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  • Thu, May 21 2009
  • 2:26 PM » Housing: Playing Games with Appraisals and Value
    Published Thu, May 21 2009 2:26 PM by Seeking Alpha
    Tom Lindmark submits: I’m starting to see a lot of this, so I thought it worth a short blog at least. Now that houses are starting to sell, at least at the cheap end, there’s a lot of talk about value and how foreclosure sales are not representative of the true value of a house. It’s couched in lots of different ways but that’s the snake oil that people are trying to peddle.
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 1:24 PM » Credit cards in America: Knocked off balance
    Published Thu, May 21 2009 1:24 PM by
    A once-glittering business loses its shine CREDIT-CARD borrowers who roll over a portion of their balance each month are known as revolvers. These days lenders are in a spin as they struggle to cope with write-offs, a regulatory crackdown and changes in consumer behaviour. On May 18th American Express, a credit- and charge-card giant, announced a second round of job cuts (bringing the total to 11,000), slashed its marketing and business-development budgets and offered a “very cautious” outlook. A few days earlier Advanta, a provider of cards to small businesses, froze all existing accounts after charge-offs (uncollectable debt) reached a dizzying 20%. The shutdown sent a shiver through the market for bonds backed by credit-card debt, which is only now starting to recover from the ravaging securitised assets took last year. ...
    Click Here to Read the Full Article

  • 1:24 PM » The world's best banks: A short list
    Published Thu, May 21 2009 1:24 PM by
    As the dust starts to settle, which banks deserve the most plaudits? TRYING to work out which banks are the world’s best is a bit like awarding the prize for prettiest war-torn village. It is a title that carries little kudos. It is also likely to prompt further shelling. Winners of industry awards in the past three years include Ken Lewis, the chief executive of Bank of America, for banker of the year (2008); Societe Generale for its risk management; and Angelo Mozilo of Countrywide, a failed mortgage lender, for a “lifetime of achievement”. Still, the question is becoming more pertinent. After months of indiscriminate fear, widespread losses and government hand-holding, the banking industry is gradually stabilising. Money markets are steadily calming. American banks that got a clean bill of health in this month’s stress tests are queuing up to repay government money. A first wave of escapees is likely to include Goldman Sachs, Morgan Stanley and JPMorgan Chase. Those banks that emerge from this crisis with reputations and franchises strengthened will find it increasingly easy to raise funds, win clients, attract employees and buy assets. ...
    Click Here to Read the Full Article

  • 12:22 PM » Future Fed Debt Buying Not a Foregone Conclusion
    Published Thu, May 21 2009 12:22 PM by WSJ
    Economists are warning bond investors not to get carried away by news the Federal Reserve is thinking about boosting its future purchases of Treasury and mortgage debt. Right now, the central bank is embarked on a radical effort to lower borrowing costs in mortgages and other lending markets by purchasing $300 billion in Treasury debt. It’s buying considerably more in the mortgage and agency markets. These large purchases of debt have forced yields and mortgage lending rates down and have largely done what policy makers wanted. But investors hope the Fed would do even more, especially as Treasury yields, facing massive government borrowing, have ground higher over recent months. Some investors saw in the meeting minutes for the late April gathering, released Wednesday, signs their hopes will be soon realized. The document said some FOMC members “noted that a further increase in the total amount of purchases might well be warranted.” That said, for now “all members concurred with waiting to see how the economy and financial conditions respond” before shifting policy. Bond yields moved lower on the news, with longer-term yields sliding by around six basis points, as investors cheered the possibility of additional Fed intervention in the future. Fed watchers countered that should be about all investors do with the Fed minutes. Whether the central bank will or won’t be buying Treasurys beyond what it’s already committed to is a decision that will be made some time from now, on conditions that will be hard to know. The current program runs until September. To be sure, some think it’s a good idea. Ward McCarthy , a bond strategist with Stone & McCarthy Research Associates , said more purchases is “something they should consider” because what’s been done so far has been “helpful.” The evidence for success is strongest in mortgage related buying, because borrowing rates for homes have indeed come down, McCarthy said. He calls success in Treasurys more “elusive” but notes...
  • 11:43 AM » Freddie Mac Purchases $37.5 Million Loan from CBRE
    Published Thu, May 21 2009 11:43 AM by Freddie Mac
    Through CME, Freddie Mac buys conventional mortgages backed by stabilized apartment buildings from its lender network. Depending on market conditions, Freddie Mac will either pool the loans, securitize them through a broker/dealer and sell them in the commercial mortgage-backed securities market; or securitize them and hold them in its portfolio for future sale.
  • 9:03 AM » Treasury prices edge higher
    Published Thu, May 21 2009 9:03 AM by CNN
    Government debt prices rose Thursday as investors await the next buyback by the Federal Reserve and digested the central bank's gloomy economic outlook.
  • 9:02 AM » FHA Now Has 100% Plus Financing | Mortgaged Future
    Published Thu, May 21 2009 9:02 AM by
    The American Recovery and Reinvestment Act of 2009 , passed early this year, provides up to an $8,000 tax credit for first time home buyers. The tax credit refund would be given to the home buyer after filing the 2008 or 2009 tax return.
    Click Here to Read the Full Article

