How are people supposed to spend their way out of this depression if mortgage services get all picky about who is paying whom?
Nostrovia,
we're number 2!!! subprime, nothin but a wannabe.
HAL : I'm afraid. I'm afraid, Dave. Dave, my mind is going. (CHONG : Dave's not here.)
Three percent looks good to me. No doubt in my mind that is exactly what the policy makers are working toward.
And that is an excellent long term plan for the financial industry, to make funding commitments at 3% for thirty years. A debt structure neither the borrowers nor the lenders can afford! I am glad we are thinking long term now.
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Mr. Obama assumes the contraction in GDP for 2009 will be only 1.2%. That's a big improvement from the -6.34% annual rate drop of last quarter and far better than the non-partisan Congressional Budget Office's (CBO) prediction of -2.2% growth for 2009. Then from there things get truly surreal. The Obama administration predicts GDP growth for 2010 will rebound to 3.2% and then increase by more than 4% for each of the next three years!
http://www.financialsense.com/fsu/editorials/delta/2009/0421.html
Judging by the 10 year yields, the Fed may have shot their load.
Good luck with getting that default level down any time soon.
Sounds like a reason to rally! 
I know I should care; but it's gotten tiresome reading the mountains of bullcrap in memo's like this.
.............................
If you don't take your profits, someone else will.
Someone really needs to do some back of the envelope calcs on how big a block of money would be required to get to 4% mortgages or what ever their goal is.
My gut feeling is that its massive, truly massive and not worth it.....
Anyone seen any calcs? TIA!
Uh...I'm feeling queasy...incoming Tsunami...
If risk is not being appropriately priced then who is selling the puts? Ohhh.... I get it.... 
I miss Tanta.
---------------------
Chemical con-trails from Air Force spraying operations cause cancer and respiratory problems! Where are all the environmental wackos concerns? See; Killer Chemtrails: The Shocking Truth
http://www.youtube.com/watch?v=Psdg3OAw_a8&fe
I wonder whether the prime borrowers are underwater or behind because of job loss or big medical bills. Maybe some combination of those ... a perfect storm.
Job losses will not help....Yahoo will cut 5%...
April 21 (Bloomberg) -- Yahoo! Inc., owner of the second- most popular U.S. search engine, reported profit and sales that met analysts' estimates. The company will cut 5 percent of jobs amid a slowdown in online-ad sales.
First-quarter profit fell 78 percent to $118.7 million, or 8 cents a share, Yahoo said today in a statement. Excluding fees passed on to partner sites, sales were $1.16 billion. Analysts on average had estimated profit of 8 cents and revenue of $1.2 billion, according to a Bloomberg survey.
So, I'm catching up on threads...and I wanted to ask about a CRE group - Americas Capital Partners out of Miami - but everybody had moved on from the CRE thread by the time I posted.
Any idea how they're weathering the downturn? They're somewhat regionally diversified, so they may be somewhat shielded from the carnage in Miami (though I don't know how much of that is in CRE); they are in Atlanta and the NoVa area...
Of course, no one could have known this from discussions here on the reset charts.
Actually, it's rather refreshing to find out that my income **really** is in the top percentiles on the west side of LA. It's just that those that were buying all of the houses were not.
That was so predictable. Even with all the wall street and MSM propaganda.
Green shoots. Haha. that's a good one.
"Uh...I'm feeling queasy...incoming Tsunami... "
I got a report out of SoCal yesterday that said the foreclosure tsunami is hitting now, post-moratorium.
Equities markets displayed insanity today. Glad to see we gained back half of what we lost yesterday (or thereabouts).
/hoping hoopajoops doesn't flame me...
One of my clients was modified to a 3% mtg--did it herself, no help from me. Was able to make ONE payment. Behind on assn fees also; they stupidly wont cooperate. They are going to end up with an empty house, with no assn fees.
Point is, they didn't reduce the principal. So tho the 3% did get a lot more affordable, and gets them a stream of income for awhile (maybe only a month) the homeowner is not really helped cause after the 5 year reduction, unless we have a massive inflation (which we may) the owner is in just as much trouble as they were before. Usually, the lenders tack on the shortage to the end, so after 5 years, the borrower still owes much much more. I say 5 years, because my understanding is that is when these super low rates end. Of course, if your kid graduates from the school system in 5 years, and the payment is roughly the equivalent of rent, you just walk away--5 years from now.
lawyerliz
If you reward people that default on the mortgages, then you get more people defaulting on their mortgages. It seems inevitable to me that there would be a corresponding spike in the default rate after it was announced that the new administration was going to help people in foreclosure. Whether those people are actually helped is irrelevant, what matters is that they had a perception that they were going to be helped if they defaulted.
