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Million Dollar Homes Defaulting At Twice National Rate
2009-12-18 15:00:00
While first-time buyer credits and government backed mortgages have kept the moderately priced end of the housing market on life support, the same is not true of more expensive housing- especially in the million dollar plus range.  A nearly frozen luxury market along with a tough economy means that more and more McMansion owners are ...
More About: Politics , National , Housing Bubble , Dollar , Foreclosure

Foreign Cenbank Holdings of US Obligations Weekly Update ? to December 16,
2009-12-18 08:01:00
"The world does not have so much money to buy more U.S. Treasuries." - deputy governor of the People’s Bank of China Zhu Min4 Meanwhile there’s heavy action coming from the agencies side, too.5 As Jan-Martin often says, "I am without words …" But the numbers, as usual, moved opposite to the rhetoric. The Fed ...
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Home for the holidays- just in case?
2009-12-17 08:01:00
It looks like it’s "Home for the Holidays " in Arizona this year: More people across the country are hitting the road for the holidays this year, but that’s not expected to be the case in Arizona. AAA estimates that 3.8 percent more people nationally will travel during the holidays this year compared to last. In Arizona, the ...
More About: Housing Bubble , Foreclosure , Case

Are Buyers Getting Less Excited About Foreclosures?
2009-12-16 18:33:00
We’ve seen some great sales numbers this past year in some housing markets due to investor interest in purchasing foreclosures.  Phoenix is a great example.  If CNBC is correct, the foreclosure mania might be losing it’s luster:  [Hat tip L!] US home buyers are less willing to buy foreclosed properties than they were six months ...
More About: Foreclosures , Housing Bubble , Market trends , Foreclosure

Congress Reining In The Wild West Of Wall Street, Or Giving It Its Head?
2009-12-16 08:01:00
Last week the House passed HR4173 the Wall Street Reform and Consumer Protection Act.  Forbes said this about the legislation: The House bill does address the most important problems of regulating systemic risk and too-big-to-fail institutions directly–make no mistake about it. Guaranteeing the liabilities of major U.S. financial institutions distorts the allocation of ...
More About: Politics , Congress , Housing Bubble , Wild

AEI Subprime VI Charlie: Complete Annotated Transcript
2009-12-16 08:01:00
3:18:42 And I think the classic definition of quantitative easing is that the size and composition of a central bank’s balance sheet influences financial markets and the economy over and beyond the level of the policy rate. [slide 4] There’s a couple of things to notice about the definition. First, if you hold to ...
More About: Politics , Credit Contraction , Housing Bubble , Charlie

Bill Maloni: Zimmer Plan For GSE Recapitalization
2009-12-16 00:00:00
Longtime Doom friend, blogging colleague and former Fannie lobbyist Bill Maloni has been kind enough to drop by the Castle with another one of his intriguing works of political analysis. I’m not quite sure what to say about this latest effort, except to note that it’s certainly a change of pace from what the guys are ...
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The housing market is failing, not recovering
2009-12-15 17:56:00
At the risk of overdoing the Peter Schiff thing today, I thought he summed up the problems of the housing market so succinctly in today’s Asia times that I had to post it: [W]hile it is true that home prices have stopped falling, this represents failure, not victory. True success would be a drop in home ...
More About: Politics , Market , Housing Bubble , Housing

Peter Schiff Debates Obama?s Economic Policies
2009-12-15 08:01:00
I know we have a lot of Peter Schiff fans, so I thought I’d post this debate between Peter Schiff and an economist from Columbia University, David Epstein.  Epstein maintains that Obama ’s economic policies are saving the economy: [Hat tip to Organized Exploitation via Freedom's Phoenix]   I’ve only seen the first 30 minutes as of this ...
More About: Politics , Debates , Housing Bubble , Policies

Crack of Doom: Xmas Tree meet CRE
2009-12-14 08:01:00
Fairfield Residential LLC, one of the nation’s largest apartment owners and developers, filed for bankruptcy on Sunday, the latest casualty of the turmoil engulfing the U.S. real-estate market. - WSJ1 Versus versus Doom . In this corner (without hat, with cold ears) Doom’s very old John M & friends under Marie’s direction playing it straight … The challenger, from ...
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Slow Times Here in Cybernia
2009-12-13 20:52:00
Lost in Cyburbia: How Life on the Net Has Created a Life of Its Own by James Harkin Toronto: Alfred A. Knopf, 2009. This book is much too fast for my taste. Harkin takes us back to the early 1940s and basically shows how cybernetics, the general study that rose out of Norbert Wiener’s wartime human factors studies of ...
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VI.C Preview: ?? that?s a pretty interesting question?
2009-12-12 15:01:00
So my question is — What’s going to happen to the balance sheet of the Fed in such an environment where foreign countries which have absorbed a lot of government, US government debt in the last few years might be reluctant, and have given signs to be reluctant, to continue absorbing that debt? What’s going ...
More About: Interesting , Question , Preview , Updates , Pretty

