little boxes made of ticky tacky

From Yahoo! Finance:

The downturn has accomplished what a generation of designers and planners could not: it has turned back the tide of suburban sprawl. In the wake of the foreclosure crisis many new subdivisions are left half built and more established suburbs face abandonment. Cul-de-sac neighborhoods once filled with the sound of backyard barbecues and playing children are falling silent. Communities like Elk Grove, Calif., and Windy Ridge, N.C., are slowly turning into ghost towns with overgrown lawns, vacant strip malls and squatters camping in empty homes. In Cleveland alone, one of every 13 houses is now vacant, according to an article published Sunday in The New York Times magazine.

The demand for suburban homes may never recover, given the long-term prospects of energy costs for commuting and heating, and the prohibitive inefficiencies of low-density construction. The whole suburban idea was founded on disposable spending and the promise of cheap gas. Without them, it may wither. A study by the Metropolitan Institute at Virginia Tech predicts that by 2025 there will be as many as 22 million unwanted large-lot homes in suburban areas.

I can't find a post now, but I know I've talked about this possible effect of the housing crisis. Essentially, as property values plummet in the suburbs and rise in the cities, we may see a reversal in our population as the working poor are displaced from the cities and move out into McMansions divided into apartments, while the wealthy and middle class relocate to the cities. The process has a feedback loop built into it, as the presence of brown people scares more whites out of the suburbs and the higher property values in the cities continue to climb as the wealthy move in and their tax dollars contribute to better school systems, more attention from the city council's road repairing committee, etc., thus making them even less affordable for the poor.

I hate the suburbs. I hate everything about the suburbs. They're wasteful. Their relationship to the cities they rely on is parasitic. They're the products of residual, unconscious racism/classism. They're conformist, insular, and nostalgic for a bubble gum Eden that never existed. They're plastic in both the literal and figurative senses, all packaging and presentation, and made primarily of petroleum. As much as I hate the suburbs and wish people would wake up and move the hell out of them, perhaps the only situation worse than all the rich people living out in the 'burbs is all the working poor living out there, miles and miles from their jobs, from everything, with little or no public transportation, trying to divide those flimsy, plastic castles into apartments. If it becomes clear that this is going to happen, cities and states need to be scrupulous about preparing the suburbs for the change by improving their transportation infrastructure and getting serious about home inspection, or this is not going to go well.

that's you and me they're screwing

From The Washington Independent:

Well, there's a fine way to thank the U.S. government for its trouble: Bloomberg reports that investment banks may be packaging high-risk corporate loans into securities to use as collateral for borrowing from the Federal Reserve.

You might recall that the Federal Reserve last month opened its discount window for borrowing money at cheap rates to non-banks for the first time since the Great Depression. It was a radical step, aimed at easing the credit crunch and unlocking the markets.

Remember, folks, where does the Fed's money come from? Our taxpayer dollars. And what happens if the junk loans (aka. "Big Shitpile") go into default after they get turned over to the Fed?

If I had to guess, I'd say the financial institutions who used them as collateral will say to the Fed, "Actually, we're gonna pass on the whole 'paying you back' thing. You can keep our 'collateral.'"

And that, my friends, is the story of how we bailed out the banks and financial institutions who spent the last decade yoking us to permanent, crushing debt.

nothing "lone" about it

AP says Texas tops the charts of population growth again:

Dallas-Fort Worth added more than 162,000 residents between July 2006 and July 2007, more than any other metro area. Three other Texas areas - Houston, Austin and San Antonio - also cracked the top 10.

Atlanta saw the second-largest population jump with just over 151,000 new residents. Phoenix was third with more than 132,000, and was followed by Houston, Riverside, Calif., Charlotte, N.C., Chicago, Austin, Las Vegas and San Antonio.

Surprisingly, Lubbock didn't make the list.

I'm a little surprised that there's so little growth in the Northeast. The property values thing makes sense (and yes, houses are a lot cheaper in Texas), but I thought everybody wanted to move either to NYC or Boston.

wait a minute, to "save" them?

I knew the banks had gotten themselves into some trouble, but unless the reporter used sloppy wording, I had no idea it was this bad. From Marketwatch:

Mideast sovereign wealth funds may fail to save troubled U.S. banking giant Citigroup Inc. unless more cash is pumped into the lender, the head of a $13 billion Dubai-owned investment firm said Tuesday.
Sameer Al Ansari, Chief Executive of Dubai International Capital told delegates at a private equity conference that it will take more than the combined efforts of the Abu Dhabi Investment Authority, the Kuwait Investment Authority and Saudi investor Prince Alwaleed bin Talal to save the bank.
"It's going to take more than that to rescue Citi," Ansari said. He added that more write downs are expected and that Gulf investors would be required to bolster Citi.

This sounds like Citigroup is in very real danger not only of losing more profit or downsizing or layoffs, but actually of closing. Citigroup, by the way, is the largest firm in the world, with assets over $2.4 trillion. The ramifications of any major bank closing, with its echoes of 1932, would be enormous; Citigroup's demise would be something truly ominous. For those of you interested, Accrued Interest has a nice article dealing with the question of whether Citigroup is too big for the government to allow it to fail.

Maxed Out

See this movie. It's one of the best documentaries I've seen in a long time. I don't even have any credit card debt, and parts of this movie puckered my sphincter.

We are so f**ked.

It reminds me of an important point that Atrios made a couple of months ago, the long and short of it being that people implicitly trust financial institutions more than, say, used car salesmen, but nowadays that trust is badly misplaced. Millions of people are paying dearly for assuming that Bank of America wouldn't intentionally push them to take on a loan or credit line they aren't equipped to handle.

the truth behind the housing/lending crisis

Bob Herbert tells a story, and it's unbelievable.

These companies will, in all likelihood, be saved by the government when they should be allowed to drown (or perhaps even thrown an anchor), and Ms. Dailey will get the opposite treatment.

But don't worry, Senate Democrats will burn a couple of weeks strongly demanding George W. Bush accept completely voluntary, advisory timetables for withdrawal in Iraq before completely caving and writing him another hundred billion dollar check.

what a genius

Great work from Tom Tomorrow. I will remind you, also, that Greenspan spent much of his life prostrating himself before the wisdom of Ayn Rand.