  • 9:01 AM » Is the Time REIT for Real Estate ETFs?
    Published Thu, May 21 2009 9:01 AM by Seeking Alpha
    submits: As a result of the seemingly endless decline in the U.S. housing market (we're nearing the three year mark for the current downturn), most on the market have been posted huge losses since 2007, with many still down more than 50% from their record highs despite recent rallies. But as any shrewd investor knows, crisis begets opportunity. With real estate ETFs reaching new lows, the time may finally be right to snatch up some funds at bargain prices.
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 9:01 AM » Realty Income: Prudent Management, Justified Premium?
    Published Thu, May 21 2009 9:01 AM by Seeking Alpha
    submits: Business Summary: Realty Income Corporation (O) is an REIT that focuses on sale-leaseback deals. This is where a business, such as a restaurant or convenience store chain, raises capital by selling the land and buildings used to conduct the firm’s business, but retains the use of the property through a long-term lease.
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 9:01 AM » Secondary Sources: Greenspan and Banks, Mortgage Recasts, CAFE
    Published Thu, May 21 2009 9:01 AM by WSJ
    A roundup of economic news from around the Web. Yves Smith comments on former Fed Chairman Alan Greenspan’s that banks will need large amounts of capital. “You have to give former Fed chairman Alan Greenspan credit for having no shame. Well, he did once look a bit rattled before Congress for about five minutes and ‘fessed up it never occurred to him that people would be so greedy as to pull so much cash out of companies so as to leave burned hulks in their wake. Did he utterly miss reading the news during Enron and the 2002 accounting scandals? Greenspan also made life difficult for Bernanke in early 2007 more than once. Indeed, prior to Greenspan, no former Fed chairman made frequent pronouncements. This is unseemly, but having a sense of propriety went out of fashion in America some time ago. Now Greenspan is saying the banks are not OK (if they need a lot more capital, then by definition, they are undercapitalized now) when the powers that be have a full court press on to present precisely that image. And whose responsibility might it be that the banks are in such sorry shape? Might the Greenspan Fed’s extreme laissez faire stance have had a wee bit to do with it?” Via , Matthew Padilla of the OC Register looks at new estimate for mortgage recasts. “The older chart shows a big peak in 2010 — about $40 to $45 billion a month in loans around September/October 2010. The newer chart pushes that peak about one year into the future into late 2011/beginning 2012. Some borrowers will hold on a little longer. Maybe the housing market will recover by 2012 and they can sell to avoid foreclosure. But if any of these borrowers are deferring principal and interest owed, reaching say a maximum of 125% on a loan amount on 2005 to 2007 prices, then it is much less likely home prices will have rebounded enough to save them by 2011 or 2012.” On her blog, Megan McArdle has some quick comments about the changes to the CAFE standards. “What to say, beyond the obvious, about the administration...
  • 7:40 AM » BofA seeks to repay $45 billion by year-end: report
    Published Thu, May 21 2009 7:40 AM by Reuters
    NEW YORK (Reuters) - Bank of America Corp wants to pay back $45 billion in bail-out funds by the end of the year, accelerated by a program to raise capital, the Financial Times reported on its website late on Wednesday.
  • Wed, May 20 2009
  • 5:19 PM » Retail REITs: Tough but Stabilizing
    Published Wed, May 20 2009 5:19 PM by Seeking Alpha
    submits: In his first note released in the post Sakwa world, Craig Schmidt continues to attempt to restore confidence in retail REITs. It would, after all, seem prudent to bang clients' heads into their desks until they see the light at the end of the tunnel (oncoming bullet train?) at a time when the only cash, and equity value, REITs can create is by raising expensive, dilutive equity in order to repay the cheapest form of capital (that of secured loans previously held by Mr. Schmidt uber parent, Bank of America). This is especially true, after these same clients have plunked down about $20 billion in new equity in companies that at this point exist on fumes of hope, speculation and short covering. not surprisingly, the report comes just prior to Realtors's release which indicates that Commercial Real Estate activity in Q1 fell 4.8% from Q4 of 2008 and 12.9% year over year, while vacancy rates are poised to rise to 12.1% from 9.7% last year. While the title is expected, even Mr. Schmidt is at a loss to present the REIT "green shoots" that would substantiate his note. Amsuingly, Schmidt quotes favorable restaurant trends to back up the stabilization thesis:
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 4:01 PM » New Economic Data: Commercial Leading Indicator
    Published Wed, May 20 2009 4:01 PM by Google News
    The general economic downturn, complicated by a severe credit crunch in commercial real estate, is dampening commercial real estate activity.
  • 3:49 PM » Federal Reserve Summary of Economic Projections
    Published Wed, May 20 2009 3:49 PM by Federal Reserve
    In conjunction with the April 28-29, 2009, FOMC meeting, the members of the Board of Governors and the presidents of the Federal Reserve Banks, all of whom participate in deliberations of the FOMC, submitted projections for output growth, unemployment, and inflation in 2009, 2010, 2011, and over the longer run
    Click Here to Read the Full Article