Renters Going Back To Basics
2009-12-12 08:01:00
Even in the rental market- luxury is out and back to basics is in:     After the economic panic of 1873 many large Victorian homes were abandoned.  Do you suppose that could be the fate of many of today’s McMansions?  They might be too expensive to keep and too frivolous to rent out.
More About: Housing Bubble , Market trends , Back

Foreign Cenbank Holdings of US Obligations Weekly Update ? to December 9, 2
2009-12-11 08:01:00
Thirty-year bond auctions have an erratic record: They appeal mainly to pension funds, for asset-liability matching purposes, and foreign accounts are infrequent buyers. - WSJ4 Well, the foreign central banks frequented just about nothing last week, at least net-wise, and the Fed itself increased its own MBS holdings, but only by a modest $2.141 billion. The ...
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Twist Is On The Road Again
2009-09-23 17:45:00
My thanks to John for keeping the wheels turning around here and keeping Igor in line the last while.  He’s been pulling more than his share.  Things will mostly be in his and Igor’s capable hands (and claws) for the next couple of days.  I’m off to the Big Apple to visit family. Consider this an ...
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the Fred eyes the Exits, Sheila flogging Treasure Coast Condos
2009-09-23 15:35:00
There are some who think it’s time for the central bank to exit the market. Others say such an abrupt end would undo the Fed’s efforts to keep mortgage rates low and instead suggest a gradual wind down of its purchases and an extension of the program into the early months of next year. - ...
More About: Eyes , Fred , Coast

Government Agency To Get Bailout From Banks?
2009-09-22 21:51:00
I guess what goes around comes around, but at this rate, it’s hard to know if government and lenders are coming or going: [Hat tip Freedoms Phoenix] Tired of the government bailing out banks? Get ready for this: officials may soon ask banks to bail out the government. Senior regulators say they are seriously considering a ...
More About: Government , Banks , Agency , Housing Bubble

bump: the Ominous Euphoria of Panic
2009-09-22 12:38:00
Last Wednesday I called a bottom (why not? everyone else is ) I was visiting a friend near Dal, and baldly stated that the bottom was 6 weeks out. That would make it a bit more than 5 now.  I’m not completely sure why I made that assertion, basing it consciously on the staggering wave of happy-chat coming out of high authorities lately, like Bernanke recently uttering that the recession was likely over. Anyway, last evening I invited sidebar readers to the Google News Homepage and directed their attention to the indexes chart at upper right.  Overnight, I’ve come to realize that I’d sensed a bump through my toes on that one.  The signature will still be there for another 2 1/2 hours, but here it is for your inspection after that. What this means is that the algo trading community has now achieved nearly perfect correlation across diverse indexes.  If I understand the message of the students of emergent behavior that look at ant armies, this me...
More About: Bump , Panic

High Unemployment Causing Record Mortgage Defaults
2009-09-21 23:29:00
It’s tough to pay the mortgage when you don’t have a job: [Hat tip CPGone!] NEW YORK (Reuters) - High U.S. unemployment keeps pushing up the rate of mortgage delinquencies, which could in turn drive personal bankruptcies and home foreclosures, monthly data from the Equifax Inc credit bureau showed on Monday. Among U.S. homeowners with mortgages, a record 7.58 percent were at least 30 days late on payments in August, up from 7.32 percent in July, according to the data obtained exclusively by Reuters. But is the problem improving? Apparently not: August marked the fourth consecutive monthly increase in delinquencies, and the report showed an accelerating pace. By comparison, 4.89 percent of mortgages were 30 days past due in August 2008, while in August 2007, the rate was 3.44 percent, Equifax data showed. The rate of subprime mortgage delinquencies now tops 41 percent, up from about 39 percent in each of the prior five months. The results, which correlat...
More About: Mortgage , Unemployment , Record

CDARS, Moral Hazard & the FDIC
2009-09-19 13:02:00
“I’ve recently seen some cases where banks that participated in the CDARs program were cited for accepting third-party brokered accounts,” van Doorn said, referring to the Certificate of Deposit Account Registry Service that lets banks join a network and place funds into certificates issued by other network-member banks. “It’s still an open issue.” - NJ Biz1 I had to go back a couple of weeks to find that single item suggesting that there may possibly be a moral hazard problem with CDARS. Indeed, there seems to be an ominous reluctance in the mainstream media for bringing up CDARS in connection with the FDIC, even as the deposit insurance agency  is struggling4 against the perception that it may require a bailout of its deposit fund.  Nevertheless, if I’m reading the tea leaves correctly on this really obscure piece,2 there’s a serious war going on under the covers between an alarmed regulatory community and a lot of bankers ...
More About: Hazard , Moral

