"The central banks are rapidly losing control. By not cutting interest rates nearly far enough or fast enough, they are allowing the money markets to dictate policy. We are long past worrying about moral hazard," he says.The biggest loser in all this will be the sprawl growth of the last couple decades. Unfortunately, real people live in those suburban sprawl houses. Meaning that, the true cost of our short-sighted sprawl will soon become more and more painful to the average suburban American.
"They still have another couple of months before this starts imploding. Things are very unstable and can move incredibly fast. I don't think the central banks are going to make a major policy error, but if they do, this could make 1929 look like a walk in the park," he adds.
But, wait, if all those financial numbers made little sense, then there's this problem too:
Americans are falling behind on their credit card payments at an alarming rate, sending delinquencies and defaults surging by double-digit percentages in the last year and prompting warnings of worse to come.The financial crash of sprawl growth has shocked even people like me who follow all of this closely.
An Associated Press analysis of financial data from the country's largest card issuers also found that the greatest rise was among accounts more than 90 days in arrears.
Experts say these signs of the deterioration of finances of many households are partly a byproduct of the subprime mortgage crisis and could spell more trouble ahead for an already sputtering economy.
I used to think that strong regulatory changes were needed to stop sprawl. Now, it's pretty clear that the financial markets are correcting sprawl themselves.
Don't believe me?
Just try and find a new suburban, single-use subdivision on a planning commission agenda. You generally can't because they've been stopped cold in their tracks.
No buyers. Few lenders. Hesitant developers. The perfect storm to stop sprawl.
Unfortunately though, real people will end up realizing real big problems because of this. This is very unfortunate, but ultimately a necessary part of the process toward correcting our unsustainable mistakes.