Monday, May 26, 2008
“Just give me a one-armed economist.” President Harry S. Truman
President Truman was referring to the infuriating way in which economists would hedge themselves about their economic recommendations and prognostications. Classical economic theory is PERFECT for reviewing the data and telling you what HAPPENED AFTER THE FACT. A lot of good THAT does you...
The bigger problem is that every economist the public hears from is one that is being compensated to "talk his book", or that of his employer. You are not hearing an independent analysis ANYWHERE in the mainstream media.
I am referring to the "surprise" housing numbers. Who was surprised? Until housing prices go low enough to clear the current inventory and restore a balance between buyers and sellers this will be the crisis de jour (de anno?) for many years to come.
I live in Boca Raton, Florida, a wealthy enclave of New York and environs transplanted nouveau riche. In the last couple of months downtown Boca Raton has become a ghost town. Empty stores, failed restaurants, no trouble finding a parking space - in one of the most appealing places to live in the most appealing country to live in in the world.
South Florida is a second home and travel and leisure destination - and its economy and housing market are doomed. You heard it here first:
Traffic in to South Florida's Fort Lauderdale, West Palm Beach, and Miami Airports will be down 20% in 2010 from 2006, 50% by 2015. Florida will have no choice but to cut government services to the bone while increasing the sales tax to 8 or 9%. The property value implosion here will be like nothing ever considered, irrespective of how much the currency is devalued and how much hyper-inflation the Fed can arrange. And if you think things are bad in South Florida, Orlando is in much deeper s--t.
Of course, this is only if we are lucky. If we get unlucky, and take a direct hit from a major storm... you better have the means to permanently relocate, because it is lights out.
"An ounce of prevention (preparation) is worth a pound of the cure".
Mentatt (at) yahoo (d0t) com