The Affordable Mortgage Depression
Government policies were designed to increase homeownership. Affordable Mortgages, created to realize this goal, were responsible for the Housing Bubble and distorted the economy. The unwinding of these distortions will result in a Global Depression.
The Affordable Mortgage Depression

Origin of the Housing Bubble: “The National Homeownership Strategy”

"At the request of President Clinton, HUD is working with dozens of national leaders in government and the housing industry to implement the National Homeownership Strategy, an unprecedented public-private partnership to increase homeownership to a record-high level over the next 6 years.” << MORE >>

Survey Results: The National Homeownership Strategy

Less than 30% of respondents have heard of the National Homeownership Strategy. << MORE >>

Survey: The National Homeownership Strategy

More than 4 years into the collapse of the Housing Bubble much has been written and spoken on the subject. Genuine economic understanding has proven to be elusive. << MORE >>

The Bureau of Labor Statistics Shuffles Deck Chairs While the Economy Sinks

In February the number of persons working part time for economic reasons (involuntary part-time workers) increased by 475,000 from January to 8.8 million. This change is ignored by the widely reported Unemployment Rate. Photobucket << MORE >>

Portrait of a Failed Attempt to Prop Up Housing Prices

The Government's coordinated attempt to prop up housing prices has failed. Housing sales collapsed in January: Prices to follow... << MORE >>

Housing Sales “Unexpectedly” Collapse Providing Institutional Economists an Education in Economics and Common Sense

The Government’s strategy in dealing with the Housing Collapse and broader Depression has been consistent. Policy makers continue to interfere in the private sector in ways which are unsustainable but create short-lived economic distortions which establish the fleeting impression of stability or recovery. In pursuing this strategy our misguided politicians only succeed in postponing a resolution to the downturn and worsening our economic predicament. << MORE >>

Case-Shiller December Price Index Analysis

Market-by-market price changes required to reach pre-bubble, inflation-adjusted price equilibrium. << MORE >>

Explanation of Case-Shiller Monthly Analysis Methodology

Since housing prices began to decouple from the fundamentals of value in 1997, it makes sense to analyze current prices relative to the sustainable valuations which existed before the distortion. Calculating what 1997 home values would be today, adjusted only for inflation, provides an interesting perspective on how much farther prices might be expected to fall. << MORE >>

The One Year Anniversary of The Stimulus Spending Bill

5/8/09 - “In only a few months it should be evident to all intellectually honest people that the Stimulus Bill was an ineffective, waste of money relative to the professed benefit of such spending. Taking into account that we will be in debt by an additional $787 billion, which will act to restrain future economic activity, and the Stimulus Bill may represent the most egregious waste of money in U.S. history.” << MORE >>

The War Against the Poor: Change in Unemployment Rates by Income Level

The poor are disproportionately affected by public policies which created and are extending the economic depression. Photobucket Photobucket << MORE >>

When Exactly, Precisely Did The Housing Bubble Begin? Part II: Home Prices

Pre-Bubble Housing Prices Were Remarkably Stable << MORE >>

When Exactly, Precisely Did the Housing Bubble Begin? Part I: Homeownership

Pre-Bubble Homeownership Rates Were Remarkably Stable << MORE >>

The Mortgage Bankers Association Demonstrates Its Lack of Real Estate Market Understanding

“We have come to the inescapable conclusion that owning our own building was the smartest long-term investment for the association" - The Mortgage Bankers Association, 2007 << MORE >>

Economic Contra-Indicator Hank Fishkind is Close to Extending his Extraordinary Record of Soothsaying Ineptitude to Seven Straight Years!

We are two and a half months into Hank Fishkind’s latest prediction of economic recovery. Mr. Fishkind, a Florida-based economist and comedian, has assembled an impressive record misdiagnosing the Housing Market and underestimating the damage caused by its collapse over the past six years. << MORE >>

The Department of Labor Plays a Game of “One of These Things is Not Like the Other”

According to a revision in today’s report, from March 2008 to April 2009 1.2 million more jobs were lost than had been previously reported by the Bureau of Labor Statistics. << MORE >>

The Federal Reserve, FDIC and Bank Regulators Ignored Repeated Warnings of a Housing Crash Going Back to 2005

One of the nation’s biggest mortgage industry players repeatedly warned the Federal Reserve, the Federal Deposit Insurance Corp. and other bank regulators during the housing bubble that the U.S. faced an imminent housing crash. But bank regulators not only ignored the group's warnings, top Fed officials also went on the airwaves to say the economy was "building on a sturdy foundation" and a housing crash was "unlikely." << MORE >>

Putting the Housing Crash in Perspective with an Analysis of the Case-Shiller November Data

The Case-Shiller 10-City Index remains 33% above inflation-adjusted, pre-bubble levels. Seven out of 19 scrutinized markets remain overvalued by at least 31.5% relative to the 1997 base value. << MORE >>

What Happens When Consumer Behavior is Distorted by Government Subsidies? A Case Study Which Bodes Poorly for Housing.

When it comes to regretting a purchase, one in five who used the government’s $4,500 incentive said they now wish they hadn’t. The buyer's remorse rate for non-Clunkers buyers was one in 20. << MORE >>

A Stark Portrait of Government Excess and Fiscal Irresponsibility

The Four Largest Budget Deficits in U.S. History << MORE >>

A Pivotal Event in the History of American Labor

For the first time in U.S. history more public sector employees (7.9 million) belong to a union than do private sector employees (7.4 million), despite there being 5 times as many workers in the private sector. << MORE >>

Why Not Manufacture 20% GDP Growth in 2010?

The legacy of steroid-induced GDP gains may be to accelerate the onslaught of debilitating inflation even as the real economic damage has yet to be halted or reversed. This is the economic crime being perpetuated against the American people by a political administration that does not understand how wealth is created, where jobs come from or why the economy continues to suffer despite make-believe GDP gains. << MORE >>

Government Foreclosure Mitigation Schemes Do Not Work - Update Courtesy of MSNBC

"Ten months into the government’s third program in two years to stop a record wave of foreclosures, homeowners, housing counselors, consumer advocates and attorneys working with borrowers report that the latest effort is falling far short of its goal." << MORE >>

As Expected, Existing Home Sales Collapsed Following the Zenith of "Cash-For-Condos"

In December existing home sales declined by the largest amount (month-to-month) in 40 years. Based on media reports, politicians, institutional economists and housing cheerleaders were apparently surprised by steepness of the collapse, but drew solace in year-over-year gains (I guess they were worried that housing sales would decline forever?). << MORE >>

Ben Bernanke Cleary Established the Case Against His Own Renomination in 2005

What is the worst case scenario if in fact we were to see housing prices come down substantially across the country? Photobucket Ben Bernanke: "Well I guess I don’t buy your premise. It’s a pretty unlikely possibility. We’ve never had a decline in house prices on a nationwide basis. So what I think is more likely is that house prices will slow, maybe stabilize. Might slow consumption spending a bit. I don’t think it’s going to drive the economy too far from its full employment path though. I am hopeful that, confident in fact, that the bank regulators will play close attention to the kinds of loans that are being made, making sure that underwriting is done right. But I do think that this is mostly a localized problem and not something that is going to affect the national economy." << MORE >>

Why Housing Prices Will Resume Collapse in 2010

Today houses are cheaper than they have been since 2003. Yet, based on a thorough understanding of the fundamentals which determine housing prices, there may never have been a worse time to purchase a home. << MORE >>
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