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Ten Days That Changed Capitalism
David Wessel, Wall Street Journal
The past 10 days will be remembered as the time the U.S. government discarded a half-century of rules to save American financial capitalism from collapse.
On the Richter scale of government activism, the government’s recent actions don’t (yet) register at FDR levels. They are shrouded in technicalities and buried in a pile of new acronyms.
But something big just happened. It happened without an explicit vote by Congress. And, though the Treasury hasn’t cut any checks for housing or Wall Street rescues, billions of dollars of taxpayer money were put at risk. A Republican administration, not eager to be viewed as the second coming of the Hoover administration, showed it no longer believes the market can sort out the mess.
… In ordinary times, a capitalist economy lets prices — such as those of homes, mortgage-backed securities and stocks — fall to the point where the big-bucks crowd rushes in, hoping to make a killing. But if the big money remains on the sidelines, unpersuaded that a bottom is near, the wait for bargain hunters to take the plunge could be very long and very painful.
So the next step, no matter how it is dressed up, is likely to involve the government’s moving in ways that put a floor under prices, hoping that will limit the downside risks enough so more Americans are willing to buy homes and deeper-pocketed investors are willing, in effect, to lend them the money to do so.
(28 March 2008)
Dollar chilled by rise of euro
Richard Wachman, The Observer
The once-unchallenged world hegemony of the US currency is under threat as its value
Lurking behind the headline-grabbing stories about the credit crunch, the US housing crash and the near-death experiences of Northern Rock and Bear Stearns, is the bigger one about the slump in the value of the American dollar.
So steeply has the greenback fallen in value against its main rivals – the euro and the Japanese yen – that economists are talking about the dollar losing its status as the world’s reserve currency, a position it has held since 1945.
Commentators have written the dollar’s obituary on countless occasions over the past 40 years, principally in the late 1970s and early 1990s, when America’s economic performance compared badly with that of Japan or Germany.
So what is different about today? There are two answers: globalisation and the existence of a rival in the form of the euro, the currency of choice for an economic bloc that is as big as America’s.
(30 March 2008)
U.S. Suburban Sprawl, By the Numbers
Dan Shapley, The Daily Green.
The latest data from the U.S. Census Bureau reinforce a vision of the United States where population growth and suburban sprawl will have to confront serious water shortages in the years to come.
Nine of the 10 fastest growing counties were located in South or West, with water-stressed areas like Phoenix, Atlanta and parts of Texas among the leaders.
… Phoenix, like much of the Southwest, relies on massive dams and aqueducts from the Colorado River to remain viable. Meanwhile the desert region has been suffering through a decades-long drought. One recent study predicted that Colorado River reservoirs could run dry in less than 15 years – not enough time to pay off the mortgage on all those new homes. Clark County, near Las Vegas, Nev., which also relies on the Colorado River, also made the list of 10 fastest-growing counties by sheer numbers, with 461,000 new residents sine 2000.
Atlanta, too, has been sprawling outward, with three suburban counties making the nation’s top 10 list for fastest rate of population growth since 2000, with population growth between 56% and 62%. The Southeast has confronted an historic drought in the past year, and some long-term projections say global warming could result in the traditionally wet region being starved for water in the coming decades. The demand for water has prompted Georgia to fight Alabama and Florida for rights to some river systems, and Tennessee for others.
(27 March 2008)
They’re Going To Have To Give Them Away In Florida
Ben Jones, The Housing Bubble blog
The Herald Tribune reports from Florida.
“The crowd filed in to the large white tent behind the Bahia Mar resort for Friday’s real estate auction organized by Sotheby’s and Daniel DeCaro Auctions as a four-piece jazz band played a peppy rendition of ‘I Feel Good.’ Only a handful of the properties would be selling absolute, where any bid would be accepted. The rest carried a non-disclosed reserve, or minimum bid. The auction, which was anticipated to take four to five hours, wound up clocking in at barely two.”
“The first property out of the gate was not a good omen: auctioneer Daniel DeCaro tried opening the bidding for 1850 South Treasure Drive in Miami Beach, a waterfront lot, at $1 million. There was no response.”
“He then tried to get something started at $500,000, but again, no dice. $250,000? Still dead air. $100,000? Silence. At that point, DeCaro threw in the towel and passed the property by.”
“‘Please come see us afterwards,’ he told the crowd.”
“By the time it was over, 67 of the 99 properties on the block had no bids. ‘This was a disaster,’ said Fort Lauderdale broker Paul Merlesena following the auction. ‘They’re basically going to have to give them away now.’”
(30 March 2008)
Collection of article excerpts about Florida real estate.
Contributor Jeffrey Brown writes: “Future business opportunity: converting suburban lawns and golf courses to organic gardens and farms.”
Silent Insect Killer Ravages American West: pine beetles (text and vidio)
Sam Champion, Raquel Hecker and Olivia Sterns, ABC News
Global warming is contributing to an epidemic destroying the American West.
The American West is under attack by a silent killer that’s causing some of the worst-ever destruction to hit the nation’s forestland: the mountain pine beetle.
“People are looking out their windows and seeing dead trees where they used to see green,” said Sandy Briggs from the Forest Health Task Force in Aspen, Colo.
Despite their small size (approximately 5 millimeters when fully grown), these beetles are doing enormous damage, wiping out millions of acres of lodgepole pines as an epidemic of them explodes across the West.
(28 March 2008)
Video is online.