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  • Fri, Aug 28 2009
  • 1:55 PM » Banks 'Too Big to Fail' Have Grown Even Bigger
    Published Fri, Aug 28 2009 1:55 PM by Washington Post
    When the credit crisis struck last year, federal regulators pumped tens of billions of dollars into the nation's leading financial institutions because the banks were so big that officials feared their failure would ruin the entire financial system. Banks 'Too Big to Fail' Have Grown Even Bigger
    Click Here to Read the Full Article

    Source: Washington Post
  • 11:38 AM » Unemployment Claims Falling Faster than in Half of Past Recessions
    Published Fri, Aug 28 2009 11:38 AM by Google News
    The U.S. Department of Labor released the Unemployment Insurance Weekly Claims Report showing that initial jobless claims decreased 10,000 in the latest week to 570,000 from an upwardly revised 580,000 the week prior. The 4-week moving average is now 566,250, less than 100,000 off the April peak. Since the week ended Jul. 18, the average initial claims figure has been hovering in the 560-570,000 range. So, this marks six straight weeks during which we have seen no discernible improvement in the employment picture painted by jobless claims data. It is now 20 weeks since initial jobless claims peaked and we are shedding only 92,500 fewer jobs. I found this quite worrying until I compared it to previous recession , demonstrating that the last two jobless recoveries had a similar dynamic. Even in the recessions of 1970 and 1974-75, jobless claims were slow to fall. Below is a comparison of the 20-week fall during previous recessions: 2001 : 92,750. Oct. 20, 2001 peak of 489,250 vs. Mar. 9, 2002 figure of 396,500. 1991 : 68,500. Mar. 30, 1991 peak of 501,250 vs. Aug. 17, 1991 figure of 432,750. 1982 : 185,500. Oct. 9, 1982 peak of 674,250 vs. Feb. 26, 1983 figure of 488,750. 1980 : 179,750. May 31, 1980 peak of 629,000 vs. Oct. 18, 1980 figure of 449,250. 1974 : 61,250. Feb. 1, 1975 peak of 560,750 vs. Jun. 21, 1975 figure of 499,500. 1970 : 25,250. May 9, 1970 peak of 343,750 vs. Sep. 26, 1970 figure of 318,500. If one looks at these numbers in percentage terms, the fastest job recovers in order are: 1980: 28.6% 1982: 27.5% 2001: 19.0% 2009: 14.0% 1991: 13.7% 1974: 10.9% 1970: 7.3% So, contrary to my expectations, the fall in unemployment claims is very much in line with what we have seen in recessions over the previous 40 years. Originally published at and reproduced here with the author's permission.
  • 11:37 AM » Obama Lucky to have Bernanke
    Published Fri, Aug 28 2009 11:37 AM by Google News
    Brad DeLong explains why presidents are willing to reappoint Fed chairs that are members of opposing political parties: William McChesney Martin, a Democrat, was twice reappointed chairman of the ... Federal Reserve by Republican President Dwight D. Eisenhower. Paul Volcker, a Democrat, was reappointed once by the Reagan administration (but not twice: there are persistent rumors that Reagan's treasury secretary, James Baker, thought Volcker too invested in monetary stability and not in producing strong economies to elect Republicans). Alan Greenspan, a Republican, was reappointed twice by Bill Clinton. And now Barack Obama has announced his intention to renominate Republican appointee Ben Bernanke... The reason American presidents are so willing to reappoint Fed chairmen from the opposite party is closely linked to ... confidence of financial markets that the Fed will pursue non-inflationary policies. If financial markets lose that confidence - if they conclude that the Fed is too much under the president's thumb to wage the good fight against inflation, or if they conclude that the chairman does not wish to control inflation - then the economic news is almost certain to be bad. Capital flight, interest-rate spikes, declining private investment, and a collapse in the value of the dollar - all of these are likely should financial markets lose confidence in a Fed chairman. And if they occur, the chances of success for a president seeking re-election - or for a vice president seeking to succeed him - are very low. By reappointing a Fed chairman chosen by someone else, a president can appear to guarantee to financial markets that the Fed is not too much under his thumb. ... It may or may not be true, especially these days, that what is good for General Motors is good for America and vice versa, but certainly what is good economically for America is good politically for the president. It is here that Obama has lucked out. Ben Bernanke is a very good choice for Fed...
