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Special Report

Housing Stops

By on 8.25.10 @ 6:08AM

You were expecting something better under this administration than yesterday’s bad news of a record drop in home sales?

Yesterday morning, the National Association of Realtors reported a 27% drop in existing home sales for July (as compared to June), the largest month-over-month drop in 15 years. At sales that pace, given the number of houses on the market, existing home inventory jumped up to 3.98 million existing homes for sale, a 12.5 month supply of housing (i.e. if all houses currently on the market were purchased at the rate that houses traded hands last month, it would take just over a year to sell them all), the highest inventory by this form of measure in more than a decade. According to NAR, “Raw unsold inventory is still 12.9 percent below the record of 4.58 million in July 2008.”

The report was much worse than economists predicted, with Bloomberg’s median estimate (among the 74 economists asked for a prediction) being an annualized selling rate of 4.65 million homes versus an actual report of 3.83 million (again, an annualized number).

Prices were down 0.2% from the prior month but up 0.7% from a year earlier, showing perhaps that housing prices must fall further in order to get buyers interested.

It’s not all about price, however, when it comes to housing. Two perhaps larger factors are employment and availability of mortgages, both of which are disastrously weak for what should be a point of recovery in a typical economic cycle.

Much demand for existing houses comes from people moving to a new location to go to a new job. With unemployment stuck near 10% and underemployment (including unemployment) near 17%, with entrepreneurs, particularly those who would normally consider starting up a small business, pinned to the sidelines by uncertainty about what Obama and Pelosi’s next business-crushing shoe to drop will be (taxes? cap-and-trade? protectionist legislation?), the chances of job creation improvement in any single digit number of months is bleak. As the L.A. Times notes:

…the nation’s tiniest companies had fewer new hires last month than any time since October. The data are further evidence of a trend that has had many economists worried for months and intensifies concerns that smaller firms may not be robust enough to help lead the country out of its financial slump. The slowdown in hiring is particularly troublesome, experts say, because small businesses typically hire first during a recovery. A reluctance by little companies to add positions could mean that the big firms, which typically lag behind, will add jobs even more gradually.

(For more on this topic, I recommend this fascinating study by the Kauffman Foundation: “The Importance of Startups in Job Creation and Job Destruction” which notes that “startups aren’t everything when it comes to job growth. They’re the only thing.”)

With no new jobs, people are staying put. Unless you’re simply outgrowing your current home by having kids (or having your mother-in-law move in), a house would have to get a lot cheaper to get you to move if you don’t actually have any need to.

Then, even if you did want to move, you’d have to be able to get a mortgage. While mortgage rates have reached record lows in recent days, it’s harder than ever to get a mortgage. Several years ago, a ham sandwich could get a 100% loan-to-value mortgage by just claiming a decent income in mayonnaise. Heck, it could even have been an illegal alien ham sandwich as long as he could show the right bar code for a jar of Hellmann’s. Now, you have to have near-perfect credit, a high income, and the ability to put down a substantial down payment to be able to get even a conventional government-guaranteed mortgage, much less a “jumbo” mortgage needed for most loans over $417,000 in most parts of the country (the conventional limits are higher in certain high-cost areas.)

In a typical example of government shutting the barn door after the horse has left — actually a few years after it’s left in this case — even the FHA is raising its lending standards, although calling requiring a 3.5% down payment a “standard” would be laugh-out-loud funny if those sorts of Barney Frank- and Chris Dodd- mandated levels hadn’t cost the rest of us our jobs, our home values, and our retirement savings.

Between a lack of new jobs, a lack of available credit, and the tremendous uncertainty regarding how the newly established Consumer Financial Protection Bureau will punish lenders not only for mortgage failures which they contributed to, but also for failures entirely of the borrowers, it’s hard to see how the housing market improves anytime soon.

As with the failed “cash for clunkers,” the Obama Administration’s actions have served only to shift demand between time periods, with their recently expired homebuyer tax credit briefly lifting sales only to give us this record plunge when the credit expired.

