From the WSJ:
Home prices are rising at the fastest rate in seven years, with some communities seeing double-digit gains, as buyers are returning to a market where the number of properties for sale is in short supply.
Prices increased 9.3% in February from a year earlier while mortgage-interest rates hovered near record lows, according to the Standard & Poor’s/Case-Shiller index that tracks home prices in 20 major metropolitan areas. All 20 cities posted year-over-year gains for the second consecutive month, which hasn’t happened since 2005, before the crash.
In some of the hardest-hit markets, the gains have been particularly heady. Home prices rose 23% from one year ago in Phoenix and 18.9% in San Francisco. Nationally, the median home price in March stood at $184,300, well below the peak of $230,400 in 2006 but up from $154,600 in January 2012.
“Nobody that I’m aware of anticipated the kind of price growth that we’ve had,” said Budge Huskey, chief executive of Coldwell Banker Real Estate LLC. “It’s simple supply and demand.”
The Federal Reserve, whose policies have kept rates low, has a lot riding on the housing-market rebound. The encouraging data come as other aspects of the recovery disappoint: Hiring remains patchy and the unemployment rate, at 7.6% in March, is more than 2½ percentage points above where it was when the recession started in late 2007. Consumer-spending data this week, while solid, pointed to some second-half headwinds.
The real-estate market’s brisk rebound also raises concerns among some observers that traditional buyers, facing still-stringent mortgage-lending standards, are being squeezed out because investors are able to make winning bids by offering to pay in cash. Others are concerned that the pace of recent price gains isn’t sustainable.
For now, recent data suggest home-price gains are likely to continue. Sales of previously owned homes rose by 10.3% from one year ago in March, even as supplies of homes for sale fell by 16.8%. The Wall Street Journal’s quarterly survey of market conditions in 28 metropolitan areas showed very low supplies of homes available in a rising number of markets, including a less-than-three-month supply in a dozen markets, including the two hottest—Phoenix and San Francisco.
…
Still, the speed of recent price gains has raised concerns that prices could be going up too fast relative to incomes. “There is enough improvement in the underlying fundamentals to suggest that the housing recovery is well on its way. The only question that somebody could legitimately ask is, ‘Is the pace sustainable?’ ” Mr. Huskey said. “You cannot suggest that we could sustain double-digit gains year after year.”Normally, he said, prices should rise by 3% to 4%, outpacing inflation modestly. No one should be “buying a home because they think the 23% increase in Phoenix is going to be repeated two or three years in a row,” Mr. Huskey said.
Economists say that, for now, home prices in most parts of the country remain in line or below their long-run relationship with incomes and rents. “In many instances, owning still beats renting,” said Joseph LaVorgna, chief U.S. economist at Deutsche Bank DBK.XE +6.11% . “I don’t think this is bubble-like at all.”
Also, many parts of the country that are seeing the strongest price increases witnessed some of the largest declines. In those markets, “there is room for prices to rise relative to incomes because they are at such a low base,” said Frank Nothaft, chief economist at Freddie Mac FMCC -1.22% .
The concern is that home prices could more easily rise above their traditional relationship to incomes because lower mortgage rates will enable buyers to swallow price increases. “We are encouraging people to buy an asset that, when [mortgage] rates go back to 6% to 8%, will look a bit overpriced,” said Stan Humphries, chief economist at Zillow, the real-estate website.
This first post has be furloughed due to sequestration cuts.
Time to hop a ride on the refi train?
From CNBC:
Mortgage Applications Rose Last Week as Rates Fell
Applications for U.S. home mortgages rose last week, fueled by demand for refinancings as interest rates dropped, data from an industry group showed on Wednesday.
The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, rose 1.8 percent in the week ended April 26.
The MBA’s seasonally adjusted index of refinancing applications climbed 2.8 percent. But the gauge of loan requests for home purchases, a leading indicator of home sales, slipped 1.4 percent.
…
Fixed 30-year mortgage rates averaged 3.60 percent, down 5 basis points from 3.65 percent. It was the lowest level for rates since late last year.
