Category — Heard On The Block

CALCULATED RISK has Case Shiller, Price to Rent Ratio, and Median Income to Price graphs all indicating home prices will fall 10%, or just over 10%, nationally  in 2011.  I agree– unless there is second dip recession or further financial crisis.

Local markets are different.  California has a one year hidden inventory of unlisted REOs, not yet foreclosed defaulted mortgages (320,000),  and homeowners in default without recorded notices of  default, with a total shadow inventory of 464,000 homes and listed inventory of 142,000.  Further,  California has a price to rent ratio  much higher than other markets in most of the state, 1.4x ; a much lower median income to price ratio in coastal California, and a much higher unemployment rate than the rest of the nation, 12.7%.

I agree with Fitch’s rating service– coastal California can expect to see a further 35% decline in home prices in 2011-2012.  Not calculated is the projected negative domestic migration out of coastal California the Legislative Analysts Office estimates at -224,000 for 2011.

Nationally the projections are good for housing.  But it doesn’t fix the broken mortgage market which could change these projections.

NEW YORK MAGAZINE’s December feature article is a treatise on the Libertarian Tea Party.  Except the author, Christopher Beam, misses the obvious.   The Tea Party is NOT Libertarian.

The Tea Party Caucus with 68+ members in the House exists, and it isn’t the Liberty Caucus with 13 members which, of course, consists of Libertarians.  Ron Paul the outspoken long term spokesman for Libertarians is not a member of the Tea Party Caucus, and refused to join.

The Tea Party consists of American Values Voters, historically populists, who don’t have, don’t want, and don’t believe in ideologies, even those ideologies like Libertarianism that have some vague similarity to their voting values, which include, voting for candidates who are truthful and appear honest; who oppose government corruption and special interest legislation, and among other things, distrust government.

That tens of millions of American Value Voters exist, as they have existed for at least 190 years, not in NY or New England, but in rest of the US seems to be beyond the comprehension of progressive NY journalists who seem to never have taken a course in US history, of if they did, forgot US history.  This is aside from the fact they miss the obvious in the current makeup of the Congress.

THE NEW YORK TIMES editorial on the Repeal Amendment referred to in this Washington Examiner op ed via Instapundit is a good example of how elites in NY and CA still don’t understand either the Tea Party, or understand that nationwide somewhere between 38-47% of voters support the Tea Party platform.  Conservatives (17%), Progressives (21-28%), New Democrats (12%), and others reflect the balance of political opinion nation wide.

Progressive journalists in NY don’t understand the history of the nation as this is not the second or third populist rebellion against NY elites, but the fifth in the last 210 years.

The proposed Repeal Amendment is just one of 12 proposed Amendments being discussed by 30 state governors, 19 of them being Tea Party endorsed… so far.  How many Progressive state governors are there?  Nine, down from 13, and all with failing economies and decreasing or static populations including NY and CA.

Democrat Whip calls not passing the tax compromise a procedural “bump”. But is it a “thump”?

This Congress couldn’t pass a federal budget for 2010; and hasn’t made up its mind on anything since the Health Care bill…  aftermath.  This is Dec. 17th, and Congress runs out of time on Jan. 4th.

Democrat voters favor this compromise by 68%, Independents by 68%, and Republicans by 75%.

The 111th Congress reminds me of a Jackrabbit caught on the road, first it runs one way, then another, trying to dodge, then it goes thump.

It looks like a Thumper.

Maybe next year the 112th Congress will be more aligned with the desires of The People.

Chairman Ben scares at least one viewer at Business Insider who distrusts academics.

Federal Reserve Chairman Ben Bernanke appeared on 60 Minutes this week to sell the Fed’s quantitative easing, print money, policy to the public just like any other politico.

Defeated Democratic gubernatorial candidates say they were not elected because Democrats are viewed by voters as “elitist” and “European.”  It is also no secret that 95% of the Obama Administration’s cabinet posts and political appointees are academics from “elite” universities .

Democrats have been unable so far to rebut this charge of academic elitism.

All nine  Supreme Courts justices are Harvard (5) or Yale (4) law school graduates.  Only Harvard or Yale law school graduates are considered as likely candidates for the nation’s high court.  But the nation has over 1200 law schools.

For twenty-two years only Harvard and Yale graduates have been elected President.

Ben Bernanke’s statement that he is “100% certain” the Fed can control inflation will be remembered.  Even if the Fed does control technical inflation, if mom’s finds groceries and products at Wallmart substantially more expensive as a result of Federal Reserve policy, then the academic economists at the Federal Reserve will get failing grades as both practical economists, and as political economists.

At stake for academics in elite universities in the US is the whole idea that academics can plan and manage the US economy, including industries like health care.  Who voters want in charge of the Federal Reserve are practical successful bankers.  Not academics.

Expect depreciation in the value of  Sheepskins if Chairman Ben and other elite academics now in charge of the US economy, legal system, and politics are unsuccessful.

The complete Bernanke’s interview on 60 Minutes is here.