    Source: Federal Reserve
  • 2:44 PM » Minutes of Federal Open Market Committee, April 28-29, 2009
    Published Wed, May 20 2009 2:44 PM by Federal Reserve
    Minutes of Federal Open Market Committee, April 28-29, 2009
    Click Here to Read the Full Article

    Source: Federal Reserve
  • 2:44 PM » FOMC Forecasts: The Pessimism Worsens
    Published Wed, May 20 2009 2:44 PM by WSJ
    There may be green shoots appearing for the economy, but to much of the Federal Reserve they appeared to be light green. Central bank officials in recent months grew more pessimistic about their prospects for the economy, expecting a worse 2009 and 2010 than they forecast in January. , provided for the April 28-29 Federal Open Market Committee meeting, show central bankers getting closer to private economists’ expectations for the unemployment rate. The central tendency of the forecasts (excluding the three highest and three lowest among 17 policymakers) puts the unemployment rate at between 9.2% and 9.6% in the fourth quarter, down from the earlier projection of 8.5% to 8.8% made in January. The fourth-quarter 2010 forecast worsened to 9% to 9.5%, compared with a projection of 8% to 8.3% submitted in January. Even the 2011 forecast went up a full percentage point to between 7.7% and 8.5% in the fourth quarter of that year. Fed officials still expect a recovery in sales and production to begin in the second half of this year, but the forces weighing on the economy were “likely to abate only slowly,” a summary released with the minutes said. Gross domestic product was projected to decline by 1.3% to 2% in the fourth quarter of 2009 from the year-earlier period, worse than the January projection of a decline between 0.5% and 1.3%. The forecast for 2010 was also downgraded a bit: the central tendency projection is now 2% to 3% growth, down from the January forecast of 2.5% to 3.3% for 2010. The Fed said officials expected that “recoveries in consumer spending and residential investment initially would be damped by further deterioration in labor markets, still-tight credit conditions, and a continuing, if less pronounced, decline in house prices. Moreover, they anticipated that very low capacity utilization, sluggish growth in sales, and the high cost and limited availability of financing would contribute to further weakness in business fixed investment this year.” Projections...
  • 2:44 PM » St. Louis Fed Paper Rebuts Bernanke’s Treasury-Purchase Views
    Published Wed, May 20 2009 2:44 PM by WSJ
    Is Ben Bernanke wrong about the potential effects of the Federal Reserve ’s purchases of longer-term Treasurys on yields? released this week by the St. Louis Fed suggests he might be. Bernanke “seems to suggest that the purchase of a large quantity of longer-term government securities might reduce longer-term rates,” St. Louis Fed economist Daniel Thornton wrote in a research note posted on the St. Louis Fed’s Web site. And with short-term rates near zero, the yield curve would presumably flatten under that hypothesis, Thornton observed. That, however, is “inconsistent” with the “commonly held view” that long-term rates are influenced by what’s known as the expectations hypothesis, Thornton wrote. “Under the expectations hypothesis, long-term rates are equal to the market’s expectation of the short-term rate over the term of the long-term asset plus a risk premium,” Thornton wrote. Therefore, the Fed “cannot permanently affect the shape of the yield curve by purchasing securities in one end of the market,” he wrote. In March, the Fed announced that it would buy up to $300 billion in longer-term Treasury securities in addition to more than $1 trillion in agency and agency-backed mortgage backed securities. The announcement, on March 18, led to a stunning rally in Treasurys and flattening of the yield curve that appeared to support Bernanke’s statement in December 2008 that buying longer-term Treasurys or agencies in large quantities “might influence the yields on these securities, thus helping to spur aggregate demand.” But the yield-curve flattening, Thornton noted, “has vanished” since March. So while the Fed has boosted longer-term Treasury purchases and expanded its balance sheet, “these actions appear to have had no permanent effect on the yield curve,” he wrote.
