“Soft despotism is a term coined by Alexis de Tocqueville describing the state into which a country overrun by "a network of small complicated rules" might degrade. Soft despotism is different from despotism (also called 'hard despotism') in the sense that it is not obvious to the people."

Wednesday, June 01, 2011

Housing prices have now fallen further than they did during the Great Depression

  • The last time that happened, it took nineteen years to recover.
  • 4 million homes have been lost to foreclosure since 2006.  
  • Goldman Sachs cut its economic growth forecast for the second time in a month last week. It now predicts the economy to have added just 150,000 jobs in April, down from 244,000 in March.
  • Economic growth is under 2%.
  • Gas prices, food prices, and rental prices are increasing.
  • May 31st,  14.5% of the American public received food stamp benefits that averaged $133.24 per person, up over 10% since January past. 
  • The number of limousines owned by the U.S. government increased  73 percent during the first two years of the Obama administration, 
  • The Democrats have not a clue and neither do the Republicans and Obama plays golf.


  1. Many people are forced to work for insufficient wages. Obviously, they cannot afford the present cost of living.

    A surprising number of middle class families are finding themselves going to food banks, places that they have even donated to in the past and that's another issue we have.

    Because many Americans cannot live off $9.00 an hour, especially if you are the head of the household or have one income, they are forced to take whatever help they can. The problem has moved on past owning a home. It is about having a place to live and a job to support it.

  2. Great job, Deuce. That is an astonishing statistic.

  3. So, what's saving us? Why aren't we in a full-fledged depression?

    1) TARP

    2) Progressive Income Tax

    3) Massive Borrowing

    4) Social Programs

  4. Whit:
    What would it cost to build this?

    For Sale: $98,900
    Mortgage payment: $393
    Bedrooms: 4

    Titusville: Inland, across the bay from the shuttle launch area.

    Year built: 2007

    For Sale: $98,900Mortgage payment: $393 Bedrooms: 4
    Bathrooms: 3
    Sqft: 2,754
    Lot size: 10,890 sq ft / 0.25 acres
    Property type: Single Family

    Days on Zillow: 76
    MLS number: 592320
    Additional features: Roof: Asphalt,,,Flooring: Carpet, Tile
    County: Brevard

  5. Rufus (Socialist) itemizes the factors leading to a double dip.

    Vote Democrat!


  6. Having Studied the Japanese Malaise, and it's causes, Rufus recommends following their lead...

    Beat excessive debt with more debt!

  7. Glad to see you're alright, Pineapplehead. I wuz getting worried about you. :)

  8. Financial and psychological double dip for real estate –

    How new economic news will feed into lower home prices as incomes remain stagnant.

    Only 11 percent of recent loan volume in the first quarter dealt with purchases.

    The official double dip in home prices is not significant in the sense that it is a surprising revelation but will carry more traction because of the way the news cycle works.

    The press reports on what happened especially when it comes to economics and feeds the beast especially with bubbles. Virtually every large news outlet missed the most obvious and biggest housing bubble ever witnessed by humankind.

    During the meteoric rise in housing prices the press fed into the feeding frenzy by drawing more and more buyers into the housing game either through cable shows erotically showing granite countertops or ordinary people making a mint by simply slapping on a coat of magenta paint to the living room wall. This is typically how manias work until they reach a tipping point.

    After the bubble burst the press reported on the “shocking” crash and fed into this part of the cycle. But for well over a year it has been stories about housing rebounding.

    The fact that we have now officially double dipped will create another news cycle reflecting the continued decline in home values.
    What you as a thoughtful reader and follower of the housing market should ask is why isn’t the press actually examining the connection between home values and actual household incomes? This is the absolutely most important item never examined. This is the most obvious item to explore from a big news story since mortgages are paid by W2 wages, not by some alchemy of finances or HD cameras.

  9. Thnx,
    But who besides you claim
    I'm "alright?"

  10. Beating an economic stagflation with excessive Federal borrowing certainly worked out well, for US, during the tenure of Mr Reagan.

    New Deal policies of borrowing & spending have a long, modern tradition, in the US.

    Leading US to the position of dominating the global economy.

  11. Lowering taxes while boosting spending, it is the Republican way.

    Best exemplified by Ronald Reagan and George W Bush.

