Austin Real Estate Market Outlook for 2009

Well, 2008 is behind us and it seems like every Realtor in Austin except me and Sylvia are saying “good riddance”. For reasons I won’t fully go into in this blog post, Sylvia and I actually did better in 2008 than in 2007, by almost every measure. It was another record year for us, which I know isn’t fair to all those other Realtors who are suffering and dropping like flies, but we work hard. So, most agents are looking forward to 2009, expecting an upturn in Austin real estate sales activity by this summer.

Yesterday was the Austin Economic Housing Forecast, and here are some quotes from the panel members and todays article about the forecast in the Austin Statesman:
“The Austin-area housing market took a big hit last year, and more pain is in store for 2009”.
“Things are probably going to get a little bit tougher before they get better”.
“Austin-area builders started construction on slightly more than 8,000 houses last year, according to Metro-study, the lowest number since 1997”.
“home starts will plunge by another 25 percent this year to about 6,000. That would be down 63 percent from the peak in 2006”.
“Expectation is that we will continue to see a decline in pricing through 2009”.
“The 990 sales (in Nov 2008) were the lowest number for November since 1997”.
“The area will lose more jobs than it creates in 2009, much as it did in the tech-bust years of 2002 and 2003”.

Jeez, was there any positive news? Yes, a small bit.

“Austin’s housing market remains healthier than many across the country”.
“Austin’s economy also continues to outperform most areas of the country, but the number of jobs in Central Texas grew by 2.2 percent in 2008, about half the growth rate experienced in 2006 and 2007”.

So what does all of this mean? Well, it depends on who you are, whether you’re a buyer or seller, the price range of your home, location, whether you are moving up, down or out, your credit score, and a number of other factors. There is no one label that can properly describe the Austin real estate market as “good” or “bad” for all people, so let’s try to break it down and see which categories are the winners and which should be the waiters.


Move-up buyers – If you are secure in your job, have good credit, own a home worth less than $300K, and are ready to move up to a more expensive home in a better area, there could not be a better set of circumstances for you to do that right now, immediately. Whatever discount you might have to provide to the buyer of your current home will be substantially smaller, both in dollars and percentage of sales price, than the discount you can obtain on a replacement home (of which you’ll have many to choose from and negotiate for), especially if the replacement home is selling for $400K or more. And as an extra bonus, you’ll probably get an interest rate below 5%. If you fit this profile, and do intend to move up, there is no rational reason to wait.

Investors – Investors have the added advantage (most of the time) of being unburdened by emotional clutter in the decision-making process, (though they can sometimes suffer from analysis paralysis). This means you can set your selection criteria broader than the typical owner occupant buyer, who tends to eliminate perfectly good homes for frivilous emotional reasons and sometimes fall in love with homes for equally frivilous reasons. The broader selection criteria, and emotional freedom, means you can run through 4 or 5 offers if necessary, until we encounter the truly motivated seller who has to sell and is willing to accept or seriously counter your below-market offer.

We closed on one last month for our buyer at a price $20K (10%) below the bank appraisal and our own CMA. The seller was motivated, though it took a bit of work to find that particular seller. This home appraised for $235K in 2006, our CMA put it at $220K in the current market. Our buyer got it for $199K. For those who think all buyers should “wait” right now, why on earth should this investor have waited on this deal?

There is a lot of good rental stock on the market, much of it over priced, but enough to pick from to find the right house at the right price. And what if the price stays the same and doesn’t appreciate right away this year? So what? Who cares?

You’re buying for a long term hold, at least a 5 to 10 year horizon. And with the high levels of inventory and low buyer activity, you have more to pick from now, and therefore more negotiating power than you may have again for many years. And the low interest rates make it a no brainer. Investors with good credit scores can get loans in the mid 5% range at present. This is a great time for smart, well qualified investors to be picking up property in Austin TX.

First Time Buyers
With low interest rates, you can qualify for a higher purchase price than you could have a year ago. Depending on where you buy, you may or may not get a better sales price on a sub-$200K home (closer in, probably not… further out, yes). Because 30% of your competition buyers no longer qualify at all, and another 30% are on the sidelines because of emotional reasons, you have the best pickings you’ll ever have. Just make sure, if you buy in a newer subdivision further out, that you know you’ll live in the property for at least 5 years to build equity and that you are secure in your job.