From MarketWatch:
Foreclosures rise in March: CoreLogic
The number of completed U.S. foreclosures rose in March from the prior month, but were below the level of 12 months earlier, signaling a housing market that continued to heal over the past year, according to data released Tuesday by CoreLogic.
There were 55,000 completed foreclosures in the U.S. in March, up 6% from February, but down 16% from March 2012, according to CoreLogic’s national foreclosure report. In March about 1.1 million U.S. homes were in some stage of foreclosure — representing 2.8% of all homes with a mortgage — down from 1.5 million during March 2012.
The year-over-year data are a fresh indication of the housing market’s continuing recovery, which has been supported by historically low interest rates.
“Although we still have more than a million homes in some stage of foreclosure, this trend, combined with rising home prices, is another signal of a gradually improving housing market,” said Anand Nallathambi, CoreLogic’s chief executive.
While year-over-year trends showed improvement, completed monthly foreclosures remain higher than before the bubble burst. Between 2000 and 2006, completed foreclosures averaged 21,000 per month.
Is it election season already?
From Bloomberg:
Christie Renews Call to Pass N.J. Homeowner Tax Credit
Governor Chris Christie, a Republican, said New Jersey lawmakers should pass a tax break for homeowners in the next 60 days or the Democrats who lead the legislature will show that they “lied” to voters.
Christie has proposed a 10 percent credit, phased in over four years, for homeowners making $400,000 annually or less. The amount would be as much as 10 percent of property tax paid, capped at $10,000. Top Democrats have said they want to pass a cut, while blocking the governor’s proposal.
“Let’s give these jokers 60 days to show their true colors,” Christie, 50, told a town-hall style meeting in Long Beach Township yesterday. The governor made his proposal a condition of his acceptance of an increase in a separate break for low- and middle-income workers. Lawmakers have held up the credits until state revenue meets budget goals.
“No one wants to do a tax cut more than I do,” Senate President Stephen Sweeney, a West Deptford Democrat, said at the Statehouse April 15. “If the revenues work out, we’ll do a tax cut. If they don’t, we won’t.”
Christie, who is seeking a second term in November, has cited higher-than-forecast tax receipts for several months as an indication that the state can afford the breaks. He has also proposed a mechanism that would block the credits if they become unaffordable.
Refi up; purchase down?
The Refinance Index increased 3 percent from the previous week and is at its highest level since the week ending January 18, 2013. The seasonally adjusted Purchase Index decreased 1.4 percent from one week earlier.
http://www.calculatedriskblog.com/2013/05/mba-refinance-mortgage-applications.html
Ed Demarco is out. REFI mania is on.
Home prices based on current interest rates, incomes and home prices are 30% below historical prices
They are insanely affordable for the average 28 year old newly engaged couple with two incomes looking for a starter home.
Near me a fixer upper with some light flood damage just sold for 240K. That house in mint condition sold for 600K in spring 2006 when rates were 6%. 20% down or 120K would get you a 480K mortgage at 6% or like 3k a month
Today if you had the same 120K you had in 2006 to put down, buy that house for 240K, you put down 20% or 44K. Then take rest of your 120K or almost 80K and renovated house. You will have a 196K mortgage at 3.5% which is like $700 a month .
Salaries are higher than 2006 yet in this case your mortgage is $2,300 less a month. Crazy
Place I just bought was 500k at peak and I paid 290K. Not a great bargain, nut it is where I wanted it. Even math on that is crazy. It is a vacation condo, I was asked to put down 40% to get super low rate. In 2006 40% would be a 200K and then a 300K mortgage at 6% or $1,800 a month for 30 years, flash forward 7 years and I paid 290K, only 90K more than 40% down in 2006 and I have no mortgage payments.
So it is 210K off home price and no mortgage payments.
First time home buyers are the luckiest SOBs in the world. Almost like the folks after WWII hiting a bull market.
For instance my elderest niece just got engaged. Talk abut a free ride in life, graduated ivy league school May 2007, got a job right away in a fortune 500 non financial services company at a great salary as it was 2007, she still works there, joined 401K in Summer 2007 and had basically peanuts in it when 2008 hit, then she bought stocks in 2008-2013 cheap cheap cheap. Her and her husband. Together that is 12 years of insane low prices and she has 40 years for that money to grow!!!!!! A few weeks ago she locked in on a fancy condo development that was built late 2007 that owner got transferred and willing to sell for a big loss. She just locked in on a super low interest rate on a 30 year mortgage. Told me and wife her and hubbie never plan on selling even when they trade up. Such super low rates locked in for 30 years makes this a cash cow for renting.
