Henry Paulson

The Economist Magazine Investigates Preppers

“Some Americans find survivalists sinister. After Adam Lanza shot 26 people in a school in Newtown, Connecticut in 2012, the media made much of the fact that his mother was a gun-stockpiling prepper. Yet there is no evidence that preppers in general are more dangerous than their compatriots. On the contrary, when natural disasters strike, it is useful to have neighbours who know how to stormproof a house and have bandages to spare.”

The Economist website, December 17, 2014

Late this morning, I stumbled on an article on The Economist website about preppers. I just finished reading “Preparing for the apocalypse: I will survive,” and thought I’d blog about it a little. The author (couldn’t find a name attached with the piece for some reason) did a pretty good job writing about preppers/survivalists, not falling victim to the usual stereotypes/generalizing echoed in a comment on the article. From “walrusandthecarpenter”:

Preppers are people who are unhappy with their life and can’t wait for the end of the world to come and the tables to turn. They are excited for it to happen.

Me? I like my smartphone. I have a first aid kit though.

“I like my smartphone.” What a goof.

Like I was saying, the author did a pretty good job (points deducted for trying to link those Westboro folks to preppers) with the material. I found what James Wesley, Rawles of SurvivalBlog.com-fame had to say particularly interesting. From the article:

So how might TEOTWAWKI come about? The biggest threat, says Mr Rawles, is a huge solar flare. The last big one, in 1859, known as the “Carrington Event”, disabled telegraph lines. A similar disaster today would “fry the circuitry” of electronic devices and take out the power grid “from end to end”. It would take years to reactivate. Perhaps 60% of the American population could die, predicts Mr Rawles…

I’ve seen some put that die-off figure at 90 percent.

There was also this about present-day preppers:

Survivalists vary politically—just as they are dispersed geographically—and their views colour their apocalyptic imaginings. Many are conservatives, worried about crime, terrorism and hyperinflation and sure that the state cannot be relied upon to protect ordinary citizens. But a fair number are environmentalists, convinced that the planet can only take so much abuse before it becomes uninhabitable. The movement is broad enough to encompass anyone who suspects that disaster is looming, for any reason. It used to be mostly “Bible-believing Christian conservatives”, says Mr Rawles, “But now we have a lot of alfalfa-munching Birkenstock-wearing leftists.” He adds: “The more the better.”

One more reason for me not to bash specific political ideologies/parties- except when they really ask for it, of course.

(Editor’s note: Any former readers of Boom2Bust.com out there remember when I used to savage “Dubya” and Hank Paulson? Thinking of that reminds me this giant economic mess belongs to both sides of the political aisle.)

Jason Charles, a New York firefighter of Doomsday Preppers-fame (blogged about here), is also featured in the piece.

You can read the well-written article in its entirety on The Economist website here.

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

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Signs Of The Time, Part 23

From the “Moving on Up” section of the Chicago Tribune web site:

Henry M. Paulson Jr., distinguished senior fellow, University of Chicago

(June 30, 2011)

Henry M. Paulson Jr., former Treasury Secretary and chief executive of Goldman Sachs, has been appointed as a distinguished senior fellow at the University of Chicago Harris School of Public Policy Studies. The five-year appointment began July 1. Paulson brings four decades of experience in public policy and economic issues, culminating in his tenure as U.S. Treasury Secretary from 2006-’09. He also has extensive experience in policy and business issues concerning China. His work at Chicago Harris will include research collaborations, speaker series, conferences, workshops and other events and programs. Besides joining former Chicago Mayor Richard M. Daley at Chicago Harris, Paulson also is creating the Paulson Institute, an independent entity at the U. of C. that will seek ways to foster cooperation between the U.S. and China. Paulson served President George W. Bush as the secretary of the Treasury and was a leading policy adviser on a broad range of domestic and international economic issues. Before that, he spent 32 years at Goldman Sachs, serving as chairman and chief executive since the firm’s initial public offering in 1999.

