What Recovery?

I’m reading a lot of crowing about a housing recovery based on the year-on-year improvement in the Case-Shiller index as of January 2013. Quite a few people are reproducing one of the charts from that post, the one that shows a sharp recovery in the percentage increase over time.

The same release, linked above, has another chart in it and I’ve reproduced that one here. As you can see it shows the increase in housing prices from 1987 to date. Does that look like a recovery to you? Prices are back where they were in 2003. Whoopee. Happy days are here again. Of course, the value of the dollar as measured, say, in how much healthcare or education you can buy with it isn’t quite the same as it was in 2003.

Another aspect of the chart bears mentioning. To my eye it looks as though we can trace the housing bubble to some time in 2002 (there’s an arguemnt for the late 90s, too). That would mean that housing potentially has another twenty or thirty percent to give up before the effects of the bubble are fully dissipated. Offhand I’d say that the only thing that would save us from that would be the increase in the population over the last decade. Of course, today’s first time home buyers don’t have nearly as much money to spend as the typical seller. That couldn’t possibly put any downwards pressure on prices, now could it?

37 comments… add one

  • Regarding the adjustment to housing prices you mention, I think there is something to what you write. Many of the policies over the last couple of years have been aimed at stopping the decline in the Cass-Shiller index. In that regard they were a screaming success. Problem is if the prices in the housing market are still to high, then there is another shoe waiting to drop…and guess what, our “recovery” is getting rather long in the tooth.

    Could a recession trigger another wave of selling and price declines that exacerbate the recession and make it deeper and longer than it otherwise might be.

    Fun times, that I can tell you. And with health care prices going up I’m sure many people will get to look forward to more stagnant wages maybe even declines. How awesome would that be? Oh, and aren’t there a number of articles on how Obamacare is going to push up premiums in the coming year(s)?

    Gee thanks Barry.

  • PD Shaw

    The thing I’ve never really appreciated by Cass – Shiller is the underlying assumption that its particular selection of the largest metro markets is a barometer of America housing. To the extent the graph here is showing a difference between the top ten and the top twenty, it implies that the medium end of the market is probably less volatile.

    For example, five of the ten-index cities are in California, Florida or Nevada. None in Texas?

    The twenty-index includes Dallas, but doesn’t include Houston (5th largest metro), nor San Antonia (25th), but does include Cleveland (29th) and Las Vegas (31st). The twenty index also doesn’t include Philadelphia (6th), St. Louis (19th) or Pittsburgh (22nd)

    Am I wrong in thinking that the metro selection is based upon an expectation of change? More action in these slots? Not necessarily representational?

  • Steve

    Did you see McBride’s Real Housing price chart? Havent had time to look at it in detail (his methods), but it suggests a different picture.

    Steve

  • Icepick

    And with health care prices going up I’m sure many people will get to look forward to more stagnant wages maybe even declines. How awesome would that be?

    And that’s different than the last few years of B+ economy how?

  • Icepick

    Havent had time to look at it in detail (his methods), but it suggests a different picture.

    Let me guess: It suggests that Bush II was the Anti-Christ and that Obama is better than the second coming of Jesus.

  • I think that Bill McBride is a smart guy but I also think that he’s absolutely desperate to demonstrate progress.

  • Icepick

    Nixon was a smart guy, too. So was Clinton. That by itself means nothing but that someone is a smart guy. (Or gal, of course.)

  • michael reynolds

    I’m not getting something. Why is it bad news that housing prices have stabilized for the last three years at something like the level they’d be at had we experienced normal growth rather than bubble growth?

    Would it be better news if the bubble were re-inflating? Would we be happy if prices were skyrocketing?

    Builders began work on more houses in February and permits for future construction climbed to the highest level in almost five years, pointing to a sustained rebound that will help power the U.S. expansion.

    Real people spending real money seem to be betting that the housing market is coming back. Ditto the stock market which seems untouched by gloom. And despite Drew’s warnings the bond market does not appear to be in a state of panic. There’s zero evidence that wealthy Americans are running off to Cyprus to escape taxes. And, by the way, medical costs have been leveling off, no longer going straight toward the sun. At the same time, the deficits are shrinking, not rising.

    And just a reminder: GM? Still there and doing quite well.

    So, we have a record high stock market, a recovering housing market, less pressure from medical costs, falling deficits, stable bond market, low inflation, stable dollar, a solid domestic car industry and booming US energy sector. At the same time unemployment is sloooowly improving.

    But it’s all still gloom and doom?

