"By stepping back and looking at the big picture, we can see that real estate should be correcting and trending down. The reasons why our grandparents bought their homes have changed. Government intervention cannot last forever. It will change from accommodation to devastation, when they finally run out of ideas. As for buying a house, I would consider it more of a luxury as opposed to an investment, and one has to be prepared for the possibility of it being a depreciating asset, especially if one decides to move."
What do El Paso, New York, and Chicago have in common? They are among the top 20 cities from which Americans are fleeing in droves...
Just when you think that the depravity of the United States cannot possibly get any worse, something else comes along to surprise us.
A conventional housing recovery in the US is now dead: the builders have spoken and what the next generation wants is to rent, not to buiy.
With Puerto Rico missing a payment on a bond overnight "due to non-appropriation of funds" but denying that this constitutes anything close to a default, the territory may be about to retake the limelight as Greece is now "fixed." As Peter Schiff explains, this is far from over... As in Greece, the Puerto Rican economy has been destroyed by its participation in an unrealistic monetary system that it does not control and the failure of domestic politicians to confront their own insolvency. But the damage done to the Puerto Rican economy by the United States has been far more debilitating than whatever damage the European Union has inflicted on Greece. In fact, the lessons we should be learning in Puerto Rico, most notably how socialistic labor and tax policies can devastate an economy, should serve as a wake up call to those advocating prescribing the same for the mainland.
"Racial and ethnic minorities now surpass non-Hispanic whites as the largest group of American children under 5 years old, the Census Bureau said Thursday. The demographic rise of minorities comes at a time when heightened racial tensions make headlines from St. Louis to Charleston, South Carolina, and as minorities lag in education, earnings and labor market outcomes."
One hoary old myth claims the interest rate you see isn't real. You see, it’s only nominal. To calculate the real rate, you're supposed to adjust the nominal rate by inflation.
The idea of an imminent US recession may seem moot as all the self-proclaimed experts and talking heads still acts as we are well into a recovery and patiently waiting for the forthcoming escape velocity which will take care of all ills plaguing today’s over-indebted society. Never do they stop to think about why things looks as dismal as they do. The sheer scale of the backwardness shown in such gross economic illiteracy suggest to us there is ulterior motives behind so-called Keynesian economic theories. Comparing GDP with cumulative goods sold and inventory accumulation since 2000 should tell you everything you need to know. The US economy is now on the verge of a new recession.
Officially, the unemployment rate in the U.S. is 5.6%, meaning 5.6% of the work force is temporarily out of a job and actively seeking another one. But these do not feel like good times for most households, despite the low unemployment rate. By our reckoning, roughly 60% of the civilian work force is fully employed and 40% are marginally employed or unemployed.
Spot the outlier in housing permits among the four US census regions. Hint: at an annual change of 165.8%, it has never been higher.
After 27 years, honest price discovery has been destroyed, thereby reducing the nerve centers of capitalism - the money and capital markets - to little more than gambling casinos. Accordingly, speculative rent-seeking in the financial arena has replaced enterprenurial innovation and supply side investment and productivity as the modus operandi of the US economy. This has resulted in a severe diminution of main street growth and a massive redistribution of windfall wealth to the tiny share of households which own most of the financial assets. Warren Buffett’s $73 billion net worth is the poster boy for this untoward state of affairs. The massive and systematic falsification of asset prices which lies at the heart of this deformation of capitalism is a direct and unavoidable consequence of monetary central planning.
Currently, there are things occurring that are very troublesome, and in more normal times, would likely already have investors heading for cover. However, in today's liquidity fueled, Central Bank supported environment, that has yet to be the case. The reason was best described recently by Dr. Robert Shiller "I call this the 'new normal' boom ó it's a funny boom in asset prices because it's driven not by the usual exuberance but by an anxiety." What happens next is only a guess. However, historically, it hasn't been the outcome that investors were hoping for. But then again, maybe "bearish bull" isn't as much of an oxymoron as it is just a warning.
"The elderly dependency ratio is in the early stages of a relentless rise that doesn't hit an interim peak until around 2036, over two decades from now." The "structural shift" in the dynamics that drove the economy and financial markets in the 80's and 90's will not likely exist again for quite some time. Of course, if this was not the case, would we still be needing massive Central Bank interventions to support global economies and markets? Meh? What could possibly go wrong? [sarcasm alert]
... at least according to the Atlanta Fed. Based on the one GDP model which hasn't lost all credibility and which for the past 3 months has captured the attention to wannabe weathermen and other Wall Street strategists, today's bevy of stronger than expected data, everything from Durable Goods, to core CapEx, to New Home Sales, to Case Shiller, to Consumer Confidence, and even the Richmond Fed was sufficient to push Q2 GDP... by 0.1% to 0.8%.