May 2006

First of all, why do I comment on real estate bubble in my political blog? I think the movement in the housing prices is the most important thing happening in our economy in the last 3 years. Construction created millions of jobs and lifted commodity prices, mortgage refinancing injected hundreds of billions of dollars into consumption, wealth effect is driving people crazy into negative savings. In short, the whole nation is consuming more than it is producing as real estate creates paper wealth.

So, when the bubble had popped? Interesting thing is that many people expect something similar to Nasdaq dropping 5 times from 2000 to 2002. This may never happen with real estate, as any slowdown kills liquidity and just prevents people from selling. Moreover, many people just can't sell as they own more of mortgage then their house is worth. The prices decline just 3-5% every year, but for several years in a row. This is called slow bleeding.

Let just look at the mortgage applications graph:

After hot 2005 we see a normal seasonal decline in December and then sharp rebound in January. Then a drop after feds raised in late January to 4.5%. Currently, mortgage applications are trailing 2005 by 15% and the gap is slowly widening. The purchase index declined 13% from January and is slowly trending down.

What's the answer to my question, when the bubble popped? I think it never popped and never will, instead, it is slowly deflating and will continue to deflate in the years to come.


This time desperate whistleblowers seem to be surrounded. Commander Alito hits the target with graceful accuracy. Keep watching.

As you know, the Westboro Baptist Church was picketing the funeral of the soldiers killed in Iraq with messages like "God is America's terror", "Thank God for dead soldiers" and "You're going to hell". They suggest that God is killing our young boys in Iraq for Bush not being tough on homosexuals.

Just another illustration on how far the Church is from its founder, Jesus, who was teaching that love is above all. If the Lord of Hell is indeed alive, then Westboro Baptist Church is his messenger. Amen.

While Hayden is passing senate I want to point out to some horrible things that are happening with our freedom, if you still know what it is. liberty in chains
As reported here,  DOJ and FBI are secretly wiretapping journalists in order to reveal their confidential sources, or what we call whistleblowers. There is a good article on that here:

Anyone who still believes that a free press is important to America, and that whistleblowing is crucial to a functioning democracy, should be appalled and worried about this new Bush administration step towards dictatorship, which like all the earlier ones is being cast as part of a fraudulent "war" on terror. 

So is Rove indicted or not? Why there are only denials and no reports? Simple. He was indicted but is bargaining a plea deal, which is still refused by Fitzerald. It could take a while, so be patient. Read

Thank you Mr. Patrick Fitzgerald. America stands on people like you. Thank you.

Fortunately for Bush, the last day scandal did not took as much as public interest as the last year wiretapping revelations. But, look how much more of interest the NSA has in the last few months.

On this graph from google trends, red is NSA, blue is wiretapping.

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