inkbluesky

snow in my boat  

Bubble, Bubble, Toil, and TroubleUh-oh. The housing bust is just beginning.

The other reason it’s so hard to call a bottom has to with how bubbles burst. After investors and corporations overreact on the upside, they overreact on the downside. As a result, it generally takes more than a few quarters for equilibrium to return to turbulent markets. For example, lenders are just now starting to tighten standards on the loans they make to subprime borrowers—a measure that is sure to weigh further on an important sector of the housing market.

All of which means that the housing industry in 2007 may be where technology was in early 2001—engaged in the first serious hard times the industry had seen in more than a decade, finally aware of the problem, but still a long way from the bottom.

Daniel Gross at Slate compares the signs at the beginning of the tech bubble burst of 2000 with the current trends in the housing bubble. I’m a well indoctrinated little capitalists and realize that the markets are at least to some degree self-correcting. Still abstractions about market corrections do not quite address the real economic pain of those like myself that grew up hearing the mantra that you can’t go wrong with real estate. While that will always be true in comparison to pork belly futures, for ten percent or more value to drop out of what is to many people their major investment is going to cause some real hurt. Hurt with repercussions in the furniture, appliance and mortgage industry.

Eating Better Than Organic or the search for the perfect apple.

Nearly a quarter of American shoppers now buy organic products once a week, up from 17% in 2000. But for food purists, “local” is the new “organic,” the new ideal that promises healthier bodies and a healthier planet. Many chefs, food writers and politically minded eaters are outraged that “Big Organic” firms now use the same industrial-size farming and long-distance-shipping methods as conventional agribusiness. “Should I assume that I have a God-given right to access the entire earth’s bounty, however far away some of its produce is grown?” asks ethnobotanist Gary Paul Nabhan in his 2002 memoir, Coming Home to Eat: The Pleasures and Politics of Local Foods. Nabhan predicted my apple problem when he vacillated over some organic pumpkin canned hundreds of miles from his Arizona home. “If you send it halfway around the world before it is eaten,” he mused, “an organic food still may be ‘good’ for the consumer, but is it ‘good’ for the food system?”

This reminded me of an article that I can’t find at the moment from a few months ago that made a very convincing case that buying locally made products as much as possible was actually better for the environment then buying a Prius. Though buying local and buying a car that averaged 40+ mpg couldn’t hurt. If there is anyone to look back a hundred years from now at one of our big mistakes, one of them will be the infrastructure necessary – from highways, to gas guzzling trucks to make it possible for someone to eat fresh California strawberries in New York in the dead of winter.