Has Stimulus Distorted The Housing Bottom? [View article]
Thanks Steve.
I think we both agree we remain mired in the great recession and the occasional spurts of growth we have seen are a result of modest inventory builds or the fleeting effects of policy initiatives, whether monetary or fiscal.
It should now be abundantly clear, even to the most obtuse, government cannot create either prosperity or jobs; it can only create an environment conducive to commerce, innovation, investment, expansion and employment. As opposed to becoming more involved in the economy, the administration should boost confidence by admitting to its countless failures and reverse intellectual course by concentrating upon incentives, reigning in the EPA, freezing new regulations and improving our educational system by gutting the Department of Education..
Unfortunately, this highly partisan and ideologically driven administration will not admit failure and will continue with highly destructive policies while desperately clinging to the shibboleths of Keynesian economics. They will continue to throw money at problems believing that increases in aggregate demand will magically morph into organic growth not understanding any effects will be transitory and the only durable result will be more debt. We have many structural problems that will not be resolved through fiscal alchemy.
With respect to housing, you making an interesting point about the influences of the first time home buyer tax credit likely boosting prices a year ago and possibly exaggerating recent declines. Perhaps another way of determining where we stand it to refer to the work of Reinhardt and Rogoff who observed that after a financial crisis homes prices typically fall around 35% over a six year period.
I think the 20 city index produced by Case Schiller reached a high of close to 190 and it’s presently around 130, suggesting a fall of 32% since the sub-prime collapse. To the extent we follow the historical precedents, we may be very close to a bottom.
Existing Home Sales Expected to Be Down in the Dumps [View article]
Purchases dropped 13.4 percent from June to a 4.65 million annual rate, according to the median of 73 forecasts in a Bloomberg News survey. A decline would be the third in a row. The most pessimistic forecast belongs to Goldman, Sachs & Co. who expects homes sales to fall to 4.03 million, a -25.0% drop MOM.
Has Stimulus Distorted The Housing Bottom? [View article]
I think we both agree we remain mired in the great recession and the occasional spurts of growth we have seen are a result of modest inventory builds or the fleeting effects of policy initiatives, whether monetary or fiscal.
It should now be abundantly clear, even to the most obtuse, government cannot create either prosperity or jobs; it can only create an environment conducive to commerce, innovation, investment, expansion and employment. As opposed to becoming more involved in the economy, the administration should boost confidence by admitting to its countless failures and reverse intellectual course by concentrating upon incentives, reigning in the EPA, freezing new regulations and improving our educational system by gutting the Department of Education..
Unfortunately, this highly partisan and ideologically driven administration will not admit failure and will continue with highly destructive policies while desperately clinging to the shibboleths of Keynesian economics. They will continue to throw money at problems believing that increases in aggregate demand will magically morph into organic growth not understanding any effects will be transitory and the only durable result will be more debt. We have many structural problems that will not be resolved through fiscal alchemy.
With respect to housing, you making an interesting point about the influences of the first time home buyer tax credit likely boosting prices a year ago and possibly exaggerating recent declines. Perhaps another way of determining where we stand it to refer to the work of Reinhardt and Rogoff who observed that after a financial crisis homes prices typically fall around 35% over a six year period.
I think the 20 city index produced by Case Schiller reached a high of close to 190 and it’s presently around 130, suggesting a fall of 32% since the sub-prime collapse. To the extent we follow the historical precedents, we may be very close to a bottom.
Existing Home Sales Expected to Be Down in the Dumps [View article]