A rising housing market was critical fuel for the economic boom of the last decade, not least due to irresponsible homeowners using their homes like piggy banks, borrowing against their equity (which they no longer have) and spending the money on cars, trips, and perhaps most dangerously, on real estate speculation. That speculation caused rising prices which created a self-reinforcing game of real estate musical chairs that people with no experience, no investing talent, and no goal other than not to miss the money train all wanted to play. As is typical of bubbles, it turned out there was a lot more than one chair missing when the music stopped.

But even without such recklessness, and even treating the “wealth effect” as of minimal importance, a second dip in housing could point to problems not just for the broad economy but also for local budgets — not least school districts — whose finances are heavily dependent on property taxes. A 2009 paper on “House Prices and Economic Growth” by Norman Miller of the University of Cincinnati and Liang Peng of the University of Colorado concludes that “house price changes have significant effects on Gross Metropolitan Product growth…[and that] the effects last for eight quarters.”

Furthermore, as the Federal Reserve Bank of San Francisco notes, much spending in recent years, and not just in America, was done with borrowed money that now must be repaid rather than spent or saved in an economically constructive way. Therefore,

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About the Author

Ross Kaminsky is a self-employed trader and investor and is a senior fellow of the Heartland Institute. He is the host of The Ross Kaminsky Show on Denver’s NewsRadio 850 KOA at 11 AM on most Sundays. You can reach Ross by e-mail at rossputin(at)rossputin(dot)com.

Letter to the Editor View all comments (43) |

TennesseeVolunteer| 8.25.10 @ 7:42AM

A problem you didn't mention that will stifle home building for quite awhile is that appraisals are now so low that builders literally can't build a house for what the appraisals will be getting in most markets. My company has been working with homeowners who want steel framed homes with great energy efficiency. The appraisals coming back because of all the foreclosures and depressed sales have driven prices down so low that new houses can't be built for that.
On another note, we had an investor who owned outright fifteen occupied rental houses with six more that are occupied and being paid off by the investor. The investor wanted to try one of our houses and the bank would not give him a construction loan even though he has great cash flow, always paid on time and would make a 20% down payment. If a guy like him can't get a loan, the low interest rates are a mirage for the vast majority of people in America.

chuck| 8.25.10 @ 8:00AM

Vol,
I agree with you about appraisals, the new rules are just stupid. However, you can not build a house for the price you can buy an existing one now. I'm a contractor in the Atlanta area, and I recently sold a home I lived in for 17 years. Feels like I gave it away. With the proceeds, I bought a foreclosure which I am currently renovating. For what I paid for it, I could not buy a lot, do the grading, and put in the foundation. There are so many foreclosures that banks are almost giving them away, but you must have cash to buy them. Mortgages are almost impossible to get, the paperwork is insane, the pendulem has swung way to far in the opposite direction as to the qualifications to obtain one.
Is anyone really surprised by the housing report? Cash for Clunkers II, anyone?

Eric Cartman| 8.25.10 @ 10:09AM

TV and chuck - you guys sum it up nicely. The Case-Shiller index has been pointing to sideways and even falling home prices, further depressing the market. But the media - in an effort to make out with Obama's butt - have, again, lied about what it says. Or more likely, are too stupid to understand the difference between adjusted and unadjusted data. There has been a consecutive MoM decrease in home prices and sales. This trend will continue for a couple more years regardless of the media's attempt to re-inflate the balloon (guess they want their value back hee hee). You guys have summed up the fallout well - more inventory - > falling prices - > more foreclosures -> more inventory. All thanks to the Democrats trying to "help" the poor while the other rich Democrats on Wall Street knowingly sell the worthless mortgages to the world. That's what happens when you try to help Detroit - you become Detroit. Enjoy the fall, everyone. It was brought to you by the Democrats.

JP| 8.25.10 @ 11:51AM

" - you guys sum it up nicely. The Case-Shiller index has been pointing to sideways and even falling home prices, further depressing the market."

Which means the banks will have greater write-offs (which why they are hoarding cash), which in turn lead to lower earnings, and less capital for the credit markets. This will offset much of the QE the Fed has been pusing for almost 2 years. In short, despite the large amount of public debt and the flood of liquidity, defaltion looms. That is, too little money chasing too many goods. Our over-credentialed experts have put the nation in a position where damaging deflation and hyperinflation are both possible (but, for now deflation seems more likely).