Somehow Someway Someone will tie this to CRA.
The convoluted machinations will surely be a masterpiece.
" nades (member) wrote on Tue, 04/21/2009 - 2:31pm.
Someone really needs to do some back of the envelope calcs on how big a block of money would be required to get to 4% mortgages or what ever their goal is.
My gut feeling is that its massive, truly massive and not worth it.....
Anyone seen any calcs? TIA! "
That is easy - take the size of the mortgage market, and multiply by 1.
In good times, MBS trades at 100 - 150bps over the 10 year, to compensate for prepay risk. Today, without the Fed interference, they would be at 250bps+ due to Fannie/Freddie counterparty risk.
The Fed buying has driven the spread down to 120bps or so; the par MBS is at about 4%.
A 4% MBS par leads to a 4.75% - 5% street rate, due to origination costs and MSR strip.
To get to a 4% mortgage rate, you would need MBS just about flat to slightly above Treasuries, or about 3.25%.
The only group that would pay flat to Treasuries, or a 25bps spread, is the Fed.
The mortgage market is estimated at 2.8T this year, as per the MBA estimate. Some of that is held in portfolio (mostly jumbos), some is held by MSR hedgers.
The Fed would need to buy the rest.
If rates went down to 4%, that would set off another refi wave, including everyone who refied recently, so the mortgage market would increase, probably another T.
Bottom line, the Fed would need to sop up about $3T of MBS.
Believe me, no way in hell that is gonna happen, I am sure they have done the math and realized this.
If you reward people that default on the mortgages, then you get more people defaulting on their mortgages. ~JD
I believe this is a new phenomenon.... Perhaps it should have been expected but there wasnt much history of it happening before...
I don't see the help, or promise thereof, causing foreclosures, not in my neck of the foreclosure woods.
What I see now is foreclosures stacking up because the houses are so very far underwater. Got one which the borrower said ok, foreclose me, and the bank, with no prompting cancelled the foreclosure sale and said they wanted to deal. We said ok, no response. It is typical for a peak 200-250 house to be a 100k underwater. A 400-500k house, 200k underwater. Those who are say, only 30 k underwater I advise to stick with it there may be some hope someday.
lawyerliz
So there are 1.2 MILLION loans 60 days past due, and in January, 8,953 "loan modifications" were "completed" and they foreclosed on 3,391. So after all that hard work in Jan. there are roughly 1.2 MILLION problem loans left, with plenty more coming down the pike.
This is going to get very very ugly.
Do Our Lawmakers Sell Too Cheaply?
Bailouts for just a $10 Million lobbying expenditure.
ghostfaceinvestah -
Your saying that the fed would need to buy the whole market of outstanding mortgage debt? Or just the originations this year?
Also that 2.8T number is that total outstanding mortgage (resi) debt or just this year's anticipated new issuance + refis?
Thanks again!
And this doesn't include the ones that were foreclosed already, nor the ones that aren't past due yet, but will be.
lawyerliz
The coupling between mbs and the loans that they securitized has become much looser.
Holy freaking crap ! Those numers are terrible !!!! The rate of increase is the most worrying, plot that on a chart and then ask yourself how healthy the banks will be in 12 months.
If the choice lies between rewarding deadbeats who default on their mortgages and rewarding the banking experts who made it possible for the deadbeats to borrow in the first place.... ok, I'm repeating myself again....
.............................
If you don't take your profits, someone else will.
--
Pushing Debt has consequences, a lesson that BBAD and their crooked leaders refuse to learn.
It is NOT an economic crisis; it is a human behavior crisis brought upon by unethical behavior across the board.
Jas
It only takes a couple of foreclosed primes in a tranche to make an mbs worthless. I mean zero.
rb which tranche are you referring to? The equity strip? Seems the first strip would be ok witha few FC's.... No?
" lawyerliz (member) wrote on Tue, 04/21/2009 - 2:45pm.
I don't see the help, or promise thereof, causing foreclosures, not in my neck of the foreclosure woods."
I don't believe the program was meant to help a lot of foreclosures, I believe it was meant to give some people some hope, and hope people are irrational and continue to pay on underwater houses, at least for a little while, to kick the can down the road a bit.
Think of it - we had a huge asset bubble, and either the owner of the asset has to take the loss, or the owner of the debt has to take the loss, or the loss gets deferred.
