Yves here. This post from MacroBusiness describes three risks facing the American housing recovery, and I thought I’d add a fourth, which is the open question of how much longer private equity funds and other speculators will continue to bid up housing prices.
Read more...The Chinese government, as has been widely reported, is trying to cool growth, in large measure to take the hot air out of its shadow banking sector. But can it engineer its hoped-for soft landing?
Read more...Yves here. I suspect NC readers can go even further will Bill Black’s question!
Read more...We’ve been warning that the sudden rise in mortgage rates was going to create a great deal of buyer sticker shock. It’s already virtually halted refis. Further confirmation comes from the Urban Turf website:
Read more...It’s conventional to deem local journalism to be dead, but Josh Salman at the Sarasota Herald-Tribune has written well-researched investigative story on bank bidding at foreclosures in his neck of the woods, Big lenders bidding to keep homes, that has national implications.
Read more...Yves here. While some of the concerns in this post are specific to Australia, they can be readily translated to other property regimes. The part that is missing, however, is that the US relies on “real estate taxes” which includes the value of the buildings on the land. Michael Hudson has advocated taxing land much more heavily, since unlike taxing capital or labor, it does not burden the economy with higher costs . As he explains in a 2009 interview:
Read more...Michael Hudson looks at the implications of ending QE in the context of the past 30 years of bubble blowing.
Read more...So this week I got an education in the mentality of “official” Washington.
Last week I was asked by a DC-based publication to give a comment on Corker-Warner, the flavor-of-the-month proposal to abolish Fannie and Freddie and reform mortgage finance. I basically take the same position as Yves on this issue: all of these GSE 2.0 plans assume a private label MBS market the way the proverbial economist on a desert island assumes a can opener.
Read more...Yves here. So what is the Fed going to do, now that it has delivered a big blow to the nascent housing recovery? Risk its credibility by beating a serious retreat on taper talk, or keep whistling in the dark and wait and see what happens to July and August home sales (and remember, most housing market data is reported with a nearly two month lag…)?
Read more...Let’s be clear: I’m not a fan of Fannie and Freddie. Subsidizing housing finance is a lousy way to subsidize housing. But the Corker-Warner bill is no solution.
Read more...t’s really hard to convey a sense of how utterly grotesque the looting that Promontory Financial Group conducted on the misnamed Independent Foreclosure Reviews.
Read more...As regular readers know, your humble blogger, along with a lot of investors, was taken by surprise when the typically dovish Bernanke not only started using the taper word a month ago, but then made the demise of Fed heroics sound even more imminent by talking about higher unemployment “thresholds,” namely 7%, than had been voiced previously. And the reading of Fedwatchers like Tim Duy and (even before the FOMC statement) James Aitken is that the central bank wants out of the QE business sooner rather than later.
The impact on mortgage rates already looks very likely to throw a big bowl of cold water on the housing party.
Read more...It sometimes feels like a Sisyphean task to keep discussing how Americans were thrown under the bus in the various mortgage settlements reached in 2011 and 2012. Needless to say, whistleblowers continue to come forward and describe widespread abuse even though the officialdom would have you believe otherwise.
Read more...Yves here. I have to say I’m still gobsmacked by the Fed’s belief that the labor markets are showing meaningful improvement, and the further “clarification” that this means the central bank thinks it’s on track to start easing up on bond buying this year.
Read more...Yves here. Steve Keen sent this note along with his post:
The journalist David Hirst was both one of the few to warn of the crisis, and someone who became a good friend. He died last week, as a long term consequence of internal injuries sustained about ten years ago in the USA, when he tried to stop a woman being bashed.
His spouse asked me to see if I could get the attached published on NC, which was one of his favourite sites.
If you know David’s writing, you’ll understand what a loss this is. And if you missed his prescient and incisive commentary before and during the crisis, I hope you’ll sample his work below and get a sense of what a talent he was. Either way, I trust you’ll join me in sending condolences to David’s widow and his family, as well as to Steve.
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