Reckless Endangerment

The title of the latest crisis book is “Reckless Endangerment”. Authors Grechen Morgenstern and Josh Rosner sat down with Aaron Task at Yahoo’s Tech Ticker to review the role of the regulators in our crisis. Theirs is a story of regulatory capture in which, under the influence of lobbyists from the housing and mortgage industry, financial regulators stripped away regulatory controls and refused to apply existing regulations

Remember when I said banks were under-reserving?

Listen to what Jeffrey Gundlach has to say about subprime bonds — yes subprime. Hint: he thinks banks will have to take more credit writedowns

Still Home Sick

The separation of abodes from investments should work to the advantage of rentals in future years. We’re not suggesting that Americans will give up on single-family owner-occupied housing. The idea of a single-family home of your own is just too deeply embedded in the American culture. But many who have no pride of home ownership and who would vastly prefer to yell for the “super” (New York-ese for the building superintendent) than to apply a wrench to a leaky pipe have bought houses and apartments in past decades only to participate in capital appreciation

The Housing Bear Climbs Over the Mountain

Regardless of the actual numbers, the housing market has one more mountain of mortgage resets to climb; it started last month and will continue through late 2012. This will only aggravate the number of foreclosures. With house prices behaving like they intend to resume their trajectory of descent seen in 2008/2009, a bottom in house prices does not look possible until at least

60 Minutes on The Next Housing Shock

"60 Minutes" aired a segment last night on the foreclosure fraud that we in the blogosphere have been discussing for sometime. See "Videos: Depositions of Alleged Robo-Signers From Nationwide Title Clearing" from November, for example. It’s good to see this issue go mainstream. The video is embedded below, but let me make a few comments

Las Ciudades Fantasmas

Thanks to Iza Kaminska for pointing me to the video below of row after row of incomplete homes in Spanish host towns, las ciudades fantasmas. Spain has the same problem of overbuilding that the U.S. had during its bubble days. Now that things have gone pear-shaped in the residential property markets, you see these ghost

US monetary policy and the saving glut

Is the global saving glut to blame for global imbalances? This column argues that the role played by loose monetary policy from the US Federal Reserve should not be overlooked. The prolonged decline in long-term interest rates in the mid-2000s is largely to blame for the housing boom in the

Housing Double Dip?

Well, yes. Case-Shiller data confirmed this for me in January. We’ve been saying that’s where things were headed since the expiration of the home buyer’s tax credit last year. And even last winter we saw a seasonal dip in prices that got us negative year-on-year numbers. Eventually, this was negated by the effects of the

US Treasury Unwinds MBS Securities, Lifts Dollar

By Marc Chandler News that the US Treasury will begin selling off its portfolio of mortgage-backed securities was greeted with dollar buying. The Treasury’s portfolio of $142 bln of agency guaranteed MBS will be sold at a pace of $10 bln a month. The sales will start this month, according to reports and that Treasury

The Revolving Door of Corporatism Continues

This is just in from CNBC’s John Carney: a key advisor to U.S. President Obama will leave the Federal Housing Authority where he is a regulator of the mortgage industry and make a beeline straight for the industry he once oversaw. When David H. Stevens announced he was leaving the FHA last week he said

Nevada leads all states with a mortgage LTV of 118 percent

CoreLogic released its data analysis for the fourth quarter of 2010 showing that mortgage distress is still very widespread and that negative equity is the norm in many states in the U.S. (Hat tip Yves Smith). The data showed that the owners on a full 11.1 million residential properties (23 percent of the total) were upside down i.e. had negative equity. The situation was most severe in the bubble markets and Michigan, with Nevada leading the pack.

CoreLogic highlighted several data points in their analysis

What the Mortgage Deal In The Works Reveals About The Obama Administration

The Obama Administration is keen to get this $20 billion mortgage settlement done. The prevailing view in the Administration is that the U.S. is in a fragile but sustainable recovery. With emerging markets leading the economic recovery and U.S. banks on sounder footing, now is the time to resume the expansion of U.S. financial services.

I strongly disagree with this vision of America’s future economic development. But this is the road we are on