San Diego commercial, San Diego industrial, San Diego MLS, San Diego Homes, San Diego Real Estate

I know I've been half heartedly preaching deflation for the past 7 months, and now here we are. Let me make it clear I am not bullish on stocks or any assets now; old articles kept for the record. There is now uncertainty in the markets, yet the overall belief that inflation is inevitable. The government itself needs inflation. However, this sure seems like a bottomless pit for the financials sector, which is now joined at the hip with our government. Deflation may become ruinous, and god forbid become a trade manipulation or leveraging tool for the Fed and their banking associates to use on our government. Same principles as the Great Depression. Remember, the fed has something of an "adversarial" (for lack of better term) relationship to our government; a lender/borrower relationship, which is not exactly a love nest. The Fed is a private organization and is not a US government entity. If they suspect a US government default: what lengths will they go to? Equate it to the relationship between the US and Israel; both have common interests; but Israel is a different country with different priorities than the US; namely their own.

The financials are in trouble, big time. In the haste to survive, corruption is rampant. With the Fanny Freddy fix, the government is going to have to buy ALL this crap now, because the American consumer will not because it wont make economic sense; where the government doesn't have that luxury (y'know; of being a rational investor). Liquidity is leaving the markets. All assets have bled over the past few weeks, where fundamentally one would expect some of them to run inverse to each other: Like stocks to gold/oil for example. The deflation lately seems broad and effecting every asset class.

They all cry "we need housing to recover, then everything will be OK"... However, there are implied assumptions with the statement, "bottom in housing". The term was invented on wall street, as a correlation to stocks hitting bottom. One faulty assumption is that hitting a bottom means it will go up. I think with regards to housing; there may be a bottom but then followed by a multi year dirge of price stabilization; doesn't mean housing is a buy when it hits bottom, and will surely be a non liquid, non flexible investment. With unemployment ticking up, who can have much confidence in where they are and what they're doing? All the overbuilt suburbs and cheap rents, less qualified buyers, tighter lending (especially now after fannie freddy fix, if anything it HURTS a housing recovery!), more dinged credit reports, more inventory, prime loan defaults, etc..Not to mention all the added fees the banks have to pay when people dump their loser mortgages; property taxes, insurance, HOA's, etc..

In fact, owning is just a milder form of renting from the network of leeches (insurance, gov't taxes, agent fees) that survive on immovable assets. We are still in a negative equity expectation in housing, no reason to think it will recover or even bottom. The premium for owning is roughly 60% higher than renting. after this fanny freddy fix, consumer rates are going UP but fed rates going down. Spread will be severe. More non productive debt that will just plug holes and not benefit anyone but the banks, who will continue to bleed our governments resources (as enforced by our federal reserve masters). We are digging a hole that we may not get out of..counter intuitively dollar strength may in fact bring the dollar collapse we've all expected. We still have to think all currencies will crash along with the dollar at some point; yet civilization will continue because of government military strength.

The great bottomless pit of printed money that erodes as its created. Can the banks stay afloat until the bleeding stops? Even if they do survive, the future for banks and investment houses looks bleak. Far lower lending and sales volumes in housing, and 'dead in the water' housing prices clearly points to a prolonged, multi year housing slump. A mere run on the banks by x% of the baby boomers collapses them all. Seems like a rat race that the tax payers will get to pay for: with no overall benefit or productivity to the economy.