Option ARMs: That Explosion Is The Sound Of The Other Shoe Dropping
2009-09-19 09:01:00
  Just when they thought it might be safe to go back in the housing market… [Hat tip Freedom's Phoenix] WASHINGTON (Reuters) - The federal government and states are girding themselves for the next foreclosure crisis in the country’s housing downturn: payment option adjustable rate mortgages that are beginning to reset. "Payment option ARMs are about to explode," Iowa Attorney General Tom Miller said after a Thursday meeting with members of President Barack Obama’s administration to discuss ways to combat mortgage scams. "That’s the next round of potential foreclosures in our country," he said. Option-ARMs are now considered among the riskiest offered during the recent housing boom and have left many borrowers owing more than their homes are worth. These "underwater" mortgages have been a driving force behind rising defaults and mounting foreclosures. In Arizona, 128,000 of those mortgages will reset over the the next year...
More About: Sound , Explosion , Arms , Shoe

Housing Only Managing On Government Life Support
2009-09-18 14:24:00
For the most part, the consensus in the media seems to be that the housing market is showing some sort of tenuous "stabilization".  When I Googled "housing market" this morning, here’s what the main headlines looked like: The problem is that if housing isn’t falling, it’s because the government is propping it up: Over the past year, the government has intervened heavily at essentially every stage of the home-buying process. In fact, more than 80% of the new residential mortgage loans made this year benefited from some form of government support, according to the trade publication Inside Mortgage Finance. To keep funds flowing to the housing market, the government bailed out Fannie Mae and Freddie Mac last year and now effectively owns the mortgage finance giants and their combined $5.4 trillion in loans and guarantees. To keep mortgage rates low, the Federal Reserve is on track to purchase nearly $1.5 trillion in debt issued or guaranteed...
More About: Life , Government , Support , Housing

HFT Chiseling — How Quaint
2009-09-18 12:49:00
… While these advantages are measured in milliseconds rather than minutes, both high-frequency trading and flash orders enable certain investors to chisel a profit between bid and offer — the same abuse of inside market information and access that the S.E.C. tried to eliminate four decades ago. Now, traders have simply found different ways to tilt the playing field, … - David Silver, a former senior staff lawyer at the SEC, NYT1 Next week I’m workshopping "Aleynikov Blues" at Halifax’s Dublin St. Poetry Club.  The above should help my colleagues figure out what I’m talking about. —————&mdash ; [1]: "A Short History of Fast Times on Wall Street", by David Silver, New York Times, September 17, 2009. (& today’s, 18th, print edition)

Foreign Cenbank Holdings of US Obligations Weekly Update — to September 1
2009-09-18 09:01:00
[Congressman Alan] Grayson: “So who got the money?” Bernanke: “Financial institutions in Europe and other countries.” Grayson: “Which ones?” Bernanke: “I don’t know.” Grayson: “Half a trillion dollars and you don’t know who got the money?” - Wall St. Cheat Sheet1 Twist was circulating the above around the Castle earlier today with the comment "… you could purchase a bunch of treasuries and agency debt with that," to which I’m going to add the thought — last week. Foreign central banks have been suddenly gorging on Treasury Debt, but an even bigger number is this week’s Puplava number, and it was so extreme it merited notice in Bloomberg.2 The Fed’s assets rose $51.9 billion, or 2.5 percent, to $2.14 trillion, the highest since May, in the week ended yesterday, the central bank said today in Washington. Mortgage- backed securities increased by $59.8 billion to $685.1 bil...
More About: Update , Weekly , September , Holdings

