Six Things about the US Economy that should scare you to Death

The Public Pension Crisis. State and local governments across the nation have accumulated $4.798 trillion in pension obligations, but they have only $3.607 to cover the promises to employees, The Hoover Institution calculated. That means they will have to come up with $1.91 trillion, and the most likely place it will come from is cutting basic government services.

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More Proof that a Real Estate Bubble is Brewing

A brokerage called ValueInsured is now selling something called +Plus, CNBC’s Realty Check reported. Unlike traditional mortgage insurance; which reimburses lenders, +Plus pays the buyer up to 20% of the home’s value or the down payment in case the property ends up underwater.

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Does Lowe’s Make Money?

This uneven real estate market could be a threat to Lowe’s because much of its success is based on the presumption that Americans will constantly want to improve their homes to increase value. If real estate prices stop going up or start falling dramatically, there could be little or no incentive for home improvement.

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Situation in Seattle Shows Why America Has an Unsolvable Housing Crisis and a Real Estate Bubble

What that really means is that the property values of mostly white, upper middle class people are more important than meeting a basic need of working families. It is perfectly okay for waiters to sleep in their cars and the poor to live under bridges as long as the high values of Amazon.com and Microsoft executives’ homes are maintained. Jeff Bezos does not have to worry about anybody constructing an apartment house on his block.

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Real Estate Prices Near 2006 Levels or Are They?

A more likely scenario is that the collapse of the bubbles in areas like Denver and the Bay Area will drag down real estate prices nationwide and further depress the market. A real estate market collapse is likely, but it will not be a bubble; instead, it will be deflation as housing costs fall because of lower demand. The factor most likely to trigger that event would be an increase in mortgage interest rates.

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Real Estate Bubble on the Coasts

The difference is that this real estate boom is confined to specific parts of the country; it is not happening on Main Street, and the middle class is not participating.

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Average Family Cannot Afford to Buy a Home in 13 Major US Cities

One has to wonder how major cities like Los Angeles and Chicago can survive with just the very rich and the very poor. That sounds more like a third world country than the United States of America. It also sounds like a recipe for social and political unrest.

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