In all the discussion of housing and mortgages lately, there hasn't been much said about the potential impacts outside of the financial sphere. However, as we are beginning to see, the impacts are likely to be deeper and more far-reaching, and in ways that are likely to indirectly impact our financial fortunes as well. This is consistent with one of Ed Leamer's takeaways in the most recent UCLA Anderson Forecast. We're likely to get a government regime that is far more inclined towards regulation, taxation, etc. Without passing judgement on what the "right" government attitude is, it's certainly worth noting the changing possibilities, as they are likely to impact us in the future:

Housing crisis tests GOP loyalties

Our governor now says that 10% cuts will be necessary, due entirely to housing issues. What percentage of GDP does state and local government spending represent? Enough that a 10% cut could put us into recession? I think so:

Schwarzenegger orders plan for 10% budget cuts

All this on the same day that the first foreclosure sign went up on my brother's street. A nice, fairly expensive street of apartments and condos in West LA, one of those desirable in-town areas with a high-income young professional population where just a few months ago everybody was saying that "there isn't going to be a problem."

And sorry for being offline again for a while. Since moving my mom over the summer, and since passing the three year mark after my dad's death, I seem to have emerged from a somewhat self-imposed isolation and become quite the social butterfly. It's been a fun time leaving little time for blogging. Hope to restore a bit of balance in the coming weeks and be writing a bit more frequently.

-btc