Commercial is the 2nd Shoe to Drop

Bank Fix for Unpaid Commercial Property Loans: 'Extend and Pretend' - WSJ.com

Chateaux on Central Avenue in Phoenix Sells for $7 Million | KEYTLaw

See the link for the :
Yvonne & Caleb Correa's unfulfilled listing of Chateaux for $2.8-$4M per unit (Pro*Star Realty)

The Chateux (above) were part of Mortgages Ltd's portfolio, which included condo complexes in downtown Phoenix & Tempe which only sold handfuls of units (Scott Coles, Mortgages Ltd's CEO, committed suicide in the middle of the real estate collapse).



As the Viad (formerly Dial) Tower (right) completes another stage in the slow bursting of this commercial bubble, get ready for another round of federal bailouts using taxpayer dollars.
Viad Tower in Phoenix Subject of a Foreclosure | KEYTLaw

California's Unemployment Crisis

The columnist seeks to show that California's high unemployment is tied to an imploded construction sector; however, on a county-by-county basis there is no significant correlation between construction jobs lost and unemployment levels (the R^2 value has to be close to 1 for reliable correlation). This suggests that either the construction workers who lost their jobs had long commutes (so jobs usually showed up in different counties than their unemployment filings) or (I believe more likely) construction is not the most significant factor in California's unemployment. For one, I believe the California economy is a lot more diverse than Arizona's, which is heavily dependent on construction -- so even though California may have had a larger real estate bubble, it possibly represented a smaller percentage of the overall state economy.

Death Cross a Self-Fulfilling Prophecy

AHEAD OF THE TAPE: Dark Omen Threatens Stock-Market Bulls - WSJ.com (WSJ's Kelly Evans explains the death cross -- the S&P 500's 50-day moving avg. crossing below its 200-day moving avg.)

She illustrates well the ambiguity of this indicator, showing how half the recessions since 1972 were preceded by death crosses. I've been hearing a lot of analysts on CNBC making a big deal out of it, but Ms. Evans points out that the hype surrounding a death cross puts downward pressure on investor sentiment, making it a self-fulfilling prophecy. Her counterpoint is that over the last 40 years, death crosses were followed by an average 6-month gain of 5% in the S&P 500. Here's hoping this one's above average.

Quest for Alternative Homebuilding Materials

Will China Housing Market Follow the U.S. In a Mortgage Bust? (why China's housing market is far from developing a bubble)

So there's little hope of a burst bubble bringing down raw material prices & helping American homebuilders produce more affordable homes to market to buyers w/ damaged credit from our own housing bubble. This means if US builders hope to sell more homes they must look to alternative building materials, such as light-gauge steel -- ideally something even more unconventional that can be demonstrated to satisfy building codes and withstand various gravity loads (from selfweight, people & inanimate contents, and snow) and lateral loads (from wind and earthquakes). Another approach might be to dismantle (not demolish) obsolete structures in such a way as to recover usable building materials for new construction.