Change is inevitable. Improvement isn't
Cliff Notes: Nasim Talib's current view can be summed up as: We are all in denial about the seriousness of our situation, replacing private debt with public obligations is just re-arranging the chairs, we're letting the bankers take over again, and we are all doomed.
You've Heard This One Before: While private lenders want 10 to 20% down, the FHA requires only 3.5% - and lets the buyer finance the closing costs and count the first time buyer credit, lowering the down payment to 2%. No surprise that FHA, Ginnie May, Fannie and Freddie together write 90% of new mortgages. FHA's default rate is 7% and 13% of its loans are at least 30 days delinquent. Now the FHA will help re-financing of troubled mortgages by reducing the principal by up to 30% - even though experience shows that 25-50% of these re-fi's will default. The taxpayer will fund the 30% write-down, then absorb the balance of the mortgage when it goes belly up.
All-inclusive : Patients who went to India and Pakistan for surgery have brought a new superbug resistant to all antibiotics, back to Great Britain.
Just Asking: If you think the threat of global warming is pretty scary, what about the continuing acidification of the oceans? What happens when there's no more "shell" in shellfish?
No Place to Hide: Economists agree, 27 to zip, that the recession has ended. Another 11 say it will end either this month or next. Even George Soros – who claims to be an economist – says the end is nigh. Remember, these are the same folks who didn't see it coming, and past performance may well be an indication of the worth of these opinions.
Click Your Heels: The only way to meet the clean-energy requirements in the Democrats' energy bill is to double the number of nuclear reactors (102) in the next 20 years. Some say only 45 more would be sufficient. I say hogwash.
Solar Solutions: Before we started wresting coal and oil from the earth, we pretty much got along on what the sun provided, along with a little wind and a little water power. We could do it again. First we'd need to get the population down a bit. About 500 million can live on the solar budget. You go tell the rest.
Things Change: The US corn harvest will set a new record high this year. Seems like only yesterday we were being told it had all drowned or something. Do you understand now why the quants were wrong in predicting human behavior?
Fire Drill: To perk things up in the face of a 23% drop in exports, China has pumped $1.1 trillion through the state-owned banks to state-owned companies, which explains the 33% increase in urban fixed-asset investment in the first half of 2009. What needs explaining is how this can possibly work.
Record Records: In July there were 124,874 foreclosures scheduled for sale in California, a 93.3% increase y/y - and July 08 was the existing record. The loan balance averages $425,000 on houses with an average current value of $236,000, a potential $23.5 billion loss.
Model Planes: The US Air Force will train more pilots to fly unmanned aircraft this year than actual fighter/bomber type planes. Makes you wonder where they're buzzing about - they can't all be circling wedding parties in Pakistan.
Kick the Tires: The median price of an existing single-family home dropped to $174,100.
Talk is Cheaper: Of course capitalist America has the worlds most expensive mobile phone service. And those socialists in Finland, Netherlands and Sweden have the lowest prices for mobile phone service.
Porn O'Graph: You are Here, unfortunately.