Global Economic Intersection
Advertisement
  • Home
  • Economics
  • Finance
  • Politics
  • Investments
    • Invest in Amazon $250
  • Cryptocurrency
    • Best Bitcoin Accounts
    • Bitcoin Robot
      • Quantum AI
      • Bitcoin Era
      • Bitcoin Aussie System
      • Bitcoin Profit
      • Bitcoin Code
      • eKrona Cryptocurrency
      • Bitcoin Up
      • Bitcoin Prime
      • Yuan Pay Group
      • Immediate Profit
      • BitIQ
      • BitQH
      • Bitcoin Loophole
      • Crypto Boom
      • Bitcoin Treasure
      • Bitcoin Lucro
      • Bitcoin System
      • Oil Profit
      • The News Spy
      • Bitcoin Buyer
      • Bitcoin Inform
      • Immediate Edge
      • Bitcoin Evolution
      • Cryptohopper
      • Ethereum Trader
      • BitQL
      • Quantum Code
      • Bitcoin Revolution
      • British Trade Platform
      • British Bitcoin Profit
    • Bitcoin Reddit
    • Celebrities
      • Dr. Chris Brown Bitcoin
      • Teeka Tiwari Bitcoin
      • Russell Brand Bitcoin
      • Holly Willoughby Bitcoin
No Result
View All Result
  • Home
  • Economics
  • Finance
  • Politics
  • Investments
    • Invest in Amazon $250
  • Cryptocurrency
    • Best Bitcoin Accounts
    • Bitcoin Robot
      • Quantum AI
      • Bitcoin Era
      • Bitcoin Aussie System
      • Bitcoin Profit
      • Bitcoin Code
      • eKrona Cryptocurrency
      • Bitcoin Up
      • Bitcoin Prime
      • Yuan Pay Group
      • Immediate Profit
      • BitIQ
      • BitQH
      • Bitcoin Loophole
      • Crypto Boom
      • Bitcoin Treasure
      • Bitcoin Lucro
      • Bitcoin System
      • Oil Profit
      • The News Spy
      • Bitcoin Buyer
      • Bitcoin Inform
      • Immediate Edge
      • Bitcoin Evolution
      • Cryptohopper
      • Ethereum Trader
      • BitQL
      • Quantum Code
      • Bitcoin Revolution
      • British Trade Platform
      • British Bitcoin Profit
    • Bitcoin Reddit
    • Celebrities
      • Dr. Chris Brown Bitcoin
      • Teeka Tiwari Bitcoin
      • Russell Brand Bitcoin
      • Holly Willoughby Bitcoin
No Result
View All Result
Global Economic Intersection
No Result
View All Result

Report: Current Housing Crash Has Surpassed Great Depression

admin by admin
June 5, 2011
in Uncategorized
0
0
SHARES
10
VIEWS
Share on FacebookShare on Twitter

houses-abandoned-detroit  by Guest Author Michael David White.  Bio follows article.

Economist Paul Dales at Capital Economics calls the Great Depression fall in housing prices a loss of 31% (MarketWatch). How bad was it then? The post-depression turnaround to re-attain the bubble high took 19-years.

That means if we start today and our rebound mimics the Great Depression, we are good and back to normal in 2030. Which raises the obvious question: Will we be alive?

On the bright side: Dales says housing is currently undervalued by 24%.Barry Ritholtz calls the greater-than-the-depression call unjustified. Says Case-Shiller uses hypothesized data for the Great Depression.   He throws out baby and bath water and mentions new home sales have fallen 82% in our cycle versus 80% in 1929-33.  The other Great Depression falls: GDP fell 30 PERCENT.  Peak-to-trough Dow crashed 89 PERCENT. Wow.  “Banks were failing by the 1000s.”  I’m starting to believe Barry.

A point against him: Our current bubble was radically greater than any previous bubble (If you believe the hypothesized Case-Shiller numbers, and I do.). That would mean we could fall much further.

Ritholtz mentions a cause of the difference between the two periods. Mortgages back then were 3-to-5 year loans,  not 30 years.  He seems to suggest the short loans favored a greater fall in prices.