Clearly the govt hopes the latter takes place.
This was a dramatic increase in deliquent prime, but it's only a beginning to a likely larger surge.
That's actually good news:
How foreclosures stimulate the economy:
--
"Fed better get those rates down to 3 percent so people can refinance, stat."
The real rates currently are the highest in years and even when they go to 3% it would be under the condition of 2-3% deflation rate making the real rate backbreaking for dopes that think that they must borrow money to buy a home.
DEBT must stop.
Jas
TWO BROWN SNAILS
Two brown snails without a shell
Nibbled out two brown morels,
Caps devoured, stems were hollow,
So our cities and their sorrows,
Let the ages tell
As the little so the great,
Fungus or the modern state,
Both arise and both will fall,
Down the roof and citadel,
Utopia can wait
Time the slug that climbs and gnaws
But O the weakness of the laws
Pavel
April 21, 2009
Pavel Chichikov
Im not so sure about the site meter. 550 with few comments seems decoupled from the commentariat. I suspect Bloafiing (Blog Loafing)
" nades (member) wrote on Tue, 04/21/2009 - 2:48pm.
ghostfaceinvestah -
Your saying that the fed would need to buy the whole market of outstanding mortgage debt? Or just the originations this year?
Also that 2.8T number is that total outstanding mortgage (resi) debt or just this year's anticipated new issuance + refis?
Thanks again! "
The 2.8T is the MBA estimate for the mortgage market this year.
http://www.mbaa.org/NewsandMedia/PressCenter/68196.htm
Currently, the only marginal buyer of MBS is the Fed. Note the Fed now has $330MM on their balance sheets, up 50% in a month.
The Fed would have to buy all new issuance (less hedgers, etc), as they are doing now. They ARE the MBS market. They can set any price they want, for all intents and purposes. If they wanted a 4% mortgage rate, they could get it. It would push out a few of the hangers on who still play in the market (PIMCO, etc).
The problem is, it would take nearly $3T (that mortgage size would go up at a 4% rate).
They have alloted $1.3T in purchases I believe, hoping that money will last until the "second half recovery". They are probably going to run out as it is, and allot more, my guess is they will end the year with $1.75T of MBS.
nades,
This is what I was working off of. I should have linked it as my interpretation may not be right.
http://www.businessinsider.com/how-can-mortgage-securities-be-worth-so-l...
But you can't refinance underwater ... 
In some places the drop is getting close to a bottom, here in Miami, 44% off end of January, dropping 2% per month, off then, 50% now. Off 55% eventually.
Purchasing in a sweet spot 175-250k really going up nicely.
Of course, in most places the deflation is not near the bottom.
See Touzet comment in the last thread. I will look up Amercan Capital Partners at the Secy of State's office, or the interested person can. What's Touzet's first name?
lawyerliz
GERALD CELENTE ON TEA PARTY TAX PROTESTS
http://www.youtube.com/watch?v=QPUfu5ty1lg
---------------------
Chemical con-trails from Air Force spraying operations cause cancer and respiratory problems! Where are all the environmental wackos concerns? See; Killer Chemtrails: The Shocking Truth
http://www.youtube.com/watch?v=Psdg3OAw_a8&fe
--
"But you can't refinance underwater ..."
The USG is working on submerged mortages.
Jas
" Comrade Scott (member) wrote on Tue, 04/21/2009 - 2:33pm.
Uh...I'm feeling queasy...incoming Tsunami...
"
Me, I'm hearing Wagner. Played on a scratchy gramophone.
Sweet baby Jeebus, they have 1.2m DQ, they're processing 8K mods per month. Bailing the ocean with a plastic spork.
And this is under the *streamlined* program.
This is one of the (many) problems Tanta warned us about.
Think of the time and expense. They're infinitely better off just doing a bulk cramdown.
DEBT must stop.
Jas
Sadly the only honest and transparent way to do this is via defaults, which the politicians won't stand for.
So we choose politically palatable deception and theft instead.
You mean making loans without requiring any proof that they are even employed, willing, and able to repay a loan 15X their previous years earnings because they have good credit and said they have a job is WORSE than making a loan to someone who has a job, down payment buta low credit score?
The tables show that the number of prime 60 days+ delinquent rose to 743,686 in January, from 497,131 in December
That rate of increase is stunning. It's no wonder the fed is dumping $1.25 trillion into the mortgage market.
This is a list you don't want to be on.
from the link...