Worn out investors tired of bleeding
We warned you 3 years ago about purchasing homes with “better cash flow” out in places like Manor, Kyle, Elgin, Buda. You didn’t listen and went and found another Realtor to help you buy that crackerbox. Now that house is worth $20K less than you paid, the neighborhood looks like crap, and you’ve had 4 turnovers in 3 years. You’re bleeding and simply worn out and ready to get out. Problem is, so are all the other investors in your neighborhood who were chasing better cash flow instead of a quality neighborhood. You’re screwed now. You have to decide if you want to continue bleeding from a vein, or if you want to bleed from an artery and sell that home at a foreclosure price and walk away.

Our advice: suck it up and hang in there. This is not a good time to try to dump your mistake. There are not enough buyers in the weak areas to absorb all the inventory being created by fleeing investors and underwater home owners. Summer 2010 or 2011 will be a better time to sell as we will start seeing a shortage of starter homes as a result of the builders who have skidded to a stop in these developments.

Sellers at $400K and higher
It depends on specific location, but in general, if you don’t absolutely have to sell, and you are not moving up to a more expensive home where you can come out ahead on discount offsets from the new home, you might want to sit tight and let the inventory clear out. Austin job growth will pick up again by mid summer or the end of 2009. When it does, the buyers that the new jobs bring will be looking for homes like yours. Selling now would be selling in the dip. You are better off waiting unless you absolutely have to sell now for non-financial reasons.

From our perspective at the Crossland Team, our phones are ringing and we are busy. We’re being very picky about any new listings we take, working only with motivated sellers and turning “tryers” and dreamers away. The only buyers we are counciling to wait are those with little or no downpayment who are not certain about job security. I just rented a home to a young couple moving into Austin for a brand new job. I’d hate to see them buy a house and then have the job not work out and not have the proper financial cushion to survive the worst case scenario. Otherwise, I can’t think of any reason for buyers to be a reticent as they currently are, especially with 5% interest rates and such a vast inventory of homes from which to choose.

29 thoughts on “Austin Real Estate Market Outlook for 2009”

  1. Hi Steve,

    I do not understand some of those investors. I monitor some of the condos for rent in 78701, and I am amazed to see how many new condos are for rent. I do just for fun, but right now there are about 100 condos for rent in that zip code with the cheapest going for 1000 bucks and 456 sq ft. The distribution in the newest units is as follows:

    21 units for rent at 360 condos
    13 units for rent at The Shore
    16 units for rent at Milago

    Most of the units have been sitting there fore weeks and weeks; investors seem to be stuck with the asking price even though it is obvious there are not many people wanting to lease $1500+ 1br units with just 700 sq ft.

    I personally do not believe the demand is there anymore. They have to compete with AMLI Downtown, AMLI on 2nd, The Monarch, and the upcoming Legacy among others.

  2. Hi Brett,

    Thanks for the stats. Yep, we steer completely clear of condos for investment. The exception being office condos. Many, many downsides to investing in condos, though I’m sure there are plenty who would disagree with me. I just like houses. They are easy to rent, easy to sell, and you control the physical aspects yourself, with no shared walls, leaks from above, over-zealous HOAs, parking problems, etc.


  3. I am not familiar with rental units, but I wonder if investors are willing to negotiate rates. Are those usually set in stone?

    I might move in a few months, and looking at so many rental units near downtown, I wonder if I can negotiate or low-ball the rates since there is so much competition out there.

  4. “Austin job growth will pick up again by mid summer or the end of 2009.”

    What areas of industry do the experts see this growth occurring?

  5. I had a 90 year old bungalow in Old West Austin that nearly bankrupted me in repair and spinal-surgery bills. Sold it for a nice profit, but I would never live in another fixer-upper again. Not to mention the sorry state of the infrastructure (streets, sidewalks) in that neighborhood, thanks to the Luddites over at OWANA.

    Like many in our demographic, my wife and I prefer the central city. Suburban/tract home living isn’t really an option for us, which made a new condo on S Lamar all that more attractive. Granted, buying at the tail end of a bubble is no picnic, but I got an awesome location 4 minutes from work, a two car garage, and zero exterior maintenance for $225 a sq ft. The market for these will return just as soon as all the new Austinites currently sitting it out in rentals start seeing just how pathetic the existing housing stock is in the central part of the city.

