[mEDITate-OR:
not "grow" yourselves out of the RE & economic messes that you, too, are in...
These are two very good analyses.
The First article discusses the need for growth, and the lack of savings being a major cause of that.
What the author explains, wisely too, is that while he DID believe that we could and should grow ourselves out of the economic debts we now carry..., as all good Reagan-ites did and still do think...
he now is not at all sure that that is still true. And, he explains why he changed his mind.
His GDP vs Savings chart is very interesting, as you will see below.
Savings dropped from RonnieR through GHWBush
then grew during the Clinton years...!
only to collapse again under W Bush.
Why there was more savings by U.S. under a Democrat...
than we saved under an R is very interesting.
The Second article explains quite well the current RE market quandary that we are in.
What it does not do, as you will read in my comment to them, is recognize the economic benefits that Govt actions have had, and where we would be had they not.
What it also does not do is distinguish between the sand states and the rest of U.S.!
That is essential to fully understand how we got into this mess...
AND
how we might be able to get back out of it, too.
JGBHimself
May 21 06:04 PM
While that analysis is very convincing, there as an aspect of "growth" that those of U.S. never, ever talk about = "an industrial policy".
What China did was see what Japan did, and does; and adopted it in spades. Choosing to use what they had the most of - people - they created extremely low cost manufacturing entities. Recently, they changed direction, again. Massive investments in up scale manufacturing programs in order to solve their "export problem". To export more expensive items as opposed to trying to increase low cost items.
Look at U.S., we produce derivatives, credit default swaps, "securitized RE mortgage packages", any and all kinds of "paper transactions". Why? Bcuz that is what [y]our "industrial policy" promotes. Sadly, one of the most innovative countries creates these better ideas, and then lets other countries make them.
What China and Japan did was focus on what they could do best, and then run with it, using incentives. We do not. To grow out of this mess we should - morally, economically & politically - create an "industrial policy" for U.S. that does PRECISELY that
What China did was see what Japan did, and does; and adopted it in spades. Choosing to use what they had the most of - people - they created extremely low cost manufacturing entities. Recently, they changed direction, again. Massive investments in up scale manufacturing programs in order to solve their "export problem". To export more expensive items as opposed to trying to increase low cost items.
Look at U.S., we produce derivatives, credit default swaps, "securitized RE mortgage packages", any and all kinds of "paper transactions". Why? Bcuz that is what [y]our "industrial policy" promotes. Sadly, one of the most innovative countries creates these better ideas, and then lets other countries make them.
What China and Japan did was focus on what they could do best, and then run with it, using incentives. We do not. To grow out of this mess we should - morally, economically & politically - create an "industrial policy" for U.S. that does PRECISELY that
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Can We Grow Our Way Out of Debt?
========== Article two:
JGBHimself
We actually do agree with most of what you reply.
However, please note we are from WA, now in AZ.
What we are seeing, as you should too, is: that almost all of the deeply underwater RE is in the sand states of Cal, Nev, Fla & Az; almost all of the bad ARM loans were made in the same states during the "dead years" = 2002 to 7; almost ALL of this last decades "securitized RE packaged loans" were made in the same states by Countrywide [BoA], WAMU [Chase] and Wachovia [Wells] and NOT by FMae, FMac, FHA or VA.
Being an attorney you too know that it takes two parties to form a contract - those banks/lenders "mal-invested" too. And, they are now paying for it with your & W's TARP money.
And, as you will note as an attorney there is NOTHING in the new law being passed by the Senate that will, in any way, limit re-starting the same disgusting excesses.
Believe me, we ARE as concerned as you are, possibly for different reasons, but maybe not.
But, thanks for the very good article!
May 21 10:09 PM
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JGBHimself
We actually do agree with most of what you reply.
However, please note we are from WA, now in AZ.
What we are seeing, as you should too, is: that almost all of the deeply underwater RE is in the sand states of Cal, Nev, Fla & Az; almost all of the bad ARM loans were made in the same states during the "dead years" = 2002 to 7; almost ALL of this last decades "securitized RE packaged loans" were made in the same states by Countrywide [BoA], WAMU [Chase] and Wachovia [Wells] and NOT by FMae, FMac, FHA or VA.
Being an attorney you too know that it takes two parties to form a contract - those banks/lenders "mal-invested" too. And, they are now paying for it with your & W's TARP money.
And, as you will note as an attorney there is NOTHING in the new law being passed by the Senate that will, in any way, limit re-starting the same disgusting excesses.
Believe me, we ARE as concerned as you are, possibly for different reasons, but maybe not.
But, thanks for the very good article!
May 21 10:09 PM
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JGBHimself
While your analysis is very good, you missed some things.
First, when you say there is very little holding this RE market up, you forgot to mention that after July, 08 there WAS no RE market. Securitized mortgage packages stopped in Jan 08; in July 08 China stopped buying FMae&FMac securities from U.S. to the tune of US$ 30+ B per month; and F&F had reached their lending limits - all RE lending stopped.
When W, oddly for a Republican, "nationalized" FMae&FMac and formalized the "govt guarantee" of F&F's securities, AND upped their lending by giving them, what, US$ 1.2 Trillion dollars, RE lending began again.
But, and it was a big butt, sales did not take off, bcuz lending was much tighter and job losses of 7+or- million people scared U.S.
So, the O govt "incentivized" home buying, with tax credits. What, pray tell U.S., would it be like now if they had not done that???
True, and you are right, if not too far (pun?), this is not currently a normal RE market. But, NOTHING about RE was/has been "normal" after July 08
But, and it was a big butt, sales did not take off, bcuz lending was much tighter and job losses of 7+or- million people scared U.S.
So, the O govt "incentivized" home buying, with tax credits. What, pray tell U.S., would it be like now if they had not done that???
True, and you are right, if not too far (pun?), this is not currently a normal RE market. But, NOTHING about RE was/has been "normal" after July 08
May 21 06:30 PM
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Housing Data: A New 'Bust-Bust' Cycle?
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