Quelle Surprise! Bond Investors Notice that Servicers Let Houses Fall Apart
Investors cry crocodile tears over subprime blight even though it helped line their pockets.
Read more...Category Archives: Real estate
Congressmen Call for Hearings on Risks of Rental Securtizations
Private equity firms have been playing residential landlord for only a few years, but the impressive amount of capital they’ve deployed in this strategy means they’ve had significant impact in the markets they’ve targeted. Needless to say, that impact does not look to be very positive. A Congressman has called for hearings on rental securitizations out of concern that this structure could make this already not-too-good-looking situation much worse from the perspective of tenants and communities.
Read more...Wolf Richter: Housing Bubble 2.0 Hits Messy Resistance In California
San Francisco may be extreme, but housing bubbles are now re-cropping up across the nation – and so are the very factors that helped inflate the prior housing bubble and then magnified the ferociousness of its implosion.
Read more...In Echo of Runup to Crisis, Bond Investors Reaching for Yield
An article in the Financial Times by Tracy Alloway gives yet another sighting that bond investors are getting a bit frantic in their hunt for yield. The piece has the eyepopping title, Yield-hungry investors snap up US homeless bond. It uses recent deals in the CMBS (commercial mortgage backed securities) market as a proxy for bond investors’ QE-driven hunt for more return.
Read more...Wolf Richter: How the Fed’s “Wealth Effect” Quack Medicine Hurts Renters and With Them, Consumption
The Fed is explicitly relying on the wealth effect to stimulate spending. It’s theory is that if asset values rise, people will feel richer and spend more. But that’s not exactly how this movie is playing out.
Read more...Frigid Weather Puts Homeless at Risk
Yves here. Although the current spell of nasty cold weather isn’t unusual by the standards of three decades ago, in the intervening years we’ve also had a big increase in homelessness, which means a lot more people are at risk of freezing to death.
Read more...Foreclosures by Homeowners’ Associations Rising as Their Financial Condition Worsens
While foreclosures are falling on a nation-wide basis, one category that is an exception is foreclosures filed by homeowners’ associations against members that are delinquent on their fees.
Read more...The Fed’s Taper and Market Fealty
The Fed’s announcing the taper was supposed to be an earth-shaking event. But that actually sorta happened last summer when Bernanke first used the “t” word and interest and mortgage rates made an impressive upward march in a short period of time.
From my considerable remove, what was noteworthy about the Fed’s announcement yesterday is how terrified it seems to be of creating an upset.
Read more...Michael Hudson: Trade Advantage Replaced by Rent Extraction
An interview with Michael Hudson, a research professor of Economics at University of Missouri, Kansas City, and a research associate at the Levy Economics Institute of Bard College, on the Renegade Economists radio/podcast
Read more...JP Morgan, Not Satisfied with Profitable WaMu Acquisition, Sues FDIC to Extract More
If you are Jamie Dimon, a good deal is apparently never good enough.
Read more...Big Banks About to Start Booking Second Mortgage Losses They Can No Longer Extend and Pretend Away
Reuters has a new article, Insight: A new wave of U.S. mortgage trouble threatens, which is simultaneously informative and frustrating. It is informative in that it provides some good detail but it is frustrating in that it depicts a long-standing problem aided and abetted by regulators as new.
Read more...How Wall Street Has Turned Housing Into a Dangerous Get-Rich-Quick Scheme — Again
Over the last year and a half, Wall Street hedge funds and private equity firms have quietly amassed an unprecedented rental empire, snapping up Queen Anne Victorians in Atlanta, brick-faced bungalows in Chicago, Spanish revivals in Phoenix
Read more...Bob Goodwin: Why Code is Law
Several bellwether software initiatives have gone off the rails over the last five years. I am going to focus on one, because I learned about it on Naked Capitalism, and is where I first saw the expression “Code is Law”. I hope when history is written, this example will stand out on how the anarchist nerds that we call software engineers inadvertently started to hijack public institutions.
Read more...Judge Rakoff Blasts Breuer, Prosecution of Companies Rather than Individuals in Bar Speech
Absent sitting on the Supreme Court, it is difficult for a single judge to effect much change. Yet Jed Rakoff, in sending the SEC back to the woodshed in two separate cases over its failure to get factual admissions, meaning admissions of misconduct, on civil settlements of SEC cases, singlehandedly embarrassed the SEC and the Department of Justice into seeking these statements (for instance, numerous media reports indicate that the Administration wants that sort of confession as part of its pending settlement with JP Morgan).
Rakoff threw down another gauntlet in a New York Bar Association speech on Tuesday.
Read more...Richard Alford: On Grading the Bernanke Fed
We are certain to hear more and more appraisals of Bernake’s tenure as Fed chairman as he approaches the end of his term. But will they use good benchmarks? We suggest measuring his performance against his claims for the Fed’s objectives and what he said the central bank could accomplish. Not surprisingly, we find that he came up short.
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