The opposite is true.  Our current gargantuan loan periods allow the same income to pay a ton more for a house. Thus did the Affordable Homes’ geniuses crank up the price of real estate by creating the 30-year mortgage.

Ritholtz has hard numbers on real estate prices in a study of Manhattan from 1920 to 1939. The fall in prices? 67%.

If they were far less leveraged back then, then our fall in prices should logically be greater.  Some say it already is (see first paragraph). Check out our Case-Shiller chart immediately below showing a fall in prices of 37%.

 

June 1 Core Logic reported a gain in prices of 0.7% in April. This is the first gain following the home-buyer tax credit expiration in mid-2010 according to Calculated Risk. The same report shows a price fall of 7.5% over the year from April 2010.

Stephen Meister at the New York Post reports the following price-reducing trend:  “The economy still isn’t producing enough jobs to keep up with the growing workforce. So people are reluctant to become first-time homebuyers because they’ve lost (or fear losing) their jobs, and because they fear further price drops. That means “trade-up” buyers can’t buy — even if their jobs are secure — because there’s no one to buy their current (starter) homes at a price that will pay off their mortgages.”


Editor’s note:  The statement from Barry Ritholtz that banks failed by the thousands in the Great Depression, while true, is a misleading comparison to the financial crisis of the 2000s.  From a 2009 review:

There were 10,000 bank failures in the Great Depression, but few of them had branches.

Today, a medium sized bank usually has hundreds of branches and the two big failures, Washington Mutual and Wachovia Bank had more than 8,000 branches between them.

Thus, the number of actual bank locations affected in the current crisis, which is not over, is similar to the entire period of the Great Depression from 1929 to 1941.

In 2011 there have been several hundred more bank failures, many with multiple branches, so the number of failed bank “store fronts” now easily exceeds the total for the13 year duration of the previous crisis.  And the current crisis is less than three years old.

In dollar terms, per capita and adjusted for inflation, the 2000’s financial crisis magnitude is more than 28x the size of the 1930’s crisis.  See Related Articles by John Lounsbury.


Related Articles

Spring 2011 Guide to 30 Key Charts to See beforeYou Buy or Sell Your Home  by Michael David White (at Housing Story)

Housing Market Recovery Undermined by Seriously Delinquent Homeowners  by Keith Jurow

Case-Shiller Joins the Club – All Indices in Double Dip Territory  by Steven Hansen

April 2011 Pending Home Sales Signals Disaster in Home Market  by Steven Hansen

Banking Crisis Dwarfs the Great Depression  by John Lounsbury (at TheStreet.com)

Comparing Today’s Banking Crisis to the Past  by John Lounsbury (at Seeking Alpha)

Coming Soon:  Banking Crisis of Historic Proportions  by John Lounsbury (at Seeking Alpha)

michael-david-white Michael David White has 19 years in real estate as lender, owner, mortgage originator.  He is currently loan officer at a Chicago area federal credit union and the editor of Housing Story.net.  Mike is frequently quoted by major media, such as Bloomberg, CNBC and The Huffington Post.  See Linked In for full resume.

Previous Post

Tepco Expecting ¥570 Billion Net Loss for the Year

Next Post

Panel to Address Too-Big-to-Fail Resolution

Related Posts

eBay Unveils Sports-Themed NFT Collection
Business

eBay Unveils Sports-Themed NFT Collection

by John Wanguba
May 25, 2022
SpaceX To Get $1.7B In New Funding To Send Valuation to $127B
Business

SpaceX To Get $1.7B In New Funding To Send Valuation to $127B

by John Wanguba
May 25, 2022
Hyundai Signs Deal to Establish Full EV and Battery Factories in Georgia, US
Business

Hyundai Signs Deal to Establish Full EV and Battery Factories in Georgia, US

by John Wanguba
May 25, 2022
US Tech Giants Meta, Google, and Amazon Could Profit from Ukraine War – Media Guru
Business

US Tech Giants Meta, Google, and Amazon Could Profit from Ukraine War – Media Guru

by John Wanguba
May 25, 2022
Google Looks For New Talent To Lead Global Web3 Efforts
Business

