This is the Arthur Ravenel, Jr. Bridge in my hometown of Charleston, SC. With its twin 575-foot diamond towers, quarter mile span, eight lanes of traffic, and separated pedestrian lane that offers breathtaking views of the Holy City and its waterways, the 2.5-mile "Ravenel Bridge" is a marvel of civil engineering. Other than the fact that it's visually impressive, this bridge is unique in that it's a fixture of highway infrastructure that isn't painted white. The designers of the Ravenel Bridge chose to leave its concrete its natural color for two reasons: 1) white paint would increase the contrast between the taller, modern-looking towers and the lower, historic Charleston skyline; 2) the massive size of the bridge would make painting a major undertaking.
This is the Robert B. Scarborough Bridge in Charleston. Although not as visually-impressive as the Ravenel Bridge, the 3-mile "James Island Connector" also offers excellent views of the Holy City and its waterways. Other than being smaller and less visually-stimulating, this bridge differs from the Ravenel Bridge in that it's painted standard "freeway white".
Wednesday, April 4, 2012
Tuesday, April 3, 2012
Last week CNBC published an unintentionally-humorous article about the growth of the D.C. real estate market. The article outlined a number of reasons why Washington is picking up (while most other metro areas continue to languish), including a more eager buying populace and the abundance of mass transit. The article did not, however, state the obvious: The D.C. real estate market has fared, and will continue to fare, considerably better than other metro markets during this depression because the Government is growing at an unprecedented rate!
- Federal Reserve liquidity pumping
- Federal domicile pumping through Community Reinvestment Act
- A federally-mandated reduction in minimum loan quality standards for loans that Fannie Mae and Freddie Mac purchased off the primary market
- The Gramm–Leach–Bliley Act
- The Commodity Futures Modernization Act
Starting in the late 1990s, there was a broad credit bubble (Development 1) and a subsequent housing bubble in the U.S. (1, 2, 3, 4). Excess liquidity (1), combined with rising house prices (1, 2, 3, 4) and an ineffectively regulated primary mortgage market led to an increase in nontraditional mortgages that were...often beyond borrowers' ability to pay...
Losses from the housing downturn were concentrated in highly leveraged financial institutions (1, 4). Failures in credit-rating and securitization (5) transformed bad mortgages into toxic financial assets...
Managers of many large and midsize financial institutions amassed enormous concentrations of highly correlated housing risk (1, 4,5), and they amplified this risk by holding too little capital (capital requirement easing at the behest of investment banks, 4) relative to the risks and funded these exposures with short-term debt (1)...
These risks within highly leveraged, short-funded financial firms with concentrated exposure to a collapsing asset class led to a cascade of firm failures.
Monday, April 2, 2012
With an average $16,000 in annual earnings, the 28 million unemployed, underemployed, or marginally attached workers in this country currently forgo $877 billion in annual income. According to a study (.pdf) published by the National Employment Law Project, 6 million unemployed will exhaust their benefits by the end of the year. Unless these 6 million secure jobs, which is questionable given the outrageous median duration of unemployment (see chart below), displaced workers' lost annual earnings will reach $1.14 trillion by the end of the year. An economy that's 70% consumer spending cannot recover with lost income of that magnitude.