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  • Mon, Nov 22 2010
  • 4:49 PM » Existing Home Sales Forecast, and Ireland Update
    Published Mon, Nov 22 2010 4:49 PM by Calculated Risk Blog
    From housing economist Tom Lawler (existing home sales will be released tomorrow): Based on the data I have seen so far, I estimate that existing home sales ran at a seasonally adjusted annual rate of around 4.46 million homes, down 1.5% from September’s pace, and down 25.4% from last October’s “tax-credit-goosed” pace. The YOY decline in unadjusted sales will be larger than that for seasonally adjusted sales for “calendar” reasons (including the fact that this October had one fewer business day than last October). The local realtor/MLS inventory numbers I’ve seen have on aggregate been broadly consistent with the 3.2% national drop in active listings from September to October on, though the local realtor numbers suggest that the NAR’s estimate may show a somewhat greater decline – perhaps closer to -3.7% (The NAR does not use national listings, but instead uses listings from its sample of local MLS/associations/boards). A 3.7% decline in inventory (from September) would put inventory at 3.89 million. Based on this estimate, the months-of-supply in October was around 10.4 months. And on Ireland: From the Irish Times: . Translation: The Irish government collapsed and the Prime Minister (Taoiseach) will be calling for new elections. From the Irish Times: Irish borrowing costs, which fell under 8 per cent earlier today on news that EU had approved a Government request for a multi-billion euro package, rose shortly after the Greens’ announcement and closed at 8.1 per cent. Discussions resumed today between delegations from the IMF, the EU and the Commission and a team of Irish officials to discuss the terms of the bailout. An excellent European source told me today that his attention is now on Spain - and that there are some early troubling signs of rising credit costs (not just the ). Something to keep an eye on ...
    Click Here to Read the Full Article

    Source: Calculated Risk Blog
  • 4:48 PM » Foreclosure takes toll on increasing number of children
    Published Mon, Nov 22 2010 4:48 PM by Washington Post
    Three years into the mortgage crisis, the public debate over how to stem the unprecedented tide of foreclosures and the damage they are doing to the housing market have largely overshadowed any discussion of the human toll. But researchers have begun to probe what happens to people after they lose...
    Click Here to Read the Full Article

    Source: Washington Post
  • 2:29 PM » Panel sees systemic risk in U.S. mortgage-documentation mess
    Published Mon, Nov 22 2010 2:29 PM by
    The Congressional Oversight Panel found that, contrary to what banks and the U.S. --
    Click Here to Read the Full Article

  • 2:17 PM » NCSHA Summary of Housing Trust Fund Proposed Rule
    Published Mon, Nov 22 2010 2:17 PM by National Council of State Housing Agencies
    On October 29, HUD published in the Federal Register a establishing program rules for the
    Click Here to Read the Full Article