"Of course, if 40% have cut back on luxuries, and another 31% on both luxuries and necessities, then 71% have cut back on luxuries."
hmmm
Why yes, reality check, it really is worse.
lawyerliz
" Samdog (member) wrote on Tue, 04/21/2009 - 3:02pm.
But you can't refinance underwater ... Sad"
You can up to 105LTV.
https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2009/0904.pdf
yup absolute force every pension plan into buying equities. I don't how one makes a 8.5% yield with a 3% yielding asset.
When rates go back up which they have to if the Fed. is successful whom are those borrowing at 3% be going to sell to and what price are they going to be willing to pay for 6% mortgage. Sounds to me like a prime recipe to essentially bring housing related activity to stand still in the future.
I don't know where people get the prime going down to 3% - the FED wants to go negative! Use it (spend it) or lose it!
The unemployed and other people who still have jobs, but are making less money are not going to be spending more money, and the banks aren't going to loan to people who are drifting down--or not so much.
lawyerliz
We can thank Shrub for the home loanership society. Or is home owership? Anyway, thanks George. Hope your dad made out like a bandit over a Carlisle too.
..............The Bank of Canada lowered
its overnight rate by 25 basis points...........
http://www.reuters.com/article/usDollarRpt/idUSN2146728320090421
If only the Shrub had invested with Madoff!!
lawyerliz
Gerald Celente on Alex Jones Show talking about the future trends HD April 20, 2009 part 1 of 4
http://www.youtube.com/watch?v=luc4hwnU2Pw
Gerald Celente on Alex Jones Show talking future trends HD April 20, 2009 part 2 of 4
http://www.youtube.com/watch?v=SQWsB6WbUbA
Gerald Celente on Alex Jones Show talking about the future trends HD April 20, 2009 part 3 of 4
http://www.youtube.com/watch?v=1L3XqQ_PYxQ
Gerald Celente on Alex Jones Show Talking about future trends April 20, 2009 part 4 of 4
http://www.youtube.com/watch?v=VFC_vBlWsUo
---------------------
Chemical con-trails from Air Force spraying operations cause cancer and respiratory problems! Where are all the environmental wackos concerns? See; Killer Chemtrails: The Shocking Truth
http://www.youtube.com/watch?v=Psdg3OAw_a8&fe
--
Fraud can be supported only for a limited time period. Then, like all Ponzi schemes it comes crashing down.
The current American economy is dependent on continuing the fraud and it will CRASH no matter what the policymakers do and what rogue economists that propose solutions say. Burn-ass-ke CANNOT prevent it. Frikin Krugman is a dope if he thinks that he has a better solution to avoid the Greater Depression.
Economists are part of the problem, no?
Jas
I keeping coming back to the story in the WAPO about a couple who earned a combined $150,000 and the cut backs that they are being forced to make because the husband got a 10% pay cut- so this family is still making 142,500/year. They also own a home that they paid $517,000 that is currently worth only about $360,000.
How long before they decide to stop making payments on their mortgage. At the moment people are still living in hope that prices will come back- but I think there is a point at which the capitulation takes place and people like this figure it out- they are not going to see the $517,000 price again and essentially all that they are doing is working for the bank.
martin wolf column on why the "green shoots of recovery could yet wither" http://is.gd/tKzX
Is the worst behind us? In a word, No. The rate of economic decline is decelerating. But it is too soon even to be sure of a turnround, let alone of a return to rapid growth. Yet more remote is elimination of excess capacity. Most remote of all is an end to deleveraging. Complacency is perilous. These are still early days.
The world economy cannot go back to where it was before the crisis, because that was demonstrably unsustainable. It is at the early stages of a long and painful deleveraging and restructuring. Fortunately, policymakers have eliminated the worst possible outcomes. But there is much more yet to be done before fragile shoots become healthy plants.
"Bailing the ocean with a plastic spork.
They're infinitely better off just doing a bulk cramdown"
---------------
Inertia. Even after years of reading the memegraphs, I didn't realize the extent of mental laziness until last year while reading this blog. I knew it was there, I knew it was substantial but I didn't appreciate the pervasive nature of the molasses quagmire. Tons of manipulation to maintain immediate cash flows regardless of balance sheets, which are causing the problem in the first place. An electrical engineer would get a kick from modeling this as a circuit and demonstrating the end game to Congress.
Beautiful day in Yarrow Bay, check out the Panorama program on my iPhone.
Not bad for $10.
It sure would be nice if Jas had a new insight.