  • 11:36 AM » Economists React: What’s Next After Cash-for-Clunkers Boost?
    Published Fri, Aug 28 2009 11:36 AM by WSJ
    Economists react to July’s : The cash-for-clunkers incentives boosted consumer spending in July and will give an even bigger kick in August. But, aside from that, consumer spending is still subdued. Incomes remain weak, showing no change in July, although there was one encouraging signal in that wage and salary income edged higher, its first monthly increase so far this year. But the labor market is still shedding jobs. When given sufficient incentive (as in cash-for-clunkers) consumers will spend. But reduced wealth, high debt, tight credit, and a weakening labor market are all weighing on consumers. Consumers remain a missing link in hopes for strong recovery. — Nigel Gault, IHS Global Insight Cash for clunkers lifted spending into positive territory in July. However there was noticeable offset in other discretionary categories so that the overall gain was fairly modest. Government estimates of cash for clunkers sales in August suggest an even more substantial gain in auto sales, which should confirm a solid gain for [the third quarter] as a whole. However the weakness in income highlights the fragility of these gains. Given no further boost to income from the stimulus package on the horizon over [the second half of 2009] we expect consumer spending to remain fairly subdued. — Julia Coronado, BNP Paribas Households are still facing further declines in net worth as house prices continue to fall, though rising stock prices have provided somewhat of an offset, and household debt burdens remain high even as households pare down credit card debt. In this atmosphere, the fuel for growth for consumer spending is looking less and less potent -– while clunker cash will provide a boost to the [third-quarter] spending data, the reality is that clunker cash is, at least ultimately, a nonsustainable fuel for U.S. consumer spending. Restrained growth in consumer spending beyond Q3 is one factor behind our expectation that what will be fairly rapid real GDP growth in Q3 will not...
  • 11:36 AM » Real-Time Inflation Forecasting in a Changing World.
    Published Fri, Aug 28 2009 11:36 AM by NY Fed
    Jan J. J. Groen, Richard Paap, and Francesco Ravazzolo. Real-Time Inflation Forecasting in a Changing World. Federal Reserve Bank of New York Staff Reports Staff Report Number 388, August 2009.
  • 11:36 AM » Federal Reserve Balance Sheet Update: Week Of August 26
    Published Fri, Aug 28 2009 11:36 AM by
    Total Federal Reserve balance sheet assets for the week of August 26 of $2,049 billion ($15 billion higher compared to the prior week's $2,034) consisting of: Securities held outright: $1,479 billion (an increase of $135 billion MoM , resulting from $45.2 billion in new Treasury purchases, $79.8 billion increase in MBS and $10.1 billion in Agency Debt ), or $18.6 billion increase sequentially Net borrowings: $327.6 billion , a decrease from the last update at $340.5 billion Float, liquidity swaps, Maiden Lane and other assets: $242.9 billion, a $15 billion decline on $4 billion reduction in CPFF and $9 billion in Liquidity Swaps which have now hit a low not seen since May 2008. Foreign holdings increased by $9 billion to $2,826 billion. No change in the trends in the balance sheet with skyrocketing Securities Held Outright offset by declining Net Borrowings and Other Assets. Foreign holdings, as has lately been the case, are lagging the Fed's own purchases of securities, this week with a factor slightly higher than 2x.
    Click Here to Read the Full Article