The kids are alright!!! May day today and Occupy Wall Street is non existant. Barriers up cops everywhere and not a single kid on street, bottom line they are loaded with fat stacks of cash
Ed Demarco is out. REFI mania is on.
If Zandi is in, absolutely, but not sure about Watt, no idea on his position.
clot: I was wondering whether there is any regional variance in ricin? In the same way that there is BBQ from Memphis, Texas, NOLA etc………is the ricin from Mississippi any different than Memphis ricin?
[1] Fabius,
An unexpected benefit of sequestration.
[9] chifi,
In Mississippi, you get red beans with your ricin.
Ricin beans.
Get it?
Thank you, I’ll be here all week.
Ricin is a key poision in the show Breaking Bad they try to use it to poision Gus
http://www.myfoxny.com/story/22123708/gov-christie-calls-bs-on-dune-opponents
I found my first grey pubik hair in mississippi. In a bowl if grits.
50 shades of grey southern style
pant up demand says:
May 1, 2013 at 9:33 am
I found my first grey pubik hair in mississippi. In a bowl if grits.
re: #8 – Mel Watt you will not find someone more liberal than him. I would say the refi floodgates will be opened up for those poor underwater folks who lives were drastically affected by the damm predatory lenders that gave them all of that credit they didn’t deserve.
It’s the non-government owned mortages that need help these days. About 42 percent of the 11 trillion dollar mortgage market that is having the most trouble refinancing due to poor credit scores and negative equity. I am sure the government will now be very happy to take those mortgages off the predatory lenders hands and refi them into a lower Fannie/Feddie rate no matter how bad their credit is or how underwater the mortgage is.
It just may well be the end of times.
here on the web site you can see a huge selection of interesting articles about ремонт квартиры своими руками фото.
When I read the abstract, my reaction was “you just figured that out now?”
http://www.harvardjol.com/wp-content/uploads/2013/03/Tahk_Article.pdf
But it occurs to me that the purpose is not to discover but, to use Sunsteins term, to nudge. In short, it is to validate the idea that tax policy should be used to implement social policy. In a larger sense, it is intended to justify the expansion of governmental authority. I’ll leave to the reader what the unintended, or intended, targets of such expansion would be.
RE: #13 – Cover your ears kids Gov Christie is about to blow!
Brian – if you read what I wrote you will be getting your 3.75% refi so be sure to head down to your bank in a few weeks and apply.
(13)
Christie said the dune system is largely funded, and will be built — with or without the consent of holdouts.
“I want to make it very clear to you that we are building these dunes, whether you consent or not,” he said
—thank god the red team is different
JB subprime sludge loans were made by places like American Home Mortgage and New Century that have long gone BK and portfolios bought for pennies on a dollar by vulture investors looking to either get above market interest rates, foreclosure on properties, rework mortgages or turn owners into renters.
We have a quest for yield right now. Businesses bought those mortgages to turn them around not hold them for 30 years.
I bet they re-securities them. Lets say you buy one billion face subprime sludge for 40 cents on the dollar.
You could take the 20% best where owners have never missed a payment and have decent credit ratings resecuritize that and sell it at 110% cents on a dollar
Sell worst 20% for pennies on a dollar to sleezy collectors
Take middle 60% and start working them out, principal reductions, interest rate reductions or straight out foreclosures if home is in a good location or straight up deed in lieu where owner gives the house to you or rent to own type of arrangement.
Private Equity bought these to work them out. Allowing Fannie/Freddie these home owners to refinance their mortgage principal at 2% only helps the vultures who bought the mortgages as they get paid out 100% cents on the dollar as soon as it is refinanced. The homeowners are still in deep doodoo
We saw this in in Orginal GM Zero percent down and Zero Percent financing back in GMAC subprime days. Folks in the Gettho got 65K Caddie Escaladies with zero percent financing and nothing down. Come 2008 they were piling up in repo yards. Bottom line you borrowed 65k you own back 65k Zero percent interest wont help you
re# 22 JJ – just like Apple Bonds @ 3.883% you won’t live long enough to even care. This mess is getting kicked down the road another 30 years.
