naked capitalism

Anonymous says:

I’m reading a plan for the government to offer refinancing for home loans at 4% is gathering steam. 0% would be preferable but there is still no guarantees that monthly payments will be meant and housing values will stabilize considering were in or nearing a depression.

Guess they will try anything when disparate except a payroll tax holiday for six months or more.

Yves Smith says:

Anon of 1:34 AM,

Thanks for the catch. Boy, am I hopeless on that front!

Anonymous says:

With apologies to Yves who probably won’t like it much (she’s nicer than I am) here’s my new song about H1B foreign workers, to the tune of “America the Beautiful”:

Here comes the world’s academic mob
and endless waves of pain
You see their face in every job
Your career goes down the drain!

America! America!
God shed the H1B’s
and let them land in their own land
from our sea to their sea!

Inspired, no? Well I like it, and it tells a true story about my life and diminished expectations.

Colin says:

Needs a log chart.

Anonymous says:

Cent21: that’s a ludicrous claim. There is no “right” amount of gold. The key to gold being a monetary commodity is that it is LIMITED in supply. It wouldn’t matter if there was only a 1000 tonnes, or even just 1 gram. It’s also fungible and divisible, so the problem of availability can be solved by further division.

I suggest you read the section on the Gold Invention in A Bubble that Broke the World because this “not enough gold” meme is getting out of control in anti-gold, pro-monopoly money circles

Richard says:

Actually, the Case-Schiller charts are inflation adjusted prices. It is actually better to see the a chart where the nominal prices, and the real prices are shown as it better explains how astounding the recent bubble was, how far we still have to fall (especially since it appears that a general debt-deflation is setting in and that because of over investment there is now an over supply of housing units), and it explains why the earlier small bubbles bursting in the early eighties and early nineties were not notice since those real price declines were masked by the higher general inflation of those years. http://mysite.verizon.net/vodkajim/housingbubble/

As for those who think Gold is the panacea for all our economic woes, all I can say is: Panic of 1837, Panic of 1857, Panic of 1873, Panic of 1893 (and the subsequent depression led to W.J. Bryan’s famous Cross of Gold speeech in 1896), and finally the Panic of 1907. Further, Gold did not stopp WWI from producing inflation which the Federal Reserve had to stop by raising interest rates sufficiently to cause the 1920-21 recession (now famous on right-wing blogs as the “Harding Depression”), with the economy reviving as interest rates fell, what was to become the classic post WWII business cycle until this most recent event. This event has more in common with 1929, 1893, and 1873 in that it arises from excessive financial speculation, an overinvestment spree (particularly in setting up factories for export in China), and huge asset bubbles (I am sure the guy making loan on a tulip bulb in 1635 Amsterdam thought it as a AAA safe investment as well).

The upper class and upper middle class (I am one) get a tremendous tax subsidy if we buy real estate. Because our asset prices are falling, we are going to use our political clout to try to keep back the tide. Which is why you hear both Democrats and Laissez-faire free market Republicas make proposals to “fix housing,” e.g. use tax dollars to support bubble prices. Its not pretty, its not right, and blame the politicians as we will, the fault is in ourselves.

Anonymous says:

‘factoid’ is not equal to ‘fact’. In fact the two words are the inverse of one another.

unfettered says:

Colin is right, data series that grow at geometric rates are most easily viewed on a log axis. Also, the constant growth rate curve is cleary not right, since such a trend line would only display as a straight line when plotted on a log axis. It’s surprising that Shiller would make such a goof.

Doug says:

I agree that it’s hard to get much out of a price chart going back 120 years if it’s not adjusted for inflation.

Here is the chart you’re looking for, Case-Shiller going all the way back to 1890, but this time adjusted for inflation. It’s the third chart in this article:

http://krugman.blogs.nytimes.com/2007/12/28/housing-how-far-is-down/

dlr says:

Another problem with the housing chart is the fact that it deals in the unit “houses”. The houses being built in 1940 were far inferior by almost every measure to the houses being built today. Much smaller square footage, for one thing, along with a host of other improvements.

Anonymous says:

I am trying to understand the 0.4 % value, is that per year ? If so, is the chart saying that a house that costed $1000 in real 1890 dollars is worth 1502.58 in real dollars at the end of 2002?
The formula is A= P(1.04)^n or in this case 1000=(1.004)^102
Thanks