  6. Overzealous HOAs? Park problems?

    The condos downtown are actually well run. The problem investing in condos is that your tenants are usually wealthy enough to where they can buy instead of renting.

    That’s why crappy neighborhoods always have the best cash flow…the tenants can’t afford to buy because they live paycheck to paycheck, so sales prices are not inflated.

    Also, many downtown condos for rent are not originally intended to be investment properties. Just dumb buyers who overbought and now can’t sell, so they have to rent them out.

    BRETT: You’re obviously not a realtor, please don’t make comments about lack of demand downtown, since they’re false. There were 110 leased condos since september, many at 360, and many for over $1500. Now is just a slow time of year for rentals, and AMLI recently cut prices.

  7. Jim:

    This is a public forum, and I can express my opinions. I am not a realtor, but I do have a brain. I am smart enough to go through the MLS and figure out there are exactly 106 units for rent in 78701, and they aren’t moving.

    The holidays are usually slow for the rental market since people are overspent. However, the current state of the economy isn’t going to help the market.

    I might be wrong, but only time will tell.

  8. All opinions are welcome. Sometimes non-Realtors have as good or better insight on local economics than Realtors, and I like hearing different perspectives.

    The SoCo lofts on S. Congress just converted ALL of their condos to rentals, as other condo projects central and downtown have done in the past year, so we are in fact going to see an over-supply of available downtown rentals and not enough demand to absorb them all.


  9. Steve,

    Once again, I think you are not being cautious enough and that’s a disservice to your clients are readers. This is an EXTREMELY DANGEROUS time for anyone to be buying who doesn’t need to buy.

    Did you see the latest unemployment numbers that just came out today? Unemployment is up to 7.2% for December. It was 6.8% in November. The employment picture is STILL deteriorating at a rapid rate. Texas and Austin’s numbers are still not out yet, but it can’t be good.

    All those unsold homes sitting on the market? As more and more people lose their jobs, they will be forced to sell and further lower prices. Even more inventory will be coming on the market as people keep losing their jobs. Interest rates low? Doesn’t matter if you don’t have a job to pay the monthly payment. Doesn’t matter if the banks are continuing to suffer huge losses (which they are) and have no ability to lend.

    Have you been watching the commercial side of the real estate market? That’s the next shoe to drop. Have you noticed all the stores (Circuit City, Linin’ N’ Things, etc.) closing? Each one of these anchor stores is 30,000 sq ft. or more. A bunch of those stores closing and it’s VERY hard to get new tenants to fill that space. The owners of those commercial side are going to face foreclosures for another round of huge losses to banks. That’s going to FURTHER constrain credit and banks start writing down big losses from the commercial side of the market. The low rates won’t matter because most banks won’t be able to lend with the losses they are suffering.

    What if we are going into the next Great Depression? That involves the complete destruction of the global financial system (which is already underway), unemployment reaching 20%, foreign countries collapsing, possibility the start of a major war from all the unrest(it’ll probably a buying opportunity when the shooting starts and the bombs start falling), and a “lost” generation. Do you still think $199K is a good deal if that scenario unfolds? It’s something most of us would think is unthinkable. But it is not off the table right now.

    The only thing that can stop this is coordinated actions from the world’s governments. I believe Obama recognizes how dire the situation is based on the speeches he’s made in the past couple weeks. He understands that the scenario I described must be stopped at all costs or it will be the greatest tragedy we will see in our lifetimes. But it is still unclear if our governments have the ability to stop what is unfolding before us.


  10. But Steve did you notice that from the beginning SoCo Lofts only had about 70 units as condo and all the rest as apartments? Clearly renting to St. Eds students would be the primary market and living among so many students would make it less attractive to O/O condo buyers.

    My brother took a pretty serious look at those condos but the second that he saw that 2/3 of the planned units were rentals from the start, he couldn’t walk away fast enough.

  11. “Sometimes non-Realtors have as good or better insight on local economics than Realtors, and I like hearing different perspectives.”

    Sometimes? Sometimes? Try ALL the time. We on the housingbubbleblog have been warning of the collapse for years, with factual explanation, but the greed-fueled REALTOR(tm)s and other REIC contingency laughed us off.

    I would learned a lesson and not trust any realtor. They are a dying breed, anyway.


  12. “Once again, I think you are not being cautious enough and that’s a disservice to your clients are readers. This is an EXTREMELY DANGEROUS time for anyone to be buying who doesn’t need to buy.”