Christie is stealing from Peter to pay Paul.
Folks with waterfront view from their house who only use it as a summer home dont want dunes. They aint there in hurricane season. We only get big hurricanes once every 25 years and they have flood insurance. They enjoy an amazing view and house is worth a lot with ocean view. Every 25 years they get flooded and Flood Insurance pays for it and by Memorial day it is fixed.
The dunes being built are to help the the year round residents further back from beach who have no advantage of seeing water yet without dunes they are flooded. They live their year round so in Hurricane season they are sitting ducks as they are not in their NYC condo like the waterfront guy.
Building Dunes I am all for. They benefit 99% of people. The 1% losing their view due to stacking a mountain of sand next to house and also losing their ability to easily walk on beach of course is going to hate it.
It also creates winner and losers. Christie is an idiot if he thinks the 1% like this idea. But he should go ahead anyhow
joyce says:
May 1, 2013 at 9:47 am
(13)
Christie said the dune system is largely funded, and will be built — with or without the consent of holdouts.
“I want to make it very clear to you that we are building these dunes, whether you consent or not,” he said
—thank god the red team is different
When will rates go up? Till the cows come home
Money for Nothing
Bonds, Bonds Everywhere and Not a Drop to Yield
http://www.businessweek.com/articles/2013-04-30/bonds-bonds-everywhere-and-not-a-drop-to-yield#r=most%20popular
Grim, heck yeah, you refi, I’ve adjusted my ARM four times already down from 4% to start down to 2.625. I’m thinking about a 15 year fixed but tempted to string it out to 30 too and be done with the ARM world. Then again, why not kick the can and do another arm and save the 3/4% vs. the fixed 30 for another 7-8 months?
Funny part if you went back to 1980 you could have just bought a 30 year treasury every January 2 and July 2 for the whole 33 years and almost outperformed every asset class with zero percent default risk. You would be sitting on 15 year duration right now and all the bonds you own from 1983 to 2008 would be paying big coupons.
It really was that simply. My aunt who lives off coupons for last 30 years always buys 30 year NYS or Treasury bonds nothing else. She is like what do I care about losing value on principal if rates rise I will be dead. She lives off interest gets check mailed to her each month. She only rolls bonds as they mature. Worse case when she drops dead journal entry the bonds into by then her great grand kids accounts to pay for their college.
Juice Box says:
May 1, 2013 at 10:10 am
When will rates go up? Till the cows come home
Money for Nothing
Bonds, Bonds Everywhere and Not a Drop to Yield
U.S. Sees Floating-Rate Note by 1Q 2014, Lower Coupon Sizes
http://www.bloomberg.com/news/2013-05-01/u-s-sees-floating-rate-note-by-1q-2014-sees-lower-coupon-sizes.html
re: #24 – The old folks in Harvey Cedars that Gov Christie called out because the sued over the dune and won were actually saved by the dune. The courts ruling said they got no “special benefit” from the dune. They should give the money to someone who lost their home.
“ADP Says U.S. Companies Employed Fewer Workers Than Forecast”
http://www.bloomberg.com/news/2013-05-01/adp-says-companies-in-u-s-hired-119-000-more-workers-in-april.html
Sounds about right. Who is the resident “looking for work but can’t find any” around these parts nowadays? Looking to commiserate.
re# 27 – JJ The banksters said at Davo’s in 2011 they wanted to issue $100 trillion in new credit by the end of the decade. It looks like they are well on their way from what i have been reading.
Since there will never be yield in our lifetime ala Japan might as well go all Ms. Wanatabe.
There will be yield in our lifetime. Trouble is we only have three outcomes in our lifetime.
