Rent vs. Buy Comparison Pushing People into Homes

For Aaron Carter, a musician who was struggling to fit a drum set, a piano and three guitars into his 600-square-foot apartment in Phoenix, the math on owning a home finally began to work in his favor.

Rent for the apartment he shared with his wife: $615. Mortgage payment for a home with twice the space: $760. And the interest on a mortgage is tax-deductible. So they jumped at the chance to buy some elbow room.

"We figured that everything together, getting more space, getting out of the apartment life and also just the prices right now, it just was the perfect time for us as a couple" to buy, said Carter, 20. (more)

Riding out the Recession and whatever else is thrown your way

One of the arguments against stockpiling food. First off.... why bother? The supermarkets are always full, aren’t they? Why spend the extra money? If you are reading CFP, you must have some sense that the world has changed--and not for the better.

Even the Government is encouraging us to have “Three Days” supply until you can be “Relocated.” Maybe I’d rather not sleep at a stadium and stand in line for a bowl of soup with my 20,000 new “best friends?”

Another reason in one word? KATRINA? The US Government couldn’t handle ONE large population center being hit by a hurricaine. (more)

Preparing for the coming Economic Tsunami

As discussed in parts 1 though 3of this series, the global demand for energy, and fossil fuels are expected to increase. At the same time, the supplies to meet that demand are declining. We examined how the gap between supply and demand is at risk of becoming too large and making the current economic crisis far worse. Finally we examined how a comprehensive policy that includes increasing U.S. supply and decreasing U.S. demand for fossil fuels can help ensure that we have access to a cost-effective and reliable source of energy for the foreseeable future.

The unfortunate fact is that the U.S. government seems unwilling, or unable to develop a comprehensive Energy Policy that could help prevent this economic collapse. Indeed, many members of the Senate and Congress, as well as the Obama Administration, seem bound and determined to attack our industry and make it all the more likely to create a significant gap between supply and demand. (more)

US financial market bailout tab hits $4.7 trillion

WASHINGTON – The federal government has devoted $4.7 trillion to help the financial sector through its crisis, a level of assistance equal to about one-third of the overall U.S. economy, a watchdog report said Monday.

Under the worst of circumstances, the report said, the government's maximum exposure could total nearly $24 trillion, or $80,000 for every American.

The figures are part of a tough new quarterly report to Congress from special inspector general Neil Barofsky, who accuses the Treasury Department of repeatedly failing to adopt recommendations aimed at making one component of the government financial rescue effort more accountable and transparent. (more)

Rep. Grayson VS. Bernanke

Global Exposure in Financial Derivatives Surpasses One Quadrillion Dollars (Update)

When I posted the lowest responsibly sourced figure for global exposure in financial derivatives, $592 trillion, published May 19, 2009 by the Bank of International Settlements, all sorts of hoodoo apologists for Obama, Geithner, Summers, and Goldman Sachs crawled out the woodwork to claim that this figure is ridiculously exaggerated, there's really nothing to worry about, it's just a few bucks, and so on.

All the same hoodoos unfailingly claimed that it's stupid to consider worst-case scenarios when you calculate risk, because...

They have learned absolutely nothing from the ongoing financial meltdown which annihilated some of the oldest and largest investment banks in the world, and plunged the global economy into an almost vertical downturn. (more)

Are Banks Really on the Mend?

You can rest easy today… the financial crisis is over.

CIT Group, the new epicenter of systemic financial risk, got thrown a lifeline this week from its bondholders. As we reported Friday (link), the company needed $3 billion — fast — in order to stay afloat. It was rightfully denied a government bailout, but was able to strike a last-minute deal with holders of its debt. Of course, the market rejoiced… the S&P 500 rose 1.1% yesterday largely on the news.

But again, we’re calling the market’s bluff. Anybody read the fine print of this deal? The loan was secured by “substantially all unencumbered assets.” That lawyer talk means CIT will have no collateral left over for a similar deal in the future. What’s more, the company will have to pay 13% annually on the $3 billion loan… no small order. (more)