  • 12:10 PM » Dollar falls to 5-month low on euro
    Published Wed, May 20 2009 12:10 PM by CNN
    Read full story for latest details.
  • 12:10 PM » WaMu asks bankruptcy court to rule on dispute with JPMorgan
    Published Wed, May 20 2009 12:10 PM by Reuters
    NEW YORK (Reuters) - Washington Mutual Inc has asked a bankruptcy court to rule on its dispute with JPMorgan Chase & Co over more than $4 billion in deposits, according to court documents on Wednesday.
  • 12:10 PM » A Portrait of the Mortgage Ax, Not Falling
    Published Wed, May 20 2009 12:10 PM by Seeking Alpha
    submits: Edmund Andrews’ in the NYT ended with the following line: Eight months after my last payment to the bank, I am still waiting for the ax to fall.
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 10:53 AM » Where Is TARP Money Going? How Much Is Left?
    Published Wed, May 20 2009 10:53 AM by WSJ
    In congressional this morning, Treasury Secretary Tim Geithner outlined where TARP money has been allocated and how much is left. Here is Treasury’s estimate: Projected Use of TARP/Financial Stability Plan Funds by Administration as of May 18, 2009 Programs Announced Under Previous Administration AIG $40 billion Citi/Bank of America (TIP and Guarantees) $52.5 billion Autos $24.9 billion Capital Purchase Program $218 billion TALF 1.0 $20 billion Subtotal $355.4 billion Programs Announced Under Obama Administration Housing $50 billion AIG (Second Investment) $30 billion Auto Suppliers $5 billion Additional Autos $10.9 billion Expansion of Consumer and Business Lending Initiative * TALF Asset Expansion (New Issuance) * TALF for Legacy Securities $25 billion Other PPIP Programs for Legacy Assets $75 billion Subtotal $245.9 billion Total Committed (Without Potential Repayments) $601.3 billion Total Remaining (Without Potential Repayments) $98.7 billion Conservative Estimate of Potential Repayments $25 billion Total Committed (Including Potential Repayments) $576.3 billion Total Remaining (Including Potential Repayments) $123.7 billion Additional Funding Additional Support for the Auto Industry Capital Assistance Program * The Consumer and Business Lending Initiative also includes the $20 billion committed to TALF under the previous administration and the $25 billion committed to TALF for legacy securities under the PPIP, amounting to an overall total of $80 billion under TALF and $95 billion under the CBLI. * The Public-Private Investment Program was announced at a level of $75 to $100 billion, which includes $75 billion in additional resources for the PPIP program on top of $25 billion devoted to TALF for Legacy Securities.
  • 10:53 AM » Geithner says making headway in battling crisis
    Published Wed, May 20 2009 10:53 AM by Reuters
    WASHINGTON (Reuters) - Treasury Secretary Timothy Geithner said on Wednesday the Obama administration's was making headway in settling financial markets and said a program to cleanse so-called toxic assets from banks' balance sheets will start operating over the next six weeks.
  • 10:53 AM » New Mortgage Loan Reset / Recast Chart
    Published Wed, May 20 2009 10:53 AM by Calculated Risk Blog
    Matt Padilla at the O.C. Register presents a new reset / recast chart from Credit Suisse: Credit Suisse is using recast dates for Option ARMs and reset dates for all other loans. As Tanta : "Reset" refers to a rate change. "Recast" refers to a payment change. Resets are not a huge problem as long as interest rates stay low, but recasts could be significant. Note that Wells Fargo only a small percentage of their $115 billion "pick-a-pay" Option ARM portfolio they acquired via Wachovia (originally from World Savings / Golden West) to recast by 2012 (because Golden West had very generous NegAM terms). I'm not sure how that fits with this chart.
    Click Here to Read the Full Article