1) Low Yields whole way till we are dead. You should have gone long non callable on all your bonds
2) Lower and Lower yields till we get to 1% treasuries then we get a massive rise in rates that crushes everyone who borrowed on adjustable terms or locked in long term fixed income at low rates
3) Fed magically is able to slowly raise rates over time giving opportunity for adjustable folks to lock in long at slightly higher rates and folks with bonds time to sell long term bonds and slowly replace bonds as they mature with higher yielding ones.
Outcome 2 is what everyone is scared of. It happened in early 80s, 1994, 1999 and 2006 when Fed raised rates too quickly and caused a bond blood bath and folks on ARMs to vomit when rates reset
Dan in debt [26],
That ARM rate is gonna stay there for a long, long time.
Anyone want to go in with me on a halfway house for Gitmo detainees? I am sure we can make a few $$ by charging the Gov to rehabilitate them and reintroduce them into society. We can even do a reality TV show about it to make some extra $$.
Seaside Heights must be itching for a new TV show to come to town and film and produce.
Let’s call it “The Real World Gitmo Edition”
Episode one – Saeed shows up at the beach house
Episode two – Selling t-shirts ain’t easy
Episode three – Sami won’t shave off his beard
Episode four – Khalid does his laundry before the gym and tan
Episode five – Jersey girls are too easy
WASHINGTON (Reuters) – The Federal Reserve’s debate over monetary policy could begin to shift away from the prospect of reducing stimulus toward a discussion about doing more, given the signs of economic weakness and slowing inflation.
But policymakers are not there yet.
At a two-day meeting that wraps up on Wednesday, the Fed is widely expected to maintain its monthly purchases of $85 billion in bonds to support an economic recovery that is nearly four years old but still too weak for the job market to truly heal.
Thank goodness it’s different here.
Treasurys rallied to new yearly yield lows Wednesday as investors retreated to the safe haven of the U.S. government bond market amid disappointing economic data.
The 10-year Treasury note hit 1.630%, beating yesterdays yearly low of 1.638%, according to FactSet. The note last traded at 1.631%, a drop of over 4 basis points on the day. The 30-year bond yield was down nearly 5 basis points on the day to 2.831%. The 5-year note was down over 3 basis points to 0.650%.
Guess folks who got in on Apple Bonds at offering price did pretty well
re # 35- Eddie it’s contained.
“At a two-day meeting that wraps up on Wednesday, the Fed is widely expected to maintain its monthly purchases of $85 billion in bonds to support an economic recovery that is nearly four years old but still too weak for the job market to truly heal.”
When uber-dove Yellin gets Bernake’s job she will increase the purchases to 120 billion/month. That will be the market’s expectation and she will deliver.
Hype I keep hearing Larry Summers so better make it 200 billion/month.
chi (9)-
I have some of each. Give me your mailing address, and I’ll send samples. :)
“clot: I was wondering whether there is any regional variance in ricin? In the same way that there is BBQ from Memphis, Texas, NOLA etc………is the ricin from Mississippi any different than Memphis ricin?”
Great. I now have a visual of Summers humping Yellin stuck in my head.
3 more rounded up in Boston Bombing and the wife does not want the body.
http://abcnews.go.com/Blotter/happen-boston-bombing-suspects-body/story?id=19077198#.UYE4tEqVAwA
…guess it should be Yellin doing Summers…
Three additional people arrested in Boston Marathon bombings
http://www.boston.com/metrodesk/2013/05/01/three-additional-people-taken-into-custody-boston-marathon-bombings/dhLzU1e5vfbuhxyjWlBOSP/story.html
So much for the “they acted alone” story I keep hearing on CNN, MSNBC, etc, etc…
They need to waterboard the mom of the Boston Bomber.
I think Amada Knox also requires further interrogation.
http://newyork.cbslocal.com/2013/04/30/nyc-realtor-offers-employees-pay-raise-for-getting-inked-with-company-logo/
Waterboard them in pork juice!
All hype [44];
The headline I heard is that the people arrested were accessories-after-the-fact, meaning they helped the brothers after the bombing.
On the other hand, the fact that the Saudis flagged these characters for us IN WRITING in 2012 is instructive.
Our country is in the best of hands.
Names will be out soon two were classmates of the younger brother at University of Mass at Dartmouth.
