What makes the recent crisis particularly interesting is the role of the government. The U.S. government has been unequivocal in its intention to promote universal home ownership and thereby lessen inequality in the attainment of the American dream.
The latest issue of the NFIB Small Business Economic Trends is out today. The June update for May came in at 94.4, which, despite a 3.2 point gain, remains in the lowest quartile of this indicator across time at the 22nd percentile in this series.
Earlier this month, in an article for “Project Syndicate” famous American economist Nouriel Roubini joined the chorus of those who declare that the multi-year run up in the gold price was just an almighty bubble, that that bubble has now popped and that it will continue to deflate.
Three factors – volcanic debris, more variable polar jet streams and increased human habitation in high-risk areas – are creating extreme weather and high insurance payouts. Some of these are temporary while other factors will last for decades.
Back in 2002 Warren Buffet famously proclaimed that derivatives were ‘financial weapons of mass destruction’ (FWMDs). Time has proven this view to be correct. It is difficult to imagine that the US housing and general global credit bubble of 2004-07 could have formed without the widespread use of collateralized debt obligations (CDOs) and various other products of early 21st century financial engineering.