A love letter from a reader

J.H. Huebert, a brilliant writer, libertarian, attorney and friend, wrote this column showing that Glenn Beck is not now and never has been a libertarian (even though some people refer to him as such for some unfathomable reason).

A fellow named Leon Haller wrote in calling Huebert a "leftist plant" and a "fool," which is fun in itself, but this part piqued my interest for obvious reasons:

"You are a free market egalitarian, Huebert, and I'm going to show up at any Mises Institute event in which I know you're going to be a speaker (at least someday, when I can arrange matters properly), and I'm going to expose for the world just what leftists you and [Mises Institute founder Llewellyn] Rockwell et al really are. I knew Murray Rothbard, and he would be disheartened and DISGUSTED at the "Modals" like you which turncoat Rockwell has allowed into the formerly paleolibertarian fold. Shame on you, Lew, for selling out, and building the careers of pathetic leftist nobodies like this Huebert, McMaken, Anthony Gregory, that Kramer freak, and similar jackasses."

Wuh oh. I plan to be at the Institute in March. Maybe 'ol Leon will be there to "expose" my crypto-leftism to the world too! Meanwhile, I guess the shade of the late, magnificent Murray Rothbard will weep at our treachery.

Week 2 of the Chart of the Week feature

This time, I discuss unemployment. I'm trying to make these a little livelier, but so far the comments I've received have been good.

My favorite blog of the day: Marketing Japan

Today I stumbled across the Marketing Japan blog by Mike Rogers in Tokyo. I've corresponded with Mike a couple of times since we write for the same web site every now and then.

Being an expatriate who has fled these American shores, he's naturally one of the sanest people I know. If you're interested in learning about business from the Japanese, check out his blog.

The new "Chart of the Week" feature

I've begun putting together short videos on the economy that are two to three minutes long, and will be produced about once a week. Here's the first one. I should have another one posted by Monday:

My prediction actually came true

It's a red letter day. One of my economic predictions actually came true. Note this snippet from the Denver Business Journal:

Foreclosure filings in Colorado's 12 largest counties fell 29.5 percent in July from a year earlier, although they were up slightly from June 2010, the Colorado Division of Housing reported Thursday.
Completed foreclosures in the state's urban areas, meanwhile, fell 15.4 percent in July from 2009 and were down 10.9 percent from June 2010.
The new figures appear to back up state experts' predictions earlier this year that Colorado foreclosure sales -- the last stage in the foreclosure process if a homeowner can't work out a deal with a lender -- would start to come down after months of year-over-year decline in foreclosure-filing rates.

Huzzah. My batting average is now about .100

Government owns 46 percent of foreclosed inventory

Cross posted at Mises Economics Blog

The latest data for the S&P/Case-Shiller Home Price Index were released today. The home price index for April is still down considerably from the July 2006 peak:

As of April 2010, average home prices across the United States are at similar levels to where they were in late summer/early autumn of 2003. From their peak in June/July of 2006 through the trough in April 2009, the 10-City Composite is down 33.5% and the 20-City Composite is down 32.6%. The peak-to-date figures through April 2010 are -30.5% and -30.0%, respectively.

To paraphrase Donald Rumsfeld from a different context, it is close to impossible now to deny that the housing markets are in for a long, hard slog. Well, the places that have hit bottom are in for a slog. Some places, such as Las Vegas, are still on their way down. Comparing year over year, Las Vegas home prices actually fell 8.5 percent. April of 2009 was a disastrous month for home prices, but Vegas is now below even that.

This all assumes an owner's perspective, of course. It's a nice buyers' market out there right now for some people.

This is April data, so it doesn't compare directly to the May data I commented on here a few days ago, but the data continues to drive home the fact that home prices simply aren't going to bounce back. Thanks to bad public policy and perennial but unwarranted bullishness about real estate, lenders assumed that prices were going to bounce back. Consequently, mortgage servicers and investors have been dragging their feet on approving short sales and the liquidation of foreclosed properties.

Nevertheless, the holders of REO properties (foreclosed properties returned to the bank) are going to have to do something with them sooner or later. And worse yet, almost half of those REOs are held by the government:

Based on Radar Logic’s analysis, the federal government’s REO inventory — including homes owned by Fannie Mae, Freddie Mac, HUD, and the Department of Veterans Affairs (VA) — has increased steadily for over 24 months and now accounts for approximately 46 percent of the nation’s total REO supply.

Looking at information from the GSEs and HUD, Radar Logic says the government currently owns 209,500 homes as a result of foreclosure, and the company estimates there could be an additional 9,560 homes held by the VA, for a total of 219,060 government-owned foreclosed homes.

This will create additional downward pressure on prices for the foreseeable future.

In a larger context, the protracted growth of non-performing loans will likely continue to have a deflationary effect as lender portfolios contract with the value of residential real estate.

Twilight of the Economists

by Ryan McMaken

Cross posted at LRC blog.

The economics profession is experiencing a crisis of legitimacy. Well, not the whole profession, just the mainstream neo-Keynesian part that comprises the majority of the professional economist corps. Austrian economics, on the other hand, is in a state of renaissance since the old Keynesian sloganeering obviously isn't working anymore.

So, in response, an economist who works for the Federal Reserve, Kartik Athreya whines that the economics bloggers are mean and are undermining the real economists with PhD's who sit around with their computer models and debate whether the government should tax everything at a rate of 40 percent or 50 percent.

In reality, this isn't a matter of PhD's, since many brilliant economists from Ludwig von Mises to Joseph Salerno have had PhD's or an equivalent degree. So what Athreya really means is that non-PhD'ed economists -who point out the Olympus-like heights to which the non-Austrians have reached in being wrong about almost everything- should just shut up.

The Screed Against The Bloggers should be recognized as its very own genre of non-fiction now. It is a genre first developed by professional journalists who couldn't stand the fact that they were being upstaged by more informative, balanced and interesting bloggers who were gaining readership at the expense of the "official" organs of public information. Now the economists have joined in the game, and it's just as unseemly.

It is also worth noting, that there is no true real distinction between an economist with a PhD and one without. The National Association of Business Economists is filled with professional economists who lack PhD's but who are paid, professional economists. Yes, the economists with PhD's perhaps make up the majority of the NABE rolls, but Athreya's claim that real economists have PhD's is an arbritary novelty invented by Athreya in an effort to perhaps make himself feel better about all those years spent writing for obscure scholarly journals that no one ever reads.