Should Central Banks Focus On Core Inflation?

Here’s a morning note from UBS’ Andy Lees in London on core inflation that made me think. Andy writes: Opinion – By focussing on core inflation rather than headline inflation, central banks are making a major policy mistake. Because of declining geological reasons, the energy network is expanding rapidly relative to the world economy. This

Countrywide Control Fraud, Inch Deep Prosecution

By William K. Black I write to contrast four recent stories about Countrywide. Here are their headlines and brief synopses provided in the initial paragraphs of the stories. U.S. drops criminal probe of former Countrywide chief Angelo Mozilo Mozilo’s actions in the mortgage meltdown — which led to $67.5-million settlement against him — did not

U.S. Housing Market: Down Trend May Be Slowing

Guest Author post by Steven Hansen, Publisher of Global Economic Intersection. Econintersect is using the Case-Shiller data release to overview the home price situation as of December 2010. Generally, all home price indexes are trending down. Econintersect begins with the opening of the Case-Shiller’s press release: Data through December 2010, released today by Standard &

Freddie Mac: Tone Deaf at the Top

By William K. Black Freddie Mac made a terse announcement Wednesday in a securities filing about the resignation of its chief operating officer, Bruce Witherell. Freddie said that Witherell resigned "for personal reasons." His departure was effective immediately and he received no termination benefits. He had been receiving several millions of dollars in annual compensation

Banks Harassing and Foreclosing on U.S. Soldiers

This is from the testimony in the video below: Soldier’s wife: I’m dealing with Chase, getting their phone calls, getting their harassment around the clock. My husband Jonathan missed two hours of our daughter’s birthday party, because Chase simply would not hang up the phone until he made a payment in which we have already

Jon Stewart on the Mortgage Bankers Association Strategic Default

Hey if y’all can do it, so can we. (Hat tip Ryan Chittum)

How to Regulate Mortgage Lending, Part 2

By William K. Black (cross-posted from Benzinga.com) When Reputation becomes Ineffective or even Perverse Control fraud also makes reputation perverse. Theoclassical economists predict that reputation trumps everything, even auditors’ conflicts of interest. This prediction has repeatedly been falsified by reality. The asserted reputational trump ignores crippling errors. Several theoclassical assumptions about reputation and fraud are

How to Regulate Mortgage Lending, Part 1

By William K. Black (cross-posted from Benzinga.com) “Regulating” and “deregulating” are terms that often mislead. My next three columns discuss how to regulate two diverse activities that are critical to our economy – residential mortgage lending and starting small businesses. This column explains the most regulatory approaches essential to regulate residential mortgage lending effectively. Next

Ten Ideas That Would Turn David Rosenberg Bullish on the USA

From today’s Breakfast with Dave research note at Gluskin Sheff (highlighting added):

1. An energy policy that truly removes U.S. dependence on foreign oil (shale case, coal, nuclear).
2. A complete rewrite of the tax code that promotes savings, investment, and a revamp of the capital stock. Cut tax rates, eliminate loopholes and costly tax breaks. Tax consumption, promote savings and investment. That is crucial. But it will take political courage (ask Brian Mulroney).
3. A credible plan that reverses the runup in the debt to GDP ratio. This includes not just on-balance sheet items but new rules governing entitlements too. We need delineation of the future of Fannie and Freddie if there is any … they became wards of the government nearly three years ago and there is still no clarification on this file (slightly more important than these periodic consumer spending gimmicks that have surfaced over the past few years). We need a complete rewrite of social contracts and a reversal in sacred cows that have been created over the years that are completely unaffordable. Plus, people are not going to learn to live within their means if our politicians continue to set a bad example. The act of dipping into Social Security, incentivizing companies who are already cash-rich to spend more on new equipment and extending a Bush tax cut that always had a 10-year expiry date at the expense of the already severely strained public purse was political expediency at its worst.
Published by Edward Harrison on 24 January 2011 10:00

This Week in Housing

by Annaly Capital Management This was a relatively data-filled week for the housing market. We’ll start with the good news. The National Association of Realtors (NAR) reported that existing home sales rose more than expected in December 2010, to a seasonally adjusted annual rate (SAAR) of 5.28 million homes. Also reported was the level of

A Kind Word for Homeowners

By Annaly Capital Management The next voice to be heard in the debate on the future of housing finance in the United States will be that of the Treasury Department, which is slated to release its report on the subject sometime this month. Given the sensitive political and economic nature of the topic, the complexity

Housing Humbug

This marks the 4th month in a row of falling home prices, and the first negative year-over-year reading since January of 2010. Freddie Mac released their monthly volume summary for November which contained information on seriously delinquencies (90 days or more delinquent), which rose for the 2nd month in a row. As you can see below, this delinquency rate tends to move with unemployment, which crept back above 15 million people in November. Delinquencies had been on an improving trend throughout 2010, and the recent reversal is worth watching. The coming year could be an interesting one for the US housing market.