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Friday, July 8th, 2011 Banking, Signs Of The Time No Comments

The Housing Bubble Is Pricked

Housing Rebound Ahead?
June 6, 2007

The latest housing headlines come from the National Association of Realtors (NAR), which is reporting that home sales and prices in 2007 will decline more than originally forecasted before picking up later in the year. A month ago, the NAR predicted that existing home sales would decline 2.9% and home prices would drop only 1%. Now, the Association is calling for a 4.6% decline in existing home sales to 6.18 million units. They also forecast that the U.S. median existing home price will fall 1.3% to $219,100. The NAR is also revising its new home numbers. The median price for new homes will fall 2.3% to $240,800 with new home sales declining 18.2% to 860,000 units. Last month, they predicted new home prices would remain unchanged with sales totaling 864,000 units. The trade group, representing more than 1.3 million real estate professionals, has revised its forecasts downward several times since the beginning of the new year.

The NAR continues to predict the first annual decline in the median national existing home price since it began compiling data in the late 1960s.

However, the National Association of Realtors did offer a glimmer of hope for the beleaguered housing sector. “Home sales will probably fluctuate in a narrow range in the short run, but gradually trend upward with improving activity by the end of the year,” says Lawrence Yun, an economist for the trade group. In 2008, existing home sales are projected to rise 3.7% to 6.41 million units. The national median existing home price is forecast to rise 1.7%. The median new home price is expected to rise 2.6% next year as well.

It is still too early for the National Association of Realtors to call an end to the housing bottom. The sub-prime mortgage debacle has led to a tightening of lending standards, making it impossible for a growing number of potential homeowners to get credit. Also, the rising number of foreclosed properties is adding more supply to the inventory glut. ZipRealty Inc., a national real estate brokerage firm based in California, just released a report showing the number of homes listed for sale in 18 major U.S. metropolitan areas at the end of May was up 5.1% from the previous month. This is important because on a national basis, housing inventories have typically remained unchanged in May over the last two decades, reflecting the fact that May is a peak home-selling month as families are moving during the summer vacation. The growing inventory of unsold homes will continue to put downward pressure on prices as well as sales, since the remaining buyers will hold off until better bargains come along.

Housing Slump Ends In 2 Months
June 22, 2007

In an interview with Bloomberg on Tuesday, Bank of America’s Chief Executive Officer Kenneth Lewis said the U.S. economy will pick up speed due to a recovery in the housing sector. Lewis predicted, “You’ll see the economy begin to pick up in the third and fourth quarters, and the slowdown in home sales is just about to be over.” He went on to say that the housing market will begin to improve in the next month or two, forestalling a recession, according to Bloomberg. Lewis believes that job growth will lift home prices and reinvigorate construction by early 2008.

However, as Bloomberg pointed out, Mr. Lewis’ views contradict those of other market watchers, including money manager Paul McCulley of Pimco. At a Bloomberg News panel discussion on Tuesday, McCulley insisted that, “The housing-market recession ain’t over. It’s going to be a long, protracted recession.” Some are willing to go farther than that. Mark Kiesel, executive vice president of California-based Pacific Investment Management, said in Bloomberg yesterday, “It’s a blood bath. We’re talking about a two- to three-year downturn that will take a whole host of characters with it, from job creation to consumer confidence. Eventually it will take the stock market and corporate profit.” Nouriel Roubini, a former Treasury Department director under the Clinton administration and head of Roubini Global Economics in New York, added, “It’s not just a housing recession anymore, it looks more and more like an economic recession.” Roubini believes the chance of a recession in 2007 is at “50-50,” greater than the 33% chance former Federal Reserve Chairman Alan Greenspan was calling for back in March.

It will be interesting to see just how Mr. Lewis’ housing prediction pans out 2 months from now. I’m circling August 19 on my calendar!

