In other words, what? We can't afford to stop belching CO2 and farting methane? Coal is cheap again? Sure, the news is dire, but is the situation it refers to just as dire? The UK Independent wrote: "As well as reaching its lowest level against the euro, which has been trading at more than $1.47, the dollar has also fallen to its lowest level against the Canadian dollar since 1950, sterling since 1981, and the Swiss franc since 1995". In fact, the Canadian dollar spiked for 2-3 days last week to its highest level against the US dollar, but it's fallen back. In fact, the Canadian dollar had reached its highest value against the US dollar way back in 1974 -- when it was higher than it is today (Nov. 16). "Since 1950" is meaningless language for this discussion, but it sure stands out like it's really really significant. A few weeks ago Pat Buchanan misspoke or outright lied when he said the US dollar has fallen below the Canadian dollar for the first time "in 50 years". More of the same assholespeak.

Why is everyone targeting only the "subprime" mortgage crisis, when the actual mortgage culprit has been the housing price bubble of the way-overvalued properties? The truth is, there aren't enough home buyers anymore who can afford to pay those insanely inflated prices. Real estate stagflation in this market leads to a real estate crash and more dire news.

If you bought a home in 1950 for $20,000 with a 25-year mortgage, you wound up paying something like $40,000 including P+I. Maybe you were entitled to sell it for $40K or $50K in 1975, so you did. The next buyer would also pay double at mortgage's end and expect $100K. A very significant effect of this post-1970 real estate 'inflation' was that it prevented persons of certain pigment from being able to buy a home in most working- and middle-class neighborhoods. Yes, the banks, the homeowners, and the real estate companies conspired to keep white neighborhoods white when 'redlining' became criminal after 1965. That was around the time when 'slums' were re-named as 'ghettoes', at first a meaningful economic metaphor, but now it's just another euphemism for slum.

Interest rates will stay 'low' until the housing crisis turns into the lost cause everyone feared. Then interest rates will rise to attract foreign currency investment again, and slow the dangerous home-equity borrowing, and hopefully strengthen the dollar a little bit. That's how money works. US banks will take in valuable euros and yen for a year, or 5 or 10, making debt again, which isn't always a bad thing, and pay out US dollars in abundance.

When universal health care kicks in, and the government subsidizes much of it, domestic costs of most things will level off to a manageable rate because employers won't be paying for health insurance.
 

I'll blame Bush for a lot of things, but creating the housing bubble, no, that was above his pay grade. He'd have no idea how that works.

Most observers lay that at the feet of Greenspan's Fed, in a purported move to blunt the collapse of the prior bubble, the dot-com one, from tanking the economy.

Presidents generally don't dictate monetary policy (Carter and Miller and Nixon and Burns being exceptions)-- more typically, monetary policy dictates to presidents (as in Volcker to Reagan, Greenspan to Clinton, Greenspan to Bush the wiser, etc.).

...sofla
 

I disagree that the international move away from the US dollar is (mainly) the result of this sub-prime lending crisis.

It's rather the result of a long term inability of the US to make enough goods attractive to the world to balance our trade account. The import surplus over exports is roughly 6% of gdp, a very large number indeed, and something everybody has always said could not go on forever. 'Not forever' is coming right now, although it took a long time coming.

...sofla
 

http://www.realitysandwich.com/node/732
fact: capitalism is doomed to fail.