KeNo's Housing and Economic Portal: Wednesday August 31 Housing and Economic stories

Tuesday, August 30, 2011

Wednesday August 31 Housing and Economic stories

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TOP STORIES:

Decade of Fiscal Stimulus Yields Nothing but Debt - (www.bloomberg.com) When George W. Bush took up residence in the White House in January 2001, total U.S. debt stood at $5.95 trillion. Last week it was $14.3 trillion, with $2.4 trillion freshly authorized by Congress Tuesday. Ten years and $8.35 trillion later, what do we have to show for this decade of deficit spending? A glut of unoccupied homes, unemployment exceeding 9 percent, a stalled economy and a huge mountain of debt. Real gross domestic product growth averaged 1.6 percent from the first quarter of 2001 through the second quarter of 2011. It doesn’t sound like a very good trade-off. And now Keynesians are whining about discretionary spending cuts of $21 billion next year? That’s one-half of one percent. And it qualifies as a “cut” only in the fanciful world of government accounting. The Budget Control Act of 2011 will save $917 billion over 10 years relative to the Congressional Budget Office’s baseline. It leaves the tough work to a bipartisan congressional committee of 12, to be appointed by the leadership in each house. If this supercommittee fails to agree on a minimum of $1.2 trillion of additional savings over 10 years, automatic spending cuts -- evenly divided between defense and nondefense -- will kick in.

Even Tiger's Mistresses Are Winning More Than Him: Rachel Uchitel Just Made $330K On This NYC Apartment - (www.businessinsider.com) One of Tiger Wood's most well-known mistresses, Rachel Uchitel, just made a $330,000 profit on her apartment in New York City, according to Zillow.com. Uchitel bought the apartment on Park Avenue a year ago for $1.62 million, renovated it, and sold it for $1.95 million. The brownstone has three bedrooms and bathrooms, a formal dining room, and a fireplace. Click here to tour the apartment >

Extend and Pretend works only so long until it doesn't - (www.telegraph.co.uk) Eurogeddon is postponed again. Jean-Claude Trichet has saved civilization. There will not be a spiralling bond crisis in Italy and Spain in early August after all. An imminent disintegration of Europe’s financial system has been averted. On balance, this is good, though not optimal. (Lancing the boil immediately by organising an orderly German exit from EMU would be better: it would halt the Fisherite debt-deflation spiral in Club Med and clear the way for recovery.) Spanish 10-year yields dropped 85 points to 5.2pc, Italian yields fell 76 points to 5.32pc in the first hour or so of trading after last night’s announcement. Now for the hard part. Unless the ECB is willing to back up its new role as lender-of-last-resort with massive purchases of Italian and Spanish debt, it will inevitably be tested by markets. Weak hands will take advantage of rallies to offload holdings onto the ECB, i.e. onto eurozone taxpayers. Frankfurt will find itself underwater very quickly without a legal mandate or EU treaty authority.

Big access threat - (to the wealthy) seen in little beach pathway - (www.sfgate.com) In the beach town where California's surf industry first took root, where the loss of an epic break to a marina helped prompt the passage of the nation's most stringent coastal access laws, few imagined the city would go to such lengths to keep people off the beach. But in the minds of many coastal activists, Dana Point has emerged as ground zero in the battle between the public's right to its coast and rich homeowners who want to keep the soft-sand beaches to themselves. In the last year, this city enacted an emergency ordinance, assigned a beach monitor of sorts and even went to court — all in an effort to lock prior to sundown a pathway through a private neighborhood with multi-million dollar mansions. "It's kind of come full circle with this," said resident Rick Erkeneff, who has been surfing Strand Beach for 30 years. "It's one little beach accessway, but ... if they can do this, any city can put up gates and limit the hours."

A Second Recession Could Be Much Worse Than the First - (www.nytimes.com) If the economy falls back into recession, as many economists are now warning, the bloodletting could be a lot more painful than the last time around. Given the tumult of the Great Recession, this may be hard to believe. But the economy is much weaker than it was at the outset of the last recession in December 2007, with most major measures of economic health — including jobs, incomes, output and industrial production — worse today than they were back then. And growth has been so weak that almost no ground has been recouped, even though a recovery technically started in June 2009. “It would be disastrous if we entered into a recession at this stage, given that we haven’t yet made up for the last recession,” said Conrad DeQuadros, senior economist at RDQ Economics.