    Source: Calculated Risk Blog
  • 10:37 AM » Recall Why TARP Funds Were Necessary
    Published Wed, May 20 2009 10:37 AM by The Big Picture
    Now that the bulk of the crisis has passed, and the panic has subsided, the banks want to return the money, no strings attached. Return the cash, leave the regulatory environment alone, write downt h warrants, and move on with our lives. My response is, “Not so fast.” Let’s not forget how this occurred: A radical deregulatory scheme let these companies operate with little or no oversight. Without adult supervision, they promptly blew themselves up, destroyed billions of dollars in shareholder value, cost the global economy trillions, and scared the beejesus out of everyone else. When these companies were circling the drain, nobody but Uncle Sam (and the Taxpayers) — and for only Goldman Sachs and GE, Warren Buffett — was willing to fund these companies. The risk levels were extremely high, the potential damage to the dollar, the taxpayer, inflation, and the US credit rating was also very high. As is, the US is still out of pocket trillions of dollars, and are likely to see major losses. Prudent well managed firms are seeing their expenses go thru the roof — especially FDIC insurance. This is not money that you get to return and say, Thanks, but we no longer need this. Instead, there are several things that should happen, if our elected officials and regulators have any savvy: 1) The Warrants should be placed into a Trust for the benefit of taxpayers, where it will be held for 5 or 10 years. Then, it can be liquidated for the benefit of the Treasury. 2)Re-instate Glass Steagall, revert the leverage rules, repeal CFMA; 3) Adequately fund and staff the SEC; 4) Remove the incentives for excess risk taking (i.e., private profits but socialized losses) 5) Align compensation systems with actual risk adjusted profits. Lastly, I would like to see a bi-partisan, Blue Ribbon panel put together analyzing why this occurred. Put an Elizabeth Warren or a Paul Volcker in charge, and give them 6 months to create a comprehension assessment of what went wrong, along with recommendations...
    Click Here to Read the Full Article

    Source: The Big Picture
  • 9:07 AM » Have We Gained Anything from the Housing Bubble?
    Published Wed, May 20 2009 9:07 AM by Seeking Alpha
    submits: We are in the middle of a Great Recession, but someday we will be out of it. It is very easy to focus on the losses, but what did we gain? where he says: There have been three big banking booms in modern U.S. history. The first began in the late nineteenth century, during the Second Industrial Revolution, when bankers like J. P. Morgan funded the creation of industrial giants like U.S. Steel and International Harvester. The second wave came in the twenties, as electrification transformed manufacturing, and the modern consumer economy took hold. The third wave accompanied the information-technology revolution. Each wave, Philippon shows, was propelled by the need to fund new businesses, and each left finance significantly bigger than before. In all these cases, it wasn’t so much that the bankers had changed; the world had.
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 9:06 AM » U.S. Markets Propped Up by Delirious Toxicity
    Published Wed, May 20 2009 9:06 AM by Seeking Alpha
    Jean-Paul Cassone submits: With the Obama administration now showing a complete "do nothing" approach to the oversight crisis in US banking, it appears Goldman Sachs (GS) not only has succeeded in gaining a set of personal keys to the US Treasury Department, but has its tentacles in a complete squeeze of the entire government itself. This feat has been blessed by the Federal Reserve Bank; who together have created an even larger bubble in bank stocks, since before the crash! In any other country in the world today, this would be known as "a conspiracy". I'd like to take this time to thank one Mr. Phil Grandy who has been one of the most diligent and brave Americans I know on this subject, who has refused to just sit on his hands like the rest of us; showing outstanding courage in his weekly broadcasts of the "Phil's Gang" radio broadcast to educate the public on these injustices now taking place. I join him in his plea to all investors to write every Senator, Congressperson and government representative you know to urge an investigation, make arrests and put a stop to the fraudulent activities between certain members of the US Treasury and Goldman Sachs and to the grossly inflated bank stock prices they are causing through criminal manipulation! I would further state that it is my sincere opinion that these activities are creating a bubble in the markets that will be worst than the one which has already popped and crashed!
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 9:05 AM » The New Regulatory Structure Begins to Emerge
    Published Wed, May 20 2009 9:05 AM by Seeking Alpha
    submits: The WaPo all-star team of Zachary Goldfarb, Binyamin Appelbaum and David Cho this evening that of a Financial Product Safety Commission is likely to become reality, thanks to the Obama administration. The WSJ’s then did a fantastic job with his follow-up (although weirdly Warren’s name is nowhere to be seen): Under the patchwork of regulation that presently exists, oversight of financial products is now split between a myriad of state and federal agencies, including the Fed, the Securities and Exchange Commission, the Federal Trade Commission, and others.
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 9:05 AM » Federal Reserve announces that certain high-quality commercial mortgage-backed securities will become eligible collateral under the Term Asset-Backed Securities Loan Facility (TALF)
    Published Wed, May 20 2009 9:05 AM by Federal Reserve
    Federal Reserve announces that certain high-quality commercial mortgage-backed securities will become eligible collateral under the Term Asset-Backed Securities Loan Facility (TALF)
    Click Here to Read the Full Article