Some economists are now waking up to the dangers. A few even expect the DJIA to fall over the next 2 years to around 5000. Instead of slashing federal spending and funneling that money back into the economy, the federal government has created the conditions where wealth is being destroyed (which is what delfation actually leads to). And once private firms can no longer price thier products at stable levels (ie keep prices from falling), they go under. Deflationary spirals are just as difficult to control as hyperinfaltion. The years 1932-33 was a deflationary depression. Banks balance sheets evaportated, and shareholders in a panic created several bank runs.

The President's economic goals when he took office were actually political ones. He really thought he could game the system by flooding our economy with dollars, subsidies, and massive spending programs. He thought he bought himself and his party 2 years of recovery in order to enact his transformative agenda. It of course backfired. The damage done now will require a lot of pain to correct. But, the current governing class is not up to the job.

Eric Cartman| 8.25.10 @ 12:37PM

Exactly. In doing the calculations, I'm betting worldwide deflation followed by more idiotic tinkering with interest rates (this time raising them) setting off inflationary spikes depreciating purchasing power. Unfortunately, this will probably happen without the corresponding ability to raise prices on manufactured goods (non-core goods). Either way, its a scary thought.

The WSJ had a great article about The Hindenburg Omen. Another technical indicator showing bad weather ahead.

Florida Floyd| 8.29.10 @ 9:02AM

All of this, and yet there is still talk of eliminating tax deduction for home mortgages. When will it end? Stimulus my ass. Wouldn't it make sense, if you really wanted to stimulate things, to bring back tax deductions for interest paid on automobiles and credit cards? Or is that too simple?

Ret. Marine| 8.25.10 @ 7:44AM

So in other words OBAMA is the failure of this time!

Dustoff| 8.25.10 @ 11:33AM

Yep. Good call Marine.

Jeff Lee| 8.25.10 @ 7:54AM

Obama's goal is to destroy the US economy. He's making good progress toward his goal.

Tim*| 8.25.10 @ 8:41AM

Obama is an Economic Gravedigger .

Watch out!
Futures are down today and if the 10 am New Housing Report is bad there will be more tanking .

Ross Kaminsky | 8.25.10 @ 10:07AM

Tim,

New home sales came in below expectations but not as disastrously so as existing homes. Also, new home sales are a MUCH smaller issue than existing.

Futures dropped briefly on the announcement and then recovered to where they were before the news, still down about 6 in the S&P 5 minutes about the news.

Ross Kaminsky | 8.25.10 @ 10:09AM

the new home sales numbers were, I think, the lowest reading ever...but expectations were already pretty low.

Tim*| 8.25.10 @ 10:42AM

Thank you for the information.

Question : Your best guess , Where's Dow October ?

JP| 8.25.10 @ 12:07PM

The DJIA and other markets are no longer governed by reason. The QE of the past 20 months have prevented the correction in both equities and banking, which was needed to seperate the wheat from the chaff. Obama did what Hoover did; he mis-used both the Treasury and the Fed banks in order to forstall a much needed correction. From March 2009 to March 2010, the DJIA recovered most of its 2008 loses based soley on QE, subsidies, and huge government spending increases. Like Benjamin Strong's 1928-29 "Coup de Whiskey" easing of interest rates and liquidity injections, Obama's minions flooded the markets with easy money, which went into speculation and not the credit markets. But unlike 1929-30, the real estate markets never recovered. While market and commidity speculation soared in 2009-10, real estate continued to lose ground, forcing banks to hoard cash to offset asset depreciations.

With the recent fall in the DJIA oil pirces has fallen (refined gas in most areas is now below $1.80 wholesale). Commodities remain over priced, but that may be a reaction to a weak dollar than anything else. It isn't demand. Despite what many experts say we are awash in a glut of wheat, beans, and corn. Precsious metals of course are the ultimate hedge against a weak currency.

The DJIA will fall below 10000. But if Bernecke decides on one last "coup de whiskey", we could see one last round of market speculation. And all that will do is funnel more cash into banks, which will only go overseas. But with falling US consumption, not even China will be able to avoid the cold when the US economy sneezes. The Dow will fall below 9500 by October without any further Fed intervention.

