The Seduction of America

September 6, 2009

From easy money in Wall Street banking to easy money in Main Street America real estate, the country has been seduced. We now live with the ensuing mess that was begat. I read a comment that talked about the free lunch syndrome, written by a certain “morph366” on a Seeking Alpha article by another author. I now know that commenter personally as Clive Corcoran, a London private equity manager. At the time this article was written, though, he was known to me only by his pseudonym, taken from the name of his personal blog site.

This article was originally published about five months ago, but I think that with what has unfolded since, it has even greater significance today. The structural problems in our economic theories, financial systems and our individual situations continue to be revealed. Read the entire article at Seeking Alpha.


More on the Historic Size of the Bank Crisis

August 26, 2009

The ratio of failed bank assets to GDP is much larger (seven-fold) than the Great Depression and has an even greater magnitude compared to the S&L crisis. This follow-up to the article below was discussed at

Banking Crisis Dwarfs the Great Depression

August 24, 2009

Even when adjusted for inflation and population growth, the 2008-09 banking crisis exceeds by far previous banking crises, including even the Great Depression. There were 10,000 bank failures in the Great Depression, but few of them had branches. Today, a medium sized bank usually has hundreds of branches and the two big failures, Washington Mutual and Wachovia Bank had more than 8,000 branches between them. Thus the number of actual bank locations affected in the current crisis, which is not over, is similar to the entire period of the Great Depression from 1929 to 1941.

When it comes to the amount of money involved, the current crisis has had bank failures 70 times those of the Great Depression. Even when the figures are adjusted for inflation and population growth, the current crisis is still much larger in dollar terms.

Read the entire analysis at The numbers are truly astounding.

April 4, 2009

Search Engine Submission – AddMe

Housing: Where Is The Bottom?

March 1, 2009

Note:  This is an update of an article by the same title published in early January.  Data and discussion of the previous article is not repeated here, unless specific updates are being made.  Some additional data is included in this article, including data from the National Association of Home Builders and regional housing market differences.

Thursday morning (February 26) a new U.S. Department of Commerce report found new home sales in January at a lower level than any time since they started keeping records in 1963 (New-Home Sales Tumble To Record Low; Prices Fall). The day before, the National Association of Realtors announced a 12-year low in sales of existing homes for January (January Existing Home Sales).

To continue reading this article click on Housing: Where Is the Bottom?


January 13, 2009

It is generally agreed that housing is a significant contributor to the current economic crisis. Many have said that the credit bubble can not be deflated and the consumer can not return to spending until housing prices stabilize. Others have said that recovery will not be sustainable until the housing market bottoms. I have heard so many people offer opinions (watch CNBC) that the housing market will bottom in 2009 or 2010. A few have offered an opinion of a longer wait. I have not seen a comprehensive discussion of the factors involved in the housing shake-out, so here goes. I hope it’s not a case of “fools rush in where wise men fear to tread.”

There are three aspects of the housing crisis: Falling prices, mortgage defaults and supply issues. They will be tackled one at a time, although they are related. Falling prices increase mortgage defaults, which throw foreclosed houses onto the market, and thus the inventory glut is increased. Additionally, there is a section analyzing the demographics involved in the current housing cycle, which are different from the previous cycles since 1950.  To continue, click on the following link:

Investment Ideas For An Inflationary Environment

November 30, 2008

Over the past decade, a lot of money has been printed. It was not printed by the U.S. Treasury but in the form of debt instruments by investment banks and others. These debt instruments (which were not subject to any regulation or oversight) became currency which was spent on commodities, stocks, bonds and real estate, including houses. Because this new currency was so plentiful, all of these things had their prices inflated to bubble levels. When a few of the debt instruments became subject to default, a wide range of debt came into doubt and the liquidity of this manufactured currency dried up – financial institutions became reluctant to recognize that it had the value previously assumed. The new currency was no longer working the way it had been and demand for the inflated items (commodities, houses, etc) began to fall.

(To read the rest of this article, click on

Super Cycle Critical Point

November 18, 2008

I have just published another article on the website Seeking Alpha:

Where Are We In the Stock Market Cycle?

October 9, 2008

I just published this article on Seeking Alpha:

Bull or Bear – Let History Be The Guide

September 8, 2008

I recently published an article of stock market history at