Market commentary

Market Valuation Update

Whenever someone puts together some nice valuation charts I feel compelled to share :-). The story they tell is the same. If you only consider the last 20 years, current valuations look about average.  If you look over the last century however, we are currently in the top quintile of valuation and [...]

Fraudclosure Update

So far the banks are mostly getting a pass.  But there is enough bad faith stuff going on that the right snowball could really shake things up. The Florida Attorney General produced a presentation documenting a number of the frauds that servicers and lawyers are perpetrating on the court. The [...]

ForeclosureGate Update

With everyone focusing on QE2, I thought it would be helpful to see where we stand with the foreclosure problems. On October 27th there was a congressional hearing on foreclosure mitigation programs (e.g., HAMP). Katherine Porter gave an in depth analysis of some of the problems facing the [...]

GDP Growth Needed to Reduce Unemployment

The following graph shows the historical relation between unemployment changes and GDP growth. Real (i.e., before inflation) GDP growth of at least 2% is needed just to stay even. And even high growth doesn’t tend to reduce unemployment by more than 1% a year. With housing and deleveraging [...]

Home Negative Equity by State

I often meet young couples these days who are in a slight panic about the need to buy a house before prices start to rise again. With demand low and supply high, I don’t see prices climbing significantly upwards over the next year or two. Here is a quick breakdown of the number of homes that are [...]


The left/right divide in politics seems to have reached the level of kabuki theater.  The following graphs depict congressional seats if you color them by who donates the most money to their campaigns. If you want to know why the financial reform bill was such a mess, this should help make it all [...]

Changes to Income Distribution

Here are how incomes have changes over the last 30 years. In percentage terms we get the following. Bottom Fifth: 28% decline Second Fifth: 25% decline Middle Fifth: 15% decline Fourth Fifth: 10% decline Top Fifth: 24% increase Top 1%: 128% increase If we break the top 1% into smaller groups we [...]

Bank Fraud – The Bank is not on your side

Naomi Wolf provides a chilling account of how Washington Mutual responded when she discovered fraud occuring in her account. The main take away, besides disgust, is that if you discover unauthorized transactions occuring in your account, close it immediately, no matter what the bank tell you to [...]

Money Supply – Part II

Last week we learned that for price stability, the money supply needed to grow with the economy. But to make things more challenging, changing the velocity of money also changes the money supply needed for price stability. Today, I’m going to take a quick look at how the fractional reserve [...]

Money Supply – Part 1

The news seems to be more of the same, so I thought I would take a little time and explore the topic of money supply. Doesn’t that sound exciting :-). A lot of silly things get said on the news and having a deeper understanding of this subject will help you filter some of those out. It will also [...]
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