Eric Cartman| 8.25.10 @ 1:58PM

There are those who are saying DJI @ 5000 by next year. That's too scary to think about. I'm skeptical. In October? I agree with JP. I say hovering around 9,000 (+/- 500)

Ross Kaminsky | 8.25.10 @ 2:36PM

Tim,

I'm going to go out on a limb here and say the Dow is close to 11,000 by the end of October.

I know (having been a professional trader since 1987) that Sep and Oct are normally TERRIBLE months.

But I can't find one professional trader or sophisticated investor or even just a well-informed person like most readers of these pages who is not bearish.

In more than 20 years of trading, I don't think I've ever seen such consistent bearishness among the pros. While I'd much rather bet against public sentiment than professional sentiment, nevertheless the overwhelming bias in one direction makes me think the market's next serious move is up, leaving aside what would happen due to an exogenous event like a terrorist attack.

Also, I think that as we get closer to October, more people will come to believe (as I have for months) that the GOP will take back the House of Representatives, and I think that will be good for the market.

So, I'll say 10,700 by end of Oct, knowing that every smart person I've spoken to in the last two weeks disagrees with me.

Eric Cartman| 8.25.10 @ 2:49PM

Well, you could be right going contrary - I find it a good strategy most of the time. The heard is often going off a cliff. But not this time. The technical and fundamental indicators just point to bad stuff ahead. I think you are right in one sense - profit taking and making will cause spikes, but I think the trend is down for the next few quarters. Look at the new highs and new lows for the past year if your a techie. If you're using fundamentals, look at, well, ANY indicator. Employment, job creation, interest, inflation. Both systems are pointing in bad directions.

Tim*| 8.25.10 @ 4:29PM

Ross ,
You're instincts , considering your professional experience sound valid.

I admire your straight shootin' attitude .

Stan Redmond| 8.26.10 @ 3:11AM

Never underestimate the new power of the federal government to influence the Dow. Cooked books, remarkable "growth," sudden employment growth...ALL in time for November. And what else is in that monstrosity of a "financial overhaul" law. I have a feeling the Dow will be even higher but for other reasons. The population has been programmed to believe that the Dow is the end all be all of woeld economics. One last burst of Dow stimulus from leftover TARP funds will be just what is needed to get domocrat votes. Then stand aside while it crashes hard.

Clinton nee Publius | 8.25.10 @ 9:34AM

This is one of the symptoms of what happens when government spending increases so dramatically - there is not enough credit left in the private-sector market to sustain borrowing for capital investment.

You want to know what happened when an additional trillion dollars comes out of the economy? Well, that's a trillion dollars that is not available to capital pools in the private-sector that would otherwise invest in housing mortgages and it is a trillion dollars that isn't available to lend to companies that want to expand and create new jobs.

This also demonstrates the inherent weakness of the mortgage lending model of finance versus the equity investment model of housing finance. It won't be long before we see the Housing Plus model take on the mortgage lending model in head to head competition and eliminate mortgage lending altogether over the next 10 years. We need something that is a game-changer that can save our housing market and the mortgage lending model of financing isn't up to the job.

John DuBose| 8.25.10 @ 9:51AM

It is true that banks have nearly stopped lending. That is why sales have nearly stopped. But this too shall pass. It will take a while.

Bill Hussein O'Stalin| 8.25.10 @ 10:40AM

One truism you can count on is that the bills always come due.

One minor nuance that should be pointed out is that just like Carter this is not a crisis in confidence but a lack of skills and knowledge evidenced by a total and unrelenting wave of incompetency by the U.S. Congress and the Obama White House.

In fact, incompetency is being rewarded at all levels and in all industries. Banking, autos, unions, public service unions, incompetent state leadership are all receiving bailouts.

In the meantime sinister music plays in the background as the President continues to engage in a series of obvious lies.

RAMIII| 8.25.10 @ 2:05PM

BHO,
You are exactly correct. It is the "Peter Principle" at work. These people have been promoted to their level of incompetency. From the national level all the way to the local levels -- it is nauseating and somewhat overwhelming. "The power of the few creates apathy among the many". Perhaps this November we can change this -- but in the 1930's America's and England's weakness partially led to World War II. These truly are unstable times.