  • 8:14 AM » Top 10 Cities Facing the Next RE Bust
    Published Fri, Aug 28 2009 8:14 AM by
    10. Las Vegas What happens in Vegas depends on the rest of the American economy, and until Americans start to travel (and gamble) again, nearly one-fifth of Sin City’s commercial space will stay vacant. 9. Baltimore With the nation’s retail sector in a tailspin, shipments in and out of the Port of Baltimore have tanked, leaving acres [...]
  • 8:14 AM » How the Feds Are Making the Mortgage Mess Even Worse
    Published Fri, Aug 28 2009 8:14 AM by Seeking Alpha
    submits: So goes the title of a July 7th letter to the editor of Delaware Online by Linda A. Moffett, a Realtor from Newark. In it Linda charged the Feds with forcing mortgage lenders to deal "with such ridiculous government-imposed regulations that it is becoming more and more difficult to settle on time, if at all... Banks laid off the majority of their mortgage department staff and hired temps with little or no real estate knowledge to get through the overabundance of refinances and short sales." "Obama mortgage plan needs work" proclaimed the title of another article on CNN Money the next day. Apparently, many borrowers were asking, "Mr. President, help us get one of your mortgage workouts now." Nearly five months after President Obama unveiled his housing rescue plan it was still beset with problems, said borrowers, housing counselors and even the president himself: "Loan servicers are overwhelmed by the numbers of homeowners applying for loan modifications or refinancing. Borrowers are frustrated that their paperwork is being lost, and calls are not returned. Administration officials are racing to roll out new features to improve the program."
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 8:11 AM » Fannie Mae Monthly Summary-July
    Published Fri, Aug 28 2009 8:11 AM by Fannie Mae
    Fannie Mae’s Book of Business grew at a compound annualized rate of 10.1 percent in July and 6.1 percent year to- date. Fannie Mae’s Gross Mortgage Portfolio declined at a compound annualized rate of 18.2 percent in July. The Conventional Single-Family Serious Delinquency Rate rose 26 basis points in June to 3.94 percent; the Multifamily Serious Delinquency Rate rose 1 basis point to 0.51 percent in June (latest data available). The Effective Duration Gap on Fannie Mae’s portfolio averaged negative one month in July.
  • Thu, Aug 27 2009
  • 4:37 PM » For Young People, A Jobless Summer
    Published Thu, Aug 27 2009 4:37 PM by WSJ
    The youth unemployment rate hit 18.5% in July 2009, the highest level for that month since 1948, the. The youth unemployment rate, which covers people 16 to 24 years old, was down from 19.9% in June, but was the highest for the month of July since the Labor Department started tracking it. From April to July, the number of employed young people rose by 1.6 million to 19.3 million, according to Labor Department data that’s not seasonally adjusted because it’s meant to track the traditional increase in summer employment among young people. Last summer the number of young people grew by 1.9 million. The proportion of young people working, though, was 51.4%, another historic low for the month of July, which tends to be the peak for youth summer jobs. At its peak in 1989, that proportion was about 18 percentage points higher. Young workers tend to be some of the most vulnerable employees, so they’ve been hit particularly hard during this deep downturn. Summer is traditionally the season when they hit the market en masse, searching for their first jobs, internships, or seasonal employment. The worst recession in 70 years has made that pursuit extraordinarily tough, pushing even experienced workers and parents to shell out thousands . Some, it appears, are fleeing the labor market entirely – at least for now. The labor force participation rate for the age group, meaning the proportion of young people working or looking for work, was 63% in July, 2.1 percentage points lower than last year. It’s the lowest July rate in more than 50 years.
  • 4:33 PM » Fed Purchases $25.4bn Agency MBS
    Published Thu, Aug 27 2009 4:33 PM by NY Fed
    The goal of the Federal Reserve's agency MBS program is to provide support to mortgage and housing markets and to foster improved conditions in financial markets more generally. Only fixed-rate agency MBS securities guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae are eligible assets for the program. The program includes, but is not limited to, 30-year, 20-year and 15-year securities of these issuers.
  • 2:01 PM » Report: Car Sales Slump 11% Below June Levels
    Published Thu, Aug 27 2009 2:01 PM by Calculated Risk Blog
    From the Financial Times: (ht James) [S]igns are already emerging that overall sales will fall back sharply now that the incentives have expired. ... [] estimates that, based on visits to its websites, “purchase intent” is down 11 per cent from the average in June ... excerpted with permission It now appears that sales in August were at about a 16 million SAAR (auto sales for August will be released next week). This follows an 11.22 million SAAR in July. The Cash-for-clunkers program started on July 24th. If sales in September are 11% below June - that would put sales at under 9 million SAAR - the lowest sales for this cycle, and perhaps at the lowest rate since the early '70s. Of course the program just ended, but it will be interesting to see how much Cash-for-Clunkers cannibalized future sales.
    Click Here to Read the Full Article