  • jan

    The housing market is re-inflating by some of the very cause and effect variables that effected the last housing bubble — prices going up too fast causing panic buying as seen in multiple offers.

    As for the stock market, people I read are saying it is being fed by the QE stimulus and is an artificial measure — kind of like hiding a weak economy in a robust-appearing stock market’s wolf attire.

    But, for those of you who see it differently, just go on reading those fiscal fairy tales.

  • Drew

    Prices in the housing market have been forced into recovery by greedy bankers who, at gunpoint, have forced borrowers to take out mortgage loans they can never repay thereby inflating home prices…….wait. OK. OK.

    Here are some things to chew on.

    1. PD – note that the 20 city avg is more attenuated than the 10 city, although it mirrors. This is practically a statistical tautology. For practical reasons they measure where the major population centers are, and don’t even try to figure in bofo Montana or, oh, Peoria. The statistics should be viewed as directional, not absolute.

    2. How one comes to the conclusion that 2002 is the start of the bubble is beyond me. The index was at 125 in 2002, not 80, as it was in 1997. Last time I looked that was a 60% more in 5 years, or about 11-12%/yr.

    As I have noted before, a more granular version of the graph shows Q3 1996 as the inflection point. Some say this was when people realized that the capgains law was obviously going to be signed by Clinton. T or F I don’t know. Let’s not even deal with CRA. The only other possible interpretation brings me to Michael.

    3. You could draw a long term (decades) trend line and attempt to say two things: a) 2002 was the departure from long term trend and b) we are now back to long term trend. There are two problems. That doesn’t hold up to scrutiny, and second, its sort of like asking a boiler operator after a boiler explosion kills 50 people, “so the boiler pressure tended to increase 3%/yr, yet it suddenly took off at the 1997 mark after 5 yrs of flat-ness…….and you don’t want us to look at what was going on with the boiler in 1997 as the culprit in the explosion that eventually ocurred in 2006-2007?” Whatup with that?

    As for the current return to long term trend – a topic near and dear to my (financial) heart right now. The most excellent Drew eyball regression method says not quite so fast. We might still be high. Which brings me to jan.

    4. jan cites the stock market and QE. The mechanisms are a bit different, but she’s on the trail. QE has driven people to yield chase from low return metered money to risky assets (say, stocks). That’s a desire for investment return. I’ve said my peice on risk adjusted returns. Housing is driven more by credit. Here is a little exercise you can all do in 10 minutes if you doubt me. First, Google “mortgage calculator.”

    Because people’s experience/bias for years was to view housing as an “investment” they tended to buy as much house as they could. After all, a mortgaged house is a little LBO. The two considerations were the required downpayment, and THE MONTHLY PAYMENT. They bought as much house within those parameters. Try this little exercise:

    Step 1 – plug into the mortgage calculator a 6%, 30 year fixed mortgage and fiddle with the price until you get to either a hypothetical or your own personal appetite for a monthly payment.

    Step 2 – reduce the interest rate to 3.5% and fiddle with the home price until you get the same monthly. In combination with lower downpayments, that was called 1997 to 2006.

    Step 3 – reduce the mortgage rate to 2.75% and fiddle with the price until the monthly is the same. That’s today.

    Step 4 – Increase the mortgage rate to 5%, and fiddle with the price until the monthly is the same.

    Step 5 – inspect all the prices. After you pick yourself off the floor ask yourself what is driving home prices today, and what you think about the ask price of that home you have your eye on right now, vs what its selling price might be in 3-5 years.

    That all said, I take solace in the notion that Michael is happy defending Obama, Obama and Bernanke’s political needs have been met and they are out of office so what do they care, and that the MSM, Congressmen and steve will look back and blame “greedy bankers” for the housing price collapse.

    As a final note, Michael once again proves he is the master of the clueless argument in not understanding QE and yield chase, QE and time financed assets – like GM cars – the real inflation rate in non-time financed consumption and a degree of weirdness in what can only be described as a bizarre reference to the wealthy and Cyprus.

    I catch shit over this, but I will just say it. Michael and I are rich. I gather that just about every commenter here is doing quite well. But you cannot view the world through your own prism. The Average Joe is not rich, and is suffering. The real unemployment rate is probably 11-13%. (just ask ice) The real inflation rate for food, fuel, clothing, health care and the like – prime expenditures – is not low. The index is jimmied. Taxes are up, and despite all the promises ObamaCare has not reduced costs and is causing employers to rethink their employing standards. I wish Michael would spend less time waving the flag and saying “I’m OK,” while singing “hooray for my guy” while he looks out over the San Francisco Bay, and more time asking how the schlub in Everywhere IL, OH, TN, WI, MI, or FL etc is doing. Venus and Mars…..