Google Looks For New Talent To Lead Global Web3 Efforts

by John Wanguba
May 25, 2022
Next Post

Panel to Address Too-Big-to-Fail Resolution

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Browse by Category

  • Business
  • Econ Intersect News
  • Economics
  • Finance
  • Politics
  • Uncategorized

Browse by Tags

adoption altcoins banking Binance Bitcoin Bitcoin adoption Bitcoin market Bitcoin mining blockchain BTC business Coinbase crypto crypto adoption cryptocurrency crypto exchange crypto market crypto regulation decentralized finance DeFi digital assets Elon Musk ETH Ethereum Ethereum blockchain finance funding government investment market analysis Metaverse mining NFT NFT marketplace NFTs nonfungible tokens nonfungible tokens (NFTs) price analysis regulation Russia social media technology Tesla the US Twitter

Archives

  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
  • February 2018
  • January 2018
  • December 2017
  • November 2017
  • October 2017
  • September 2017
  • August 2017
  • July 2017
  • June 2017
  • May 2017
  • April 2017
  • March 2017
  • February 2017
  • January 2017
  • December 2016
  • November 2016
  • October 2016
  • September 2016
  • August 2016
  • July 2016
  • June 2016
  • May 2016
  • April 2016
  • March 2016
  • February 2016
  • January 2016
  • December 2015
  • November 2015
  • October 2015
  • September 2015
  • August 2015
  • July 2015
  • June 2015
  • May 2015
  • April 2015
  • March 2015
  • February 2015
  • January 2015
  • December 2014
  • November 2014
  • October 2014
  • September 2014
  • August 2014
  • July 2014
  • June 2014
  • May 2014
  • April 2014
  • March 2014
  • February 2014
  • January 2014
  • December 2013
  • November 2013
  • October 2013
  • September 2013
  • August 2013
  • July 2013
  • June 2013
  • May 2013
  • April 2013
  • March 2013
  • February 2013
  • January 2013
  • December 2012
  • November 2012
  • October 2012
  • September 2012
  • August 2012
  • July 2012
  • June 2012
  • May 2012
  • April 2012
  • March 2012
  • February 2012
  • January 2012
  • December 2011
  • November 2011
  • October 2011
  • September 2011
  • August 2011
  • July 2011
  • June 2011
  • May 2011
  • April 2011
  • March 2011
  • February 2011
  • January 2011
  • December 2010
  • August 2010
  • August 2009

Categories

  • Business
  • Econ Intersect News
  • Economics
  • Finance
  • Politics
  • Uncategorized
Global Economic Intersection

After nearly 11 years of 24/7/365 operation, Global Economic Intersection co-founders Steven Hansen and John Lounsbury are retiring. The new owner, a global media company in London, is in the process of completing the set-up of Global Economic Intersection files in their system and publishing platform. The official website ownership transfer took place on 24 August.

Categories

  • Business
  • Econ Intersect News
  • Economics
  • Finance
  • Politics
  • Uncategorized

Recent Posts

  • eBay Unveils Sports-Themed NFT Collection
  • SpaceX To Get $1.7B In New Funding To Send Valuation to $127B
  • Hyundai Signs Deal to Establish Full EV and Battery Factories in Georgia, US

© Copyright 2021 EconIntersect - Economic news, analysis and opinion.

No Result
View All Result
  • Home
  • Contact Us
  • Bitcoin Robot
    • Bitcoin Profit
    • Bitcoin Code
    • Quantum AI
    • eKrona Cryptocurrency
    • Bitcoin Up
    • Bitcoin Prime
    • Yuan Pay Group
    • Immediate Profit
    • BitIQ
    • Bitcoin Loophole
    • Crypto Boom
    • Bitcoin Era
    • Bitcoin Treasure
    • Bitcoin Lucro
    • Bitcoin System
    • Oil Profit
    • The News Spy
    • British Bitcoin Profit
    • Bitcoin Trader
  • Bitcoin Reddit

© Copyright 2021 EconIntersect - Economic news, analysis and opinion.

en English
ar Arabicbg Bulgarianda Danishnl Dutchen Englishfi Finnishfr Frenchde Germanel Greekit Italianja Japaneselv Latvianno Norwegianpl Polishpt Portuguesero Romanianes Spanishsv Swedish