    Source: Calculated Risk Blog
  • 2:00 PM » NewsWatch: FDIC's 'problem list' of troubled banks tops 400
    Published Thu, Aug 27 2009 2:00 PM by Market Watch
    The Federal Deposit Insurance Corp. says more lenders ran into financial trouble during the second quarter as the recession continued to saddle banks with soured loans.
  • 2:00 PM » For Toll Brothers, Future's Uncertain
    Published Thu, Aug 27 2009 2:00 PM by
    Editor's Note: This article was originally published on the Buzz & Banter. It's being reposted here for the benefit of the Minyanville community.In its earnings announcement Toll Brothers (TOL) states that the company: "...recorded non-cash valuation allowances of $416.8 million against its federal deferred tax asset and $22.6 million against its state deferred tax assets following an assessment of the recoverability of its deferred tax assets under SFAS 109. The Company believes that the extended downturn in the housing market the uncertainty as to its duration and the Company's recent losses due primarily to recognition of impairment charges are significant evidence ...
    Click Here to Read the Full Article

  • 2:00 PM » FDIC Rightly Worries About Consumer Confidence
    Published Thu, Aug 27 2009 2:00 PM by Seeking Alpha
    submits: Due to the large number of bank failures during 2009, the FDIC Deposit Insurance Fund (DIF) has fallen to the lowest level since March 1993. Numerous headlines are screaming that the FDIC is bankrupt and that the DIF fund is depleted. Considering the perilous financial condition of the banking industry and the possibility of perhaps another 1,000 or more bank closings, the FDIC is probably not capable of fulfilling its mission without substantial loans from the US Treasury. (The last time this happened was in the early 1990s during the savings and loan crisis when the FDIC had to borrow $15 billion from the US Treasury.) This does not mean, however, that the upcoming FDIC Quarterly Banking Profile will report a negative balance in the DIF. The FDIC has made it clear that they consider it important to maintain a positive DIF number to avoid causing a lack of confidence in the banking system by the public.
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 9:51 AM » Keepin’ It Real Estate: Allocating Stimulus to Land Banks
    Published Thu, Aug 27 2009 9:51 AM by
    After four years of searing pain the US housing market is finally showing signs of life. And even as the causes and relative sustainability of this nascent “recovery” are being hotly debated traditional buyers and investors alike are jumping into the market for homes with both feet. It now appears that the biggest baddest investor of them all the one with infinitely deep pockets is wading into the fray: Uncle Sam. According to HousingWire the US Department of Housing and Urban Development or HUD is giving state and local governments a total of $50 million to help deal with ...
    Click Here to Read the Full Article

