Miracle of the Loaves, Fishes and New Home Sales

If the housing market in the US were in fact recovering, it would be a miracle. Alas, (Wikipedia Photo)

If the housing market in the US were in fact recovering, it would be a miracle. Alas, (Wikipedia Photo)

To call it a miracle is to misunderestimate it by at least an order of magnitude: according to the US Commerce Department, sales of new single family homes in August surged 18% from July, and 33% from last year, “offering confirmation,” swooned CNBC, “that the housing recovery remains on course.”

Even while humming its charming little refrain of “Happy,” CNBC, like the many others who sang from the same sheet music, slipped in a few clunkers without elaborating or explaining: one, that new home sales account for only nine percent of the market, and thus (despite CNBC’s offered confirmation) are hardly determinative; and two, that despite the rise in sales, the stock of new houses still unsold hit its highest level in four years. Wait, what? You sell more than you have in six years, and end up with more unsold inventory than you’ve had in four years? Continue reading

Perfect Storm Gathering off America’s West Coast

Sea Storm

A storm gathers over Manhattan Beach, California. But the real threat to the West Coast is from what’s happening in the water, not in the air. (Photo by Neil Kremer/Flickr)

When three or more meteorological disturbances merge, the result is called a “perfect” storm to signify that it is more destructive than the sum of its parts. In the Pacific Ocean off our West Coast, a confluence of dire events is forgathering whose cumulative effect may destroy more life on earth than anything that has occurred in 300 million years. That is not hyperbole, it is the considered opinion of a number of oceanographers who have begun to look at the threats cumulatively, rather than in the confines of one specialty or another. What happened 200 million years ago is called the Great Death of the Permian Age, during which most living things on Earth died.

What is happening today in the eastern Pacific Ocean is thought by some experts to be a runup to just such an event, beginning, as did the Great Death, with the extinction of most life in the ocean. Continue reading

More Warnings from Wall Street: The Party’s Over

On Wall Street the party's almost over, and the music is about to stop. Wall Street's response: dance harder. (Image by Stock Graphic Designs)

On Wall Street the party’s almost over, and the music is about to stop. Wall Street’s response: dance harder. (Image by Stock Graphic Designs)

The warnings are coming thick and fast now, from inside the redoubts of the Masters of the Universe, that their world is spinning out of control. I am especially interested in the warnings from the MOTUS themselves, not because they have demonstrated any special ability to forecast, but because they are making noises in a large herd of bulls, knowing that if they set off the stampede they will get hurt.

There is no bigger bull than UBS — it’s the largest asset manager in the world, with nearly two trillion dollars in assets. It told its clients in a newsletter last month that it no longer likes stocks, and it no longer likes bonds. Where you gonna put two billion dollars? Baseball cards? [Thanks to Wolf Richter on WolfStreet.com for bringing this to light.] Continue reading

Housing Bubble II: Deja Vu, Again

FOR RENT in tony neighborhood, handyman special, low low rent, tenant responsible for maintenance. Any problems, call 1 800 BITE ME. (Photo by Kevin Dooley/Flickr)

FOR RENT in tony neighborhood, handyman special, low low rent, tenant responsible for maintenance. Any problems, call 1 800 BITE ME. (Photo by Kevin Dooley/Flickr)

I knew a woman with lung cancer who almost blew her face off while sneaking a smoke under an oxygen mask. Wall Street reminds me of her. The Masters of the Universe (hedge fund guys, private equity managers, parasites, whatever you wish to call them) are so addicted to subprime lending they can’t give it up, even though they are still in traction from the last time it blew them up (and evicted ten million Americans from their homes).

Immediately — and I mean, immediately — after the collapse of the subprime-mortgage bubble brought the entire world’s financial system to its knees, the MOTU decided that the remedy to the destruction wrought by subprime mortgages was — subprime rental contracts. (Not to mention subprime auto loans, which is another story.) Continue reading

Junkie Nation

Are antidepressants depressing the vote in America? (Wikipedia Photo)

Are antidepressants depressing the vote in America? (Wikipedia Photo)

I was standing outside a small-town courthouse, chatting with a clutch of town and county officials, on a fall evening a few years ago, when the conversation turned to their constituents. We were on a break from a sparsely attended candidates’ forum inside, and I asked them what was on the voters’ minds that year. After a little bit of this and a little bit of that, they reached sudden and enthusiastic consensus (after making sure that no one from the local paper was in earshot): in general, the voters don’t give a shit.

