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Tag Archives: Federal Reserve

The ‘House Rich” movement, and the woe of aftermath

Where I live they are building houses again. The neighborhood beside me should have been built 5 years ago but finally the bulldozers are in motion again. But don’t call it a recovery. There is no vibrance in the market. Just a subset of people escaping places like California with solid state jobs at the University.

But even here there is concern. 2 years ago the builders began again, thinking the market had finally turned. But after a brief uptick things settled down again. The all cash buyers disappeared and all that was left were regular people who actually needed mortgages.

And getting a mortgage is still pretty tough as the attached article outlines.

But I believe a small part (but a growing part) of the ongoing housing chill is that many people have finally seen through the rather idiotic obsession with always living in the largest house one can afford – or in many cases – one can not afford.

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David Stockman: In Praise Of Price Discovery

I think that it’s funny that David Stockman, Ronald Reagan’s former budget chief, starts his column with this sentence:

“This morning’s market is more erratic than Claire Danes off her lithium.”

Seems a little gratuitously mean. Accurate (?) perhaps but mean. But that is one of the things we like about the guy. His acid.

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Big Business and Big Government are often natural allies

It’s amazing but even now many people refuse to see this rather obvious fact. Government and big business like each other. For the most part they aren’t rivals. GM, Goldman Sachs, GE, Boeing, JPMorgan, Monsanto, Walmart, Chrysler, Berkshire Hathaway, Google, CVS, AT&T, Northrup Grumman and many other giant companies are partners (to a significant degree) with the US government.

Why?

Because that’s where the money is. Specifically taxpayer money.

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