    Source: National Council of State Housing Agencies
  • 2:16 PM » ‘Shadow’ housing inventory seen topping 2 million
    Published Mon, Nov 22 2010 2:16 PM by Reuters
    NEW YORK (Reuters) – The shadow supply of homes set to hit the U.S. housing market jumped more than 10 percent from a year earlier to 2.1 million units in August, suggesting prices will continue to decline, a mortgage data firm estimated on Monday. Based on the number, it would take eight months to work through the shadow inventory, compared with five months a year ago, the firm, CoreLogic, said. Shadow inventory includes properties whose borrowers are at least 90 days delinquent or those in foreclosure or already foreclosed and not yet listed for sale. Together with the 4.2 million homes on the market, it would take 23 months to work through supply at the current pace of sales, up from 17 months a year ago, the firm said. Shadow inventory is seen as one of the chief threats to the fragile housing market that is showing new signs of weakening. If banks swiftly dump the homes on the market, economists fear it may renew a vicious cycle that could depress home prices to levels that would cause more defaults and foreclosures. Adding to the problems are errors in processing tens of thousands of foreclosure cases at Bank of America Corp, the largest U.S. mortgage servicer, and other financial institutions. The massive failure to provide proper documentation in court has resulted in delays to an already lengthy processes of repossessing homes, leading to a backlog in paperwork and repossessions as the companies fix their procedures. The banks are also facing a nationwide probe by state attorneys general. “The weak demand for housing is significantly increasing the risk of further price declines in the housing market,” Mark Fleming, CoreLogic’s chief economist, said in a statement. “This is being exacerbated by a significant and growing shadow inventory that is likely to persist for some time due to the highly extended time-to-liquidation that servicers are currently experiencing,” he said. What’s more, buyers of distressed properties have become gun shy due to the foreclosure...
  • 2:15 PM » CoreLogic: Shadow Housing Inventory pushes total unsold inventory to 6.3 million units
    Published Mon, Nov 22 2010 2:15 PM by Calculated Risk Blog
    : Shadow Inventory Jumps More Than 10 Percent in One Year, Pushing Total Unsold Inventory to 6.3 Million Units Click on graph for larger image in new window. This graph from CoreLogic shows the breakdown of "shadow inventory" by category. For this report, CoreLogic estimates the number of 90+ day delinquencies, foreclosures and REOs not currently listed for sale . Obviously if a house is listed for sale, it is already included in the "visible supply" and cannot be counted as shadow inventory. CoreLogic estimates the "shadown inventory" (by this method) at about 2.1 million units. CoreLogic estimates shadow inventory, sometimes called pending supply, by calculating the number of properties that are seriously delinquent (90 days or more), in foreclosure and real estate owned (REO) by lenders and that are not currently listed on multiple listing services (MLSs). Shadow inventory is typically not included in the official metrics of unsold inventory. According to CoreLogic, the visible supply of unsold inventory was 4.2 million units in August 2010, the same as the previous year. The visible inventory measures the unsold inventory of new and existing homes that were on the market. The visible months’ supply increased to 15 months in August, up from 11 months a year earlier due to the decline in sales during the last few months. The total visible and shadow inventory was 6.3 million units in August , up from 6.1 million a year ago. The total months’ supply of unsold homes was 23 months in August , up from 17 months a year ago. Although it can vary and it depends on the market and real estate cycle, typically a reading of six to seven months is considered normal so the current total months’ supply is roughly three times the normal rate. ... Mark Fleming, chief economist for CoreLogic commented, “The weak demand for housing is significantly increasing the risk of further price declines in the housing market. This is being exacerbated by a significant...
    Click Here to Read the Full Article

    Source: Calculated Risk Blog
  • 2:14 PM » Chicago Fed: Economic Activity picked up slightly in October
    Published Mon, Nov 22 2010 2:14 PM by Calculated Risk Blog
    Note: This is a composite index based on a number of economic releases. From the Chicago Fed: Led by improvements in production- and employment-related indicators, the Chicago Fed National Activity Index increased to –0.28 in October from –0.52 in September. ... The index’s three-month moving average, CFNAI-MA3, decreased to –0.46 in October from –0.33 in September, reaching its lowest level since November 2009. October’s CFNAI-MA3 suggests that growth in national economic activity was below its historical trend for the fifth consecutive month. With regard to inflation, the amount of economic slack reflected in the CFNAI-MA3 suggests subdued inflationary pressure from economic activity over the coming year. Click on graph for larger image in new window. This graph shows the Chicago Fed National Activity Index (three month moving average) since 1967. According to the Chicago Fed: A zero value for the index indicates that the national economy is expanding at its historical trend rate of growth; negative values indicate below-average growth; and positive values indicate above-average growth. This index suggests the economy was sluggish in October.
    Click Here to Read the Full Article

    Source: Calculated Risk Blog
  • 2:14 PM » Unemployment Benefits Lead to Higher Taxes, Loans
    Published Mon, Nov 22 2010 2:14 PM by WSJ
    States are raising payroll taxes, even as they raise borrowing from the government, to pay for unemployment insurance with some regions harder hit than others.
  • 2:14 PM » Real Estate News: Housing Bear Paulson Buys Condo
    Published Mon, Nov 22 2010 2:14 PM by Google News
    Here is a look at real-estate news in today's WSJ:
  • 8:35 AM » Shadow Inventory
    Published Mon, Nov 22 2010 8:35 AM by Calculated Risk Blog
    Tomorrow morning CoreLogic will release their Shadow Inventory report as of August 2010. For this report, CoreLogic estimates the number of 90+ day delinquencies, foreclosures and REOs not currently listed for sale . Obviously if a house is listed for sale, it is already included in the "visible supply" and cannot be counted as shadow inventory. CoreLogic then adds this shadow or "pending inventory" to the "visible supply" for August as reported by the NAR: 4.1 million units and 12.0 months-of-supply. The term "shadow inventory" is used in many different ways. My definition is: housing units that are not currently listed on the market, but will probably be listed soon. This includes: REOs, foreclosures in process and some percentage of seriously delinquent loans. This is the number CoreLogic is estimating. Unlisted new high rise condos. This also includes high rise condos that were converted to rental units with the intention of eventually selling the units. Note: these properties are not included in the new home inventory report and are not included in the CoreLogic report. These is no data for the number of units nationwide, and these have to be counted on a city by city basis ( and Miami have many of these units). Homeowners waiting for a better market. This includes the "accidental landlords" who rented their properties and who will try to sell as soon as the market improves after the current tenant's lease expires. I expect CoreLogic to report 1.5 to 2.0 million units of pending supply, and that will put their combined months-of-supply metric in the stratosphere. Although the CoreLogic report is useful in estimating future supply, I think it is the visible supply that impacts prices. Earlier: Here is the for the coming holiday week. There will be plenty of data released early in the week, including existing home sales on Tuesday, new home sales on Wednesday, the 2nd estimate of Q3 GDP on Tuesday, and Personal...
    Click Here to Read the Full Article

