Krugman: "Housing Gets Ugly"

Paul Krugman writes about the long-feared crunch in the housing market, which appears to be upon us at last:

Bubble, bubble, Toll's in trouble. This week, Toll Brothers, the nation's premier builder of McMansions, announced that sales were way off, profits were down , and the company was walking away from already-purchased options on land for future development.

Toll's announcement was one of many indications that the long-feared housing bust has arrived. Home sales are down sharply; home prices, which rose 57 percent over the past five years (and much more than that along the coasts), are now falling in much of the country. The inventory of unsold existing homes is at a 13-year high; builders' confidence is at a 15-year low.

A year ago, Robert Toll, who runs Toll Brothers, was euphoric about the housing boom, declaring: "We've got the supply, and the market has got the demand. So it's a match made in heaven." In a New York Times profile of his company published last October, he dismissed worries about a possible bust. "Why can't real estate just have a boom like every other industry?" he asked. "Why do we have to have a bubble and then a pop?"

The current downturn, Mr. Toll now says, is unlike anything he's seen: sales are slumping despite the absence of any "macroeconomic nasty condition" taking housing down along with the rest of the economy. He suggests that the unease about the direction of the country and the war in Iraq is undermining confidence. All I have to say is: pop! [snip]

There's no link to the remainder of the article, unfortunately, because the New York Times doesn't really want you to read it, so they hide it away in their premium section. I'd repost the whole thing, but I'm really not interested in having the NYT on my ass.

As for the topic at hand, though, I must say that I've been looking forward to this. Why? Because I am not currently a homeowner, and I figured out a few years ago that the only way I'd be able to afford a home is if the real estate market went through a nice big crunch. So I guess I'd better start saving up for that down payment, eh? :) I used to scoff at the idea of becoming a homeowner--after all, why would I want to mow lawn, shovel snow, pay real estate taxes, and do all that pain-in-the-ass home maintenance? I'd make a shitty homeowner, I think. But yesterday I realized that with a mortgage, I wouldn't ever have to plan on rent increases. The payment may be high to start with, but it won't go up. That would be cool. Plus, I'd never have to deal with the landlord needing to let the cable-TV guy into my closet to track down a bad connection for the apartment two floors above me, or any of that kind of shite.

Anyway, back to the Krugman column--he speculates on why the bubble is bursting, why the bubble happened in the first place and so on. One point he makes is that the tipping factor appeared to be that housing prices in general finally rose high enough so that even a lot of optimistic speculators were unwilling to take the risk, plus interest rates rose a bit. He does not mention gasoline prices, though, which appear to have stabilized at a much higher cost than they were just a few years ago. Given that most new homes are far enough away from places of employment that people would have to commute every day, I'd guess that gas prices are definitely a factor. I would be interested to see if, over the long term, the bursting bubble isn't bursting quite so hard in areas closer to cities.

Forbes columnist advocates elimination of electronic vote counting

This is fabulous:

Pull the plug

I am a computer scientist. I own seven Macintosh computers, one Windows machine and a Palm Treo 700p with a GPS unit, and I chose my car (Infiniti M35x) because it had the most gadgets of any vehicle in its class. My 7-year-old daughter uses e-mail. So why am I advocating the use of 17th-century technology for voting in the 21st century-as one of my critics puts it?

One problem, though--he says optical scanners are okay, ignoring the fact that optical scanners use computer technology and are therefore vulnerable to most of the same problems he outlines in the preceding paragraphs.**

The main point here, in any case, is that a major conservative magazine has actually printed an op-ed with an anti-DRE viewpoint. This is progress.

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**The only advantage of an optical scanner system over a purely electronic system would be the existence of the paper ballots, which would create a verified audit trail. In that situation, though, there would still be some questions. For example, the question of knowing whether or not to actually make use of the audit trail--if the vote is close, but not extremely close, it is likely that a recount would not be called for, and so any electronic tampering in that situation would go undetected. This is why I advocate a paper-all-the-way approach, counted by hand. Expensive, yes. But are we really so cheap that we don't even want to pay for reliable elections? The columnist advocates doing a hand count in a number of randomly selected precincts, to lower the probability of tampering. However, that introduces an additional layer of complexity into the process, and each layer of complexity actually creates more opportunities for fraud. How would we know, for instance, that the "randomly chosen" precincts were really randomly chosen? Wouldn't it be better to just keep it simple and do it the old way? There's no utterly corruption-proof method, but keeping the process as simple and primitive as possible puts a sharp limitation on where and how fraud can be perpetrated, thereby making it easier to detect if it does happen.

Why Wal-Mart is bad

An interesting article on, essentially, why Wal-Mart's domination of the marketplace is a bad, bad thing:

Breaking the Chain

A brief excerpt:

Examples of monopsony can be difficult to pin down, but we are in luck in that today we have one of the best illustrations of monopsony pricing power in economic history: Wal-Mart. There is little need to recount at any length the retailer's power over America's marketplace. For our purposes, a few facts will suffice—that one in every five retail sales in America is recorded at Wal-Mart's cash registers; that the firm's revenue nearly equals that of the next six retailers combined; that for many goods, Wal-Mart accounts for upward of 30 percent of U.S. sales, and plans to more than double its sales within the next five years.

The scary part is that, given the power Wal-Mart has accumulated, it most likely will be able to achieve that goal of doubling its sales, simply because it can easily steamroller anyone or any company that gets in its way. The article as a whole takes a rather theoretical approach, which I find interesting. Well worth reading, and taking to heart.

(Props to Wilyone on DWS forums for locating the article.)

"Believe in our benevolent, peace-loving God, or suffer torture and dismemberment at His hands!"

What the ‘Left Behind’ Series Really Means

It's a chilling article. This in particular struck me, though, as going above and beyond the simple exposé of these books as hate literature:

The Rapture—the time when God takes up all saved Christians before he lets loose slaughter, pestilence and torture upon the earth—is very real to people in whom its glorious and grisly promise was instilled and cultivated from birth. Even those who escape fundamentalism agree its marks are permanent. We may no longer believe in being raptured up, but the grim fundamentalist architecture of the soul stands in the background of our days. There is an apocalyptic starkness that remains somewhere inside us, one that tinges all of our feelings and thoughts of higher matters. Especially about death, oh beautiful and terrible death, for naked eternity is more real to us than to you secular humanists. I get mail from hundreds of folks like me, the different ones who fled and became lawyers and teachers and therapists and car mechanics, dope dealers and stockbrokers and waitresses. And every one of them has felt that thing we understand between us, that “skulls-piled-clear-to- heaven-redemption-through-absolute-self-worthlessness-and-you- ain’t-shit-in-the-eyes-of-God-so-go-bleed-to-death-in-some-dark- corner” stab in the heart at those very moments when we should have been most proud of ourselves. Self-hate. That thing that makes us sabotage our own inner happiness when we are most free and operating as self-realizing individuals. This kind of Christianity is a black thing. It is a blood religion, that willingly gives up sons to America’s campaigns in the Holy Land, hoping they will bring on the much-anticipated war between good and evil in the Middle East that will hasten the End Times. Bring Jesus back to earth.

One other thing that struck me in that piece: Evangelical NASCAR?!?!?! What the fucking fuck?

There's a lot more great stuff in that article. I may have to put a link to that blog in the sidebar at some point.