Paulson Weighs In On Housing
July 3, 2007

Today, U.S. Treasury Secretary Henry Paulson spoke to Reuters about a number of economic issues, including housing. Paulson said the U.S. economy is healthy, despite problems with the subprime mortgage sector. The former chairman of Goldman Sachs stated that the downturn in the housing market is “at or near the bottom. It’s had a significant impact on the economy. No one is forecasting when, with any degree of clarity, that the upturn is going to come other than it’s at or near the bottom.” Beyond subprime mortgage woes, Paulson declared that the financial markets looked sound. He said, “Markets are volatile. I haven’t seen a single thing that surprises me- it’s hard to surprise me.”

There have been a number of stories in the news lately pointing to the end of the U.S. housing slowdown. Newshounds and regular readers of Boom2Bust.com might recall some of the more recent ones:

• June 18- The Coldwell Banker Previews International Luxury Survey showed more than half of affluent homeowners expect their property value to appreciate at least somewhat during the next year, with one-tenth of respondents expecting significant gains.

• June 19- Bank of America’s Chief Executive Officer Kenneth Lewis said the U.S. housing market will begin to improve in the next month or two, forestalling a recession. Job growth will lift home prices and reinvigorate construction by early 2008.

• June 26- A Boston Consulting Group survey revealed that 55% of Americans believe they can sell their house for more now than a year ago. Nearly three-quarters believe they can sell their homes within the next 6 months at a price they set, and 63% feel that real estate is a good or excellent investment.

I have a pretty good idea that realtors and others dependent on a healthy U.S. residential real estate market are welcoming such statements. Maybe they’ll back off of real estate columnist Mary Umberger, who said yesterday in the Chicago Tribune that, “Real estate agents complain to me that every time there’s a news story about declining home sales, consumers send up a collective screech and run to the sidelines, further suppressing the marketplace.” Umberger talked about the Coldwell Banker and Boston Consulting Group surveys and had this to say:

Obviously, one might point out that a real estate company has a vested interest in promoting positive attitudes about the market, but I’m inclined to believe that both studies do reflect Americans’ conviction that real estate — that is, their real estate – won’t let them down. It’s not unlike the way that every parent of every toddler thinks their little darling is a genius. And it’s why sellers in the last year or so have clung so hard to asking prices that are way too high.

While wishful thinkers refuse to lower asking prices, the inventory of unsold homes continues to grow. As prices inevitably fall, so will consumer spending (no more housing ATM) and eventually, the financial markets.

Surprise, Mr. Paulson!

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Housing Hits

Henry Paulson, the former Chairman and CEO of Goldman Sachs and U.S. Treasury Secretary, is back in the news these days. Although it’s for something I’m guessing he’d rather not be. From Chicago Tribune real estate columnist Mary Umberger this past weekend:

Paulson’s treasury hit. Former Treasury Secretary Henry Paulson endured a bit of a price cut, himself, when he recently sold his Washington, D.C., home: It sold for about one-third less than his initial asking price and more than $1 million less than he paid for it, according to the Washington Post.

A buyer paid $3.25 million, though Paulson spent $4.3 million for the three-bedroom home in 2006, according to the Post.

Paulson’s old hangout is doing far worse these days. Diane Tuman wrote on the Zillow Blog back on January 6:

What is the value of the White House today? Like all of real estate, the worth of a home is ever-changing and it’s no different for the White House, which presently carries a Zestimate® home value of $251,617,000 — which is nearly $80 million (almost 25%) less than it was valued at the peak of the housing boom when it was worth $331.5 million.

Sources:

Umberger, Mary. “Real estate mantra in 2010: How low can you go?” Chicago Tribune. 14 Jan. 2011. (http://www.chicagotribune.com/classified/realestate/ct-mre-0116-umberger-20110114,0,5937305.column). 18 Jan. 2011.

Tuman, Diane. “White House Value Takes a Hit — Just Like the Rest of Real Estate” Zillow Blog. 6 Jan. 2011. (http://www.zillow.com/blog/white-house-value-takes-a-hit-just-like-the-rest-of-real-estate/2011/01/06/). 18 Jan. 2011.

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Tuesday, January 18th, 2011 Housing No Comments
Survival And Prosperity
Est. 2010, Chicagoland, USA
Christopher E. Hill, Editor

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