  • Zachriel

    michael reynolds: Why is it bad news that housing prices have stabilized for the last three years at something like the level they’d be at had we experienced normal growth rather than bubble growth?

    This is a bit dated, but gives a better idea of the long term trend.
    http://i345.photobucket.com/albums/p372/hounddog1111/Shiller-history-of-home-values.png

  • Drew:

    How one comes to the conclusion that 2002 is the start of the bubble is beyond me.

    As the long-term chart to which Zachriel linked illustrates, the history of housing for the last half century, the period of the modern economy, is one of spikes followed by declines to baseline. The early 2000s was one of the spikes. The shorter term chart above shows a very slight decline beginning which was scotched, presumably by Fed policy. Then it was off to the races.

    As you noted (as did I in the body of the post), another possible dating would be the late 90s. You may be right about the effects of treatment of capital gains. I think that Chinese currency manipulation also was a factor. There doesn’t need to be just one cause.

    Michael:

    It’s not doom and gloom. It’s a realistic corrective to the unrealistically optimistic treatment too many analysts are giving it.

    As long as housing stays flat (as it has), we’re not going to see housing-based economic growth. As Zachriel noted, the long-term trend suggests the likelihood of what I suggested: housing prices have farther to decline.

    The reason the stock market is so buoyant is Fed-produced asset inflation. That’s spilled over into sharply increasing prices in sable coats, caviar, Grand Cru Bordeaux, and 80 foot motor yachts. And in healthcare, just about the only thing that people like me compete with the very wealthy for.

  • PD Shaw

    Drew, Cass-Shiller doesn’t measure systematically where the major population centers are. Four out of ten of the largest metropolitan areas (MSAs) in the country are not in the 10 City Composite (Dallas, Houston, Philadelphia and Atlanta), and two of them that are in the 10 City Composite are not among the 20 largest MSAs in the country (Denver (21st) and Las Vegas (31st)).

    I’m not asking why Peoria isn’t included, I am asking why Houston is not.

  • Andy

    I think PD is onto something. Additionally, judging from my area in Florida, the housing market splitting – areas with family houses in nice neighborhoods with good schools bottomed out a while ago and are rebounding pretty strong. Most everything else is flat or still declining. According to Zillow, for instance, my old house (sold in 2009) lost about 1/3 of its value since we sold it. In short, the upper-end of the market seems to be doing well, but that’s about it.

  • Andy:

    the upper-end of the market seems to be doing well

    That’s consistent with the asset inflation explanation in an earlier comment.

    PD:

    I am asking why Houston is not.

    Just a guess. The Case-Shiller may have a problem similar to that of many indices. If you start adding metro areas and moving them around as conditions change, at some point they mean whatever the people constructing them want them to mean.

    Most of the original Dow companies no longer exist, at least not in their original form. Most of the present Dow companies didn’t even exist when the index was first issued in 1896. Picking its components is an art form rather than a science.

  • Icepick

    Falling deficits? Really? They’re around a trillion dollars a year and not going to get much smaller. But Bush’s deficits were BAAAAAAD.

    As for less pressure form medical costs: What the FUCK are you talking about? We’re going down to a lower tier of coverage this year because that’s the only way we can keep expenses LEVEL. Anything bad happens and we’re totally fucked – because lower levels of coverage.

    And how stable is the housing market? One of my wife’s co-workers is looking for a house for her and her husband to fix up. They’re having trouble even getting to see a house in the range they want. This sounds good, right? There are so many buyers that once again we’re having bidding wars, and if you don’t get a bid in when the house hits the market, then you won’t get the house. (In fact, the advice from the agent they’re working with is to bid on any house they might be interested in, because otherwise they’re not likely to even get to see the house.)

    Here’re the problems: Not all houses are moving. (Prices continue to fall in my neighborhood, for example.) Second, who’s buying the houses? It’s investors, expecting that housing prices (in certain segments) are going to DOUBLE in the next two or three years. Yeah, no shit. And also, a lot of buyers are from overseas, Europe especially, and there are rumors in the local market that Chinese money is starting to flow in. Locally, the market is starting to look just like 2004 and 2005 all over again, though at reduced prices.

    What that means is that the market is once again being driven by speculators. To the point that people who actually want to buy houses and live in them are having trouble getting their bids in. This is not a healthy market, not in Orlando.

