Wednesday, March 28, 2012

SAR #12088

“So long as a man rides his Hobby-Horse peaceably and quietly along the King's highway, and neither compels you or me to get up behind him -- pray, Sir, what have either you or I to do with it?”   Laurence Sterene, Tristram Shandy.

Stop Me If You've Heard This One Before: The S&P/Case Shiller Home Price Index fell again in the quarter ending in January, down 3.8% y/y, but the prices didn't fall much m/m, which is a Good Thing. Of course nominal prices are back to 3Q2002 levels and in real terms prices are back to 4Q1998, neither of which is particularly cheery.

No-Brainer: Which would you rather have, a picture of Newt walking away or $50?

Thought Experiments: Do you ever wonder about the secret lives of those who think they are better suited to decide what you can watch, what you can do and who you can do it with, and what you should think? Really, what sort of depraved things go on in these people's minds? I'm pretty sure porno does not cause brain damage, no matter what Sanctimonious Rick claims. Nor does it "contribute to misogyny and violence against women"; something else must explain his contempt for women.

Point Made: The current electoral reality in the United States is that billionaires and corporations finance candidates and assure we will continue to get government of, by and for billionaires and corporations.

Modern Times: Shiller's take on housing is that the current shift towards renting, living in the cities instead of the suburbs, and moving back with mom and dad instead of rushing into marriage suggests “that we will never in our lifetime see a rebound in [housing] prices in the suburbs." He sees a politicized housing market in a prolonged “Japan-like slump that will go on for years and years.”

Land of Broken Dreams: Americans now think the game is stacked against them, that no recovery is at hand and none is in sight, and that their children will have a lower standard of living than they do. The majority say that equal opportunity is a myth and that hard work is not rewarded. Hard to work up a lot of enthusiasm, isn't it.

Final Exam: There are far too many of us now and there will be a lot more of us later on. The issue is complex and solutions are few. Your task is to devise a morally acceptable solution. Usual prizes.

Now and Then: Today about 27% of the $1 trillion in outstanding student loans are more than 30 days past due. Why? Because the students who took out the loans are either underemployed or unemployed. If (and when) interest rates rise, the delinquency rates will also rise.

Bitter Medicine: During the quarter-century before the housing collapse, the average homeowner with a mortgage held about a 40% equity interest in the house. Today the figure is about 6%. The difference in equity held by mortgaged homeowners is $3.7 trillion. Home prices would have to rise over 60% to narrow that gap. Government programs cannot bail out the homeowners - it would take 24% of the nation's GDP. The only way out is for houses to fall another 20%, erasing a total of $5 trillion in mortgage debt. Or says Williams Emmons, an economist with the Federal Reserve Bank of St. Louis.

Definition: If you sign a contract and it turns out to be less than a good deal for you, you can attempt to re-negotiate the terms, or, if you are American Airlines and it is a union contract, you just ask a judge to toss it out.

Prescription: The US needs a fairer definition of income (to include capital gains and interest) a far more progressive tax system, an absolute cap on bonuses, and a willingness to invest in public infrastructure, welfare and education. But don't hold your breath.

Porn O'Graph: The constant gardener.

2 comments:

Anonymous said...

RE: Bitter Medicine:

Scariest thing I've ever seen.

RBM

CKMichaelson said...

RBM - Yeah, I thought it was the scariest thing I've put on the blog in a long time. Hope most of my readers understand "the rest of the story."