tag:blogger.com,1999:blog-5713178645208582139.post1999703484205706222..comments2024-03-22T02:37:15.030-05:00Comments on Macro Musings Blog: What a MessDavid Beckworthhttp://www.blogger.com/profile/04577612979801459194noreply@blogger.comBlogger8125tag:blogger.com,1999:blog-5713178645208582139.post-54869711066082472252010-09-13T20:38:25.552-05:002010-09-13T20:38:25.552-05:00The obvious solution is to raise interest rates AN...The obvious solution is to raise interest rates AND liquidate - but only allow private investors to acquire the homes in $1 auctions with 40% down.<br /><br />The current issue we face is this:<br /><br />800+ insolvent banks<br />The remaining banks are sitting on their assets BECAUSE they hope to acquire the assets of the failed banks in FDIC take downs (loss sharing).<br /><br />The remaining Morgan Warstlerhttps://www.blogger.com/profile/16938589106562557110noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-72028660114462716252010-09-12T18:35:40.692-05:002010-09-12T18:35:40.692-05:00Strange bedfellows.
Obviously, Ronald Reagan (b...Strange bedfellows. <br /><br />Obviously, Ronald Reagan (because of his tax cuts).<br /><br />Clinton may have run budget surpluses, but the trade deficit cratered during his terms. <br /><br />The private-sector is deleveraging & the public-sector will eventually have to too. <br /><br />One cool thing, the FED flattened the yield curve (by buying longer dated Treasuries), and saved a Salmo Truttahttps://www.blogger.com/profile/13910212017849902362noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-58848735394310026742010-09-09T14:28:18.032-05:002010-09-09T14:28:18.032-05:00Scott:
The graph is correct, the label is wrong. ...Scott:<br /><br />The graph is correct, the label is wrong. It should read "real estate value x 0.4." The 0.4 represents the how much mortgage debt has been as a percent of the U.S. housing stock historically. Joshi considers it the sustainable level of mortgage debt given the collateral value of housing. I added the second paragraphs above to make this clearer.David Beckworthhttps://www.blogger.com/profile/04577612979801459194noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-33973380438460767842010-09-09T12:45:03.823-05:002010-09-09T12:45:03.823-05:00btw, it wouldnt just be the banks that get hit:
F...btw, it wouldnt just be the banks that get hit:<br /><br />FDIC's Bair Warns of Government "Exposure" in Mortgages(Reuters) - A key U.S. banking regulator raised concern on Wednesday about the risk of "exposure" the government is taking on in the mortgage market and urged more stringent standards for underwriting mortgages. "We should all be concerned about the type rjshttps://www.blogger.com/profile/15681812432224138582noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-89086306786761539582010-09-09T12:21:39.583-05:002010-09-09T12:21:39.583-05:00I think reflating property markets is Job One, and...I think reflating property markets is Job One, and generating mild inflation. <br /><br />This will recharge the economy, and bolster both lenders (who may not get paid back without relfation) and borrowers (who will find debts shrinking relative to assets and income). <br /><br />There are structral improvements in the economy we could make, such as paring back the vast federal rural Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-33119189886012489182010-09-09T12:21:01.337-05:002010-09-09T12:21:01.337-05:00David, The graph is incorrect, it suggests mortga...David, The graph is incorrect, it suggests mortgage debt exceeds house assets, while the reverse is actually true. If I were you I'd delete that graph, or provide some sort of explanation. The bottom graph seems OK.Scott Sumnerhttps://www.blogger.com/profile/15864819372390187247noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-57496966359043434632010-09-09T10:50:07.170-05:002010-09-09T10:50:07.170-05:00The way out is microeconomic stimulus - otherwise ...The way out is microeconomic stimulus - otherwise known as deregulation. Increased tax revenues, increased investment, increased consumer spending, lower inflation, job creation, higher returns for savers, improved education, improved health care, energy independence, etc.,etc., etc.Charleshttps://www.blogger.com/profile/00607057013050715435noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-73987412259772965502010-09-09T07:56:36.149-05:002010-09-09T07:56:36.149-05:00first of all, you've underestimated the proble...first of all, you've underestimated the problem...there are nearly 19 million vacant houses; you gave the number on the market...see:<br />http://www.usatoday.com/money/economy/housing/2009-02-12-vacancy12_N.htm<br /><br />the median starting wage is going down...about 76% of the job growth this year has been in jobs that paid below $15 an hour...with the median home price still north of $rjshttps://www.blogger.com/profile/15681812432224138582noreply@blogger.com