N.J. state workers protest proposed civil service changes
http://www.northjersey.com/news/state/politics/State_workers_protest_proposed_civil_service_changes.html
Best quote in the article: “Stowers said she took a state government job almost 25 years ago after she had difficulty taking time off from a private sector job to care for her daughter.”
Terrorista #1 license plates? Really?
49. This one is all O’Bammi’s.
[51] libtard,
I like this quote:
“Most state workers, when they came to work for the state, it was for job security,” said Darlene Stowers, one of the Communications Workers of America picketers . . .
Translation: I came here because it would be harder to fire my fat, lazy ass.
$10 to tour the MTV Jersey Shore House
http://www.nj.com/news/index.ssf/2013/05/seaside_heights_making_progres.html#incart_m-rpt-1
54. Uh. Yeah. Job security in this economy is a big deal. Yes?
Look for the Union label.
Paul Krugman’s Proud War on Fools, Knaves and Lunatics
By Clive Crook Apr 30, 2013 6:20 PM ET .Facebook Share Tweet LinkedIn Google +1 241 Comments
Print QUEUEQ..Could I say a word about Paul Krugman? A recent blog post by the eminent economist and New York Times columnist struck me as out of the ordinary, even for him. Krugman was responding to critics who accuse him of seeing everybody who disagrees with him as either a fool or a knave. He says that’s not right: Many of those who disagree with him are sociopaths.
“The point is not that I have an uncanny ability to be right; it’s that the other guys have an intense desire to be wrong,” he says. “And they’ve achieved their goal.”
Q.Before I examine this mindset and where it leads, I should mention my boundless admiration for Krugman as a scholar. As a young economist many years ago, I was in awe of his ability to examine an economic problem in a new way and find something simple and crucial that others had missed. He did this again and again. A remarkable talent, humbling to watch.
These days, when I read his column or his blog posts (such as one on April 29, which boasted that he’s more popular on the Web than celebrity gossip), I sometimes feel as though I were watching Albert Einstein on the Cooking Channel. Is this, I wonder, the best use of his gift?
He would say it is, I’m sure, and the reason is the danger posed by the fools, knaves and sociopaths who disagree with him about fiscal policy and the proper role of government. Nothing is more urgent than to confront this threat, he believes, which demands all hands on deck as long as it persists. Krugman sees his mission as telling people the truth — or as much of it as they can handle — so the liars and lunatics don’t have it their way all the time. This might not be enough to save us, but it’s his duty to try.
Guiding Opinion
As readers of this column won’t need reminding, I think Krugman’s been right about U.S. fiscal policy — the stimulus was too small and it’s being withdrawn too soon. But he’s wrong about many of the people who disagree with him and about the best way to guide opinion. He’s enormously influential with those who need no persuading, which is to say not very influential at all. He would have more influence where it would actually make a difference if he developed — or at least could feign — some respect for those who aren’t his disciples.
Krugman says his opponents are motivated by politics. “Am I (and others on my side of the issue) that much smarter than everyone else? No. The key to understanding this is that the anti-Keynesian position is, in essence, political. It’s driven by hostility to active government policy and, in many cases, hostility to any intellectual approach that might make room for government policy.”
Talk about lack of self-awareness. Does Krugman imagine that he isn’t motivated by politics? His own views are equally driven by support for active government policy; in many cases, they are also driven by support for any intellectual approach that might make room for such government policy. Like any politician, he expresses certainty where he knows there is doubt. He’s more than happy to simplify and exaggerate as the cause demands.
And that’s fine. Vigorous debate on the subject is not just desirable in a healthy polity but also essential. Reverence for scientific niceties belongs in academic journals, not the public square. But it shouldn’t need saying that reasonable people can disagree about how big a role the government should play in society, and about where the burden of proof should lie in discussing proposals for more or less government intervention.
Radiating Contempt
A line has been crossed when the principal spokesmen for contending opinions have no curiosity whatsoever about their opponents’ ideas and radiate cold, steady contempt for each other. That’s dangerous. Civil society depends on a minimum threshold of tolerance and mutual respect. Fall too far below it, and the seething paralysis you see in Washington could soon be the least of your concerns. This is America’s biggest political problem — and Krugman’s not part of the solution.
