The Forgotten balls in the air

[william the wie]

The double dip in housing and the strategic default wave is coming and it has been building for seven years. 5 years for reset and 2 years for foreclosure proceedings means the 2004 year vintage of non-idiot loans is just now hitting the market in large numbers. With loans to idiots at two year resets already clogging the financial sewers sales of owner occupied housing will soon be harder than can be imagined.

The latest rounds of QE and direct bailouts seem less effective worldwide than their predecessors like QE I. String pushing rarely works and the more it is used the less well it works.

The tweaking of inflation and UE numbers has reached the point that there is almost no trust in the numbers so good news is no longer believed even when true. For example I have heard arguments that Chinese growth is so improperly deflated that real economic growth over there is negative (the latest McAlvaney podcast guest made this claim.)

Usually hits from the blindside do the most damage so am I missing any major problems that are not making the news?

 

[iamwhatiseem]

Trusting numbers is impossible at just a glance.
Take the trade deficit decline that wall street is having a party today over.
Two factors play into that, one is temporary the other is the result of a bad thing not a good thing.
Temporary decline is the Japan Earthquake/Tsunami.
The other is the result of a wrecked dollar. Our products get cheaper overseas of course as the dollar declines. The dollar declining to this degree is only good for investors short term.

 

[william the wie]

Trusting numbers is impossible at just a glance.
Take the trade deficit decline that wall street is having a party today over.
Two factors play into that, one is temporary the other is the result of a bad thing not a good thing.
Temporary decline is the Japan Earthquake/Tsunami.

This may not be temporary. A lot of those plants in the affected area may never reopen. The US economy is based on a lot of possible point failures in other nations, including the tsunami area.

The other is the result of a wrecked dollar. Our products get cheaper overseas of course as the dollar declines. The dollar declining to this degree is only good for investors short term.

That result is more likely to be temporary with the EU sovereign debt crisis and Chinese housing bubble going into crisis.