  • 9:51 AM » Answers for Homeowners With Taylor, Bean & Whitaker Loans
    Published Thu, Aug 27 2009 9:51 AM by Freddie Mac
    My loan is with Taylor, Bean & Whitaker (TBW) and they have closed. What should I do? Freddie Mac has arranged for several servicing companies to begin working directly with homeowners who have TBW-serviced mortgages. You should soon be receiving notification from your new servicer, the company that collects your mortgage payments.
  • 9:36 AM » New Home Sales Strong... At the Right Price
    Published Thu, Aug 27 2009 9:36 AM by Seeking Alpha
    Yesterday was another "borefest" on Wall St as the bears and the bulls continued to tango around the 1000-1050 area on the S&P. We got some more bullish housing data on new and existing home sales. I have to admit, that tax credit seems to really be working. A few mortgage brokers have told me that things (especially on the low end) have picked up as a result of the government stimulus.
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 8:17 AM » Housing prices
    Published Thu, Aug 27 2009 8:17 AM by
    Even if the big bust is over, that doesn't mean we'll see a rebound; at best, this is the new normal. 2005 isn't coming back.
    Click Here to Read the Full Article

  • 8:02 AM » Report: Mortgage Delinquencies increase in July
    Published Thu, Aug 27 2009 8:02 AM by Calculated Risk Blog
    From Reuters: Among U.S. homeowners with mortgages, a record 7.32 percent were at least 30 days late on payments in July, up from about 4.5 percent a year earlier and 7.23 percent in June, according to monthly data from the Equifax credit bureau. There numbers aren't directly comparable to the , but this shows that delinquencies are still rising.
    Click Here to Read the Full Article

    Source: Calculated Risk Blog
  • 8:02 AM » Reviewing the FDIC's Role in This Crisis
    Published Thu, Aug 27 2009 8:02 AM by Seeking Alpha
    submits: With the Federal Deposit Insurance Corporation (FDIC) about to release its latest figures for banks it regulates and its own financial condition, now is a good time to review its role in this crisis. This post is about the FDIC’s role in the credit crisis, how it seizes banks and why I believe this matters. In my opinion, Sheila Bair, the head of the FDIC, is the best regulator in government these days (although ). Her agency has taken on the workman’s regulatory role in this crisis of identifying undercapitalized institutions, seizing them and putting their assets in new hands. These actions are a necessary part of capitalism. When a bank is reckless, it must suffer the consequences.
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • Wed, Aug 26 2009
  • 10:42 PM » Subprime Lenders Getting U.S. Subsidies, Report Says
    Published Wed, Aug 26 2009 10:42 PM by
    Much “of this money is going directly to the same financial institutions that helped create the sub-prime mortgage mess in the first place,” Bill Buzenberg, executive director of the center, said in a statement. For example, J.P. Morgan Chase, Wells Fargo and Countrywide, which has been bought by Bank of America, are eligible to receive billions [...]
    Click Here to Read the Full Article

  • 7:20 PM » FDIC Lowers Qualifications for Failed Bank Acquisitions
    Published Wed, Aug 26 2009 7:20 PM by Calculated Risk Blog
    From Bloomberg: (ht Anthony) The Federal Deposit Insurance Corp. approved guidelines for private-equity firms to buy failed banks ... agreeing to lower to 10 percent from the proposed 15 percent the Tier 1 capital ratio private-equity investors must maintain after buying a bank. From the FDIC: Attachment: As a reminder, the deadline for Corus Bank bids is reported to be next week. So this is just in time. Also, the Q2 FDIC will probably be released tomorrow AM (including stats on the Deposit Insurance Fund and the number of problem banks at the end of Q2).
    Click Here to Read the Full Article