Sigh.
lawyerliz
Jas, I dedicated this to you and even used DOPIEST - let me know your thoughts.
# 8 is for you.
http://thebarricadeblog.com/2009/04/11/the-top-10-signs-you-are-living-i...
I'm in the middle of a refi and this is the first time I can recall having to submit a W2 so they are definitely getting more cautious. It is taking longer too. Appraiser came in and checked through the house counting rooms and looking at the heater.
Maybe they were just placing contrails and listening devices though. Unfortunately my wife used the tinfoil hat to wrap sandwiches so I'm left defenseless.
"But the foreclosure problem is now mostly a prime problem!"
Don't forget that part of that is that the fraudsters moved into prime (with falsified numbers) when the subprime and Alt-A lenders were shut down.
Bernanke's trying to reinflate a balloon that's riddled with fraudulent holes. The corruption bubble is as big as all the other bubbles were, and no one has started deflating it yet!
I think even this crowd should take this as a positive. If Geithner is staking what little political capital he has left on the idea that the majority of banks are well capitalized, then its going to be much harder for him to hit the till again to hand more dough to the banksters. The heist may be slowing down.
The question that remains NOW is what qualifies as "vast majority"? If the vast majority except for Citi, BAC, and WFC are solvent, then we are still in pretty deep water.
****
U.S. Stocks Advance as Geithner Says Banks Have Enough Cash
By Rita Nazareth
April 21 (Bloomberg) -- U.S. stocks advanced the most in almost two weeks, led by financial shares, after Treasury Secretary Timothy Geithner said the "vast majority" of the nation's banks have enough capital.
" don't how one makes a 8.5% yield with a 3% yielding asset."
-----------
I think that in theory, if the Feds could get total yield down to 2.5-3% or so, on all debt & stocks, then they might have an infinitely sustainable zombieland.
Japan's not so far from that, you know, nineteen years and counting.
Pavel: Thank you for the poem.
"...As the little so the great..."
Do you think Americans get it?
Hmmm, are the banksters gonna say, oh, no we are not solvent after all, give us more money.
Maybe this is a fancy politcial switcheroo?
Off to get something to eat and watch NCIS.
RockyR, they may be well capitalized now, but what happens after they process the next wave of PRIME foreclosures? and foreclosures in the JUMBOs?
We are in the eye of the Hurricane.
The good news is that the extent of the injustice has hit the mainstream media, and a much larger fraction of the population is shedding the bubble blinders they had on.
I even saw a flawless takedown of the banking sector in the Sunday Comics in our newspaper here!
"Once upon a time, there was a bank C.E.O. who decided to make a lot of home loans to people he knew could not pay them back..."
The Mortgage Bankers Association today increased its forecast of mortgage originations in 2009 by over $800 billion. MBA now expects originations to total $2.78 trillion, which would make 2009 the fourth highest originations year on record, behind only 2002, 2003, 2005. from ghostfaceinvestah's link.
Pretty scary stuff...
ghostfaceinvestah thanks for the response.... they could also just agree to back the debt with the full faith instead of this asinine equity play.... Oh well....
--
Lawyerliz,
Truths are few. Dopes are always looking for new truths and get sucked in by falsehoods promulgated by charlatans. Pandering to dopes is not my style.
Most important thing about truths is if they are being confirmed.
Jas
Economists are part of the problem, no?
The problem is in large part that these economists are trying to manage the economy with models that are vastly less complex than the essential aspects of the real economy itself.
They don't understand that in an economy this complex and specialized, distributed management of business and finance by actors with deep localized knowledge is the only thing that's possible.
Through their arrogance and lack of real world experience they're ignoring their own limitations and destroying entire nations in the process.
couple of comments on your analysis
I think the Fed screwing around in the markets has actually caused rates to be higher than what they would be. As you correctly point out mortgages price in a prepayment risk- however this risk (absent the Fed games) is really quite low.-interest rates are low and refinancings are hard to do so one would expect the spread relative to treasuries to be lower than the historic norm. Paradoxically the Fed intervention by creating the possibility of non market based rate reductions is actually causing investors to price in a refinance risk - so the Fed is really running in place.
Second, as to the amount that the Fed would require it is a great deal more than $3T. That number is just based on the new originations. BUt if they start artificially pushing down rates they will all also have to absorb investor selling.