  12. Unemployment/underemployment is ALWAYS the biggest, baddest elephant in the room.

    Figured by 1933 metrics we're getting damned close to Great Depression levels.

    In one aspect we're in Much, Much Worse shape. Gasoline Prices started high, and steadily declined in the thirties. This time around, they started very low, are up 800%, and will be increasing for many years to come.

  13. May 8th, 2011
    The 20 year Japanese bear market in real estate is making its way to the United States.

    Lower paying jobs, higher expenses, shadow inventory, and big government spending all align with a path of real estate malaise.


    Now the similarities are closely aligned in terms of banking policy.
    Our Federal Reserve followed a more aggressive path than Japan in bailing out our large banks.

    Yet all this did was make the too big to fail even bigger and exacerbated underlying issues in our economy.

    Four full years into the crisis and we are still dealing with a massive amount of shadow inventory. Remember the initial days when the talk was about working through the backlog of properties in a clean and efficient manner?

    Whatever happened to that?

    Banks operate through balance sheet accounting and it has made more sense to pretend the shadow inventory has somehow maintained peak prices while chasing other financial bubbles in other sectors.

    Not a hard way to make money when you can borrow from the Fed for virtually zero percent.

    Japan and U.S. see real estate as poor investments

    Our earlier assumption about the double-dip real estate recessions has now materialized through home price measures:

  14. My bad. Actually, OIL prices are up 800% (depending on your start date,) but gasoline prices are only up about three, or four hundred percent (again, depending on your start date.)

  15. "Leading US to the position of dominating the global economy."

    It worked when Reagan lowered taxes and the Dems raised spending.

    It worked when Clinton raised taxes and Republicans decreased spending and reformed welfare to produce a balanced budget and fewer welfare recipients.

    The cumulative effect of adding more and more debt over the years, Climaxing with the unprecedent Democrat spending spree leaves us on the precipice, with no way out w/o spending discipline.

  16. Rufus repeats a lie when he states that oil consumption decreases

    x number of barrels when

    y number of barrels of alcohol are consumed.

  17. We're going through a Huge Boom in Productivity. This leads, in the early stages, to Massive Unemployment.

    Massive Unemployment + the resulting low wages + Massive Number of Fraudulently-sold suicide loans resetting + skyrocketing gasoline costs = One Bad Mess

    I've been saying for a while that we're, likely, in for ten years, or more, of a really bad deal. I've always been considered an optimist, for what it's worth.

  18. Doug, don't get stuck on stupid. It takes, depending on the farming technique involved, less than 1/20th of a gal of diesel to produce a gallon of ethanol. Total. Farming, harvesting, transporting corn, transporting ethanol, etc.

    When I put a gallon of ethanol in my car I have replaced .95 X .80 = 0.76 gallons of gasoline.

  19. "We're going through a Huge Boom in Productivity. This leads, in the early stages, to Massive Unemployment. "

    MORE jobs have been lost due to the liquidation of many trillions of dollars of "wealth"

    ...compounded by Obama gangsta govenment introducing massive uncertainty, overwheming debt, overarching regulation, and payments for people not to work.

  20. Spending discipline?

    Some 20% of Federal spending is on the military industrial complex, I do not hear a single Republican calling for cuts in that area of Federal spending.

    The GOP is attempting a revision of Federal social engineering, not "spending discipline".

    I hear no Republican calls for a repeal of Medicare Part D.

    The GOP is perpetrating a political fraud, using fear as a tool, as is their wont.

    I hear no GOP calls for a withdrawal from our foreign adventures, which would be required if "spending discipline" was the goal.

    I hear no calls for an across the board cut in spending, which would be required if "spending discipline" was the goal.

    No, the GOP goal is revising the social engineering by the Federals, not "spending discipline".

  21. It takes MORE than
    the energy turned to auto fuel

  22. Good Lord, Doug. Reagan presided over the largest tax increase in history when he "reformed" social security.

  23. Obama/Pelosi/Reid good,
    GOP Bad.


    Waivers for we, not thee:

    They had to pass it for us to find out what was in it.

  24. Doug, take your API talking points elsewhere. You don't have a clue. You have no idea what the inputs are. I've posted them many times here. Said, simply, 90% of the inputs are nat gas (that stuff that you guys keep saying we have a gazillioon years supply of.)