    Source: Calculated Risk Blog
  • 7:20 PM » Misc: ARMs, Mortgage Fraud, End of Tax Credits, and more
    Published Wed, Aug 26 2009 7:20 PM by Calculated Risk Blog
    From the NY Times: (ht Shnaps, Ann) When Harvey Clavon took out an exotic mortgage to refinance his home in Santa Clarita, Calif., three years ago, he thought he knew what he was doing. Mr. Clavon, 63, was planning to sell the home in a few years and retire to Palm Springs. So he got a loan called an option adjustable rate mortgage, or option ARM, which allowed him the option of paying less than the interest for the first five years. On his annual salary of $100,000 as a television camera operator, he could afford the $2,200 initial mortgage payments. And he would sell the home before the mortgage reset. ... Mr. Clavon made only minimum payments on his mortgage, his balance has risen to $680,000 from $618,000, on a house worth closer to $400,000. What a surprise! And the article also has a quote from the Shnapster's friend Ted Jadlos on Option ARMs! “Everyone’s been focused on subprime, but we’re more concerned about this,” said Todd Jadlos, managing director of LPS Applied Analytics ... “By the time subprime defaults had increased 200 percent, in June and July of 2007, option ARMs had gone up 400 percent. People just didn’t notice because the overall numbers weren’t as high.” And some more mortgage fraud news: Ohio Attorney General Richard Cordray and Cuyahoga County Prosecutor Bill Mason today announced details of an 18-month investigation that led to indictments against 41 people and four companies. The defendants are alleged to have engaged in real estate transactions to purchase 453 homes with fraudulent loans totaling $44 million. ... The scheme involved using straw buyers to purchase homes, falsely claiming home improvements were performed on houses in order to refinance them, and then selling houses to unqualified buyers with the assistance of real estate agents, mortgage brokers and title companies. Lenders were tricked into believing that the buyers were making at least a 10% down payment when they were not, that the buyers had assets when they did not...
    Click Here to Read the Full Article

    Source: Calculated Risk Blog
  • 7:20 PM » Fed's Lockhart: "slow recovery" and "protracted period of high unemployment"
    Published Wed, Aug 26 2009 7:20 PM by Calculated Risk Blog
    From Atlanta Fed President Dennis Lockhart: On the economic outlook: With respect to growth, my forecast envisions a return to positive but subdued gross domestic product (GDP) growth over the medium term weighed down by significant adjustments to our economy. Some of these adjustments are transitional in the sense that they impede the usual forces of recovery. Among these are the rewiring of the financial sector and the need for households to save more to repair their balance sheets. Some of these adjustments, however, are more "structural" in nature. By this, I mean that the economy that emerges from this recession may not fully resemble the prerecession economy. In my view, it is unlikely that we will see a return of jobs lost in certain sectors, such as manufacturing. In a similar vein, the recession has been so deep in construction that a reallocation of workers is likely to happen—even if not permanent. ... My forecast for a slow recovery implies a protracted period of high unemployment. And labor market weakness is a concern I hear about often as I travel around the Southeast. And on Commercial real estate: I'm concerned that commercial real estate weakness poses a serious potential risk to the economic recovery and to the banking system. Commercial real estate loan exposure is heavily concentrated in banks and commercial mortgage-backed securities. Commercial real estate values—that is, collateral values for loans—are being revised down materially by the potent combination of increased vacancy, rent reductions, and appropriately higher capitalization rates. Further, there is a clear link between employment trends (positive and negative) and commercial real estate trends. On that note, here is a graph from a post in July: Click on graph for larger image in new window. This graph shows the office vacancy rate vs. the quarterly unemployment rate and recessions. As Lockhart noted: "[T]here is a clear link between employment trends (positive and...
    Click Here to Read the Full Article

    Source: Calculated Risk Blog
  • 6:56 PM » Discussion: Worsening “Cure” Rates on U.S. Prime (yes PRIME) RMBS
    Published Wed, Aug 26 2009 6:56 PM by
    Delinquency cure rates refer to the percentage of delinquent loans returning to a current payment status each month. Cure rates have declined from an average of 45% during 2000-2006 to the current level of 6.6%. It is important not only to observe total roll rates, but delinquency cure rates as well, according to Managing Director Roelof Slump.
    Click Here to Read the Full Article

    Published Wed, Aug 26 2009 6:49 PM by NAHB
    Press Release
  • 4:46 PM » Federal Reserve Board alerts public to instances of fraudulent solicitations directed at consumers
    Published Wed, Aug 26 2009 4:46 PM by Federal Reserve
    Federal Reserve Board alerts public to instances of fraudulent solicitations directed at consumers
    Click Here to Read the Full Article

