Big Oil Found to Have Done...

Absolutely nothing.

Now, just think of all the hours, days, if not years of people's lives wasted on getting all hot and bothered about "big oil."

If you think about it, it's really sad.

Labor Productivity

Imagine what would happen to the US figures if we banned;

American Idol
Paris Hilton
Hip Hop
People Magazine
and
Reality TV

HAR!

Implodometer!

You will click on it.

You will conform!

Buyer's Market Arrogance

I remember Top Gun. Where Sundown, Goose's replacement, is in with Maverick and they're going against Viper. Viper sets Maverick up with an easy shot. Cake, pure cake. And Maverick says, "It doesn't look good."

Sundown, not paralyzed by the loss of Goose says, "What do you mean it doesn't look good? It doesn't get to look any better than that!"

And so is the housing market.

Buyers, much as I have been on your side and advocating this is a buyers market, you are goofing up big time. Wake the ef up and quit being so God damned arrogant.

I don't know how many times I've seen buyers come into the market and have the unrealistic expectations that housing is just going to be given to them for free. Matter of fact, not just free, but the seller is going to pay them to take their house. Furthermore, I don't know how many friends of mine I've said, "Hey, have you gotten pre-approved? Now is the time to start looking." only to have them say, "Well, I don't know, you know. I mean housing is on the way down, I think if I wait a while longer I might get a good deal."

The only problem is in "a while longer" there may not be such great deals.

Led by a media blitz that the housing market is in dire straights, buyers have been led to believe to postpone their purchasing decision indefinitely. Only problem is indefinitely means you'll pass up on what is arguably going to be the greatest time in your life to buy property. Prices are on the way down, interest rates are still at a historic low, debt servicing costs relative to potential rents are reasonable, but oh no, we're not going to buy. We're going to wait until the market tanks even more.

Now, I've always insisted that prices are going to go down (which I still opine they will). But what I've seen based on anecdotal stories and some incidental research is that not only are buyers passing up on discounted prices, but they're passing up on prices where they actually cash flow. Where if you rented out the property, your rental income would cover the mortgage, insurance, utilities and taxes. In other words, buyers have unrealistic expectations and are going to wait too long.

So here is my humble advice to all you aspiring junior, deputy, official or otherwise economists;

Don't let this opportunity pass you up.

Yes, there is a glut of housing, but based on housing starts, they're cutting back production drastically. Which means that once this excess inventory is eaten through, you'll be back to a balance market, and I surmise rather quickly. Yes, yes, I've insisted that the market has a ways to go, which it does, but buyers have become so loth to pull the trigger I fear they'll NEVER pull the trigger until it is too late.

So for me, for yourself, for the sanctity and holiness of capitalism, do yourself a favor and at least get pre-approved for a loan and be on the hunt, be on the look out. It is an opportunity, especially for those of you aspiring economists that are younger that may not present itself again.

All that being said, I could be completely wrong, you could lose everything, markets are inherently risky, you are a fool to listen to my advice, blah blah blah and all the other legal mumbo jumbo that alleviates me of any responsibility of you investment decisions.

Real GDP Per Capita 1790 to Present

I had received a challenge from Rammage over at Atlas Blogged. To find Real GDP per capita from 1776 to the present.

I failed him miserably since the only data set I could find went back to 1790.


Oh, what a bad economist am I.

That Was Then

Friend of mine sent me this link to an old US propaganda poster from WWII.

I could only imagine the furor that would arise today if something similar was done today...of course that was during FDR's days...which means he must have been TWICE the terrorist and racist that GW is.

An "Economist" Too Far

I remember the movie "A Bridge Too Far" where there was a military analyst who kept trying to warn the higher ups about intelligence he was getting about German armor being spotted in the vicinity Arnhem (it is SOOO worth clicking on the link for this is the exact same thing that has happened to every analyst, economist and researcher out there). While his commanding officer appreciated his concerns, inevitably he become too much a thorn in people's side and was relieved of his duties. I even remember the Chaplin coming up to relieve him, saying, "You're tired. You need to rest." To which he responded "Isn't there a way to stop it?"

And that was me about three years ago. I would go to management, present my research and my findings, showing them much more conclusively than a handful of pictures of German tanks that there was a housing bubble and that if they didn't pull back on the real estate development deals, they'd lose their shirts. I too was "relieved" of duty after I refused to capitulate and play ball and start producing research that they wanted to see, not that reflected the realities of the economy and housing market.

And so with today's news I watch as I see the Allies get slaughtered in Operation Market Garden, sitting there thinking "how many billions would have been saved if the banks just listened to me." Alas I don't have gray hair and therefore I'm just a dumb economist. But with housing prices dropping so quickly...


maybe next time the higher ups might start listening.