And so it begins anew.
Tent cities in sprouting up from sea to shining sea (
http://www.msnbc.msn.com/id/26776283/). Toyota, the largest car maker in the world laying off thousands in "Jobs For Life" Japan (
http://layofftracker.blogspot.com/2008/12/toyota-may-layoff-for-first-time-in-24.html). The world's economy contracting for the first time since WWII with a monetary loss of $50 trillion so far this year. Stock markets across the globe tumble out of control at AIG's losses. ETC. It all has a sadly familiar ring to it.
Mark, I'm still wishing that your reasons for hope prevail, but............
I have just watched the Warren Buffet interview on CNBC. He is concerned but up beat overall. However he has more to loose than the rest of us in this crash! So he has some self interest in talking things up.
I do however think strategy needs to be reviewed.
I'm amazed at the stupidity of officialdom always. Just imagine that some one even has to ponder the impact of turfing people out of homes and apartments has on the incidence of homelessness!
I do think we have to have a good look at homelessness in the context of having an inventory of over a million empty homes.
The banks have not only been stupid in creating the housing bubble, but they are culpable in its aftermath.
What I mean by this is they have kicked people out of houses and then not protected their assets. They have let them deteriorate fast, further damaging their liquidity position. They don't pay taxes, and local authorities are forced to cut the grass etc, to control mosquitoes.
I would propose that no bank that forecloses be allowed to keep a home vacant more than 30 days.
I would back legislation that would allow local authorities to confiscate bank owned property vacant more than 30 days, with no compensation to the bank. This would add to housing stock to house people with no homes, and provide a needed source of revenue to local authorities. It would also encourage banks to do everything possible to keep people in their homes, and failing that provide a source of needed rental property. At the same time it would force banks to protect their assets. It would also stop the increasing number of empty houses and limit the fall in house prices.
As I have said before, we need to know how big a hole the banks have dug. And yes, as Senator Shelby said at the weekend, some banks may need to go out of business.
We must not forget the poorer countries and emerging markets who are suffering terribly at present. If we don't extend a hand to them we will all pay a huge price and this thing will really drag on.
I think we have very little time left to get this right, and Warren Buffet said as much tonight. The next few weeks will determine whether we emerge from this in two or three years, or we have a 30 to 100 year depression. I just hope this does not turn into the greatest depression.
I can tell you one thing, enacting carbon trades is exactly the wrong thing to do!