    Source: Federal Reserve
  • 4:45 PM » IRS Is Scrutinizing Mortgage Deductions
    Published Wed, Aug 26 2009 4:45 PM by Realtor.Org
    The IRS is examining some tax returns with high deductions for mortgage interest and enforcing obscure rules that many home owners may be unfamiliar with.
  • 4:45 PM » NAR Launches Short Sales Certification Program
    Published Wed, Aug 26 2009 4:45 PM by Realtor.Org
    The new Short Sales and Foreclosure Certification Program provides training in how to manage the growing market for distressed property sales.
  • 4:45 PM » Housing Numbers You Don't See
    Published Wed, Aug 26 2009 4:45 PM by CNBC
    Posted By: As usual, by the middle of the day, I get bored with talking about the headline housing number du jour, and I start pondering some of the numbers that never make it into the general news stream. Today I'm looking at P.4 of the Commerce Dept.'s report on "New Home Sales in July." I'm wondering why sales of homes "Not started" (i.e. still empty lots) rose 33 percent month to month, while sales of "Completed" homes fell 6 percent. Topics: | | Sectors: |
  • 4:30 PM » Credit Spreads and Monetary Policy.
    Published Wed, Aug 26 2009 4:30 PM by NY Fed
    Vasco Curdia and Michael Woodford. Credit Spreads and Monetary Policy. Federal Reserve Bank of New York Staff Reports Staff Report Number 385, August 2009.
  • 4:14 PM » Recovery rubs off on Freddie, Fannie, AIG
    Published Wed, Aug 26 2009 4:14 PM by
    Shares of Fannie Mae, Freddie Mac and AIG, the three financial groups taken over by the US government at the height of the financial crisis last year, have surged over the past three weeks, making them the most improved stocks on the New York Stock Exchange since early August
    Click Here to Read the Full Article

  • 4:14 PM » HUD announces $50 million in Recovery Act funds to assist local communities stabilize neighborhoods hard hit by foreclosure
    Published Wed, Aug 26 2009 4:14 PM by
    WASHINGTON - U.S. Department of Housing and Urban Development Secretary Shaun Donovan today announced HUD is launching a $50 million effort to help state and local governments address the inventory of foreclosed properties assisted under the Department's Neighborhood Stabilization Program (NSP). HUD is awarding $44.5 million to nine national organizations and another $5.5 million to help local communities purchase, rehabilitate and resell foreclosed properties in especially hard-hit neighborhoods.
  • 3:12 PM » Distressing Gap: Ratio of Existing to New Home Sales
    Published Wed, Aug 26 2009 3:12 PM by Calculated Risk Blog
    For graphs based on the new home sales report this morning, please see: According to the of real estate agents, over 63% of sales in Q2 were distressed. The number of distressed sales has probably declined in Q3, but it is still very high. The July NAR shows "distressed homes accounted for 31 percent of transactions", but their survey is very limited. And even using the NAR numbers, distressed sales are running around 1.5 million this year. All this distressed sales activity has created a gap between new and existing sales as shown in the following graph that I've jokingly labeled the "Distressing" gap. This is an update including July new and existing home sales data. Click on graph for larger image in new window. This graph shows existing home sales (left axis) and new home sales (right axis) through July. As I've noted before, I believe this gap was caused by distressed sales. Even with the recent rebound in new and existing home sales, the gap is still very wide. The second graph shows the same information, but as a ratio for existing home sales divided by new home sales. Although distressed sales will stay elevated for some time, eventually I expect this ratio to decline back to the previous ratio. The ratio could decline because of a further increase in new home sales, or a decrease in existing home sales - or a combination of both. I expect the ratio will decline mostly from a decline in existing home sales as the first-time home buyer frenzy subsides, and as the foreclosure crisis moves into mid-to-high priced areas (with fewer cash flow investors). From a longer term graph of the ratio, see my last month. By request the Feed is Full length and Free of ads. And also by request , once a month, here is a tip jar - to leave a tip. Thanks! CR
    Click Here to Read the Full Article