    Source: Federal Reserve
  • 9:05 AM » Quarterly Revenue Down 51% at Toll Brothers
    Published Wed, May 20 2009 9:05 AM by NY Times
    But the luxury homebuilder said it sees signs the real estate market is recovering.
  • Tue, May 19 2009
  • 7:38 PM » Median Price Mix Example
    Published Tue, May 19 2009 7:38 PM by Calculated Risk Blog
    The following table shows how the mix of units can skew the median price. This is just an example (not based on actual data). In this example, from 2002 to 2005 low priced homes doubled in price, and high priced homes increased by two-thirds. The mix remained the same (50 units of each), and the median price increased 75%. Median Price Example Item 2002 2005 2007 2009 2010 Low Price $100 $200 $200 $100 $100 High Price $300 $500 $500 $400 $300 Low End Units Sold 50 50 40 40 30 High End Units Sold 50 50 50 10 20 Median Price $200 $350 $367 $160 $180 Change in Low Price -- 100% none -50% none Change in High Price -- 67% none -20% -25% Change in Median Price -- 75% 5% -56% 12% Now look at what happened in 2007. Since subprime imploded first, the number of units sold at the low end decreased to 40 from 50. Everything else stayed the same - and just the change in the mix (higher percentage of high end homes) pushed up the median price! Note that the median price (light blue) increased WITHOUT any actual prices increasing. This happened at the beginning of the housing bust in many areas. In the period I marked as 2009, the low end prices have fallen all the way back to 2002 prices. However the high end prices have only fallen 20%. The low end is seeing fairly high activity (40 units), but at the high end sales activity has collapsed (10 units). Look at the median price (in orange) - it has fallen more than the prices have declined for even the low end! And finally, in 2010, prices fall further at the high end - and have stabilized at the low end. As prices fall, the volume picks up at the high end. And what happens to the median price? It increases by 12% (marked in red)! This illustrates why we need to be very careful with median prices (like from NAR, DataQuick or other sources). The mix can distort the price, and I expect to read about median prices increasing later this year or in 2010, even though actual prices are still falling!
    Click Here to Read the Full Article

    Source: Calculated Risk Blog
  • 4:49 PM » Economists React: Good News ‘Lost in the Commotion’ on Housing Starts
    Published Tue, May 19 2009 4:49 PM by WSJ
    Economists and others weigh in on . Wrong direction: starts and permits stalled along their upward path for the month in a downside surprise miss that’s going to leave some investors wondering why they were so excited about this whole recovery thing. Taken in concert with last week’s retail sales numbers, it’s starting to appear that the entire month is a bit of a lost cause. Behind the headlines (interestingly, the same was the case with retail sales), the numbers didn’t look as terrible. The entire drop in starts was the result of weaker multifamily activity, while single-family starts actually increased nearly 2.8% during the month –Guy LeBas, Janney Montgomery Scott Obviously, the condo market is in bad shape — and has been for quite awhile. We suspect that much of the latest decline in the multi-family sector deflects a pullback in construction of rental properties as rents sare coming under significant downward pressure in many areas across the country. Also, the recent problems in the [commercial mortgage backed securities] market are probably helping to restrain starts of both apt and condo construction. There was one interesting quirk in the April starts report — the volume of housing completions rose for the second straight month. This seems quite bizarre in the face of the steady downturn in new homebuilding seen over the past couple of years. However, our analysis of the regional data, suggests that all of the recent increase is tied to the completion of some projects in NYC. These projects were undertaken last year just before a significant tightening of building codes went into effect (see our June 2008 data bulletin for more details). –David Greenlaw, Morgan Stanley The headline says “record low housing starts in April”, but somewhat lost in the commotion is that the single family segment of the housing market is indeed exhibiting signs of stabilizing while the multi-family segment has gone into the tank… What is likely happening is that the single family...
  • 4:48 PM » WL Ross, Carlyle Group Said to Make BankUnited Bid
    Published Tue, May 19 2009 4:48 PM by
    WL Ross & Co. and private-equity firms including Carlyle Group made a bid to buy BankUnited Financial Corp.
    Click Here to Read the Full Article

