Obama and the Band

Obama and his band are great salesmen, and if they don't start putting some meat into this current stimulus campaign, they'll soon look like great used car salesmen. Apparently, the $350 billion is still safely in the system; banks are simply too timid to lend it, and over $850 billion of reserves sit in the Fed's vault. Goldman Sachs wants to give their TARP money back in light of the executive pay contingency. So it's there.

Hopefully we'll see some details of this $2.5 trillion deus ex machina soon. I doubt the greed will be controlled by new regulations soon enough; the US government could very well become our new First National Bank -- for good. (A cartoon in last week's New Yorker called it First Nationalized Bank.) That may be the future: we look back at the 1990s and the 2000s as an era when men and women in suits legally stole from men and women in jeans.

Where's the fat lady and why isn't she singing?

In assuming certain measures that the Obama administration will enact, Moody's Economy.com came up with some siginificant key findings in their current house price forecast, the most eye-catching of which is that house prices will stabilize by the end of the year.

But not before sliding another 11%, according to the Case-Shiller indices which Moody's sites in their study. That gives us a peak-to-trough swing of about 36% in home prices, so when they do stabilize, we'll see housing prices similar to the ones we saw at the dawn of the new millennium.

Moody's findings go on to state that by the end of the downturn, almost 62% of the country's metro areas will have experienced double-digit declines in home prices, and in almost 10% of those metro areas, prices will have fallen over 30%.

Do not ask for whom the fat lady sings...