Dr. Housing Bubble sends this warning:
The big story surrounding American housing has to do with distressed inventory that is not reported in any meaningful way. It is amazing that even after the National Association of Realtors had to revise home sales lower and was blasted by those who track the housing industry, little has been done to reform the system. Keep in mind this is the data that is quoted line by line on a monthly basis by the mainstream media as if it were gospel. It is hard for average folks to understand what is really going on with the housing market because much of it is hidden in the dark netherworld of bank balance sheets. Thankfully there are methods of shining a light on the true nature of the housing market but it takes time and using multiple sources. The shadow inventory is enormous and Bank of America is hinting at going forward with a “bad bank” model which is likely to make it even harder to track the true health of the U.S. housing market....
This suggests that the recent Minsky moment — a bursting debt bubble that culminates the long financial cycle ending in Ponzi finance — is hardly momentary and has some way to run. Remember, MMT not built just on a description of monetary operations. Minsky's financial instability hypothesis lies at its core, too.
Prof. L. Randall Wray, one of the developers of MMT and PhD student of Minsky, explains this in a five minute video, Crash Course on Hyman Minsky.
This is not an ordinary business cycle with the financial problems behind us now, as some are making it out to be. In the terminology of Nomura's Richard Koo, it is a "balance sheet recession." Prof. Bill Mitchell explains this from an MMT perspective in his post, Balance sheet recessions and democracy.
Housing says that we are not out of the woods on this yet, and there may still be some shoes to drop due to the toxic debt that is being swept under the rug or papered over. Dr. Housing Bubble is waving some red flags.