There are a number of reasons to worry about the current housing market. The housing affordability rate actually got worse last year despite collapsing home prices. Home mortgage obligations are still historically high.
(Bloomberg) -- The crash in U.S. home prices will probably resume because about 7 million properties that are likely to be seized by lenders have yet to hit the market, Amherst Securities Group LP analysts said.
Volcker calls for the separation of banking from commerce and also calls for reforms in executive pay. He also calls for regulation of hedge funds and private equity firms. Volcker also implies that by saving the Zombie banks, the U.S. in fact has encouraged even worse risk taking and highlights these very questions so often written about on this site:
George Washington of Washington’s Blog, posted Black's recent proposal on Naked Capitalism. Black is Associate Professor of Economics and Law at the University of Missouri – Kansas City, and the former head S&L regulator, and author of the book, The Best Way to Rob a Bank is to Own One. Black' has been a lonely voice in the wilderness warning that the entire financial collapse, from sub-prime mortgages, to rating agencies, to the creation and handling of credit default swaps, is fraught with criminal fraud that both the Bush and now the Obama administrations have refused to deal with.
There is a silver lining to the housing bust, at least for some people.
As of July, mortgage companies hadn’t begun the foreclosure process on 1.2 million loans that were at least 90 days past due, according to estimates prepared for The Wall Street Journal by LPS Applied Analytics, which collects and analyzes mortgage data. An additional 1.5 million seriously delinquent loans were somewhere in the foreclosure process, though the lender hadn’t yet acquired the property. The figures don’t include home-equity loans and other second mortgages.
For earlier parts in the series, see here and here.
In the history of public policy, like in other disciplines, sometimes the most fascinating topics are the most ordinary, the most overlooked. The things we don’t really notice can be the most powerful influences in our lives, because they can function unseen. And that brings us to the topic for today’s post.
We grumble about taxes, we handle money every day, but we don’t really think about what the power of the public purse means.
The United States is home to four of the nine largest banks in the world -- JPMorgan, Bank of America Corp, Wells Fargo & Co and Citigroup Inc. It is also home to four of the six most handsomely rewarded bank CEOs.
As the leaders of the industrialized world converge on Pittsburgh later this week to "commit to a framework for sustainable and balanced growth" (as President Obama has put it), perhaps a nail in that frame could be the forgiveness of the debt burden saddling many of the world's poorest countries.
Wow. These are some serious allegations that Eric Kolchinsky, a Moody's analyst, has made to the Wall Street Journal. Here is a link to the story on Huffington Post. Mr. Kolchinsky is prepared to testify in front of the House Committee on Oversight and Government Reform on Thursday that Moody's is still issuing artificial high ratings to complex debt securities.
Here is what Mr. Kolchinsky told WSJ:
Kolchinsky said Moody's "gave a high rating to a complicated debt security in January 2009 knowing that it was planning to downgrade assets that backed the securities. Within months, the securities were put on review for a downgrade.
There are regulatory agencies with good reputations, and then there are agencies with bad reputations. There are bad ideas, and then there are criminally bad ideas. That's why it is so disturbing to see a regulatory agency with a good reputation like the FDIC propose a criminally bad idea.
(AP) — Regulators may borrow billions from big banks to shore up the dwindling fund that insures regular deposit accounts.
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