StevenR| 8.25.10 @ 11:30AM

Home prices may have fallen, but the taxes on homes have not. I am looking to buy a vacation home in the Poconos. There are lots of houses for sale in the $150K range, but I will not pay the township $300 to $400 per month to live there.

Seek| 8.25.10 @ 11:50AM

The falloff in seasonally-adjusted home sales was inevitable, a by-product of mortgage loan curtailment. I find this to be a good thing -- not in and of itself, of course, but a necessary corrective to the mortgage madness of the 2003-07 period. Long-run NAR data show that 4-to-5 million sales a year is the natural average. The middle of the last decade, when annual adjusted sales exceeded 6 and even 7 million, was an aberration.

Take two of these and call me next year; this, too, shall come to pass.

Eric Cartman| 8.25.10 @ 1:16PM

Wrong! BUZZZZ! Ignore seasonal adjustments in this market - they are meaningless (if they ever had meaning). The overall trend is down because housing was over-priced due to a false demand fueled by government policies and low interest rates - with some fraud thrown in. The downward trend is bad because it starts from a false level to begin with. Trillions of dollars are gone - that's a good thing?

Blackwatch| 8.25.10 @ 2:28PM

Once the downward spiral starts and the banks accelerate the destruction of wealth by tightening lending requirements so that persons with decent credit can not re-finance their homes, a lost job or cut in hours will force millions more homes into foreclosure. Placing more strain on the banker's balance sheets.

This is far from over--a self fulfilling prophecy is taking place. Another large waive of foreclosures is looming do to these machinations by the government and banks. They are destroying our country.

PolishKnight| 8.25.10 @ 8:56PM

No, they're not (destroying our country)

As Eric points out, housing is way overpriced not only due to government fueled speculation, but the notion by egotistical owners thinking that they could use a home like a piggy bank to fund a retirement from unrealistic gains. Even a modest 10% growth above inflation guarantees, by definition, that in just a few short decades, housing would be so overpriced that people wouldn't be able to afford anything else (gas, food, etc.)

Since most people are owners rather than renters, there was political pressure for government to protect housing prices from correction or even stopping a massive upward slide. The one group NOT represented? Buyers. The same people that they expect to buy in order to fuel prices from falling or moving upward.

But this is the definition of a ponzi scheme: The demand that new buyers protect old ones. At some point, the last buyer gets left holding the bag after having paid off the previous investors according to seniority.

Why should I, as a buyer, fund a pyramid scheme? I should buy according to the Case-Schiller index. For my region, that means housing is still doubly overpriced and if that means that some homeowner doesn't make more money owning a house than earning a living, so be it. I am not going to work 50 years to pay off a shack just so someone else can retire in luxury or break even!

Blackwatch| 8.25.10 @ 9:54PM

Ok in a fit of emotion I failed to complete my argument. The final sentence should have read: "They are destroying the wealth of our country."

The loss of wealth by home owners has real world consequences for generations to come. Banks will be returning to the government to prop them up as more mortgages are defaulted on. Adding to inventory and driving down prices. Sure you as a buyer find this attractive, but where is the bottom? Why buy if the asset declines in value? Would it not be wiser to rent?

Your Ponzi scheme analogy is a failure. There is never a "final buyer" with real property. It can't be consumed so there is always a good to be sold to the next buyer. I do see where you were going with that analogy though. A better example would be Social Security. If you are under 45 you won't see much of a Social Security check--the Feds spent all the money they took in on social programs and bribing senior citizen voters with inflated checks over the last 40 years. So you are going to work for 50 years and get screwed on that one too.

PolishKnight| 8.26.10 @ 12:18PM

All analogies, by definition, are imperfect since they are not exact comparisons. While there are exceptions, housing prices rise and fall based upon a market rather than an individual home. So even if a home has a certain value, a buyer purchasing at the top of a market will see a loss if other homes fail to sell. By the same token, at the top of a bubble market, when a few homes sell for stratospheric prices to top bidders, it appears as if ALL homes have shot up in value even if the market represents a fraction of homes at the time.