UBS & CDO Sales: Early Warning
2009-09-16 20:36:00
1:23:33 Here’s a great story, a friend of mine went to Japan a year ago, was talking with one accountant, and he was talking about investing in some subprime securities, and the accountant said, ‘no, no, no, I don’t want any subprime securities, I want a CDO.’ [laughter] So, you know, that’s, yeah, there’s an issue, but I … - Tom Zimmerman,1 UBS fixed income analyst, March 28, 2007 So what’s the big tickle?2 …. And it’s fair to assume that Pursuit wasn’t the only hedge fund or institutional investor buying “crap” from UBS in the summer of 2007. The Pursuit case looks like it could become a much bigger headache for UBS than anyone imagined. Matt Goldstein and the gang at Reuters are all over this story of allegations that UBS may have had advance knowledge that Moody’s had doubts about some of their bonds.  But the Swiss bank’s top research boffin had been cracking that joke en plein air ...
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Nova Scotia’s New Empty Apology Act
2009-09-16 15:00:00
The Apology Act, which comes into effect Oct. 1, broadly defines an apology and states that it can’t be used as evidence in legal proceedings to establish fault or liability. - CBC1 As usual, there is rather more than meets the eye here, and it’s not a case of an eccentric rookie mistake by our newly elected NDP (that’s socialist, by the way, a Maritime first) provincial government, either.  The story and a commenter in the thread below note that the majority of Canadian and American jurisdictions, Australia and the UK all have similar laws.  So what gives with this? "An Act Respecting the Effect of an Apology and to Prohibit its Use as Evidence of Fault or Liability" … 3 (1) An apology made by or on behalf of a person in connection with any matter does not constitute an express or implied admission of fault or liability by the person in connection with that matter; does not constitute a confirmation of a cause of action or acknowledgm...
More About: Nova , Scotia

Foreclosures Dominate Phoenix Condo Market
2009-09-15 09:01:00
  I was recently asked about the state of the Phoenix condominium market, which we haven’t looked at lately.  M pulled some numbers for us, and the numbers speak volumes about what’s happening out there.  [So does this picture from the 3rd Avenue Lofts in Scottsdale] Here’s what M had to say: [Numbers from 9/11] Active       ;                     5,775      1,997 Under Contract         ;   1,993      1,520 Sold (Past 30days)       860      &n bsp; 528   The number in red is the total of REO and pre-foreclosure.  76% of the pending sales are "distressed", but only 35% of listings.   You and I both know the condo market was a haven for speculation and fraud.  Some of the largest commercial defau...
More About: Foreclosures , Market , Condo

Crack of Doom: Bernanke’s Secret Weapon — Canada
2009-09-14 14:30:00
1:36:22 I think the idea was to facilitate industry consolidation. … Charlie’s not here, but an interesting factoid is, Chairman Bernanke’s 2nd most cited paper on the Great Depression is actually one that compares the business cycle in the United States and Canada in the 1930s. And the contraction activity was much more gradual [in Canada]. The reason? Canada didn’t have bank failures, because Canada had a consolidated banking system. - AEI1 Resident Fellow Vincent Reinhart, Oct 2, 2008 So this is a bit of shameless self-promotion for Doom ’s new transcript of 2 hours worth of battle chatter at the American Enterprise Institute a couple of weeks after Lehman’s collapse a year ago tomorrow. Meanwhile the Mothership is patting itself on the back because Canada hasn’t lost any banks so far this time either, … … but of course that had everything to do with the C$32 billion subsidy the banks got when retail and institutional inves...
More About: Secret , Crack , Weapon

AEI Credit Crunch III: Complete Annotated Transcript
2009-09-14 04:32:00
0:50:30 … My brother’s a cardiologist, I should show him this as a cardiogram, you know, he would tell me the patient was long since dead. - Desmond Lachman Doom Transcripts: Index & Guide Housing Doom is pleased to present a complete unauthorized annotated transcript for the American Enterprise Institute’s October 2, 2008 event "What Lies Beyond the Credit Crunch ? Part III".1 The event site has a variety of resources including a summary and both an audio and a video of the proceedings. There is an official transcript, but the link to it does not seem to be currently working. Part of the importance of this seminar is that it occurred just over 2 weeks following the pivotal crisis of mid-September 2008.  In contrast to reflections2 a year later, these guys are giving their raw thoughts in a period before the story-line got established. Table of Contents [link navigation works best when full article displayed] 0:00:00 - Dead Air 0:01:35 - Peter...
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9605: HFT Fun & Games? Looks like …
2009-09-12 20:48:00
At any rate, the stock market, at the center of today’s economic crisis, closed on the eighth anniversary of 9/11 at nearly the exact same level the Dow Jones industrial average was at the day of that tragedy. Was this an eerie coincidence or some kind of coded Wall Street tribute? - Prison Planet1 Seems more like a mischievous exploit to me.  I’m guessing some young trader cowboy with more HFT horsepower than brains saw that the index was close to that symbolic level and nudged it into position, thereby coding an Easter Egg into the Dow itself.  You’d know a real hacker by her ability to refrain from doing something brain dead like that. —————&mdash ;—— [1]: "On anniversary, stock market closes at exact 9/11 level: Eerie coincidence or coded Wall Street tribute?", by Aaron Dykes, Prison Planet, September 12, 2009.
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