    Yes, we have a long way to fall folks.

    Anyone know anything about risk v. reward as it relates to pricing? Still have a long way to fall, price wise. Do not buy / get out!

  13. None of us can know anything for sure, of course, but I am still optimistic that by mid-summer, most of the news we hear will be about how the economy seems to be turning a corner. That seems to be the consensus view of most of what I read and hear.

    As far as the “timing” issue goes, I’ve said it before and will continue to say I’m not a believer in trying to time markets. My Dad bought his house in San Diego in 1964. Was that a good time? Should he have waited? I bought my first investment property in Austin in 1994. Was that a good time? Should I have waited?

    We, as a nation, have become a bunch of twitchy barometer watchers. Long term buy and hold investments, whether real estate or stocks, don’t require timing. Real Estate is not day trading. If someone wants to buy a house right now, and they can afford it, and they plan to hold the property long term (at least 5 – 10 years), and they know how to negotiate the right price, within the context of current market conditions and expectations, they have no reason to be listening to naysayers and renting instead of buying.


  14. Steve,

    I hope things do turn by mid-summer – both in Austin and across the nation – but I am not seeing that sentiment in the majority of the news I am reading.

    Can you please brief us on what you are reading that is supposed to prevent the economy from sustaining a long recession if not an outright depression?


  15. > Can you please brief us on what you are reading that is supposed to prevent the economy from sustaining a long recession if not an outright depression?

    Mostly I listen to Bloomberg Radio when out driving around (XM Radio station 129) which has a lot of interviews and information from in-the-trenches people that you don’t hear from on CNN, FOX, CNBC, etc. I read a lot of different publications also.

    I started to post some links to articles, but it’s just as easy to find opposing opinion, so I’m not sure that’s useful.

    I’m not an economist or an expert, but if you search around, there is a lot of information and indicators to suggest the most likely turnaround for unemployment to be mid summer 2009. Slight chance it could be sooner, and also a chance of course it could go much longer.

    But Obama, the Fed, Treasury and all of Congress are working to make sure the turnaround has every chance of happening sooner rather than later. Whether it does or not remains to be seen, but I choose to believe it will.


  16. Steve,

    If there was no government intervention at the moment, we would be entering the next Great Depression right now. There are some that argue that we are going to go into one anyway and it can’t be stopped. They say all the government intervention that is going on right now will just prolong and deepen the mess we are in.

    I don’t necessarily agree with that, but you are pinning your hopes on the government successfully being able to intervene and stop the deflationary spiral that we are in, which is not a sure thing at the moment.

    Timing is everything. My parents bought a house in 1989 and for 11 years it went nowhere. If someone bought at the tops, it might take n 10 years or more just to break even. Why not just rent in that case?

    Even if you believe unemployment will turnaround by mid 2009, why not wait until then and see what happens? What are we going to miss?

    Unemployment is ACCELERATING right now. Why not wait until unemployment reaches 10-15% and reevaluate the situation then? At the pace we are losing jobs, it will only be a few months before unemployment reaches double digits.Those people that are going to be losing their jobs over the next few months are going to be forced to sell their homes, further lowering prices and increasing inventory…

  17. Leon: I appreciate your comments and opinion. We have to agree to disagree. Nobody can time real estate or stock markets with any certainty. This is a well known fact. Waiting has as many risks and unforeseen possibilities as not waiting. And for long term investments, the nuanced changes of short cycles don’t matter at all. For investors, the frequency of tenant turnover will have a far greater impact on the ultimate return of the investment over 10 years time than will the month or year the purchase took place.

    Joe: Thanks for the link, but we could trade links all day long with conflicting viewpoints. That’s why I opted to not post a bunch of links supporting my viewpoint but instead simple offered that we can all search around for economic and business reports to gain a sense of what others think will happen this coming year.


  18. You came a long way, Steve.

    From (back in 04/07/2007):

    “No, Austin prices are not going to go down and the market is not cooling. All I’m seeing in South/SW Austin is a strong seller’s market.

    We are still in the early stages of a 5+ year boom cycle. Luckily, we haven’t heated up out of control. We don’t want $500K average home prices here, but Austin has for sure been discovered and is one of the best real estate markets (for seller and builders) in the nation right now.


    “Sometimes non-Realtors have as good or better insight on local economics than Realtors, and I like hearing different perspectives.