    The stock markets, at least the last time a checked, have volumes that are significantly lower than they were several years ago. Given that HFT algos are a big part of the markets these days that does NOT indicate people are participating in the stock markets like they used to.

    Early 401(k) withdrawals were in the news lately: People are pulling from them early to pay bills. THAT is REALLY bad.

    Can’t speak for all bond markets, but Treasuries are getting a trillion dollar pop from the Fed. Plus, with most of the rest of the world going to Hell, US Treasuries still represent a last bastion of safety.

    Food stamp* usage continues to increase.

    * Yeah, I know, SNAP uses plastic cards these days – oh so emblematic of the age!

    SSDI enrollment continues to increase.

    Something I haven’t seen is a stat on the percentage of people claiming their SS early. I bet that is up and remains elevated too.

    The UE rates have largely come down based on falling participation: People, especially the young, have just given up. This is a sign of a reduced future.

    LTUE remains near record highs.

    Saw a stat the other day that the federal government now spends over $31,000 annually per non-government worker. Yeah, that’s a sign of a truly remarkable economy all right.

    Median incomes have gone down during the recovery that all you partisan Democrats crow about. That doesn’t factor in inflation appropriately, in my view, and it certainly doesn’t factor in ever increasing healthcare costs.

    Back to employment, a few weeks ago I saw that even one of the Daily Kos writers was realizing that we’re over ten million jobs short of where we need to be. (I believe that writer claimed we’re 13,000,000 jobs short of a typical recovery. Anyone who’s interested can go find it themselves. ) That from someone who, like Reynolds and steve, thinks that Obama is so fucking good that we should make him Supreme God Emperor of the Universe for All Eternity.

    An interesting topic will be what will spur future growth. It isn’t going to be exports. The Chinese government is desperately trying to keep their economy in over-drive – that won’t succeed indefinitely, even if it is still working now. (There’s doubt on that, as the Chinese lords and masters are still more adept than our lords and masters at fudging the numbers. How our ruling class dreams of having the power of the Chinese Politburo.) Europe is rapidly coming apart, especially now that the ECB has instituted policies guaranteed to create bank runs. (That’s ALWAYS a good sign!) Japan is finally showing the signs of rot that people have been predicting. The rest of the world can’t possibly generate enough growth to spur the US economy. So it won’t be coming from exports, save at the edges.

    It’s not really going to come from manufacturing growth for the domestic market either. Those jobs are increasingly automated, and while we’ve had some jobs come back, it’s been about an order of magnitude smaller than what was lost since 2000.

    It’s not likely to be extraction, not on a large scale anyway. Certain locales will certainly boom, however, at least until they bust.

    Services? Yeah, everyone working as wait staff at restaurants or greeters at WalMart, that’s the ticket!

    That leaves government work. Again I come back to that $31,000 spent by the feds per anum per non-government worker. That does not look sustainable.

    OTOH, if you’re currently in the top ten percent, you’ve never had it so good! And those other 90% can go fuck themselves, just so long as they vote for the right candidates come election day.

  • Icepick

    I gather that just about every commenter here is doing quite well.

    Nicely done! I’m reminded of a scene from “The Producers” (the original movie):

    Max Bialystock: Here’s to failure

    Leo Bloom: …To failure

    Drunk: Why, thank you! You’re very kind!

  • Icepick

    I think that Chinese currency manipulation also was a factor. There doesn’t need to be just one cause.

    Don’t forget cheap Chinese drywall as installed by cheap Mexican labor. Manipulation of the labor market by high-ranking Republicans, Democrats and plutocrats of both stripes had its effect too.

  • Icepick

    Drew: Here’s something chess related you might find amusing. They’re holding a Candidate’s Tournament to find a challenger for the Champ later this year. This morning Vassily Ivanchuk used the Budapest Opening against the second highest rated player in the world, Levon Aronian. It’s early yet and I have no idea how it will turn out, but a BUDAPEST!

  • michael reynolds

    I wish Michael would spend less time waving the flag and saying “I’m OK,” while singing “hooray for my guy” while he looks out over the San Francisco Bay, and more time asking how the schlub in Everywhere IL, OH, TN, WI, MI, or FL etc is doing. Venus and Mars…..

    I’m in daily if not hourly contact with kids who can’t afford a $17 hardcover. Also visited a youth prison for a chat last month, my second such visit. Frequently go into poor schools. And was poor myself until about 1993 or so.

