Springtime In Profligate America

The Yahoo Finance page had these headlines Saturday morning. "The Most Expensive ZIP Codes 2005, Travel Like a Billionaire, The World's Most Expensive Yachts, Should Ex-Smokers Worry?"

The CBOE Volatility Index is a measure of investors' risk perceptions, and as the chart shows, that has been headed steadily down for years. This in spite of the many warning signs, chief among them the degrading credit quality of home buyers.

The Toledo Blade reports on speculative building. "A growing number of smaller developers are building 'spec' houses, some with price tags as high as $34 million, without any specific buyers in mind."

"Some economists caution that it could lead to price declines if there is even a slight economic blip. 'These guys typically can't carry these houses for very long, especially these small builders, and then you can get into a fire-sale type situation,' said Thomas Lys."

In the S&L debacle, it was the spec developers who were really wiped out, taking many institutions with them. But on this bright spring day, the public can see no clouds on the horizon. "That's one of the wealthiest generations ever to come into their own in the history of this country,' said Steven Crandall." And in a country that counts it's obligations in the trillions, the most indebted in the history of man.