    Peace now! 🙂

  19. Leon,

    I 100% agree with you on “This is an EXTREMELY DANGEROUS time for anyone to be buying who doesn’t need to buy.”

    It is better to play safe now than to be sorry later. We’ve entered an unchartered waters. My feeling is I have deja-vu. Nobody could’ve seen the collapse of the Soviet Union ever possible but it happend almost momentarily, bringing the tradegies to the majority of its citizens, erasing the life savings, jobs, careers, setting anarchy and havoc. I don’t want to go through this again but I’m prepairing for the worst case.

    My advise is to be as flexible as possible with less liabilities (ie debt) and less ties (rent vs own)

  20. Hi Observer,

    You said:
    > You came a long way, Steve.

    Not sure what your point is. You took two unrelated quotes from over 1.5 years apart. ?!

    I’ve always welcomed non-Realtor viewpoints here on this blog. Especially ones that disagree with me. And don’t count that 5-year run out yet. It’s a long way to 2012 and 2008 could well just be an inhale for the market.

    I’ll be posting final 2008 stats soon, hopefully tonight. Some interesting metrics to discuss.



  21. >I’m not an economist or an expert, but if you search around, there is >a lot of information and indicators to suggest the most likely >turnaround for unemployment to be mid summer 2009.


    I understand this is your opinion, but what facts are you basing your opinion on? All of the economic indicators I’m following indicate that the situation is going to get worse before it gets better. Heck, if you have been listening, even Obama has been saying it is going to get worse (and possibility a lot worse) in the coming months and we need to take drastic actions.

    Do you understand that virtually ALL

    Austin and Texas does have the strongest economy in the country. We are weathering this better than just about anywhere else. I’ll give you that. But that does not mean we are immune to a national or global collapse.

  22. Do you understand that virtually ALL of our big money center banks are essentially bankrupt? All of them! Citi, JPM, Wells, BOA, etc. etc.. They were all doing the same thing and their balance sheets will continue to deteriorate as the economy deteriorates. Only the government can save them with capital infusions. If our government loses the ability to borrow money; either in the form of the US Dollar collapsing or interesting rates moving high enough that they can no longer afford to sell US Treasuries, we are going into a DEPRESSION. That’s the only thing that stands in the way of a Great Depression at the moment…

  23. Hi Leon,

    Maybe Warren Buffet can explain it better than me. He wrote an article for the NY Times a couple of months ago, explaining why NOW is the best time to buy American stocks, which is what he is doing with his personal money. Translate what he says about stocks in this article to real estate, and you’ll better understand why I think like I do.

    Among some of the quotes I like from the article:
    “Be fearful when others are greedy, and be greedy when others are fearful.”
    “So if you wait for the robins, spring will be over.”

    What you essentially are preaching is, wait for the robins to come out and start singing. By then, it’s game over. All the buyers start coming out and it’s off to the races again, competing against all the other people who sat on the sidelines and now finally think it’s a good time to buy.

    Here is a link to the article:


  24. Tradition and history dictate that homes are worth 2-3 times the gross income of the people who live in them. In Austin, a couple that makes 100K per year combined can live in a home that is priced between 200 and 300 thousand. Home prices will decline if salaries decline and go up when salaries increase. For the MOST part Austin is about the most stable RE market you can find. There are the stabilizing forces, of State Government Jobs, UT Jobs, and Federal employers (ie IRS). These employers are pretty much immune to recession, but the earning power of these jobs are limited. Houses above 300K where built mainly by technology money and that is something that is heavily impacted by recession. If I were in the market for a 200K house right now, and I have 40K down, I wouldn’t worry about too hard about buying. If I were in the market for a 400-500K house, I would hold out for a steal. A 500K house is worth 300K if there are no 500K buyers.

  25. Steve,

    It’s very easy to look a chart and pick the low point in 1932 and say we should have bought there because there was fear. But wasn’t there fear in 1930, 1931? How do you know if we are in 1930, 1931, or 1932? Have you actually looked at a chart of the Dow Jones averages from 1929 to 1940?

    The peak in 1929 stock market was 375. It bottomed at 41 in July 1932. That was 90% decline!

    Let’s try to understand how the math works here.

    Let’s say you bought after the down dropped to 225, a 40% decline. That’s about where we are today. Sounds like a great deal right? There was gloom and doom everywhere and we were in the middle of the Great Depression. You still lost 80% of your money after the market had ALREADY fallen 40%.