    Were you raised in a trailer park? Did you have to wash dishes in the middle school cafeteria to cover the cost of lunch? Ever slept in a public library or behind a bush or under a freeway? Ever driven a car you couldn’t get past inspection because there was no barrier between passenger compartment and muffler? Ever had to preserve your one disintegrating pair of shoes despite the fact that they were painful to wear? Ever been unable to afford 60 cents for a bus? For that matter, have you ever even been on a bus? Ever hidden from a bill collector?

    I didn’t think so. Don’t lecture me about poverty.

  • Icepick

    I didn’t think so. Don’t lecture me about poverty.

    And don’t tell me how fucking outstanding the economy is because your favorite asshole is President.

  • michael reynolds

    Ice:

    I’m not telling you any such thing. I quoted specifics. If you have a problem with the data, point it out.

    What you and Drew both have is a bunch of anecdotes and some speculative notions of the future and some reasons for why the data doesn’t show what the data appears to show. In other words, you’re the guys leaning on the numbers in order to validate a pre-existing political preference, not me.

  • steve

    PD- There is a Case Shiiler national home price index. It is closer to baseline than the one Dave has chosen.

    http://en.wikipedia.org/wiki/File:Case-Shiller_data_from_1890_to_2012.png

    Steve

  • Saying that I had “chosen” a graph suggests that I was cherrypicking. I did no such thing. That graph is the most recent from the Standard & Poors Case-Shiller report listed in the report. As mentioned in the body of the post, many people have been reproducing the year-on-year percentage change chart without putting it into the context that the graph above reflects.

  • Andy

    But it’s all still gloom and doom?

    I think you’re making a glass-half-full argument. I’m not convinced, however, the glass has reached 1/2 way yet.

  • steve

    Dave- Was on the run so typed fast. Should have said posted instead of chosen. I assume you know those charts better than I do. Not a fan of narrow data when discussing a national problem.

    Steve

  • Icepick

    What you and Drew both have is a bunch of anecdotes and some speculative notions of the future and some reasons for why the data doesn’t show what the data appears to show. In other words, you’re the guys leaning on the numbers in order to validate a pre-existing political preference, not me.

    SNAP has been increasing at a rapid rate for the last several years. The rolls are about 50% larger than they were five years or so back. That isn’t an anecdote.

    SSDI rolls continue to surge. That isn’t an anecdote. Hell, even the NPR has finally caught on to the fact.

    We’re still three million jobs short of where we were when the recession started in December of 2007. That isn’t an anecdote either.

    Nor is the fact that this has been the worst recovery since WWII.

    Nor is the fact that LTUE numbers are bouncing around near record highs.

    Those aren’t anecdotes.

    Neither is the fact that median wages have declined DURING the alleged recovery.

    If you want more on Orlando real estate, go look it up in the local rag. They actually cover news on occasion. It backs up the stuff that I acknowledged was anecdotal.

    But that doesn’t matter. You will not acknowledge that the economy is in the toilet, and that you and your beloved party and your President have responsibility for this. THIS is what you have voted for, THIS is what you claim is a success, THIS is what you want more of.

    Every stat I cite you claim is a mere anecdote. It would be unbelievable except that I know that you wouldn’t acknowledge the truth about how awful things are if a gun were held to your head. You don’t have it in you. Party before all.

    You cite the Dow hitting new highs indicates that everything is fine with the economy. Since when did the plutocrats getting richer become the only measure of how well the economy is doing? Oh, that’s right. It happened when you started making some decent scratch. Everything changes with money, or so I’m told. Like deciding that the only thing that matters is how the rich folk are doing.

    And I really like the humblebrag about your charitable works with poor people in prison. That’s great pub for someone in the public eye. But when all that mattered was simple human decency, it was all about making fun of poor, dumb Bob-in-a-bag.

  • Icepick

    Yay, Florida leads in ZOMBIE foreclosures!

    I’ve got two of those next to my house. In one case it looks like the company that started the foreclosure itself went out of business. That house has become a dump and now has rats. Which is why I encourage some feral cats to hang around my house. They bring me rat carcasses every so often as gifts. Housing recovery! If you’re a zombie or a rat or a feral cat, that is. (We’ve got face eating zombies in Florida, in case anyone forgot. Hurray for bath salts!)

  • TastyBits

    The housing bubble was fueled by artificial sources of money. Speculators must eventually sell to an end buyer, and the end buyer must have a source for a loan. In its natural state, the housing market will adjust because there are feedback loops.