As expected. And we can assume that banks are giving plenty of "wiggle" room to prime rated mortgage accounts, as per my friend in NJ, who's accountant told him that he has several Wall Street clients who lost their jobs and haven't made mortgage payements for several months and have YET to be contacted by their bank:
One aspect of banks dragging their feet on delinquency reporting and foreclosure proceedings just occurred to me today. If a bank takes over a house, the bank then becomes responsible for the real estate taxes. This is an expensive part of bank REO (real estate owned). I'm guessing that banks are dragging out the foreclosure process for many reasons, one of which would be to defer real estate tax liabilies, and that the real default rates are much higher than is being reported.
The banking black hole is going to be inter-galactic when the defaults and foreclosures at the prime mortgage level start approaching even 50% of those rates for subprime and Alt-A. I fully expect prime default rates to eventually start approaching those levels being experienced by the lower rated siblings.
how come somebody didn't ask him - why then do we need the PPIP or the concern about toxic assets. Sure some banks have cut back but if the vast majority have enough capital why are they not jumping at the opportunity to make "good loans".
@RockyR: what Geithner actually said is far different from the headline. Go down a few threads here...
He said that the "majority" of the banks were "adequately capitalized" in the eyes of their regulators.
Three flaws in the logic that takes that to a claim that the banking sector is healthy:
1) The regulators have a demonstrated track record of misfeasance - failure to execute their legal duties. A bank can satisfy the regulators and still be walking dead in the new, deleveraging economic operating mode we're now in.
2) The banks have a demonstrated track record of manipulating balance sheets to hide their true situation from those regulators who ARE working
3) The vast majority of the banks (listed by name) may actually be sound, but they are the smaller banks and given the demographics of the banking sector, do not account for the majority of the sector's deposits / assets / liabilities / whatever (when the list is weighted by the size of the bank).
"Purchasing in a sweet spot 175-250k really going up nicely"
---------
How much of that is "pent-up demand"? (I know, I hate using that weasel phrase, too).
I wouldn't be surprised if Miami fades out later in the year or into 2010 even in the most affordable categories.
crazyv - cool...
My private version of Hell would be being stuck in an elevator without power between Jas and Michael.
why would somebody not make their mortgage payment but make the real estate tax payment? That would create a tax lien on the property which would get paid when the bank ultimately forecloses on the property so they would end up with even less. So I don't quite follow the logic that a bank would hold of foreclosing because of the taxes.
3) The vast majority of the banks (listed by name) may actually be sound, but they are the smaller banks and given the demographics of the banking sector, do not account for the majority of the sector's deposits / assets / liabilities / whatever (when the list is weighted by the size of the bank).
This was the first thing I thought of when I read the head line. It was a great line by Timmaay tho... Completely true and complete full of shit at the same time... Classic!
BUt if they start artificially pushing down rates they will all also have to absorb investor selling.
They've been doing that already. At some point either the Fed's monetization becomes too much for everyone to bear and inflation kicks rates into the stratosphere or they stop buying MBS. Either one destroys whatever's left of the housing market overnight.
Looks like the depression is right on schedule.
-----
"Hope for the best, prepare for the worst"
More bad news for GGP and commercial real estate.
TJ and The Bear et. al.
I think we need to define what we mean by inflation. There are two types in my mind. (I'm sure there are lots more but I dont understand them)
A) Inflation that we get from the result of a falling dollar (ie all imported goods and materials become more expensive)
B) Inflation we get from within the borders as a result of too much demand / velocity
I think you were talking about the Fed's monetization causing a falling dollar and inflation that way no?
......................
And you can't refinance if you don't have a job... even if you have your mortgage in the bank.
105LTV max -- oh so many people are so far gone... that might have helped one year ago, but now... Added to that, the whole appraisal process is being corporatized -- more oppts for the banksters to make fees by owing appraisal companies who then pay the actual community-based appraisers... not much.
I agree that bulk cramdowns are the only sensible answer, both in terms of rate and total loan amount. It would be quick, benefit the communities, the local govts, the taxpayers and homeowners.
There should also be some mechanism to look at lowering loan amounts in dreadfully affected markets such as Central Valley, SoCal Inland Empire, Florida. It will be decades, if ever, before these prices ever go back to peak. Maybe some sort of formula that annually looks at average sale prices or something for a decade...
I don't take it personally that some 'bad' and financially irresponsible people will benefit-- given that all their 'bad' behaviour did actually keep bunches of folks employed for a while, there was some societal benefit : - ) And they were pitched hard, very hard, into this bad behaviour. That 'throw the first stone' thing. And I'm someone who saw this all coming last year and therefore paid off my debts, sold the pricey house so won't benefit from any of these programs. Got whacked with a homes sales capital gain tax, tho, 'cause I'm a single parent & not married. I think that Heads of Households should get the 'couple's' capital gain tax exclusion amount.