    Using nat gas, the first gen ethanol plants have a return of approx 2.3:1. The next gen will be more like 20:1.

  25. There is no call, from any politico, for a Federal "spending freeze", which would be real whirled "spending discipline".

  26. The similarities between the "Great" Depression, and this one are striking. Not the least of which is "A Republican President, and a Republican Congress" got us into both.

  27. Wrong, again, dougo.

    There is no difference 'tween the GOP and the Dems. They're all using the power of government to advance their own interests.

    Big oil, big banks and the status que reign supreme in DC.

    Ronald Reagan was a New Deal Democrat until the day he died.

  28. Reagan tax cuts versus increases

    Total cumulative tax cuts = $275.3B,

    Total cumulative tax increases = $132.7B.

    Total Net Tax Cuts = $142.6B.

    "And You shall Know the Truth..."

    ...with a DEMOCRAT Congress.

  29. The icon of the Republican Party is a New Deal Democrat.

    That exemplifies, more than any other salient fact, the equivalency of the political parties.

  30. Microsoft paid $19 Billion for Nokia. Do you know why. Our Dems, and Republicans have allowed them to accumulate $35 Billion "Offshore." As long as they keep it "Offshore" they don't have to pay U.S. Income Taxes on it.

    So, instead of bringing it home, and investing it Here, they buy a European phone maker.

    There are a couple of $ Trillion sitting overseas that will never get invested in the U.S.

    Thank your Democratic Politicians, And your Pubs.

    Times are too serious for "Partisan" political talking points, Doug. Way too serious.

    We have to think like businessmen. What will work? What can we do, Now? How do we "retool, restructure, refinance," Now?

    How do we keep this boat afloat?

  31. Democrats compromised with Reagan with promises to cut spending.

    Democrats lied.

    Then, as they do now.

  32. Good on you, Doug. Actual figures. That's more like it. Thanks.

  33. Yeah, refute FACTS with admonitions against

    "partisan talking points"

    Fact is that RIGHT NOW

    Dems do not want to cut spending.

    Pubs do.

    ...defend their not producing a budget for

    Followed by Obama producing a joke that was defeated

    Them's the facts.

  34. aw, gee:

    There I go again pissing on your feet when you hug me.

    My bad.

  35. I peed before I felt the hug.

  36. We need to understand one thing; the Dems, and Pubs are in Denial.

    They are so far separated from the "Real" economy that they really have "No Feel" for what's going on.

    Many of us called the upcoming "double-dip" months ago. Most of the Politicos will, actually, be "surprised."

    THAT should scare the living shit out of you.

  37. Ronald Reagan
    Start - Debt/GDP = 32.5%
    End - Debt/GDP = 43.80
    Increase in Debt = +11.3%

    Start - Debt/GDP = 43.8% End - Debt/GDP = 53.1%
    Increase in Debt = +9.3%

    George W. Bush 2001–2005
    Start - Debt/GDP = 56.4%
    End - Debt/GDP = 63.5%
    Increase in Debt = +7.1%

    Start - Debt/GDP = 63.4%
    End - Debt/GDP = 83.4%
    Increase in Debt = +20.0%

    Facts are facts

  38. "It takes, depending on the farming technique involved, less than 1/20th of a gal of diesel to produce a gallon of ethanol.



    harvesting, transporting corn,

    transporting ethanol, etc."


    ...and the moon is made of blue cheese.

    Show us THAT "study" Rufus.

    A joke on it's face to anyone with a lick of common senses.

  39. I said back in March, that, when gas prices went over $3.00, heading for $3.50, it was like someone threw the switch around here. EVERYTHING STOPPED.

    The Politicos didn't feel it. CNBC didn't feel it. When Food Stamps went up they said, "isn't that interesting; what's causing that?"

    This is the same thing, by the way, that was going on in the late "twenties" before the "Crash."

    Wall St. was lighting cigars with hundred dollar bills (yes, they really did that,) and did not notice that rural America was getting crushed.

    Please, leave the Partisanship at the door. Neither set of Crooks, and Thieves are on Your side. They are busy trying to "save themselves." If we were to get UnGodly lucky, and survive, it won't be because of the Politicians.

  40. Yeppers, 'Rat:

    Spending has exploded under Pelosi/Reid/Obama since they took control in 2007.

