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Articles Posted by whitedog57

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  • Taper Tantrum: The Fed, Inflation, Unemployment and House Prices

    12/15/2013 1:22:49 PM PST · by whitedog57 · 6 replies
    Confounded Interest ^ | 12/15/2013 | Anthony B. Sanders
    The Federal Reserve Open Market Committee meets on Tuesday and Wednesday of this week. To taper or not to taper, that is the question. Hamlet-to-be-or-not-to-be3 Let’s take a look at inflation thus far. Since 1947, there have been only three periods of deflation where the consumer price index (CPI) has fallen for consecutive months: 1949-1950, 1954-1955 and most recently, 2009. inflationcpi121413 Notice that inflation (as defined by year–over-year changes in the consumer price index) has been declining since September 1981 when inflation hit 11%. The latest measure of inflation is 0.9% YoY for October 2013. At the same time, house...
  • Agency MBS Index Earned -0.55% Over Past Year As Fed Purchases $40 Billion Per Month

    12/13/2013 8:18:40 AM PST · by whitedog57 · 1 replies
    Confounded Interest ^ | 12/13/2013 | Anthony B. Sanders
    The Federal Reserve currently purchases $40 billion per month in an effort to keep mortgage rates low and stimulate the housing market recovery (or bubble?). Over the past year, the RMBS index has earned -0.55% in spite of (or because of) The Fed’s $40 billion per month in agency RMBS purchases. And if we compare the BRMBS index to PIMCO’s vaunted total return fund, you will see similar performance until September 2013 when RMBS rallied in terms of price compared to PIMCO’s Total Return Fund. So, despite The Fed’s $40 billion of agency MBS per month, the Bloomberg MBS index...
  • Corker-Warner GSE Reform Similar To Single-Payer Healthcare (It Won't Work Either)

    12/12/2013 6:45:34 AM PST · by whitedog57
    Confounded Interest ^ | 12/12/2013 | Anthony B. Sanders
    It doesn’t look like any GSE (housing finance) reform will be taken up in 2013. Partly because the leading contender, the Corker-Warner housing finance “reform” bill is so flawed. What does Corker-Warner do exactly? It shuts down two enormous mortgage insurance companies (Fannie Mae and Freddie Mac) and creates one gargantuan government insurance company (Federal Mortgage Insurance Corporation). Ah, nationalized mortgage insurance. This is particularly bizarre given that the FHA already exists as a national mortgage insurance agency for mortgages. Like single-payer healthcare systems (as in UK’s NHS), you take what the government decrees for you. But Obamacare is really...
  • Bland Bargain: Paul Ryan Surrenders On Federal Budget, Outfoxed By Former Pre-School Teacher

    12/11/2013 2:16:11 PM PST · by whitedog57 · 27 replies
    Confounded Interest ^ | 12/11/2013 | Anthony B. Sanders
    Paul Ryan (WI-VR) and Patty Murray (WA-D) have announced a “bland bargain” on the Federal budget. The proposal would “restore” $65 million in automatic spending cuts currently in law and increase federal spending from $967 billion next year to roughly $1 trillion. In other words former Vice Presidential candidate Paul Ryan was outfoxed by former pre-school teacher Patty Murray. This will add $70 billion to Federal spending both this year and next. The result? The Federal debt load will be $25 trillion by the end of the next Presidential cycle. What happened to the downsizing of the Federal government that...
  • Mel Watt And The Flat-lined Mortgage Purchase Application Problem (Real Household Income Falling)