On a side note, more bears are being sighted in more suburban areas of CA's central valleys, coasts and foothills. Squatting in foreclosures, perhaps?
I'm also taking careful note of the flocks of canada geese (pests) and wild turkeys here in Marin. Growing my own veg, maybe it will soon be time to learn to shoot... food and blankets : - ) And hey... maybe those bears... more blankets...
I have a suspicion that defaults on prime/jumbo prime properties will be driven more by nominal dollars underwater, rather than % underwater. I bet the banks' models are based on % -- If so, they're gonna be underestimating losses big time.
--
Thanks, ac.
Seems to me like these economists suffer from the #1 human behavior problem when it comes to understanding and learning-EGO-that has been been raised to a very high level among born-and-bred American dopes as a result of triumphalism. Like BBAD, they suffer from the knowledge that they don't have. They refuse to admit, or come to terms with, the limits of their knowledge.
No one can manipulate the behavior of hundreds of millions to get to a desired result, no?
Jas
nades:
"inflation is always and everywhere a monetary phenomenon."
Think last quarter (or maybe month), the UK had a positive CPI in a deflationary environment (because of imports).
"why would somebody not make their mortgage payment but make the real estate tax payment?"
----------
The tax money was likely in escrow accrued over the past year.
--
"inflation is always and everywhere a monetary phenomenon."
I am sure that it came from a rogue economist and a BBAD.
Jas
I know this is kinda off topic, but I was wondering what happened to CDARS lately and came across this example:
Bank of Marin posts flat Q1 earnings
http://www.bizjournals.com/sanfrancisco/stories/2009/04/20/daily15.html
Deposits rose 13 percent from a year earlier, to almost $860 million. Contributing to deposit growth was the bank's decision to join the CDARS program, formally known as the Certificate of Deposit Account Registry Service, a privately owned network that allows community bankers to provide Federal Deposit Insurance Corp.'s deposit insurance to amounts exceeding $250,000. The bank's CDARS reciprocal deposits totaled $50.6 million at the end of the first quarter.
The bank's total risk-based capital totaled 11.3 percent at the end of March, after repayment of the TARP capital.
"Our capital levels exceed regulatory well-capitalized standards, which positions us to weather the economic storm," said Christina Cook, the bank's chief financial officer.
Bank of Marin operates a dozen branches in the North Bay and a loan production office in San Francisco. Bauer Financial assigns Bank of Marin a top-rating of five stars, reflecting the bank's financial strength.
I'm sorry if this seems off....
I have nothing more to add, except:
Anonymously wrote on Tue, 04/21/2009 - 3:27pm.
Fantastic comic. The injustice is filtering into music, new fiction, MSM, and everyday life. The internet has changed how people process and accumulate information. Used to be if you read something you didn't understand you would have to go to the library or other source of information. Most people wouldn't go through the extra effort. Now you do a google search and get to pick and choose where you get the info and the flavor of the slant if it is subject to spin. The only caution I see is trusting the first page responses without question. But I question everything these days so maybe the first page returns are just fine.
nades,
Yes, strictly in terms of a falling dollar due to foreigners abandoning like, well, MBS.
-----
"Hope for the best, prepare for the worst"
I am sure that it came from a rogue economist and a BBAD. Jas,
Jas I think we both know who said that! 
(Not that I've ever really understood it)
Thousands of confidential files on the U.S. military's most technologically advanced fighter aircraft have been compromised by unknown computer hackers over the past two years, according to senior defense officials.
The Wall Street Journal reported that the attacks appeared to originate in China, citing "former U.S. officials."
>>
I wonder why the Chinese don't hack into our banks and steal some of that CDS technology?
Is it possible to say that the speed at which orders are processed and goods are turned over has increased the velocity of money and increase inflation over the last 10+ years?
Or am I way out in left field?
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"The internet has changed how people process and accumulate information"
----------
The ease of access and proliferation have created the same condition in an opposite way.
The pathways are jam-packed now with information so it's hard for any particular item to achieve recognition and value.
Paradox of the network effect is that as more and more information is available, any particular item becomes less and less known.
@nades: "This was the first thing I thought of when I read the head line. It was a great line by Timmaay tho... Completely true and complete full of shit at the same time... Classic!"
Classic indeed! But it's not exactly confidence-inspiring among the investing class! As with the later years of the Vietnam (and Iraq) wars, the public's skepticism of the government's self-serving pronouncements is ramping up rapidly. Timmay cannot fool all of the people for much longer.