    Making Reagan era Democrat Big Spenders look like pikers back then when they controled the Senate, also.

    ...and the Dems took control of the Senate 2 years after Bush was elected, 4 years before they took the House, also, and really went wild.

  41. If Quirk is still around he can find where I gave more realistic energy figures, but I gotta go...

  42. Doug, I've done that, here, many times. I'm not going to do it, today. At least, not this morning.

    I'll give you a couple of figures, and if you have any brain cells left, at all, you can figure it from there.

    It takes about 4 gallons of diesel to produce an acre of corn (160 bushels.)

    You get, in a good plant, 3 gallons of ethanol from a bushel of corn.

    No Diesel is used in the biorefinery, itself.

    A gallon of diesel will move a ton of ethanol 500 miles.

    There, that should give you just about all you need.

  43. Yes sir, doug.

    Federal spending has exploded.

    Makes my point.

    GOP President and Congress, spending explodes.

    Democrat President and Congress, spending explodes.

    Little difference 'tween the two.

    The GOP announces they want to revert to 2008 spending levels, then fail to deliver.

    All that has to be done, is freeze Federal spending at 2010 levels.

    That is not going to happen.

    Rhetoric is rhetoric, facts are facts. The GOP has never cut spending.

    Even under Clinton/Gingrich spending increased.

    That's the fact.

  44. "Wall Street is having a hard time figuring out what to do now that the U.S. economy appears to be sputtering and yields are so low, Peter Yastrow, market strategist for Yastrow Origer, told CNBC.

    "What we’ve got right now is almost near panic going on with money managers and people who are responsible for money," he said. "They can not find a yield and you just don’t want to be putting your money into commodities or things that are punts that might work out or they might not depending on what happens with the economy.

    "We need to find real yield and real returns on these assets. You see bad data, you see Treasurys rally, you see all bonds and all fixed-income rally and then the people who are betting against the U.S. economy start getting bearish on stocks. That’s a huge mistake."

  45. The Main thing to remember is that the Main thing is the "Main" thing.

    The "Main" thing is, and always has been, "Employment."

    With a "Job" you can fight your way out. Without one, you're roadkill.

    The most optimistic thing that can be said about us, right now, is that we're "frozen in the headlight" of the oncoming truck.

  46. The politicos are protecting their perceived status que.

  47. I'm pretty sure that when the economic cycle guys (the ones that date recessions) date this recession they will start it around "Mar. 2011." (even if the current qtr shows some nominal small growth of 0.3, or somesuch.)

  48. We're doing so many things wrong, right now, and I haven't seen a politician, yet, that seems to "get it."

  49. They really believe this is a "garden variety" recession.

    I don't understand how they can believe that; but they do.

  50. Well, the number of vacant homes in the neighborhood has never been higher.

    While my real estate man tells me that the number of homes on the foreclosure market has decreased from the peak, by almost half. He further reports that the "word" is that the numbers will not be heading up.

    That "investors" are coming from around the country, buying the houses. This is not evident in the number of vacant houses in the area.

    It does seem clear, though, that housing prices will not recover to 2007 levels, not any time soon.

  51. Anecdotally we have made offers on three foreclosed properties, cash, at the full asking price plus, but the banks would not accept the offers in a timely fashion.

    We withdrew the offers, the properties remain vacant.

    Whatever that means, in the "big picture".

  52. Rep. Steve Israel, the Democrat charged with retaking the House for his party in 2012, says the election outcome “is going to be razor close, razor close. The House will be in play.”

  53. Israel’s strategy to regain control of the House centers on congressional districts, currently held by Republicans, but where voters supported President Obama in 2008. He has identified 14 districts, now represented by a Republican, that voted for both John Kerry and Barack Obama for president.

    His worst-case goal is to win 8 of them, Israel said. Another 47 districts voted for President Obama and are now represented by a Republican. His worst-case is to win 18 of those.

    Writing in the latest issue of National Journal Daily, political analyst Cook cautioned, “Sure, there are 61 seats in Republican hands that were in districts won by President Obama in 2008, but the political climate that year represented a high water mark for Obama and for Democrats.”

  54. Virginity tests: Misogyny and intimidation in Egypt
    Christian Science Monitor -

    The Egyptian military's use of so-called virginity tests against female democracy protesters in Tahrir Square is part of a long tradition of using sexual harassment as a tool of social control.