    12/11/2013 10:50:40 AM PST · by whitedog57 · 7 replies
    Confounded Interest ^ | 12/11/2013 | Anthony B. Sanders
    There are two pieces of mortgage application index news today. First, Mel Watt (D-NC) was confirmed by the U.S. Senate as the new FHFA Director by a vote of 57-41. Only two Vichy Republicans, Bob Portman (VR-OH) and Richard Burr (VR-NC) voted for the confirmation of Mel Watt, a person with no regulatory experience and an affordable housing hawk. Watt will now be the “regulator” for Fannie Mae and Freddie Mac, the mortgage giants in conservatorship with the FHFA. Why would President Obama nominate someone (and the Democrats confirm) with NO regulatory experience for perhaps the most important regulatory job...
  • The 106.2% Solution? Top 40% Paid 106.2% of Income Taxes While Bottom 40% Paid -9.1%

    12/10/2013 3:58:50 PM PST · by whitedog57 · 11 replies
    Confounded Interest ^ | 12/10/2013 | Anthony B. Sanders
    According to the Congressional Budget Office, the top 40% of Americans paid 106.2% of income taxes. How can the top 40% pay MORE than 100% of income taxes? Simple. The bottom 40% of Americans paid -9.1% of income taxes. And they received an average of $18,950 in government transfers. Of course, we know that real median household income has been falling generally since 2000 and especially since 2007. And house prices have been falling, but house prices have changed course and have been rising since 2012. csrealinc Seriously, how can the US have a dynamic housing market with such a...
  • ANOTHER Housing Crisis? This Time In Rental Markets (Real Problem Is Declining Real Income)

    12/10/2013 11:06:49 AM PST · by whitedog57 · 8 replies
    Confounded Interest ^ | 12/10/2013 | Anthony B. Sanders
    “We are in the midst of the worst rental affordability crisis that this country has known,” said Shaun Donovan, U.S. Secretary of Housing and Urban Development. There are now 43 million renter households, or 35 percent of all U.S. households, the highest rate in more than a decade for all age groups, according to Harvard’s Joint Center for Housing Studies. That’s 4 million more renters today than there were in 2007. For those aged 25 to 54, rental rates are the highest since the center began record keeping in the early 1970s. Wait a minute. The Clinton Administration wanted to...
  • Merry Christmas? Detroit's Emergency Manager Weighs Pension-Fund Takeover (20 Cents On The Dollar)

    12/10/2013 8:45:38 AM PST · by whitedog57 · 4 replies
    Confounded Interest ^ | 12/10/2013 | Anthony B. Sanders
    Kevyn Orr, Detroit’s emergency manager, is threatening to take over one of Detroit’s pension funds after a report found that retirees received extra payments while the funds lost value. Mr. Orr proposed for Detroit to pay 20 cents on the dollar for the $3.5 billion that the city says it owes its two pension funds, one for 20,500 nonuniformed retirees and one for 12,700 retired police and firefighters. Detroit, of course, is the largest municipal bankruptcy in U.S. history, although New York City and Cleveland came close. This comes after another Detroit-area fiscal meltdown, the infamous General Motors bailout. Treasury...
  • FHFA Raises Guarantee Fees For Fannie Mae and Freddie Mac (DeMarco's Last Stand)

    12/09/2013 3:45:34 PM PST · by whitedog57 · 1 replies
    Confounded Interest ^ | 12/09/2013 | Anthony B. Sanders
    Today, FHFA directed Freddie Mac and Fannie Mae to raise guarantee fees in three components: • The base g-fee (or ongoing g-fee) for all mortgages will increase by 10 basis points; • The up-front g-fee grid will be updated to better align pricing with the credit risk characteristics of the borrower; and • The up-front 25 basis point adverse market fee that has been assessed on all mortgages purchased by Freddie Mac and Fannie Mae since 2008 is being eliminated except in the four states whose foreclosure carrying costs are more than two standard deviations greater than the national average....
  • Oh We Got Trouble, Right Here In Bubble City: Real Income Fallinbg While House Prices Rise