Saying that a real estate market is too big to fail doesn't change the fact that it is not in buyer's best interests to prop up prices. The solution is simple: When the market bottoms out according to fundamentals, then prices will rise again. Just like stocks or commodities such as orange juice or gold.

I agree with you, it is wiser to rent and that's precisely what my wife and I are doing. We rent for a fraction of what buyers pay in carrying costs. As prices decline, rents will follow downward although there is a brief period of time where rents rise as buyers sit on the sidelines.

Anyways, my point is that the buyers are the ones least addressed by the government even as they are the ones, ultimately, who fund a recovery. Telling me I can "finance" overpriced housing reminds me of a car salesman who told me that it was ok for me to pay twice as much for a car as I knew I could get by going through costco but, hey, I could finance it at cheap rates!

This is analogous to other social programs where the people who provide the funds (taxpayers) are fleeced in order to benefit political special interest groups. Or social policy where society funds unwed motherhood via welfare and child-support by demanding "deadbeat" dads foot the bill (this drives away responsible men creating more deadbeats.)

Finally, the ponzi scheme works for one simple reason: The pyramid ultimately collapses and prices drop down to fundamentals, or below, anyway. When the Fed runs out of trillions of dollars, that's the end of artificially high housing prices.

Placing a bottom is quite simple: When EVERYONE tells me that housing is dead, then I'll buy!

Stan Marsh| 8.25.10 @ 3:10PM

Cartman, you fat ass: (just kidding)
I believe what Seek was refering to as a "good thing" is the return of sanity to housing pricing. As I have said over and over again, a house is worth the combined value of:

The cost of the lot
The cost of the permits
The cost of materials
The cost of the labor
Add about 10 to 15% profit.

Anything beyond that is simply robbery, and you will get burnt. Homes were selling for double the above costs just a few years ago. This drove up tax rates, and forced home buyers into ridiculously structured home loans. Finally, things are beginning to correct themselves. It's going to hurt like hell, but we are returning to a time of sanity in housing pricing.

Clinton nee Publius| 8.25.10 @ 2:59PM

Dude, Paul Krugman called. His parrot is missing and he'd like you to fly back on your unicorn. You can fill it up at the rainbow-power station of economic stimulus.

Oldefarte| 8.25.10 @ 4:34PM

Sadly, there is no economic cure for the current depression [and American taxpayer-voters have no one but themselves to blame for this catastrophy]. The stupidity of electing as PRESIDENT OF THE US a inexperienced COMMUNITY ORGINIZER with a law degree from Harvard is simply astounding. Did anyone in their right mind expect him to actually be able to run/manage/administer this entire country's operations after his illustrious short-term Senate career? The one and only solutions for this housing [and all other economic and other policy political problems] rests with the upcoming November elections and beyond. If Americans do not get off their backsides, go to the polls and vote experienced or knowledgable candidates into office on a national scale, this country's death knell will be a certainty!!!!!

BackToBasics| 8.25.10 @ 9:51PM

---go to the polls and vote experienced or knowledgable candidates---

Yes, and add to that tough-minded, strong-spined conservatives. If we get more of what the Republicans offered from 1994 through 2006 it will not be enough to turn us into the correct course of limited government.

We need to abolish most of the Federal departments and the government needs to get 100% out of funding health-care. Departments could be closed in 1 years time. To mitigate the financial /civil earthquake healthcare would have to be reduced more slowly, maybe over 4 years time, but it would have to be started immediately upon a new congress / president being sworn in. As soon as the government began to cut funding for health care coupled with Tort reform, health care prices would begin to drop shotly thereafter.

Redstateboy| 8.25.10 @ 4:54PM

ya ever wonder what the Leftist Lemmings are reading and commenting on on the Daily Kos or the Huffington Post?? I mean this Housing News is so "In Your Face" reality... Could they really just all be over at these sites blabbering... "It's all Bush's fault"

JmsA| 8.25.10 @ 5:07PM

Don't worry, Folks, Joe Biden says: "There isn't any doubt we're moving in the right direction." This is what we get when tens of millions of idiots vote for idiots. The democrats accuse Bush of driving the economic car into the ditch. What they failed to tell us is that Nancy and Harry, were also driving, particularly in the latter leg of the trip, and after appointing the One and his minions to get the car out of the ditch, he stepped on it by implementing his statist/socialist agenda, and drove it over the cliff.

