Economists Barry Cynamon and Steven Fazzari argue that much of the growth in the US over the past 25 years has been fueled by consumer debt. Their research indicates that the consumers will cut spending as a result of the housing recession, which they believe will trigger the worst contraction since the 1980s, and possibly […]
Read more...Bloomberg tells us that foreclosure notices increased more than 100% in August from the year prior level, rising from 1 108,716 to 42,144. These figures greatly exceed the number of homes sold at foreclosure auction. RealtyTrac, the source of the data, counts every court filing in the foreclosure process as a “foreclosure,” which results both […]
Read more...More customers lined up today to withdraw cash from troubled UK building society Northern Rock after the Bank of England provided emergency funding. Bloomberg reported that there were expressions of interest in the bank, and given the continuing run, Northern Rock’s best course of action would be to make some kind of deal ASAP. The […]
Read more...One of the salient differences between Greenspan’s and Bernanke’s tenure as Fed chairman (at least so far) was Greenspan’s skill at playing to his audience, which was the financial press, Congress, and market participants. With the publication of his memoirs next week, Greenspan will be performing for a larger crowd, although it will be dominated […]
Read more...In a departure from our usual programming, I thought I would introduce a real estate opportunity (yes this is an ad of sorts). But as you can see, it is particularly attractive and also presents an interesting case example of the issues involving the marketing of unique and illiquid assets. The asset in question is […]
Read more...This Bloomberg story, which cites a newly-released Fed report that says that minorities are denied loans more often than Caucasians and often pay higher rates, isn’t a surprise. If anything, what is surprising is first, that this is treated as news, and second (and related), that the Fed and other regulators have been slow to […]
Read more...Given that it is now September, and in most communities, the residential selling season is March to October, the forecast by the National Association of Realtors, that the housing recession will continue into 2008, hardly merits the term “forecast.” It’s closer to being facts on the ground. NAR is optimistically calling for a bottom in […]
Read more...The Financial Times’ John Gapper had an interesting piece today, “Patience on debt can ease distress.” I’ll give you the section that caught my eye to see if you react to it the same way I did: Last week, I went to a dinner in Manhattan that ostensibly had nothing to do with the credit […]
Read more...In a new report on the homebuilding industry , Moody’s noted that it now expects the housing recession to extend into 2009 (hat tip to Housing Wire). According to its press release: “Our current thinking is that the downturn, currently two years in the making, will last until 2009, with any sector recovery likely to […]
Read more...The Wall Street Journal has an informative story today that discusses how title insurance can, in some respects, be a more accurate indicator of housing market stress than other measures. The first element is somewhat obvious. The purchase of title insurance is a good predictor of sales. Title searches usually come late in the purchase […]
Read more...Some may have already seen Nouriel Roubini’s latest piece, “The Coming U.S. Hard Landing.” He goes through an exhaustive and exhausting litany of what ails the US economy (short answer: pretty much everything, although he did spare weak-kneed readers the role of global imbalances). His article is worth reading, and the extracts that relate to […]
Read more...I’m late to this item, “Task Force Will Seek More Loan Revisions,” which appeared in the Saturday Wall Street Journal. It seemed to merit comment and I haven’t seen much online. Here’s the premise: Attorneys general and banking regulators from 10 states have formed a task force hoping to persuade mortgage-servicing companies and investors in […]
Read more...In a speech in Hawaii this morning, Philadelphia Fed President Charles Plosser the Fed’s views on stability and monetary policy, and his words were cold cheer to anyone expecting a rate cut. Calculated Risk noted that it was unusual for for a Fed president to speak so directly about monetary policy. Plosser noted that monthly […]
Read more...MarketWatch reports that the Paulson Credit Opportunities fund, which focuses on distress in the mortgage markets, earned 26.7% in August, which brings its returns year to date to 410%. A sister fund pursuing broadly the same strategy but started a bit later, Paulson Credit Opportunities II, was up 32% in August and 230% for the […]
Read more...As concern about tightening conditions in the credit markets and the continued erosion of the US supbrime and broader housing market has grown, so too have calls for Extreme Measures to combat these snowballing problems. The first was from Bill Gross at Pimco, who suggested that the US government “rescue” the 2 millionish homeowners who […]
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