The Mess That Greenspan Made - Part 416

Zombie Housing Market Not Yet Ready to Rise

The Commerce Department reported(.pdf) that housing starts fell in August and permits for new construction rose, however, instead of showing the same old chart of how the residential construction has been dead and will likely continue to be that way for the foreseeable future, this approximation better expresses the current reality.

When looking at the actual data below, it’s clear to see that there’s not a whole lot of difference between the two charts, the only real question being if and when a zombie housing market will someday arise.


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Tuesday Morning Links

Italy has debt rating cut by S&P – BBC
Greece Nears the Precipice, Raising Fear – NY Times
China bank halts swaps with some European banks – MarketWatch
Siemens Deposits More Than 500 Million Euros With ECB – Bloomberg
Greece Should Default and Quit the Euro: Roubini – CNBC
America’s debt woe is worse than Greece’s – Kotlikoff, CNN
Bernanke to Preempt Accusations of Do-Nothing Fed – Bloomberg
OK, Gold’s Not Money. How About This? Is the Fed a Bank? – Lew Rockwell
“Rage” against Wall Street power clogs sidewalks – Reuters
The Old Man and the Sea – 2011 – The Burning Platform
Who wants to tax a millionaire? – Economist
The European Bank Run – Credit Writedowns

Oil rises to $87 ahead of Fed meeting – AP
Gold rises after Italy credit downgrade – Reuters
Fed Model more bullish than in decades – MarketWatch
Markets watch as Fed opens meeting – Washington Post
Dow hits 20,250 by 2020, but first a big crash – MarketWatch
Treasury bond yields dive on bets of Fed buying plan – LA Times
Eastern demand for gold still largely untapped – Holmes, Mineweb
Australia set to launch physical bullion exchange – Reuters
OPEC: Oil Price Fall Driven by ‘Speculation’ – CNBC
OPEC’s $1 Trillion Cash Quiets Poor – Bloomberg

When Inflation Was Good – Krugman, NY Times
Time to end the Keynesian pretense about stimulus – Reuters
Middle-Class Americans Suffer in Silence, for Now – Bloomberg
Merkel’s Euro Strategy at Risk from Partner in Freefall – Spiegel
Germany reaps rewards of entitlement cuts – Washington Post
Venezuela formalises gold industry nationalisation – Mineweb
Hong Kong Builders to Accelerate Sales as Demand Cools – Bloomberg
Who Needs the Mortgage-Interest Deduction? – Lowenestein, NY Times
Fannie and Freddie’s Boss Speaks Out On Obama’s Refi Plan – CNBC
Getting ready for a ‘twist’ by the Federal Reserve – MarketWatch
Fractional reserve banking – Macro Man
Rethinking central banking – voxeu


I have no idea who this guy is, but he ties together a few timely news items – the budget debate, class warfare, and the effort to occupy Wall Street that he dubs the “American Spring” – before inviting President Obama to participate.

In related news, it’s not clear if this will help or hurt (my guess is the latter), but Roseanne Barr just made a surprise appearance at the protest, apparently not having anything good to say about either Ayn Rand or Rush Limbaugh – here’s a link.

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The U.K.’s Guardian newspaper files this report on the effort to occupy Wall Street over the weekend, a move that extended into the workweek earlier today.

On Saturday 17 September, many of us watched in awe as 5,000 Americans descended on to the financial district of lower Manhattan, waved signs, unfurled banners, beat drums, chanted slogans and proceeded to walk towards the “financial Gomorrah” of the nation. They vowed to “occupy Wall Street” and to “bring justice to the bankers”, but the New York police thwarted their efforts temporarily, locking down the symbolic street with barricades and checkpoints.

Undeterred, protesters walked laps around the area before holding a people’s assembly and setting up a semi-permanent protest encampment in a park on Liberty Street, a stone’s throw from Wall Street and a block from the Federal Reserve Bank of New York.

Three hundred spent the night, several hundred reinforcements arrived the next day and as we write this article, the encampment is rolling out sleeping bags once again. When they tweeted to the world that they were hungry, a nearby pizzeria received $2,800 in orders for delivery in a single hour. Emboldened by an outpouring of international solidarity, these American indignados said they’d be there to greet the bankers when the stock market opened on Monday. It looks like, for now, the police don’t think they can stop them. ABC News reports that “even though the demonstrators don’t have a permit for the protest, [the New York police department says that] they have no plans to remove those protesters who seem determined to stay on the streets.” Organisers on the ground say, “we’re digging in for a long-term occupation”.

There is much more in this piece and via a related Google News search. While I’m not holding my breath, we can at least hope that this might lead to an awakening of some sort in the U.S., akin to the Arab Spring. Then again, there’s probably little chance of that happening – at least not until the economy gets much, much worse.

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