My colleague Chris Swann says to beware of housing false dawns. I couldn’t agree more. While the pace of decline in house prices moderated in April, one has to consider the stupendous monetary stimulus that helped drive that improvement. With rates about as low as they can go, the only way to drive a sustainable increase in prices is to increase buyers’ income. With the employment picture continuing to deteriorate, don’t look for rising incomes any time soon.
(Send links, pics, vids to rolfe.winkler at thomsonreuters)
The Cost Conundrum: What a Texas town can teach us about health care (New Yorker) Lawyers and insurance companies get the lion’s share of blame for running up health costs in the U.S. This piece argues convincingly that doctors themselves are deserve a good deal of blame for over-prescribing unnecessary and very expensive medical procedures.
(Send links, pics, vids to optionarmageddon at gmail)
China’s banks are an accident waiting to happen (Telegraph) Bank balance sheets are much messier in China compared to the U.S. For the moment, though, China is still at high tide. Those swimming naked aren’t being exposed.
(Send links, videos, pics to optionarmageddon at gmail with subject “link”)
China Wants Super-Sovereign Currency (Reuters) Particularly ironic: “In thinly-veiled criticism of loose U.S. monetary and fiscal policies, the PBOC urged the International Monetary Fund to exercise closer supervision of the economic and financial policies of major reserve-issuing countries.” The Rubin/Summers/Geithner prescription delivered to Asia via IMF hammered those economies in the short-run, but helped stabilize them in the long run. It’s what we need now. Monetary and fiscal stimulus are counterproductive when in debt.
The Great American Bubble Machine (Rolling Stone via ZH) Matt Taibbi strikes again, this time taking on Goldman Sachs. What makes the story so refreshing is the language RS lets Taibbi use. The fraud and corruption occurring at the highest levels of finance is obscene; Taibbi describes it with obscenities.