    Source: Calculated Risk Blog
  • 8:34 AM » Barron’s: Putbacks to Banks Could Be $134 Billion
    Published Mon, Nov 22 2010 8:34 AM by The Big Picture
    During the housing boom, banks underwrote over $2 trillion in subprime, alt-A and option-adjustable rate mortgages underwriting could have losses as high as $700 billion, according to Amherst Securities research. The problem is, they weren’t particularly careful in how they performed their duties. Administrative and substantive errors, missing trust documents, misleading placement memorandums, all create a potential liability for the banks. The speed over quality underwriting procedures in securitizing and processing that $2 trillion in sketchy mortgages is well over $100 billion dollars. That’s according to an article in Barron’s this weekend, citing research from Compass Point Research & Trading, looking at potential putbacks to the banks. The folks who bought this mostly AAA rated junk as mortgage-backed securities are not simply going to swallow the losses quietly. These investors –including Fannie Mae, Freddie Mac, Pacific Investment Management (PIMCO) and BlackRock (BLK) are seeking redress. Under certain circumstances, the terms of their purchase agreements allow them to “ put back the mortgages to the banks .” Bank of America, with its still awful Countrywide and Merrill acquisitions, has the greatest exposure, at over $35 billion. Citigroup somehow has a mere $8B in potential putback losses. _______________________________________________________ A Potentially Big Hit Big banks could lose $134 billion if mortgage securities are put back to them, according to Compass Point Research & Trading. Company/Ticker Estimated Loss (bil) Per Share* % Tangible Book Value /BAC $35.2 $2.11 17% /JPM 23.9 3.59 13 /DB 14.1 12.56 21 /GS 11.2 12.43 11 /RBS 9.4 0.10 12 /CS 8.9 4.50 22 /UBS 8.4 1.32 15 /MS 7.9 3.37 14 /C 7.8 0.16 4 /BCS 3.6 0.18 3 /HBC 3.5 0.22 2 Total 133.8 * After-tax. Sources: Compass Point Research & Trading LLC; Bloomberg; Inside MBS & ABS Asset Backed Alert _______________________________________________________ > One caveat : Chris Whalen...
    Click Here to Read the Full Article

    Source: The Big Picture
  • 8:33 AM » WSJ: Expert Networks = Insider Trading
    Published Mon, Nov 22 2010 8:33 AM by The Big Picture
    The WSJ occasionally buries huge stories in its much less read weekend edition; recall the investigation in 2006. This past weekend was a of this: “Federal authorities, capping a three-year investigation, are preparing insider-trading charges that could ensnare consultants, investment bankers, hedge-fund and mutual-fund traders, and analysts across the nation, according to people familiar with the matter. The criminal and civil probes, which authorities say could eclipse the impact on the financial industry of any previous such investigation, are examining whether multiple insider-trading rings reaped illegal profits totaling tens of millions of dollars, the people say. Some charges could be brought before year-end, they say. The investigations, if they bear fruit, have the potential to expose a culture of pervasive insider trading in U.S. financial markets, including new ways non-public information is passed to traders through experts tied to specific industries or companies, federal authorities say.” The criminal investigation was examining how nonpublic information was being passed to traders by consultants. These people work for companies that provide “expert network” services to hedge funds. • Primary Global Research LLC, a Mountain View, California, firm • Goldman Sachs Group Inc. bankers • Broadband Research LLC in Portland, Ore There is a laundry list of potential targets for SEC violations. Trading firms possibly under investigation include SAC, First New York Securities, Wellington, MFS, Janus, Citadel, Ziff Brothers, Jana, TPG-Axon, Jennison, UBS and Deutsche Bank. Companies whose stock trading were under review include Schering-Plough (before its takeover by Merck), MedImmune’s takeover by AstraZeneca, Abbott Laboratories take over of Advanced Medical Optics. > Source : SUSAN PULLIAM, MICHAEL ROTHFELD,JENNY STRASBURG and GREGORY ZUCKERMAN WSJ, NOVEMBER 20, 2010
    Click Here to Read the Full Article