    Some of the housing stock will never recover. While the house may have value, the land under it has become worthless. Eventually, it will be owned or rented by Walmart shoppers, and this will make the area less valuable. I suspect some of the buying is being done by “vultures”. Interestingly, they are recycling these houses, but I doubt they will be welcomed by the “save the earth” crowd.

    I would suggest looking at changes from the Fed for the 1997 & 2002 inflections. “The Maestro” was doing his magic at the Fed. It turns out he was the “Sorcerer’s Apprentice”.

  • Drew

    I just did lecture you on poverty, Michael. I’ve a share of hard times. You seem to have forgotten it. I have not.

    And I’m sorry if I offend. But I wouldn’t dream of lecturing you on how to write, or the writing business. But you seem free to lecture on things you so obviously no nothing about. Look in the mirror and ask some questions.

  • Drew

    ice

    I just assumed your wife was doing well, and geographical constraints preclude you from moving for employment opportunities.

    As for chess, I’m so rusty, you don’t even want to know. But as fate would have it, I watched searching for Bobby Fischer the other night. The juices are still there, but now I’m more interested in whether my latest surgery will force me to adopt a permanent draw vs a fade. And “old man shafts” graphite Matrix Ozick Programs or Project X seem to be in my future.

  • Icepick

    As for chess, I’m so rusty, you don’t even want to know.

    I figured as much. But I also figured you remembered what a junky opening the Budapest is (1 d4 Nf6 2 c4 e5?! -or- 1 P-Q4 N-KB3 2 P-QB4 P-K4 for the old-timers!), and how funny that makes it seeing it at a Candidates Tournament, of all things. The player that played it, Ivanchuk, lost on time, BTW. He’s having a patented Chuky meltdown and has lost four times on the clock now. But he first hit the scene in 1988 or so, which may put him past your time frame. (The oldest players at the top, Anand, Ivanchuk and Gelfand, are all younger than me now. Kasparov shouldn’t have retired, damnit!)

    As to my wife – we’re getting by. We can’t really move for a variety of reasons. But we’re still (I believe) in the lower 40%, and have mountains of debt, some of which aren’t discharageable. So we’re largely fucked until conditions improve in the economy and I can get a job again. I figure that means unemployment down under 6% again, with the participation rate up a couple of points from where it is now. It’s going to take that before employers are willing to scrape the bottom of the barrel of the LTUEs. In other words, I don’t expect to ever work again. B+ fucking economy!

  • Icepick

    As for golf (which I obviously can’t afford now) I decided I didn’t want to do more than watch after playing it a few times. I enjoyed it well enough when I tried, but that was because I knew nothing about how to play, sucked at it and didn’t care. (Beer helps with the apathy! A side bet the last time I played was a lot of fun too – watching a friend completely melt down on the course because he was losing to me was hysterical! The best part was I knew I would beat him because I knew that eventually he would hit two bad shots in a row and completely lose his cool. People just can’t golf well in a rage, LOL. And I certainly didn’t take it as a sign of things to come when I hit the flag with my tee shot on the first par three – even sucky golfers get lucky sometimes.)

    But I knew if I kept playing I’d want to improve and then get competitive about it. I’ve already had one frustrating habit for competition (chess) and I sure as Hell didn’t need another, especially one as expensive as golf.

  • jan

    More from Zero Hedge describing the ‘housing recovery’ as ‘The little train that isn’t”, in pointing out:

    “….regional home prices have recovered to only 2004 levels and while the REO-to-Rent model remains for the late-to-the-gamers, it is inevitably a self-destroying bubble if there is no organic growth and one glance at the rate of mortgage applications (‘real’ buyers) says all we need to know about the housing ‘recovery’.”

  • Drew

    ice

    Many people don’t realize that once a level of physical (or basic) competancy is reached, its totally a mental and strategic game. Like chess. But if its just hit and giggle…….you aren’t playing golf. You are just taking a walk in the park.

  • jan

    The week that was — March 23-29th — a synopsis of positive/negative events, as submitted by Zero Hedge.

  • TastyBits

    @jan

    Cyprus is the initial domino. They have locked down money (capital) flows, and the contagion will spread throughout the EU. Greece will probably be next. People will get nervous and start pulling their money out. The bank runs will be stanched by restrictions on money flows. This will affect the next worse country. Rinse and repeat.

    As long as the US does nothing crazy, the US will be a safe haven, and things may get better. This would be hailed as a result of the policies enacted under President Obama. Of course, these policies are sinking Europe, but why notice?

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