economic crisis

Today I was planning on a post about Quantitative Easing (QE), because it seemed to me that it would never work. However, today, Randy Wray beat me to it with another great post, this time at ND20, reviewing the whole situation in detail, placing it in political context, and explaining why it's very unlikely that it will allow the economy to recover much more than it has already. Here are some key quotes from Randy's piece. Read below the fold...

[Author's note: This has been re-posted by Joe Firestone (a.k.a. letsgetitdone) on behalf of author Warren Mosler with his express permission. Warren Mosler is currently the Independent Party candidate for the US Senate in CT]

By

Warren Mosler

The latest mortgage foreclosure mess is just another financial crisis.

It’s not a real economic crisis- no houses have been actually destroyed- no fire, hurricane, or earthquake damage, etc.

So the responses aren’t about bulldozers, hammers, concrete pouring, etc.

The question is whether this financial discovery/event spills over into the real economy. Read below the fold...

[cross-posted at NPR Check]

How would you complete the following sentence:

For nearly two years the US economy has been battered by a recession brought on by _________________.

Read below the fold...

I know we've seen The Big Picture visualize a trillion dollars, but here's another version in video form. From Mint: Read below the fold...

A long piece, in Rolling Stone. I won't try to, ahem, summarize him here, the work is very dense and any attempt to condense it I fear would leave out something important. Go and read, please. Read below the fold...

While there are many factors that explained the “housing bubble”, one culprit is the “new home” industry itself, which stopped building “affordable” homes..

· Nationally, in the first quarter of 2005, 31,000 new homes priced under $125,000 were sold. In the first quarter of 2006, that number had declined to 18,000 homes, and by fourth quarter 2007 that number was down to 8,000.

· The number of new homes sold in the $125k-$249,999 range declined from 34,000 in first quarter 2005 to 26,000 in first quarter 2006, declining to only 14,000 by fourth quarter 2007.

· And for the $150k-$199,999 range, sales fell from 66,000 in first quarter 2005 to 57,000 in first quarter 2006, before plummeting to 33,000 by fourth quarter 2007.

Read below the fold...