Wednesday Links Unsustainable

Martin Wolf on the Dangers of Austerity – Naked Capitalism

Premature fiscal tightening is, warns experience, as big a danger as delayed tightening would be. There are no certainties here. The world economy – or at least that of the advanced countries – remains disturbingly fragile.

Bernanke Says the Federal Debt Is ‘Unsustainable’ – NYT

The chairman of the Federal Reserve, Ben S. Bernanke, warned on Wednesday that “the federal budget appears to be on an unsustainable path,” but also recognized that the “exceptional increase” in the deficit had been necessary to ease the recession.

Five Things You Need to Know About the Markets – Minyanville, Todd Harrison

As the world’s wildest reality show continues, consuming us all, nestled within the probability spectrum is the chance that the recent serving of supply is simply an appetizer for a much meatier meal of malaise.

Economic slump stirs up homemade preserves industry – LA Times

Still, the jam business can be a struggle. Her sales boomed during the holidays last year, then slumped afterward as the economy remained sour.

“There have been months where all we eat are jam sandwiches,” Baroli-Turati said. “You do the best you can. At least we have something to eat.”

Record Low Mortgage Rates Make Now a Terrible Time to Buy a House - The Affordable Mortgage

All things being equal, lower mortgage rates make buying a similarly priced house more affordable.  The problem is that things are no longer equal.

Housing’s Double Dip: Numbers Tell How Bad It Is – CNBC, Diana Olick

I don’t think any of this is particularly surprising, given that we’ve been warning about it for months. But let the numbers begin…

Fed’s Beige Book: “modest” economic growth, “Shadow” inventory of Foreclosed Homes – Calculated Risk

Residential real estate activity improved since the last report. Most Districts noted an increase in home sales and construction prior to the April 30th deadline for the homebuyer tax credit, with contacts in many of these Districts also indicating a corresponding slowing in activity in May. Tight credit, the elevated inventory of homes available for sale, and the “shadow inventory” of foreclosed properties on banks’ balance sheets held back residential development in the New York, Cleveland, Atlanta, and Chicago Districts…