    Source: The Big Picture
  • 8:32 AM » Top banks face $100 billion Basel shortfall: report
    Published Mon, Nov 22 2010 8:32 AM by Reuters
    LONDON (Reuters) - The new Basel III banking rules will leave the biggest U.S. banks short of between $100 billion and $150 billion in equity capital, with 90 per cent of the shortfall concentrated...
  • 8:31 AM » Reality check for Fed forecasts
    Published Mon, Nov 22 2010 8:31 AM by Reuters
    WASHINGTON (Reuters) - The U.S. economy, to mix two Federal Reserve catch phrases, may be disappointingly slow for an extended period.
  • 8:30 AM » Black Friday to grab investor attention
    Published Mon, Nov 22 2010 8:30 AM by Reuters
    NEW YORK (Reuters) - Expectations about "Black Friday," when Americans traditionally get serious about holiday shopping, could sway stocks this week if it looks like the economy will get a pop from...
  • 8:29 AM » Wells Fargo to pay Citi $100 million over Wachovia
    Published Mon, Nov 22 2010 8:29 AM by Reuters
    NEW YORK (Reuters) - Wells Fargo & Co will pay Citigroup Inc $100 million to settle multiple lawsuits over the contentious 2008 purchase of Wachovia Corp, closing another chapter in the...
  • 8:28 AM » The Battle Over Nafta Continues
    Published Mon, Nov 22 2010 8:28 AM by WSJ
    So was there a “giant sucking sound” or not? Sixteen years after the North American Free Trade Agreement came into effect in 1994, economists, politicians, business leaders and union officials debate its effect.
  • 8:27 AM » Forecasters See U.S. Economy Still Sluggish in 2011
    Published Mon, Nov 22 2010 8:27 AM by WSJ
    Economic forecasters expect the U.S. economy to remain sluggish next year, weighed down by high public debt, unemployment and business regulation.
  • 8:26 AM » Geithner Defends Fed’s Mandate To Seek Full Employment
    Published Mon, Nov 22 2010 8:26 AM by WSJ
    U.S. Treasury Secretary Timothy Geithner on Friday said the Obama administration would not support a move to strip the Federal Reserve of its mandate to seek full employment.
  • 8:26 AM » Big Companies Hiring, Small Companies Aren't, Gallup Finds
    Published Mon, Nov 22 2010 8:26 AM by
    Despite the trope that "small businesses are the engines of job growth," larger companies seem to be doing the most hiring, according to new survey data.
    Click Here to Read the Full Article

  • 8:26 AM » Euro Strengthens as Irish Rescue Spurs Bond Gains; Oil Rises
    Published Mon, Nov 22 2010 8:26 AM by Business Week
    The euro and U.S. index futures gained after Ireland accepted an international bailout. Irish 10-year bond yields fell to the lowest level in almost two weeks and the cost of insuring the government’s debt declined.
    Click Here to Read the Full Article

    Source: Business Week
  • 8:26 AM » Dollar Bears Pare Bets as QE2 Attacks Prove Unfounded
    Published Mon, Nov 22 2010 8:26 AM by Business Week
    At a time when foreign officials and U.S. lawmakers are criticizing the Federal Reserve’s plan to buy Treasury bonds, the currency market is voting in favor of Ben S. Bernanke’s quantitative easing.
    Click Here to Read the Full Article

    Source: Business Week
  • 8:26 AM » New Lending Guidelines From Fannie Mae - Mortgages
    Published Mon, Nov 22 2010 8:26 AM by
    Rules that take effect next month will provide relief for cash-poor buyers but make it harder for others to get a mortgage.
    Click Here to Read the Full Article

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