A timely and frightening exploration of the causes and consequences of the emerging foreclosure mess. This close cousin of the earlier sub-prime mortgage debacle provides even more evidence of the financial industry’s hubris and inescapable self-interest.
As the saying goes: garbage in, garbage out…

Armies of bulls and bears are camped out on either side of the great debate over the future of the global economy. Armed with the latest statistics and plenty of financial incentive, both sides are engaged in massive media campaigns to rally anyone left on the fence — principally retail investors who were either burned in the great collapse of 2008-09 or sat out the fast and furious rally over the past 14 months. As the rhetoric heats up, it becomes increasingly difficult to choose sides. A careful examination of these competing wagers provides a more holistic perspective for anyone brave enough to join the fight.

“America’s mainstream religious denominations used to teach the faithful that they would be rewarded in the afterlife. But over the past generation, a different strain of Christian faith has proliferated—one that promises to make believers rich in the here and now. Known as the prosperity gospel, and claiming tens of millions of adherents, it fosters risk-taking and intense material optimism. It pumped air into the housing bubble. And one year into the worst downturn since the Depression, it’s still going strong.”

This time series from Robert Shiller puts recent house price fluctuations and their associated derivatives in an important historical perspective…

With all eyes on traditional residential mortgages, analysts are now looking for clues in related asset classes for any signs of recessionary contagion. In his weekly review of the U.S. economy, Nouriel Roubini highlights the vulnerability of commercial mortgage back securities – which typically lag their residential cousins by 2 years – as well as plunging retail sales, a worsening inventory cycle, and the soaring fiscal deficit…

“Spectacular episodes in financial history” come about more often than we might expect, and certainly more often than we remember. Harvard economist John Kenneth Galbraith wrote a brilliant primer on financial speculation in the early 1990s, suggesting that our memory for financial disaster was far more limited than our intelligence might otherwise suggest:

Even market cheerleaders are struggling to find good news to rally around these days. With labor, capital, finance, real estate, and consumer markets all reeling from a half-decade of credit-fueled gluttony, and commodities markets cresting near all-time highs, it might seem a bit clichéd to highlight yet another bearish commentator — unless that bear is David Rosenberg, one of the few bulge-bracket economists to voice frequent and convincing skepticism about the “resilience” of modern capital markets and highlight the irrational optimism of the average investor.

November 23, 2006—More dour news about the coming financial apocalypse, this time by noted economic strategist Dr. Gary Shilling. The augur, once again, is a hyper-inflated housing market, driven principally by excessive leverage, scandalous consumer spending, and inexhaustible financial optimism. “And why not?” you might ask. Everyone and their uncle has made money in real estate over the past five years, from the slummiest crack house to the most decadent penthouse. The more money everyone has, the more money everyone spends, and most developed economies have profited handsomely from that arrangement.
To get a sense of why the experts are now tempering such myopic enthusiasm, and why these so-called “speculative episodes” are inherently not in the economy’s best interests, read some …

“I can calculate the movement of the stars, but NOT the madness of men.”
- Sir Isaac Newton, after losing a fortune (£20,000) in the South Sea bubble.
I’ve been meaning to write about the impending real estate crash for quite some time, but until I get around to it, this piece is worth a read. Roubini is a Professor of Economics at the Stern School of Business at New York University, and the work below is taken from his blog. Though the prose is somewhat awkward, anyone who produces “seminal work in international macroeconomics, global macro policies, financial crises in emerging markets and their resolution, and the reform of the international financial architecture” deserves at least a few …

An article on Slate.com from another American journalist with no desire to leave the greatest city in the Middle East. I’m with Faerlie…maybe it’s time to start buying up Lebanese real estate

From: J Dyck
Sent: September 22, 2005 5:50 PM
To: d
Subject: RE: NOVA | The Elegant Universe | Watch the Program | PBS
i’m moving on up my brother! went to “scooter school” on saturday…which was largely about watching car crashes (did you know the west german government used LIVE people to test car crashes in the 70s…nothing like watching a blond haired, blue eyed german kid going 30mph into a tree…”dis exhibit iz closed!”). i have a road test scheduled for next month! if all goes well, methinks i may take a week off and scooter around the east coast to check out some MBA schools (don’t say it…i already feel dirty enough). speaking of travels…i’m also thinking of …