We check in with the financial markets, just to see if anything is happening.

Not much.

But what's this: the homebuilders are going down. Ryland and Lennar are clearly falling. What could be going on?

"Bulletproof house builders looking shaky," says TheStreet. From the look of the charts, they are not just shaky but bleeding. New house sales rose again last month. But existing house sales fell in July, after posting a record of 7.35 million in June. Inventories of unsold houses are at a 17-year high.

Our guess is that the inventories and the price of oil are finally catching up with the house market. To the old line - "they're not making any more of it" - we reply with a headline we saw in Vancouver recently: "Condos, Condos, Condos!" Builders were putting up condos all over the place, and putting up houses on nearly every stretch of bare land they can get their hands on. Even in downtown, historic Annapolis we saw a stretch of luxury accommodations under construction across the street from St. John's college. (More on the convocation...below... In Annapolis, every word gets an extra 'e' on it whether it needs it or not, so the condos will probably be sold as 'historic condoes.') All these extra units are bound to depress prices.

So is gasoline at nearly $3 a gallon. After they've filled up the strategic storage tanks in their SUVs consumers have less money to spend on other things - including housing.

And so, perhaps, we have finally reached the "Beginning of the end for real estate," as the NY POST put it.

What a run it has been. The Center for Economic and policy Research reports that the housing market added $5 trillion in 'bubble wealth' to the American economy, an amount equal to $70,000 for a family of four. That is the fraudulent money that has sustained Americans at a standard of living they cannot really afford. It is the source of the illusion that the U.S. economy is growing and healthy. It was psuedo-wealth, an asset that really didn't exist. Too bad so many people spent it.

"House party, finally over?" asks the Financial Times.

We don't know the answer. Maybe it is over today. Maybe it will be over tomorrow. Our advice to readers: don't be the last ones to leave.

*** We've been talking a lot this week about the inconsistencies and confusion that Homeland Security provides U.S. citizens under the guise of "protection." But Jonathan Kolber wants to touch on something a little closer to your pocketbook...

"Our friendly old SEC, a.k.a. the Securities and Exchange Commission. Among the SEC's egregious violations is its total failure to regulate 'phantom short selling' - the phenomenon wherein shares of public companies are sold short without the shares ever existing!

"Incredible as it seems, this behavior is rampant and CEOs of several public companies have privately complained to me that millions of shares of their stock have been fabricated. A unique kind of thief practices this behavior. It drives down the market capitalizations of some of the most promising stocks in the world.

"How does a financial parasite benefit from this, you ask? Simple: find a friendly broker, cut them in on a percentage of the take, sell the stock and either buy it back later when the price declines or (ideally) the company goes bankrupt and you pocket all of the proceeds.

"In order to 'protect' so-called unsophisticated investors, half a century ago the SEC decided to restrict venture-capital type investing to persons with high net worth or high incomes.

"Venture-capital (a.k.a. VC) has offered some of the most spectacular financial returns in recent decades. But you'll never, ever see these opportunities unless you're someone who starts companies or consults to/invests in them like I do."

*** The students entering the class of 2009 were what we expected - skinny poets from New York, fat lesbians from Chicago, and earnest young men from the Plain States. The parents were a little less than we had expected.

"That's the difference between the U.S. and Europe," Jules remarked. "Here, anything goes."

Europeans are a bit more careful what they look like. Many of the parents at yesterday's convocation seemed worn out from too many years in earth shoes and too much tofu. Many seemed like aging hippies. Others looked like Middle America, which is to say, like us; they looked awful.

It is not our place to criticize our fellow Americans. There is no profit and no sport it. Nor do we care to look in the mirror and wonder what others may think of us. Perhaps we have merely reached a stage in life when every time we get together with people our own age we get depressed. Still, we comment on it only out of a spirit of mischief...and compulsion. For everywhere we look, we see signs of Late, Degenerate Empire. Down at the Oriole stadium are pictures of baseball fans from 1910 or so. Guess what, the men are wearing suits and ties. But that was back when the empire was just getting its start - when savings were high, collars were starched, the currency was hard, and the nation had the most positive balance of trade in the world. No economy was growing faster. Now, even at a college convocation Americans wear outfits that they wouldn't have put on to pave a road in 1910. For proof, we turn to a picture on the wall of the Historic Inn where we stayed. There is a photo of paving West Street, early in the 20th century. We see no sandals, no shorts, and no tee shirts.

Fashions change with the evolving empire. Now, the whole society depends on elastic. Its credit stretches along with its waistbands. And its appetite for absurd vanities seems infinitely expandable.

*** We wandered over to Main Street to get a pair of glasses.

"These are designer reading glasses," explained the helpful clerk, pointing to a glass cabinet. "They start at about $300 a pair. In this box are regular reading glasses. They're $20 each."

"What's the difference?"

"Well, these $20 glasses are out-of-fashion, I guess. The midshipmen who come in here say they're so out-of-style that they work as a form of birth control."

"Hmmm...I already have 6 children. I'll take the $20 pair."

*** We have been disappointed in ourselves. We were determined to think New Thoughts this summer. We came up dry. But Christopher Nelson, St. John's president, explained why:

'There are no new thoughts,' he seemed to say in his convocation speech.

"We struggle with the same questions that dogged Achilles, and Odysseus, and Socrates and Aristotle. Who are we? What are we doing? How can we find honor and happiness? What is our relationship to others? To our spouse? To our children? To our fellow men...to our government and our community?"

St. John's is an unusual school, Mr. Nelson explained. It doesn't seek to prepare students for careers; it tries to prepare them for life itself. "A boot camp for life," is how one student described it. Students read the great works of western thought...talk about them...and try to understand them. They begin with the ancients and work forward, chronologically, until they are discussing Einstein and quarks. At the end of 4 years they are not prepared for anything in particular; but they should be prepared for anything in general. Thereafter, many go into engineering or science...arts or literature. Whatever they choose to do, they have a solid foundation upon which to build...and many old thoughts to use as reference.

Mr. Nelson's speech came amid much pomp and circumstance. The in-coming class marched into the theatre in black robes. Before them proceeded the entire faculty of the college, with its president in the lead carrying what we took to be a silver orb. Every member of the teaching staff was bedecked in doctoral robes, each bearing the insignia of the institution that granted it. And when all had taken their seats, the names of the new freshman were called, one by one. Each one walked to the center of the stage, shook hands with the college president, and wrote his name in The Book.

When this was completed, Mr. Nelson announced that the 215th annual class was installed:

"I declare the college in session," said he.

Bill Bonner is the President of Agora Publishing.  For more on Bill Bonner, visit The Daily Reckoning.