    "Progress", which he US continues to subsidize, while we are told the Federal government is out of money to continue to fund Medicare.

    While Congressional aides received millions in year end bonuses.

  55. I guess, Rat, the bank was carrying those houses on their books at a number higher than their "listing" price. To sell means they would have to "show a loss." (Or, maybe, they think the market is going to "turn up.")

    Either way, I'd bet you will be able to buy those houses cheaper in the future.

    Egypt, and Yemen, are sooo hosed. No "exports" to speak of, Big Food Importers. Others in the ME to follow.

  56. A typical Republican, and the "pay-off" for not having "Spending Discipline"

    NEW YORK -- With Goldman Sachs' latest high-profile hire, the Wall Street giant is unlikely to shake its Government Sachs nickname or the reputation for exerting undue influence in Washington that it implies.

    Goldman announced Friday that it had named three-term Sen. Judd Gregg an international adviser to the bank. The New Hampshire Republican will "provide strategic advice to the firm and its clients, and assist in business development initiatives across our global franchise," Goldman said in a statement.

    "Judd Gregg's experience and insight will contribute significantly to our firm and our continuing focus on supporting economic growth," said Lloyd Blankfein, Goldman's chairman and CEO.

  57. I wouldn't be so mad if they'd just put a "Few" of those sonofabitches in jail.


    Sugarcane efficiently turns sunlight and chemical inputs into energy and requires a minimal amount of fertilizer, compared with other ethanol feedstocks. "Your total input costs are less [with sugarcane] than with corn or some of the other crops that are used for ethanol production," Richard says.

    The energy balance is also greater.

    While corn generally produces about 1.5 units of energy for each unit of energy it consumes

    the energy balance of sugarcane is approximately eight to one, Legendre says.


    BUT, we will be reminded...

    EVERYBODY but Rufus is a "dumbfuck"


    Case closed.

  59. This comment has been removed by the author.

  60. Rufus II said...

    "I guess, Rat, the bank was carrying those houses on their books at a number higher than their "listing" price. To sell means they would have to "show a loss." (Or, maybe, they think the market is going to "turn up.")"

    Doctor housing bubblle has been banging that drum for years, almost back to the famous Rufus ripple in a pond quote regarding the magnitude of the oncoming Real Estate Bubble crash first referenced here by Doug.

    In addition to explaining how the Gummints free money to banks makes risk-free money making activities hard to resist.

    But some are distracted by Ethanol Dreams.

  61. Stop the Presses! Sugarcane advocate is slightly off on his numbers on Corn Ethanol.

    Lord, will it Ever stop? :)

  62. Although the index, which fell from 54.4 to 52.1, indicated that activity is continuing to grow, the rate of expansion is the slowest since September 2009, when the UK was in recession.

  63. The surprise dip in activity caused the pound to tumble almost a cent against the dollar.

    “All this does is place further doubts over the strength of the UK’s economic recovery, which pushes back expectations of a long-awaited Bank of England rate rise,” said Caxton FX currency analyst Richard Driver. “Some players bet on a rate rise at the end of this year, but as things stand we are likely to have to wait until the end of the first quarter of 2012.”

  64. Greece is due to receive a €12bn injection from Europe and the IMF on June 29 as part of the international bail–out programme. Delivery of the cash is subject to a progress report on asset sales and spending cuts by the international authorities.

  65. Banks bought 91pc of the £39.8bn of net issuance of new gilts with purchases totalling £36.1bn, compared to the £11.4bn of UK debt bought in the preceding six months.

  66. The 35-year-old man wanted to test his endurance and asked his friend to help him spend the night buried, according to Alexei Lubinsky, a senior aide to the region's chief investigator.


    The victim's friend told investigators he covered the hole with planks and earth to a depth of around eight inches and then went home, after receiving a phone call from his friend telling him he was fine. The next morning, he found his friend dead.

    Buried Himself

  67. Leading volcanologist, Clive Oppenheimer, has warned of a one-in-500 chance of the earth being hit by a “super- volcano” this century.

    Whoever thought the Icelandic ash cloud seemed worrying was in for a shock when the vulcanology expert added that this statistic is worse than it sounds: “It is a lot more likely than an asteroid impact.”