.. some swindles they push ...
.. come back to bite 'em
Here is an interesting graph:
I got the graph from Barry Ritholtz here, cited by Mike Whitney here. Ritholtz quotes his source: Ron Griess of The Chart Store.
The thing that I find sooo interesting is the point of down-turn; it well pre-dates the identified start of the so-called 'derivatives melt-down:' "the collapse that began in late July 2007 with the emergence of the subprime crisis," atimes/W Joseph Stroupe. Then a Q: If I can see this, why can't others - or if they can/have done, why no, or at least so little, chatter about it? Ritholtz's final comment is "Astonishing ..." and I agree, but for a different reason; apart from the obvious, i.e. the dramatic "over the cliff" decline, but also from the timing of the chart's peak, i.e. the start of the crash (of housing starts, remember.) According to this article in The Economist, US house-prices are "down 30% since their peak in mid-2006." According to the graph, housing starts peaked on or about 1/31/06, i.e. start-'06. As usual, there are lags, so now to my biggest Q (here): What happened, before late July 2007, before mid-'06, before even start-'06 - what triggered it all; the house-price falls, the house-start stalls, then the Wall-St rout?
An interesting forensic question; I have addressed it in a slightly different form starting looong ago, seems the 1st mention that I made of the Howard/Costello CGT-halving might have been 030805 (YYMMDD, and then Oh, s**t! - I'm still moaning about it!) Before we leave this, you might ask Q: *Exactly* why is this sooo interesting?" - and the answer is A: Because the 'derivatives mess' is *secondary*, being financial finagling based partly as it is on the (hyper!)inflation of house prices (as good as criminally aided and abetted by Howard/Costello in Aus), which in turn in the US is based on the true, real reason behind all of these problems, namely the (hyper!)irresponsible 'printing' of US$s, and the resulting asset-price bubbles. IF ... THEN; the massive bail-outs, by many estimates now into multi-trio figures are all being directed at a secondary problem, all that dough landing who-knows-where (but we can make a 'good' guess (actually, of course bad one)) - but the 'primary' cause stays largely unacknowledged, let alone treated - much less cured. Q: How incredibly odd is that!!? A: Utterly, (terminally!) gobsmacking!
more neither Arthur nor Martha ...
Posted by IDHolm at 12:09