Thursday, December 22, 2011

Rinse and Repeat

All and all, it was a pretty good day. Obama and Harry Reid showed a little spine and the Tea Baggers blinked, or at least Speaker Boner did. The Tea Bag caucus could refuse to sign off on unanimous consent, and then the House would need to come back for a vote. This would likely require Democrats to support the Speaker for the Senate bill to pass the House.

Unemployment claims fell again this week and are getting low enough to start seeing serious jobs gains. There were over 2400 Federal workers applying for initial unemployment benefits, about the same as the week before. Considering the right insists Obama is growing government at a fantastic rate, how do they explain the continuous layoffs? Oh, that’s right, we live in different universes. In their universe, facts are just opinion and don‘t matter.

Housing starts were up sharply in November, part of this was from the relocation of workers. They can’t build houses fast enough in Minot North Dakota, but ND’s total population is smaller than any of the top 200 cities. Home values continue to sag and economists that pontificate on the housing market optimistically predict prices will bottom out in a year or so. They do admit now that the fall in market prices has been 14% worse than previously reported.

Also the new housing starts are almost all apartment units. The population continues to grow and fully half of college grads do have jobs in their field. For them ever owning a house is a dim prospect however, so affordable apartments are in demand. For the other half of young college grads who don’t have jobs or are working at Best Buy, the prospects of even affording an apartment are dimming.

A growing trend in college towns is for the banks who own Mc-Mansions to rent to students at bargain prices. Some money is better than none and it keeps the scavengers away. In many rust belt cities the banks are foreclosing on homeowners, but they never going to Sheriffs Sale as this would force the bank to take possession. Instead they simply abandon the property, and since the foreclosures are posted on line, the scavengers are there waiting at the curb.

The bank could have kept the people in the houses and got something, but Bush era laws allow the banks to make more money by foreclosing. Then they simply leave the house to be demolished by the city after it’s stripped. This activity drives down the value of the surrounding property encouraging people to walk away from their underwater mortgage. Rinse and repeat.


stumbling leftward said...

Don't worry guys, everything is gonna be great so just keep shopping! :)

People are too nutzo, they get too strung out over little economic problems. But the technocrats have everything taken care of. If you don't believe me, just check out this epic article about the excellent-ness that's unfolding in Portugal:

Here's to the global coolness that's rising up. Yay! If we're lucky, maybe it's coming our way, here in the United States!