    Let’s say you were even more patient (like what I am advocating) and waited for the market to drop 60% from the peak and bought when the market was at 150 (in 1931). You would have still lost a stunning 72% of your money! Remember, this is even after buying when the market had ALREADY fallen a stunning 60%!

    OK, let’s take it to the extreme. You waited until the market had fallen 80% from the peak. The Dow was only at 80 in March 1932 compared with a peak of 375 in August of 1929. If you bought in March of 1932. You still lost 50% of your money! Even after buying when the market had ALREADY fallen 80% from its peak 3 years earlier, you still lost over HALF of your money as the Dow drops from 80 to 40.

    If you understand the credit situation, this is the kind of devastation we are facing. I’m not saying this will happen, but it is a very real possibility with the state of the world’s financial system. There is not a lot left standing between the scenario of the 30’s and what we are facing at the moment.

  26. Wow, discussion was getting a little heated there. I’m worried too, probably more so than ever about the economy too, but I can’t let go of all optimism either. People aren’t going to stop being “people” and that means they will eat, buy clothes, house themselves, watch tv, go to the doctor, etc. – even if it’s in a lot less flashy manner. The entire world is really at an odd place – I just read today about Toyota closing their production lines in Japan – all but one single line and I think that one was only so they couldn’t be reported as completely “down.”

    I can’t say that I expect our government to immediately fix anything but I DO hope they’ll start leading with a bit of optimism instead of all the fear tactics that are worsening things with every speech it seems.

    We sold our office house (thanks to Sylvia 🙂 “just in time” for us, but it seemed that the buyer had his own long term plans and many others do as well. Many people do have money but are waiting. Heck, I’ve been shopping for a vacation home up north in MI for months, actually more like a year and a half, hoping to find the right deal and I still can’t find anything under $250,000 – most of the ones I’ve been looking at have simply been sitting there holding with the price they want. And I’m talking about quaint little homes in very small towns, not waterfront mansions.

    I heard areport that U.S. businesses and investors have about $4 trillion in potential investment dollars on the sidelines just waiting for the right moves – so that is at least something to be optimistic about, right?

    At some point that money will begin to move again.

  27. Hi Kelley,

    Nice to hear from your! Hope you’re enjoying the new work space.

    Yes, I agree, there is a LOT of money on the sidelines waiting. It will be interesting to see how much of a spike we experience when all these buyers decide it’s time to buy again and come rushing back to the market all at once competing against each other and driving prices up.

    Perhaps the new $15K tax credit combined with the proposed 4% interest rate will get people motivated, but I think we have to wait and see how the logistics of that will work.

    Take Care,


  28. Kelly,

    That there is a ton of money on the sidelines is another myth. A lot of that money has simply vanished, been destroyed, or is needed to cover the massive losses on existing investments. Remember that many of these institutions were on 30 or 40 to 1 leverage. That’s why you see all these financial institutions go out of business when things move against them. The US government just pumped $350 billion into the financial system and banks just held onto it. Why? They can’t lend because they need this money to cover the losses they are taking on existing loans in order to stay solvent.

    I don’t want to be so negative, but unfortunately the facts get in the way. There is one way out of this mess that might work. Check out this link here:

    We have to wipe out the existing shareholders and convert the bondholders into new equity owners. That will clean up their balance sheets so banks can start lending again. What the government is doing right now is simply pouring money into a gigantic black hole.

    What most of us don’t realize is that we are only 2 steps away from a complete collapse from here. The government is going to attempt to spend a massive amount of money that it doesn’t have. Whether the final number of the Obama stimulus bill is $700 billion or a trillion doesn’t really matter.

    The government will first try to borrow this amount of money by selling treasuries (via auctions). If the market doesn’t allow them to borrow at a interest rate they can afford, the central bank (Bernake and Co.) will try to print the money. Watch the value of the US Dollar to see if the FX markets allow them to get away with that. If US dollar also plummets, the game is over. The government will be in the same boat as the rest of us; no credit, no income (tax revenue), no savings to fall back on, and we have to let this recession (depression?) run its natural course.

    So the first test will be after this stimulus bill passes and the government attempts to borrow the money to finance this beast. Watch what happens to the interest rates. If they stay low, we might have a shot at getting out of this. If those treasury auctions go badly, we are in deep trouble…


Leave a Comment