The Big Picture

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• 20 Startling Facts About the US Housing Market
• Schoonover: The ‘Miraculous’ Revolution in Neuroscience
• Geithner: “The Size Of The Shock Was Larger Than What Precipitated The Great Depression”
• Mid-Week Reads
• memolane timeline
• QOTD: Faux Jargon
• OPEC by the Numbers
• We know the what but still not the when
• U.S. Dollar Index Components & Swings
• How Low Budget Films Get Financed

20 Startling Facts About the US Housing Market Posted: 19 May 2011 01:00 AM PDT The Economic Collapse has put together a stupendous list of 20 startling facts about the US housing market: 1. According to Zillow, 28.4% of all single-family homes with a mortgage in the United States are now underwater. 2. Zillow has announced that the average price of a home in the U.S. is about 8% lower than it was a year ago; 3. U.S. home prices have now fallen a whopping 33% from where they were at during the peak of the housing bubble.4. During the first quarter of 2011, home values declined at the fastest rate since late 2008. 5. According to Zillow, more than 55% of all single-family homes with a mortgage in Atlanta have negative equity and more than 68% of all single-family homes with a mortgage in Phoenix have negative equity. 6. U.S. home values have fallen an astounding 6.3 trillion dollars since the housing crisis first began. 7. In February, U.S. housing starts experienced their largest decline in 27 years. 8. New home sales in the United States are now down 80% from the peak in July 2005. 9. Historically, the percentage of residential mortgages in foreclosure in the United States has tended to hover between 1 and 1.5 percent. Today, it is up around 4.5 percent. 10. According to RealtyTrac, foreclosure filings in the United States are projected to increase by another 20 percent in 2011. 11. It is estimated that 25% of all mortgages in Miami-Dade County are “in serious distress and headed for either foreclosure or short sale“. 12. Two years ago, the average U.S. homeowner that was being foreclosed upon had not made a mortgage payment in 11 months. Today, the average U.S. homeowner that is being foreclosed upon has not made a mortgage payment in 17 months. 13. Sales of foreclosed homes now represent an all-time record 23.7% of the market. 14. 4.5 million home loans are now either in some stage of foreclosure or are at least 90 days delinquent. 15. According to the Mortgage Bankers Association, at least 8 million Americans are currently at least one month behind on their mortgage payments. 16. In September 2008, 33% of Americans knew someone who had been foreclosed upon or who was facing the threat of foreclosure. Today that number has risen to 48 percent. 17. During the first quarter of 2011, less new homes were sold in the U.S. than in any three month period ever recorded. 18According to a recent census report, 13% of all homes in the United States are currently sitting empty. 19. In 1996, 89% of Americans believed that it was better to own a home than to rent one. Today that number has fallen to 63 percent. 20. According to Zillow, the United States has been in a “housing recession” for 57 straight months without an end in sight. Source: The Economic Collapse: :”Don't Buy A House In 2011 Before You Read These 20 Wacky Statistics About The U.S. Real Estate Crisis“

Schoonover: The ‘Miraculous’ Revolution in Neuroscience Posted: 18 May 2011 11:00 PM PDT Carl E. Schoonover: Portraits of the Mind swissnex San Francisco