Redstateboy| 8.25.10 @ 5:28PM

Hang on to your hats and IF you have a Job you better hang on to that soon... oh.. and bess begin get'n use to the sound of sirens.

BackToBasics| 8.25.10 @ 10:00PM

The sound of sirens will wake up more people. Such increased insecurity will wake up many women especially quickly. But the Brainwashing Brew both the men and women of the left and even center-left have been drinking for so long will still leave them with a hangover. They will not know right away where to turn. But even if many begin to arouse from slumber, by the time many sirens are sounding it may already be too late to save the country as we know it.

Michele San Pietro| 8.25.10 @ 5:34PM

I personally didn't expect anything from Mr. Obama, it was clear from the very start that his policies would be disastrous for the United States and the free world.

WTF Guy| 8.25.10 @ 7:06PM

I'm just throwing this out there and not necessarily in favor of it but here goes:

In lieu of the 787 ARRA "stimulus" bill enacted in Feb 2009, a massive loan modification program, as much as 1 trillion dollars, could have been implemented to relieve dept (mortgage, credit card, automobile) pressure, which would have freed up household spending. I always assumed TARP would perform this function but those funds went directly to banks who are sitting on it instead of it going directly to the consumer.

I'm against government spending but if Barry HAD to do it, this seems like the more direct/efficient way to kick start consumer spending.

BackToBasics| 8.25.10 @ 10:14PM

I'm against these massive governemtn intrusions / spending but I also could go one step further. If since 1965, instead of gicing so much money away the governemtn just built or bought houses for the poor they could have housed 100% of the population by now. You might say housing prices would spike but if they were to eaercise this much control thjey could prevent that too.

As I said, I do not approve of such things but if instead of welfare payments the government could do a one-time housing purchase for the poor as long as they had intact families, they could have bought all of the poor a house for the same money they already sent.

Of course all things do not remain equal but I say it just to make a point of just how much has been spent already with nothing to show for it but a lot of illegitimate births and illegal aliens on top of that.

Initially a lot of houses would have had to have been bought but as years went on fewer houses would be needed as the housing stock would be larger and most of the poor would be housed initially.

We'd have had something physical to show for all the spending already done and the governemnt outlays would be minimal at this point. As long as it was truly a one-shot deal to help in this way.

But BEST of course if the governemnt had never initiated the Great Society programs. I used to call LBJ the worst president in American History until Obam came along.

M. Btok| 8.26.10 @ 9:55PM

Out with the Global Elite and the Criminal Government - That Has Performed A Hostile Corporate Take Over of America!
The Government that has taken over America, is not American! Outsiders are running our country!
The reasons why, we must vote out, Establishment Government Representatives, whether they are Left or Right - Incumbent or Candidate!

Make sure the candidates and incumbents, you vote for in November this year and in 2012, do not belong to any of the Global Elitist Organizations: Bilderberg Group, Trilateral Commission, Council on Foreign Relations, Club of Rome, Skull and Bones, Canadian Council of Chief Executives,
Harvard Elite Players, Goldman Sachs, International Monetary Fund, The United Nations, World Health Organization, World Trade Organization.

The reason we must vote out Establishment Government Representatives, whether they are Left or Right, Incumbent or Candidate is explained on this 2 minute News Clip below:

TWO Party Paradyne System News clip:
http://www.metacafe.com/watch/.....ra_part_2/

We Americans, who wish to stop the thieving and robbing, of your income and resources in your country, by the Globalist Banksters need to, "End the Fed"! Help Ron Paul out on this one folks! There in lays our freedom!

PS: Please pass this information on to your friends - as - time is getting short, Obama and the Elites are pushing hard to start World war III with Iran, a distraction to save Obama's failing presidency, in an effort to get the sheep rallying around Obama!

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Obamacare Implodes

May 15, 2013 | Peter Ferrara

http://spectator.org/archives/2010/08/25/housing-stops

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