File this one under:
How This Economy Is Going To Play Out by Ian Welsh at Fire Dog Lake.
Welsh wrote some dire predictions about the US and world economies in this post from November. He revisits the post and italicizes which ones have already come true in the last four months:
1) Housing prices and sales will continue to decline. Expect 3 years before the bottom, as a very optimistic best case scenario.
2) Commerical real-estate will suffer a steep decline as well.
3) Consumer demand will drop. Unemployment will rise.
He continues on through number ten and even adds four more bonus predictions, here’s one:
15) A serious collapse of the US stock market, probably by September at the latest. Maybe within a couple months.
Read the full article as he goes in depth as to the “why” of the equation. This particular paragraph really hit home:
The old, oil based, suburban sprawl economy based on forever rising house prices, on easy credit, on subdivision after subdivision–on running up credit cards and on leverage piled on leverage piled on arbitrage, is in the middle of cracking up, spectacularly…Huge swathes of exurbia and suburbia become simply economically unviable. Zombie Burbs.
If you wanna get a litmus test as to the validity of what this guy is saying, just ask someone who manages money (not your money), like a hedge fund manager. We did, three months ago. and they said the same exact thing.
[FireDogLake article via Digg] and [zombie suburbs article via Curbed LA]
Wow, Ed. I already dig (enjoy) Quality Peoples a ton for the existing approach to content. Now there you go linking all sorts of meta-politcal and highly interesting stuff, adding another dimension here. I watched all through the 1990’s as corporate America and American politicians seemingly simultaneously lost their post-recession jitters from the 1990 recession and went growth crazy on the drug of cheap money. I wondered if things would recur all over again, but much worse (unemployment, instability in major pillars of “the economy,” and global political tension/war). And lo, here we are. Thanks for the links (especially the Zombie Suburbs thing), and keep it up. Buenos.
David, Seattle