The Mess That Greenspan Made - Part 414

Leaving California

It’s been two-and-a-half years since we left California (though the two years we spent in the Sierra Nevada Mountains felt like we were living in another state, that is, until we drove 90 miles down to the flatlands to go to the Costco only to be reminded that the state has nearly 40 million people) and it looks like the net migration from California to other states that began a half-decade ago is continuing, as detailed in this story at the LA Times.

The demographics of California today more closely resemble those of 1900 than of 1950: It is a mostly home-grown population, whose future depends on the children of immigrants and their children, said William Frey, a demographer and senior fellow at the Brookings Institution.

“We used to say California, here we come,” said Frey. “That now has flipped.”

It was a different world in the 1950s and ’60s, when roughly half of Californians were drawn from other states by jobs and by visions of crystalline blue skies in January and beach parties in September. The state’s shining image was burnished by a public relations machine that pushed attractive suburban real estate and a wide-open field for business.

As domestic immigration slowed between 1970 and 2000, foreign immigration filled in the gap. But since 2000, even the state’s once-growing immigrant population has been frozen at 27% of total residents. Since at least 2005, more residents have left California than arrived here from other states.

What they don’t say here is that, with little net inflows, the state’s demographics continue to be transformed by the relative birthrates of its citizens and one can only imagine what the place will look like when that process goes on for another 10, 20 or 30 years.

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New Home Sales Rise. Who Cares?

In an announcement reminiscent of the early stages of the bursting housing bubble about five or six years ago, the Commerce Department reported(.pdf) that new homes sale rose last month, from a downwardly revised annual rate of 303,000 in September to a rate of 307,000 in October. September new home sales were originally reported at a 313,000 annual rate and, when comparing un-revised data to un-revised data, you get a decline in sales, but, comparing revised data to un-revised data produces a gain and rosy headlines.

This kind of rationalization was about all there was to help a lot of real estate investors keep the faith back in 2006. Today, with new home sales running at about one-third the pre-housing bubble rate and with the home building industry flat on its back for the foreseeable future, it’s just kind of an interesting side note.

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A Cheery Monday Morning with Steve Keen

Aussie economist Steve Keen appeared on BBC’s HARDTalk to explain how the world is already in another Great Depression and that, like the 1930s, people just don’t seem to realize their predicament and call it what it is until years later.

Keen’s best case scenario for the world is a repeat of Japan’s 1990s/2000s malaise and, at about the two minute mark, Sarah Montague reinforces the point by asking, “The best we can hope for is a lost two decades?”, setting the tone for the rest of the interview.

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Cyber Monday Morning Links

IMF denies Italy loan talks – BBC
Italy borrowing rates skyrocket – Globe & Mail
OECD issues stark warning on global economy – AP
Should the Fed save Europe from disaster? – Telegraph
A large number of questions for a Monday morning… – FT Alphaville
Moody’s: All euro-region ratings threatened by crisis – Washington Post
IMF drawing up £500bn package to save Italy, Spain, euro – Telegraph
Fed’s Secrecy During Crisis Limits Effort to Stop Another – Bloomberg
Parties look to payroll tax after collapse of deficit talks – LA Times
The Dwindling Power of a College Degree – NY Times
Euro Area Is Coming to an End – Bloomberg
An Avoidable Crisis – New Yorker

Oil Climbs to Highest in More Than a Week – Bloomberg
Gold rises two percent on Europe hopes – Reuters
Markets Close to ‘Dire Straits, Cathartic Moment’ – CNBC
European debt crisis shakes investors’ confidence – Washington Post
A Reality Check on Oil Supply For Newt Gingrich – The Oil Drum
Today’s currency war may be tomorrow’s global crisis – Reuters
Gold equities, bullion provide safety in uncharted waters – Mineweb
Barclays: Gold to remain positive, silver negative – Commodity Online
Silver bullion demand witnesses surge in Australia – Bullion Street

Worries continue – EconBrowser
No, Black Friday Sales Were Not Up 16% – The Big Picture
The Politics of Economics in the Age of Shouting – NY Times
OECD: European debt crisis may hit U.S. economy harder – Reuters
OECD warns UK on the brink of double-dip recession – Guardian
Chinese factories hit by strikes amid manufacturing slowdown – LA Times
Shirakawa Signals BOJ Stimulus Boost as Europe Woes Deepen – Businessweek
China mulls purchase of European assets – minister – Reuters
Greeks Balk at Paying Steep New Property Tax – NY Times
Sellers flee home market in fastest pace since ’06 – O.C. Register
Dealers See Fed Buying $545B Mortgage Bonds in QE3 – Businessweek
Secret Fed Loans Gave Banks Undisclosed $13B – Bloomberg
Central Banks Ease Most Since 2009 – Bloomberg

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