  • 4:48 PM » Your Money: A Consumer’s Guide to the New Credit Card Rules
    Published Tue, May 19 2009 4:48 PM by NY Times
    A primer on the new restrictions that credit card companies face, and some reassurances on those rewards programs.
  • 4:48 PM » Federal Reserve to Widen Commercial Real Estate Lending Program
    Published Tue, May 19 2009 4:48 PM by Washington Post
    The Federal Reserve said today that it will expand a key lending program to support existing commercial real estate loans, broadening the central bank's rescue of the financial system to deal directly with some of the assets weighing down banks.
    Click Here to Read the Full Article

    Source: Washington Post
  • 4:02 PM » Realtors® Explore Land Use Challenges
    Published Tue, May 19 2009 4:02 PM by Google News
    Smart growth, military base development, disaster insurance, and pine beetle infestation were among issues Realtors® shared at the Land Use, Property Rights and Environment Forum.
  • 2:45 PM » Senate Passes Bill to Restrict Credit-Card Practices
    Published Tue, May 19 2009 2:45 PM by
    The Senate voted overwhelmingly on Tuesday to put new restrictions on the credit card industry, passing a bill whose backers say will make card issuers spell out their terms in fewer words, using plain English, and treat customers more fairly.
    Click Here to Read the Full Article

  • 2:45 PM » TARP Repayment Restrictions
    Published Tue, May 19 2009 2:45 PM by Calculated Risk Blog
    From CNBC: Among the conditions: no bank will be allowed to repay the TARP until after June 8, when 10 of the 19 biggest banks must present plans to boost their capital under the government's stress tests. ... The government also won't allow any one bank to repay the TARP first but will approve them in batches. ... The banks face other restrictions: they still have to pass another stress test, issue debt that isn't government guaranteed, demonstrate the ability to self-fund in the market and win the approval of their banking supervisor. ... The Treasury will also announce a process for auctioning TARP warrants ... I'm not sure what "another stress test" means or why they will only be approved in batches. Being able to issue non-government guaranteed debt makes sense.
    Click Here to Read the Full Article

    Source: Calculated Risk Blog
  • 2:45 PM » Barriers to Household Risk Management: Evidence from India.
    Published Tue, May 19 2009 2:45 PM by NY Fed
    Shawn Cole, Xavier Gine, Jeremy Tobacman, Petia Topalova, Robert Townsend, and James Vickery. Barriers to Household Risk Management: Evidence from India. Federal Reserve Bank of New York Staff Reports Staff Report Number 373, May 2009.
  • 2:38 PM » A Primer on the Secondary Mortgage Market
    Published Tue, May 19 2009 2:38 PM by FHFA
    A secondary mortgage market consists of financial institutions and individuals that buy and sell residential mortgages and mortgage-backed securities (MBS), which are financial assets whose cash flows are derived from groups of mortgages.
  • 2:10 PM » Banks Returning TARP Facing Another Stress Test
    Published Tue, May 19 2009 2:10 PM by
    The banks face other restrictions: they still have to pass another stress test, issue debt that isn't government guaranteed, demonstrate the ability to self-fund in the market and win the approval of their banking supervisor. Several big banks have announced plans to repay the TARP as soon as possible, including Goldman Sachs, JP Morgan Chase, Morgan Stanley and American Express. None of them were told to come up with more capital under the stress tests conducted earlier this month.
    Click Here to Read the Full Article

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