With so many propagandists pumping the media full of "good news" on the economic front, I felt like it was time for a little realism.
The Revolutionary Moment
The sights and smells of Christmas usually put me in a mellow frame of mind. But this year there's an acid edge in the mulled wine, an off-taste in the plum pudding, a disconcerting odor of rot in the piped-in holiday potpourri.
Obviously, the government tax deal along with the Federal Reserve's recent QE announcements represent a mighty effort to stuff some spendable lucre into this shuddering, doddering beast of the American economy. The people running things don't know what else to do. We find ourselves in a decelerating system, hopelessly over-complex (and scheming, even, to add additional layers of complexity!), with money-making activity shifted from producing things of value into a runaway Wall Street machine dedicated to something-for-nothing ...
It's fascinating that in the background of all this the price of oil is fibrillating around $90-a-barrel - and nobody is paying any attention to that. We seem to have forgotten the lesson from back in 2008 that when oil gets above the $80 mark, things in this land of Happy Motoring and the Warehouse-on-wheels don't work so well.
http://kunstler.com/blog/2010/12/the-revolutionary-moment.htmlGlobal bond rout deepens on US fiscal worries
Agreement in Washington on a fresh fiscal package has set off dramatic rise in yields of US Treasuries and bonds across the world, threatening to short-circuit any benefits of stimulus. The bond rout raises concerns that the US authorities may be losing control over events.
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Stephen Lewis, from Monument Securities, said the bond rout is a sign that Washington can no longer take global markets for granted. "We have reached the limits of tolerance for budget deficits. There is a feeling around the world that nobody in Washington is paying any attention to the implications of what they are doing, but there is a very real risk that this will backfire if it causes mortgage rates to keep going up," he said.
"At the same time we've seen a loss of confidence in Fed strategy. There is a feeling that the Fed doesn't care about inflation – in fact, wants more of it – and that is certainly not in the interest of bondholders," he said.
http://www.telegraph.co.uk/finance/economics/8190059/Global-bond-rout-deepens-on-US-fiscal-worries.htmlHouse hunters are too scared to buy despite low prices
NEW YORK (CNNMoney.com) -- Despite some of the best home-buying conditions in years -- affordable prices, low interest rates and lots of choices -- fear of buying has infected the market.
It has paralyzed house hunters, making them unable to pull the trigger even on attractive deals. Some are worried about making the payments, while others are convinced they'll save even more if they wait.
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In fact, home sales are down by about 25% from last year, which means a lot of people are sitting on the sidelines. And real estate agents are having to get used to the fear of buying trend.
http://money.cnn.com/2010/12/02/real_estate/home_buying_angst/index.htm?iid=EALWelcome to Zombieland: Ladera Ranch, California
Estimating the number of zombies isn't a simple matter. Rick Sharga of RealtyTrac says mortgage servicers are delaying filing notices of default, the first public record of a problem.
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The rough national count of zombie mortgages: 7 million. Considering that existing homes sell at a rate of 5 million a year -- and that a six-month inventory is a sign of a healthy market -- that's a big backlog.
It might be bigger. There are 2.6 million on-time loans where the borrowers are deeply underwater -- that is, they owe a lot more than the house is worth. All told, about a quarter of mortgages in the U.S., and a third in California, are underwater, according to Core Logic, and Ladera residents are quite aware of the incentives to try to get out of such loans by defaulting to seek a modification or short sale.
http://money.cnn.com/2010/12/07/real_estate/ladera_ranch_foreclosure.moneymag/index.htm?eref=aol