Housing; A Horror Movie:
Shall we talk about housing, or have you had enough? I subscribe to the “I’ve never had enough of nothing” discipline, so housing it is.
We’ll take a leisurely stroll down (way down) housing’s declining lane today, and then, tomorrow we’ll visit the local shopping center and take the pulse of our next epidemic, commercial property.
While Mr. Greenspan, Mr. Bernanke, and Mr. Bush (just a few standouts in a cast of thousands) assured us some months ago that housing would make a soft landing, these guys were, well, lying like a rug. Alan ‘Cash’ Greenspan has in all fairness said, “I don’t know what the heck happened, it was alright when I left.”
I suspicion that ‘Cash’ Greenspan had one of those little chemistry sets when he was a kid. You know the ones where if you mixed up the right chemicals, the whole thing blew to smithereens? Where else would one get the early training necessary to engineer monetary policy that could implode an entire nation?
I happily point out that 8th grade math and basic physics are not requirements for becoming the Federal Reserve Chairman (or President); and, in Mr. Greenspan’s case, the holder of that position for 112 years.
In his new book, “The Age of Turbulence; and how I created this whole mess all by myself,” Alan Greenspan makes it clear, that through his own brilliance and hard work, “I have successfully mired Middle Americans hopelessly in debt.”
In June 2003, the then head of the Federal Reserve, Alan Greenspan, lowered the federal lending rate to 1%. A number not seen since 1958, when ‘Cash’ himself, was a young 65.
The idea here was to revive an economy where the average American had obviously failed to borrow enough money to replace loses sustained after farming and industry had moved to China, India, Bangladesh and Timbuktu.
Since the U.S. had wisely jettisoned our only sustainable areas of commerce off onto the unsuspecting third world dummies, an unsustainable model was necessarily chosen to strengthen and grow our economy until such time (as planned since childhood) the whole thing blew to smithereens. Housing seemed a reasonable path that would fiscally and stalwartly lead America to a dead end road.
And so, the housing rush began and we all lived happily ever after; or, until after Mr. Greenspan retired, whichever came first.
Residential shelter (often mistakenly referred to as housing), is absolutely, positively, unequivocally…as an economic basis; unsustainable. Ya see, this class of commerce is considered ‘durable goods’, or ‘unlike computers.’ Houses last a long time. Once you buy one, you don’t need another one for a long time. Once everyone who can afford one, has one, the millions of people who are employed in some facet of housing, don’t have work for a long time.
To add to the pending misery, a few thoughtless people each and every day go off to that big retirement community in the sky and put their homes on the market, which further muddies the inventory waters.
We have now reached the point in the predicable plot that is referred to as “Market Saturation,” a horror film produced by Alan ‘Cash’ Greenspan and Directed by George ‘Badlands’ Bush, which is showing in a neighborhood near you.
As promised, tomorrow we’ll go shopping.