Here in Marin, there are signs of financial insecurity.
As compared to last year (source: redfin and what I see with my own eyes), in areas such as Mill Valley, Ross, Kentfield, Larkspur, Corte Madera, nicer areas of San Anselmo, Sleepy Hollow and Greenbrae, SFHs for sale have just about tripled over 2008. (Not going to discuss Fairfax, San Rafael, Novato, as those are quite different markets, with different demos/issues.)
And unlike last year, when homes between 1 - 1.5m were the most desirable and sold quickly, now it seems that homes over 1m just... sit there.
What is interesting is that folks still haven't really priced anywhere near the likely market -- they've chopped 10% (maybe) over what they *think* that they could have gotten last year, even though there are many 120 days + homes at that price point still unsold.
So the big question: will they just be withdrawn, or will they go into f/c? Typically in the past most of such homes have been w/drawn.
Now the realtor ads blaringly note that Marin public schools are cheaper than SF privates. ; - ) Not promo'ing better so much as just cheaper. Also many SFH for sale are starting to list first for a few months off the MLS so as to game the days on the market count. This seems silly to me, unless you have a dream that you just *might* get last year's price, but want to backstop in case you don't. Or your realtor wants to let you have that dream before bringing you back down to earth.
Do you think Americans get it?
"...As the little so the great..."
Reminds me of Ozymandias.
"My name is Ozymandias, king of kings:
Look on my works, ye Mighty, and despair!"
Nothing beside remains: round the decay
Of that colossal wreck, boundless and bare,
The lone and level sands stretch far away.
"Willie also notes that there are about $524.5 billion of whole commercial mortgages held by U.S. banks and thrifts that will come due between 2009 and 2012-and that nearly 50 percent would not qualify for refinancing in today's environment.
Commercial real estate looks like it may be the next shoe to drop. And judging by the numbers, and the slowdown in the economy, it could be a big shoe. "
http://www.thetrumpet.com/index.php?q=6123.4522.0.0
Just Wow.
The problem with most expert economists is they can't keep track of all the major factors in their head at the same time.
---------------------
Chemical con-trails from Air Force spraying operations cause cancer and respiratory problems! Where are all the environmental wackos concerns? See; Killer Chemtrails: The Shocking Truth
http://www.youtube.com/watch?v=Psdg3OAw_a8&fe
Anonymously wrote on Tue, 04/21/2009 - 3:27pm.
lol, there's a pita deli near my house, they had a special on all last week; "bailout pitas.. 5.99"
This is up here in B.C. Canada. It's worldwide.
Or am I way out in left field?
Practically in the parking lot.
-----
"Hope for the best, prepare for the worst"
Who is dictating what Timmay may or may not do with our US Treasury?
Auctions Indicate Housing Crash Not Over
Investors didn't show up.
"why would somebody not make their mortgage payment but make the real estate tax payment?"
Umm.. I'll guess because the tax authorities make Mafia loan sharks look like nice polite people with a conscience and moral values ?
- splat
I speak from experience...made the decision to LET GO on Saturday. Got guidance from a very good lawyer.
The reasons for "giving up" on an 812K mortgage, 100% 5/1 ARM, OC CA - vintage 12/2005:
1. Zillow zestimate at $519K. House 3 doors down went into f/c and sold for $400K last month.
2. In January my husband took a 10% paycut, no paid holidays, no more paid vacation time, pays 50% of health ins. costs
3. I was put on straight commission (no more draw against future) on March 31st and had to "release the rights" to commissions for work in the pipeline. That's a 60% pay cut. Plus the next commission check won't be mine until my client pays the company in 60 + days.
4. Note: the contraction in the economy was underway long before anyone caught on. My income has been going down the last 3 years, steadily. I thought it was me - not working hard enough. I was getting worried but held out hope I would still be able to turn things around. My income decreased approx. $105K annually since 2005.
5. Our 1951 built house has its original asbestos wrapped air ducts, one of the 2 heaters has a crack in the chamber and there is a carbon dioxide danger to run it and our wooden fencing is falling down.
http://www.nytimes.com/2009/04/22/business/economy/22leonhardt.html?_r=1&hp
NYT
For Housing Crisis, the End Probably Isn't Near
The closest thing to a real estate crystal ball in the last few years has been the house auctions that are regularly held around the country.
Fed better get those rates down to 3 percent so people can refinance, stat.
- Nemo