just get alot harder in the next 2 to 5 yrs because their debt has to be paid off. Countries in Asia and pacific regions have been savers in the past and now it will pay off.
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