Sunday, Nov 15, 2009
By Ambrose Evans-Pritchard
Telegraph: China has now become the biggest risk to the world economy
332,000 properties were foreclosed in October alone. More Americans have lost their homes this year than during the entire decade of the Great Depression. A backlog of 7m homes is awaiting likely seizure by lenders. If you are not paying attention to this political time-bomb, perhaps you should.
Posted by devo @ 08:03 PM (891 views) Add Comment
6 Comments
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1. devo said...
Conscious of the need to stay on-topic, I offer the following extract from the comments, for discussion by those more knowledgeable than myself...
Every lawyer and judge in the U.S.--from John Roberts on down--knows perfectly well that once a fact is raised above minimum scrutiny, the political system loses virtually ALL power over EXPENDITURE (the MONEY) with respect to that fact. The courts take over.
This is happening pretty rapidly in housing. Now the government wants to convert foreclosures to rentals--that is the successor policy to no foreclosures but instead modifications. See the trend? The trend is to IGNORE the contractual component of housing, and to emphasize the MAINTENANCE of housing.
The moment someone argues in a lawsuit that the Federal Government ITSELF, by ITS OWN POLICIES, has recognized that housing is an important fact and embodied in its own policies the idea that housing enjoys a higher level of scrutiny than minimum scrutiny, the individual takes over policy with regard to housing and the MONEY with regard to housing.
2. devo said...
Out of interest, in a 'lost decade' who loses?
3. the number cruncher said...
The lost decade is poor for speculation but good for those who work productivly
4. devo said...
3. the number cruncher said... The lost decade is poor for speculation but good for those who work productively
If you are right, then bring it on!
5. drewster said...
As per the article in Daily Kos - the lost decade meant low unemployment, free healthcare, and safe streets - hardly things to be worried about. GDP growth was nil, yet the Japanese still enjoy a high standard of living. Makes you wonder what GDP actually measures!
However Japan's story isn't over yet. Some argue that they only maintained a steady GDP (i.e. not falling) through massive public spending and piling on government debt. Japan's debt-to-GDP ratio is the highest in the world. They can't maintain their present level of spending; either taxes will rise or spending will be cut. Neither option is likely to boost employment.
6. stillthinking said...
It isn't about housing, it is about debt. The same problems existed previously in the US over a credit based stock bubble. It isn't possible to switch debt into maintainance mode unless the savers stop spending. The problem isn't having roofs over heads in the US, the problem is unbacked savings.
I don't think the lost decade is as rosy as people think. I can remember JU warning of the Japanification of the UK after a deflationary bout. Non-paid overtime and extremely long working hours/weekend working are normal in Japan, and the free health care only covers 70% of the cost, you have to pay 30% yourself. If you don't have that 30% you can't take advantage of the free 70%. Free education only goes up to 15, you have to pay afterwards. I really don't want the desert of the Japanese economy in the UK. Also, the low unemployment rate might be connected to the benefits system stopping after 3 months, not because there are any good jobs. The Japanese are all paranoid about falling sick because then complete life disaster. Who wants that?