Meanwhile, for the side that thinks it has the better arguments, naked contempt for dissenters is plain bad tactics. That isn’t how you change people’s minds. Better to fire up the base with a little demagoguery (such as calling conservatives racist, as Krugman is wont to do) than reach out to the uncommitted? I don’t think so. The enthusiasm you inspire on your side is canceled out by an equal and opposite reaction on the other. Krugman stirs up the right in much the same way that Rush Limbaugh, for instance, inflames the left. Granted, if you’re going to have a spokesman, better a Nobel laureate than a talk-radio clown. The fact remains that Krugman’s weary disdain for roughly half the country is self-defeating.
Really, I just wish he’d meet a wider range of people. It’s true that the modern Republican Party includes a growing number of extremists who have no interest in the kind of discussion I’m recommending. In their case, attempts at outreach would be so much wasted breath. But if Krugman got out of his bubble a bit more, he’d find that the other half of the country contains no more than its fair share of knaves, fools and lunatics — and a lot of thoughtful, public-spirited Americans whose views on the proper scale and scope of government are different from his, yet worthy of respect.
(Clive Crook is a Bloomberg View columnist. The opinions expressed are his own.)
To contact the writer of this article: Clive Crook at ccrook5@bloomberg.net.
To contact the editor responsible for this article: James Gibney at jgibney5@bloomberg.net.
51 – Shouldn’t they be working? Who the hell has time to stand around and protest.
I’d respect Krugman a lot more if somebody capped him.
I’d also respect Krugman a lot more if he made a g@y p0rn movie with Bernank.
#30: I’ve done some of that on behalf of my spouse. Of course he has The Big C now (does the fun ever STOP?) so I told him to just consider himself retired.
Breaking News: Americans Have Always Been Hungry
Scientists have confirmed the first archeological evidence that Jamestown settlers resorted to cannibalism with the gruesome discovery of a 14-year-old girl’s skeleton. The English girl’s remains date back to the deadly winter of 1609–10, known as the “starving time,” when settlers ate dogs, cats, horses, and even humans in the Virginia colony. Much remains unknown about the dismemberment and cannibalization of the 14-year-old, though a forensic anthropologist confirmed that a blow to the back of her head split her skull in half and the skull was penetrated to remove her brain. Scientists have long speculated that Jamestown colonists ate fellow settlers—and likely committed murder in the process.
Much remains unknown about the dismemberment and cannibalization of the 14-year-old, though a forensic anthropologist confirmed that a blow to the back of her head split her skull in half and the skull was penetrated to remove her brain.
If I was going to eat somebody, I’m really not sure that eating their brains would be my first choice. I mean, really, we’re talking about a tender young 14 year old, there are probably a number of muscle groups that would be really quite supple given that she probably wasn’t engaged in heavy manual labor (nobody wants tough and stringy). Why go for the offal when she would have probably made a fantastic osso buco. I’m sure they could have made a wonderful stock with the bones too.
If there was cannibalism, I wouldn’t expect them to find anything resembling a skeleton. Besides, eating brains is more suggestive of a Zombie Massacre at Jamestown.
I thought inflating the currency saved the Jamestown settlers.
All Hype [38];
“At a two-day meeting that wraps up on Wednesday, the Fed is widely expected to maintain its monthly purchases of $85 billion in bonds to support an economic recovery that is nearly four years old but still too weak for the job market to truly heal.”
$85B/mo. == $1 T/year == just about equals our federal deficit. Hmmm…
When uber-dove Yellin gets Bernake’s job she will increase the purchases to 120 billion/month. That will be the market’s expectation and she will deliver.
“MORE COWBELL!” -Paul Krugman
I met Krugman on the LIRR in Jamaica once. He was apparently coming from JFK (What, no limo?! I guess it broke down.) I offered a tepid “I enjoy reading your work,” (a polite lie, but anyway) and he seemed quite bothered at being recognized, even for a compliment.
Grim [64];
Gary Taubes book proposing that carbs==fat points to animal behavior — predators often go straight for the fatty organ meats from their kills — they leave lean muscle for the buzzards.