Geithner: “The Size Of The Shock Was Larger Than What Precipitated The Great Depression” Posted: 18 May 2011 10:30 PM PDT Tim Geithner says: Things were falling apart. We had no playbook and no tools…Life's about choices. We had no good choices…We allowed this huge financial system to emerge without any meaningful constraints…The size of the shock was larger than what precipitated the Great Depression. Indeed, there are some signs that we’ve been in a depression for a number of years. Geithner also warned that another financial crisis will hit: "It will come again. There will be another storm," warned Geithner, who in early 2009 succeeded Paulson as treasury secretary. "But it's not going to come for a while." *** "I'm certain we will" experience another catastrophe—he just couldn't say when or what kind. "You will not know," he answered when Sorkin tried to pin him down. "It's not going to be possible for people to capture risk with perfect foresight and knowledge." As I noted last year: Greenspan says that the financial crisis was caused by a once-in-100-year event. Tim Geithner says its more like once every 40 years. Jamie Dimon implies every 5-7 years. But Simon Johnson says its really once every 5 years: Visit msnbc.com for breaking news, world news, and news about the economy Would the American people stand for the lack of any real reform if they knew that the financial system will likely melt down again within the next 5 years? [given that the crisis started in 2007, that means that the next crisis will hit in 2012 ... if nothing blows up in the meantime] Geithner has been a big part of the problem. He’s previously said that his job as head of the New York Fed wasn’t as a regulator, even though one of the Fed’s core jobs is to regulate. As Dylan Ratigan writes: In Geithner’s own words during confirmation hearings in March: “First of all, I’ve never been a regulator…I’m not a regulator.” According to the New York fed bank’s Web site, that was your job!!Quoting from the Fed’s website: “As part of our core mission, we supervise and regulate financial institutions in the Second District.” That district of course is the epicenter for bailed out banks and billion dollar bonuses. (In other words, the 2007-2008 shock was even bigger than the one leading up to the Great Depression because Geithner and the other regulators were sitting on their hands.) Indeed, as I’ve previously noted: Tim Geithner told the Today Show that: It’s “deeply unfair” that some financial institutions that got taxpayer-paid bailouts are emerging in better shape from the recession than millions of ordinary Americans. Geithner also argued that President Barack Obama had no choice when confronted with a financial crisis. “As the president has said, we had to do some very unpopular things,” Geithner said. “People looked at what had happened.”"It’s not fair. It’s deeply unfair,” he said. “He (Obama) had to decide whether he was going to act to fix it or stand back … and that would have been calamitous for the American economy.” There are only a couple of minor inaccuracies in Geithner’s statements: The government hasn’t done anything to fix the economy Geithner’s entire approach is wrong, because the economy can’t recover until many of the “financial institutions that got taxpayer-paid bailouts [and] are emerging in better shape” are broken up The government has been anemic in addressing unemployment Moreover, it is not like their approach fell on them and they couldn’t do anything about it. Geithner … and the boys made a conscious decision to side with the oligarchy at the expense of the people. As Simon Johnson and James Kwak write: [There was a] point at which the government had to decide if it would defend the financial oligarchy from populist outrage, or whether it would reform the financial system that brought us the financial crisis and severe recession. We do not think it was an easy choice. But ultimately Obama and his advisers chose to bet on the bankers they knew. The result has been even larger banks and an even more concentrated financial sector. *** Geithner ended the interview with this pearl of wisdom: “What happened in our country should never happen again,” he said. “People were paid for taking enormous risks. It was a crazy way to run a financial system.” Geithner said, “It’s the government’s job … to do a better job of restraining that kind of risk-taking.” Indeed … too bad that Geithner and the boys are still encouraging that kind of risk-taking. Geithner was, of course, largely responsible for much of the failure of the government to restrain risk-taking in the first place. As William Black points out: Mr. Geithner, as President of the Federal Reserve Bank of New York since October 2003, was one of those senior regulators who failed to take any effective regulatory action to prevent the crisis, but instead covered up its depth. Geithner was also complicit in Lehman’s accounting fraud [and see this]. And pushed to pay AIG’s CDS counterparties at full value, and then to keep the deal secret. And as Robert Reich notes today, Geithner was “very much in the center of the action” regarding the secret bail out of Bear Stearns without Congressional approval. (So the shock was even bigger than the one leading up to the Depression because Geithner and his buddies helped blow the bubble and try to cover up wrongdoing on Wall Street.) Geithner has been equally bad as Treasury boss. Indeed, there is hardly a single independent economist who thinks he has been responding appropriately to the economic crisis. Sorry to say, but Geithner has long been a yes-man to the powers-that-be, who ships pallets of money wherever he is told without question or any follow-up or tracking whatsoever. Even worse, Geithner has been called an idiot by Nassim Taleb and a “con man” by Time Magazine. No wonder we’re going to eventually have another crash … And because Geithner (along with Bernanke) have insisted that the big banks be bailed out at Main Street’s expense, that the status quo be protected instead of reformed, and that the U.S. insure the debts of the too big to fails, the next crisis will be even bigger than the last.