Now this is at a level of politics that big money has not been able to lock down, simply because in a race for a few thousand votes to get elected to the county commission, there’s nothing on which to spend big money. At this level, votes decide, but the voters don’t care. The only way to get a crowd at a political debate is to open with Beyonce.  Continue reading

Masters of the Universe Head for Exits

It may be time to put your money under the mattress again.

It may be time to put your money under the mattress again.

The list of stock market players who are talking openly about the danger of an imminent crash (in doublespeak, that’s “correction”) is growing fast. This is all the more remarkable when you remember that it is generally against the best interests of players to warn people away from the game at which they are making their money. They are, in a sense, yelling “Fire!” in a crowded casino; either they know nobody is going to pay any attention, or they are sitting next to a pre-dug tunnel out. Or there really is a fire.

Rich people are in general given too much deference in our money-worshiping culture. We don’t do that here. But people who speak against their apparent interests are especially interesting, and it usually behooves us to listen to what they have to say.   Continue reading

Fareed at Last: The Middle East Explained. Totally.

Fareed Zakaria holds forth on CNN. He’s one of the better pundits, but as with them all, the reasoning tends to be more circular and the fables more disconnected from reality. (Wikipedia Photo)

Fareed Zakaria holds forth on CNN. He’s one of the better pundits, but as with them all, the reasoning tends to be circular and the fables disconnected from reality. (Wikipedia Photo)

Another Sunday, another tsunami of TV tirades from the elders of our tribe, as we gather around the firelike tube and absorb their wisdom. (Will someone please explain to me why William Kristol is there, week after week? How is it that a man who has been so wrong so often gets invited back to the inner circle, and how is it he is still smirking?) Hundreds of pundit-hours, in a single morning, yesterday most of it devoted to explaining to us the Middle East.

Among these explainers, perhaps the least doctrinaire and most intelligent is Fareed Zakaria, who with Time Magazine and CNN has created an admirable Pundit Empire. Continue reading

Rats Start to Leave the Fracking Ship

What top oil people are starting to do about the fracking revolution. Abandoning ship.

What top oil people are starting to do about the fracking revolution. Abandoning ship.

The first sign of a doomed ship is said to be the urgent departure of its rats; the first sign of fire in a crowded theater is not the guy who shouts it out, but the several people with good noses who start to sidle quietly but purposefully toward the exits. In the world of America’s bogus oil and gas fracking revolution, the nostrils of the rats and the smoke-sensitive alike are beginning to twitch. Let us watch those noses.

Must we review the industry’s propaganda again here? How hydraulic fracking has changed everything, America now has abundant gas and oil, we’re surpassing Russia and Saudi Arabia, we’re number one in the world again, we’re headed for energy independence? (No one has yet had the chutzpah to predict we’re going to get to energy independence, since it’s mathematically impossible, but it shouldn’t be long now, they’re getting desperate.) The latest iteration of the industry line is an essay that appeared in the New York Times  titled “America’s Oil Bonanza,” a song of oil without end, amen. Continue reading

Attack of the Zombie Plants: World War A

Just when you think it's safe to go near the water, you start feeling dizzy. Thanks, algae. (Photo by Dave Shefer/Flickr)

Just when you think it’s safe to go near the water, you start feeling dizzy. Thanks, algae. (Photo by Dave Shefer/Flickr)

Along most of its coastline, in its bays and estuaries, and in many of its rivers and lakes, America is under mounting attack by another enemy of its own making — toxic green algae. It’s like a bad horror movie, with the slime sprawling across vast reaches of water (so much that it’s visible from space), eventually covering beaches and burping a neurotoxin that is deadly to earthlings. As a movie, it wouldn’t get past a concept lunch in Hollywood today (Hey, Arnie! It’s been done, okay?) but it is raising real dread — not the fake movie kind — from California to Florida, from the coast of Washington to the coast of Ohio. Yes, Ohio. Continue reading

The Scariest Picture in the World

Just a garden-variety protest in some Middle Eastern county, you say, nothing to be afraid of here? Wait till you find out where these people are. (BBC Photo by Safa Al-Ahmad)

Just a garden-variety protest in some Middle Eastern county, you say, nothing to be afraid of here? Wait till you find out where these people are. (BBC Photo by Safa Al-Ahmad)

What, this picture? It’s almost a cliche, right, more Arab Spring stuff? Yes, except for one thing. This uprising, inspired by the so-called Arab Spring three years ago, and unquenched since then, is happening in Saudi Arabia. The protesters are minority Shia Muslims in Saudi’s Eastern Province, the center of gravity of the country’s oil industry. This picture represents the worst nightmare of the Saudi royal family, and of all industrialized nations. If Saudi Arabia comes unglued, so do we all. Continue reading