Gary Taubes has probably never eaten brain. I have (no, not human), and it’s really not so good. Although if the predatory mob was made up of hipster foodies, I have no doubt that they’d go for the offal first.
Krugman is in such a bubble that he probably thinks the NY Times is being pulled to the right of center by nefarious forces.
I don’t actually respect Krugman’s academic work. His Nobel was allegedly for his papers on trade theory, and they weren’t that great. Mostly supported government subsidies to build up economies of scale, but he didn’t recognize that all governments will be overoptimistic on their ability to succeed in such endeavors, ultimately distorting trade and industry.
Now he’s an expert lickspittle to economic interventionists.
Krugman is in such a bubble that he probably thinks the NY Times is being pulled to the right of center by nefarious forces.
I don’t actually respect Krugman’s academic work. His Nobel was allegedly for his papers on trade theory, and they weren’t that great. Mostly supported government subsidies to build up economies of scale, but he didn’t recognize that all governments will be overoptimistic on their ability to succeed in such endeavors, ultimately distorting trade and industry.
Now he’s an expert lickspittle to economic interventionists.
In honor of the day, if you would all be upstanding.
https://www.youtube.com/watch?v=2OPvWFDzDlA
Now he’s an expert lickspittle to economic interventionists.
Boo Yah
There is one big point that is missed in all the Krugman bashing and that economic intervention is the only way out. In the past 30years there has been the Thatcher and Reagan big drive from manufacturing to a 70-80% service based economy. The economy is driven by consumption so when it drops the only one big enough to bridge the gap is the government. Krugmans argument is that it needs to be orders of magnitudes greater than it has been since 2008. Now I disagree with him on that. I don’t think the numbers have to be that high, it is more of a need to make sure you are using the intervention wisely. “Shovel ready” was a nice idea, but it was always set to fail as the number of people employed building a road today vs, building the Eisenhower freeways is a lot less. While Infrastructure upgrades are needed, Intervention should be counted in jobs created, not dollars spent.
So the question is, if not intervention how else do you handle this? Scorched earth is not really feasible we know how that ends and its not pretty. Intervention gives you a chance to slow the fall and try and control the landing.
Ragner, before you go off on Thatcher’s great economic turnaround. her economic miracle can be summed up in one diagram.
http://tinyurl.com/c7954h9
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North and central New Jersey is part the New York SMA which had been slowly declining from a 2006 peak of 266% of the start of the bubble in 1997. Lower mortgage rates are driving prices back up but it will not last. To understand why look at more extreme markets: Los Angeles prices peaked at 358 % of the start of the bubble but in Dallas they were 142% higher. Mortgage problems in Dallas were minor compared to LA. The Mortgage crisis existed because of overheated local markets not because of greedy bankers. House prices did not increase sharply in Dallas because new housing can be built to match demand. In LA the permitting process prevents new housing from being built in time to meet demand. Housing is miss-diagnosed as a financial failure while it is really over subsidization and restrictions on new construction to meet demand.
The Fed believes that lower interest rates will lead to new construction and economic growth. If that were true prices in LA could not have increased 358%. Lower mortgage rates will lead to more new home construction in Dallas but price inflation in LA.
For example prices in January and February Increased at an annual rate of 22% in the three California cities in the Case Shiller but only 3% in the parts of nation not covered by this index, In the California cities ( LA, San Diego, and San Francisco) house prices average $626 K while outside the index the average price is $118K. The Feds low interest rates have a big impact in overpriced cites where the prices are not sustainable in the long term. Growth in the Case Shiller may be peaking. California cities growth rate was flat in the last three months. The next 2 months will Mortgage failure differs radically by region because housing differs radically. For example Los Angeles prices at the peak of the bubble were 358 % of the start of the bubble but in Dallas they were 142% higher. Mortgage problems in Dallas were minor compared to LA. The Mortgage crisis existed because of overheated local markets not because of greedy bankers. House prices did not increase sharply in Dallas because new housing can be built to match demand. In LA the permitting process prevents new housing from being built in time to meet demand. Housing is miss-diagnosed as a financial failure while it is really over subsidization and restrictions on new construction to meet demand.
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