Mid-Week Reads Posted: 18 May 2011 02:00 PM PDT Today’s reading list: • Apple IPad's 'Buzz Saw' Success Cuts PC Sales at HP, Dell (Bloomberg) • Against the 'strong dollar.' And the 'weak dollar.' (Washington Post) • Rating Agencies Face Crackdown (Dealbook) • Some Simple Deficit Reduction Arithmetic (The Street Light) • Foreign Buyers Getting Firesale Prices on U.S. Housing (Real Time Economics) They don’t draw a salary in dollars! • Gasoline Tax Rates by State (GasPriceWatch) • Why Does a Salad Cost More Than A Big Mac? Um, Farm Subsidies? (Good Medicine) • Wikipedia And The Death Of The Expert (The Awl) • Playboy Interview: Marshall McLuhan (Next Nature.net) • Space Shuttle Twitpic Launches Woman to Tweeting Fame (Mashable) What are you reading ?

memolane timeline Posted: 18 May 2011 01:00 PM PDT memolane is a cool free archive service that tracks all of your blogposts (via RSS Feeds), Tweets, FB posts, photos, vidoes, music, etc, in one place. I like it! > click for live site

QOTD: Faux Jargon Posted: 18 May 2011 12:00 PM PDT I love Faux Tech Jargon, and that is why this is our Quote of the Day: “We use CopyBuoy via Hoster Broaster, because it streams really easily into a Plaxo/LinkedIn yak-fest meld. When you register, click "Endless," and under "Contacts" just list everyone you've ever met. It would be great if you could post at least six hundred words every day until further notice. If you already have a blog, make sure you spray-feed your URL in niblets open-face to the skein. We like Reddit bites (they're better than Delicious), because they max out the wiki snarls of RSS feeds, which means less jamming at the Google scaffold. Then just Digg your uploads in a viral spiral to your social networks via an FB/MS interlink torrent. You may have gotten the blast e-mail from Jason Zepp, your acquiring editor, saying that people who do this sort of thing will go to Hell, but just ignore it.” -Ellis Weiner, Subject: Our Marketing Plan, The New Yorker

OPEC by the Numbers Posted: 18 May 2011 11:30 AM PDT This is the only part of the graphic; click for the rest Via Mint

We know the what but still not the when Posted: 18 May 2011 11:00 AM PDT The minutes from the Apr 26-27 FOMC meeting focused a lot on the exit strategy of its current extraordinary policy BUT the key question that was not answered and not really discussed was WHEN as they said “the 1st key issue was the extent to which the Committee would want to tighten policy, AT THE APPROPRIATE TIME…” The first step, when it happens, would be the halt to the reinvestment payments of principal on agency paper and Treasuries but they said specifically that they don’t know yet when this will happen. Bottom line, they know the party has to end at some point soon but there is no time yet on when. Their continued concerns with growth and belief that notwithstanding the rise in commodity prices and inflation readings, has them still unsure when to proceed with the unwind. Mark this down as my personal guarantee, the unwind won’t be a pretty, smooth process and is potentially going to be highly disruptive just as taking away heroin from an addict is messy (from what I’ve read).

U.S. Dollar Index Components & Swings Posted: 18 May 2011 08:45 AM PDT We’ve posted a few items about the dollar recently (See this and this). the recent counter-trend strength in the buck is what has roiled commodity markets as well as equities. Today’s NYT has an article that on a possible greenback rally, Some See Rise Ahead for Dollar: “Could the long dollar slide be over? For the better part of the past decade, and particularly in the last few months, the American dollar has been the 98-pound weakling of the foreign exchange world. It has lost value against almost every other global currency — not just the euro, pound and yen but even the Romanian new leu and the Latvian lats. Driven largely by the Federal Reserve's policy of printing dollars to help spur a healthy economic recovery that remains stubbornly elusive, the dollar, weighed against a basket of other currencies, hit a 40-year low this month. But betting against the dollar may no longer be such a safe play — not necessarily because of any sudden macroeconomic shifts but because of a sense that the long dollar sell-off may have finally gone too far. Since May 4, the dollar is up 4 percent against the euro and 2 percent against the pound, while rallying against the Romanian and Latvian currencies as well. In light of the article, let’s take another look at a few Dollar charts: > US Dollar Swings click for larger charts > Dollar vs Major Currencies > Previously: Dollar's Biggest Decline? 2001-08 (April 23rd, 2011) The value of the dollar: Five factors for investors (Washington Post, April 23, 2011) The US Dollar, Annotated (April 29th, 2011) Source: Some See Rise Ahead for Dollar LANDON THOMAS Jr. NYT, May 17, 2011   http://www.nytimes.com/2011/05/18/business/global/18dollar.html

How Low Budget Films Get Financed Posted: 18 May 2011 07:49 AM PDT What do the Blair Witch Project, credit cards, and the human condition's need to keep up with the proverbial 'Jones'' have in common? Well, one leads to the other. > Source: (Visual Economics)

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