    Source: Calculated Risk Blog
  • 12:07 PM » Clunkers program draws almost 700,000 takers
    Published Wed, Aug 26 2009 12:07 PM by Market Watch
    The cash-for-clunkers program drew to a close late Tuesday, with almost 700,000 participants grabbing $2.88 billion in rebates to trade their old rides for more fuel-friendly alternatives.
  • 12:06 PM » Treasury Announces $309 Million in Recovery Act Funds
    Published Wed, Aug 26 2009 12:06 PM by US Treasury
    August 26, 2009 TG-267 Treasury Announces $309 Million in Recovery Act Funds to Create Jobs, Provide Affordable Housing WASHINGTON – As part of the Obama Administration's effort to strengthen communities and ease pressures on the housing market, the U.S. Department of the Treasury today announced $309 million in American Recovery and Reinvestment Act (Recovery Act) funding to spur the development of affordable housing units in Arizona, Connecticut, North Carolina, North Dakota, Pennsylvania, South Carolina, and Vermont. "Today's announcement of housing funds demonstrates how the Recovery Act is putting our nation on the path to economic stability, one community at a time," said Deputy Secretary of Treasury Neal Wolin. "This initiative will help spur construction and development, create much needed jobs, and increase the availability of affordable housing for families around the country." Since the program launch in May 2009, the Treasury Department and the Department of Housing and Urban Development have been implementing new efforts designed to help families while providing important assistance to homebuilders. Specifically, the Treasury Department has implemented an innovative program that will provide more than $3 billion from the Recovery Act to put people to work building quality, affordable housing for individuals and families affected by the current crisis. The Treasury Department will work with state housing agencies to jump start the development or renovation of qualified affordable housing for families across the country. Under this program, state housing agencies will receive funds to finance the construction of affordable housing developments. Today, the Treasury Department is announcing the sixth round of recipients for a total of $309 million: $34 million in Arizona; $16 million in Connecticut; $95 million for North Carolina; $3.6 million for North Dakota; $41 million in Pennsylvania; $118 million for South Carolina; and $1.4...
  • 12:05 PM » A Look At the CBOs Latest Projections
    Published Wed, Aug 26 2009 12:05 PM by
    Yesterday the CBO released its long-term budget outlook. It is a lengthy document that involves an area of economics that I find highly questionable: long-term projections. I understand why we must include them and why they are done, but I still find them questionable because they are 50+ year projections. Let's look at a key point: Basically, it's about spending on medical care. That is the primary driver for the increase government expenditures. That is also why it is imperative that we figure out a way to hold down costs. Let's look at some charts that highlight the problem. Click on all for a larger image Social security isn't the problem. It increases to roughly 6% of GDP and then remains stable. This is an entirely manageable situation. However, Medical costs -- the net total spending of medicare and medicaid -- continue to increase until they reach 18% near the end of the decade. That is obviously unsustainable and again highlights why reform is mandatory. I'm still working through the data. The CBOs information is
    Click Here to Read the Full Article

  • 12:05 PM » Colonial BancGroup Files for Bankruptcy Protection
    Published Wed, Aug 26 2009 12:05 PM by CNBC
  • 12:05 PM » Builders overvalued after summer rally: analyst
    Published Wed, Aug 26 2009 12:05 PM by Market Watch
    One Wall Street analyst foresees a September correction for high-flying home-builder stocks, in the belief that lingering concerns over unemployment will curb investor enthusiasm.
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Mortgage Rates:
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  • 15 Yr FRM 3.63%
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  • Jumbo 30 Year Fixed 3.87%
MBS Prices:
  • 30YR FNMA 4.5 104-14 (0-02)
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  • 30YR FNMA 5.0 105-18 (0-04)
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  • 30YR FNMA 5.5 106-22 (0-10)
Recent Housing Data:
  • Mortgage Apps -3.52%
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  • Refinance Index -3.46%
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  • Purchase Index 0%