The Top 10 Stories You Missed in 2009

A few ways the world changed while you weren’t looking.

BY JOSHUA E. KEATING | DECEMBER 2009

 

A New Housing Bubble?

More than any other factor, ill-advised speculation on U.S. real estate set off the global financial crisis. But even after millions of foreclosures and secondary effects rippled through economies around the world, U.S. homeowners might be starting to make the same mistakes all over again.

After suffering their largest month-to-month drop in history, U.S. home prices began to increase again in May. The S&P/Case-Shiller index, widely considered the most reliable measure of housing prices in the United States, rose 3.4 percent between May and July, with gains in 18 of the 20 cities the index measures. Prices were still 13.3 percent lower than last year, but even that figure was less than expected. The release of this data coincided with other positive indicators, including an increase in existing home sales and home construction. "We've found the bottom," one economist told the New York Times.

Not so fast. Economist Robert Shiller, one of the index's creators, sees the numbers as alarming rather than promising. Pointing to survey data showing that most homeowners think that their house will increase dramatically in value over the next decade, he worries that "bubble thinking" might once again be taking hold.

"[I]t appears that the extreme ups and downs of the housing market have turned many Americans into housing speculators," he wrote in the New York Times.

The government's solution to the housing crisis might, ironically, be causing the new problem, by encouraging irresponsible home buying by people who aren't able to afford it. The Federal Housing Administration, which backed nearly 2 million mortgages in 2009, saw the percentage of its loans that are delinquent or in foreclosure rise to nearly 8 percent in June, and the agency is quickly burning through its reserves for loan losses. A congressional committee has been formed to investigate the losses. Even Federal Reserve Chairman Ben Bernanke has said that Congress should look into the potential trade-offs of federal loan support.

With prices looking likely to keep rising in the near term and the U.S. government giving generous incentives for homeowners, there's a risk that the same irresponsible speculative behavior that caused the Great Recession might be returning.

Justin Sullivan/Getty Images

 

 SUBJECTS:
 

Joshua E. Keating is deputy Web editor at Foreign Policy and edits FP's Passport blog.

ALWAYSSKEPTICAL

1:53 PM ET

November 29, 2009

flooding?

"The environmental consequences -- increased flooding in coastal regions around the world..."

The melting of the Artic ice will not cause flooding. The ice would displace the same amount of water in liquid form as it now does in solid form.

 

JACKERHACK

6:47 AM ET

December 18, 2009

Oh no, it will

You forget that about 1/9th of ice floats above water. When it melts, it will cause the water level to rise.

 

DARCYLARCY

1:21 AM ET

December 22, 2009

Actually...

If the ice and sea water were of similar-enough composition, then once the ice melts, the resulting "new" water would be exactly the same volume as the water that was deplaced by the floating ice. In other words, the increasing density of the ice as it melts would exactly offset the difference in volume. The threat of sea level rise has nothing to do with the volume difference of ice and water (at least, not so directly).

However, water's freezing process partitions out much of the salt content. Therefore, what melts from floating sea ice is fresher, less dense water which *does* have a larger volume than the salt water that it displaced when it was solid. While it's not really my field, I believe that the volume difference should be on the order of 2.5%, based on the densities of sea water (64 lbs/ft3) and fresh water (62.4 lbs/ft3).

 

GRANT

4:24 PM ET

November 29, 2009

I don't see quite so much

I don't see quite so much cause for concern on the Feingold-Brownback* bill, as long as the U.S doesn't see the need to engage itself to heavily in the fighting. Though there are few things I would love to see more than Kony on trial the U.S doesn't have the best record when it comes to operations with other nations. Also, if memory serves one of the reasons why the U.S has had so much trouble finding a base for Africom is partially out of memories about U.S operations during the Cold War (as well as anti-U.S sentiment in the nations).

In re. to ALWAYSSKEPTICAL: We shouldn't presume that yet. The planet isn't so simple as to be measured by human perspective, and island nations are beginning to see changes in water.

*That's what they'll call it, you heard it here first.

 

W_NELSON

10:47 AM ET

November 30, 2009

NW Passage has been open for years:

Correction:

-------
Only one problem: The Northeast Passage has been opened for commerce since 1934 – and never ‘closed’.
-------

From here:

http://www.theregister.co.uk/2009/10/06/times_thermageddon_r_us/

 

F1FAN

10:20 AM ET

December 1, 2009

I'm surprised

I'm surprised that 'climategate' isn't on this list. The media in the US has categorically ignored it.

 

MUGWAMP

1:55 PM ET

December 3, 2009

rising coast lines

It is true that the Arctic sea ice is floating and already contributing to the current coastal levels. It is also true that if the Arctic sea ice is melting, then the ice on massive Greenland and Canada's northern islands will also melt. That is the source of concern. Worse yet, is that once the reflective ice and snow are gone from the tundra regions of the north, large amounts of methane will be released. The oceans also have large amounts of frozen methane that could be released, as we move to a higher temperature range. Methane is a much more potent green house gas than CO2. Humans may have started this pattern, but Mother Nature has the means to extend it. Finding ways to adapt to the inevitable, while we try to slow the pace of climate change is the challenge.

 

LINKBUILDINGSERVICES

4:32 AM ET

December 12, 2009

surprising

Its surprising to see that some people still taking the
The environmental consequences lightly.

 

SANDNESSC

4:06 PM ET

December 14, 2009

A ROTC for spies

My question is in regards to this line in the section titled "A ROTC for spies"

"The U.S. intelligence community already funds national security studies programs at more than 14 U.S. colleges and universities."

The question is does anyone have a list of the 14 colleges that this article is talking about.