    12/09/2013 11:31:31 AM PST · by whitedog57 · 2 replies
    Confounded Interest ^ | 12/09/2013 | Anthony B. Sanders
    There are cheers from the media about the latest jobs report. While some speculated that it was so good that The Fed would begin tapering their assets purchases, few noticed that the 10 year Treasury yield actually fell on the jobs report. But let’s look at the longer term picture. House prices are rising rapidly despite declining real median household income. Problem 1: Labor’s share of nonfarm business have been falling for decades, but it’s decline has been accelerating since 2000. laborsharelt No problem, many economists say. The U.S. has been moving towards a service economy for decades. But, …...
  • Since Oct 2008, 4.6 Million Foreclosures Completed, Foreclosure Inventory Falls 30.6% YoY

    12/09/2013 6:54:03 AM PST · by whitedog57
    Confounded Interest ^ | 12/09/2013 | Anthony B. Sanders
    The CoreLogic National Foreclosure Report is out for October 2013. The good news! Foreclosure inventory in the U.S. fell 30.6% YoY in October. sersleinf120913 Florida leads the U.S. in foreclosure inventory as a percentage of mortgaged homes at 7.1%, followed by New Jersey at 6.7% and New York at 4.9%. clforecinvstate The lowest state in terms of foreclosure inventory? Wyoming at 0.4% followed by Alaska and Nebraska at 0.6%. If we compare judicial and non-judicial foreclosure states, we see a glaring difference. The worst states for percent of homes in foreclosure at judicial states (FLA, NJ, NY). The best states...
  • FHA To Drop Loan Limits (Lowering The Brad Pitt Mortgage Limit), Hawaii Still The Highest

    12/08/2013 11:51:10 AM PST · by whitedog57 · 2 replies
    Confounded Interest ^ | 12/08/2013 | Anthony B. Sanders
    According to Nick Timiraos at the Wall Street Journal, Housing Agency (FHA) Will Reduce Mortgage-Loan Limits next month. The maximum for single-family homes in certain “high-cost” housing markets including Los Angeles, San Francisco and New York will fall to $625,500, from the current level of $729,750. This is an attempt to bring the FHA back in line with their original mission of supporting first time homebuyers, not the Brad Pitts of the world. Why does the Federal government insure mortgages in expensive cities that are far more costly than middle America? Ask your Congressman. Example. Honolulu leads the nation in...
  • Coastal Fats: Millionaires Defaulting On Mortgages In Record Numbers While Others Struggle

    12/08/2013 7:51:35 AM PST · by whitedog57 · 14 replies
    Confounded Interest ^ | 12/08/2013 | Anthony B. Sanders
    While foreclosure activity as a whole has been declining in the U.S., there are still some unnerving aspects to the housing and mortgage recovery. So, it’s time for “The Good, The Bad and The Ugly.” The good. According to RealtyTac, overall U.S. foreclosure activity is down 23 percent year-to-date through October 2013. The bad. Foreclosure activity on properties in the $5 million-plus value range is up 61 percent from the same time period in 2012. And most of it is concentrated in Florida and Los Angeles. I designate Atlanta as an honorary coastal city since Georgia does have properties on...
  • The Pelosi/Ellison "Pain Dispeller" Tonics: U6 Underemployment Above 13% For 60 Straight Months

    12/07/2013 8:10:26 AM PST · by whitedog57 · 5 replies
    Confounded Interest ^ | 12/07/2013 | Anthony B. Sanders
    Yesterday’s jobs report was tremendous … if you have been dumbed down. The sad facts are that U6 underemployment has been above 13% for 60 months, the last month below 13% was November 2008. U6RATE_Max_630_378 And there are still 91.27 million people NOT in the labor force. nilf120713 Income inequality, as measured by the GINI coefficient, continues to rise. ginicoef2005 While real median household income has been falling since 2000 and house prices have been rising rapidly for the past two years. realmedincomcase What are the solutions to the employment problem? Nancy Pelosi (CA-D) made the following statement this past...
  • The Bernankeburg Omen: The Hindenburg, Elliott Wave And The Fed Balance Sheet

    12/06/2013 4:55:54 PM PST · by whitedog57 · 1 replies
    Confounded Interest ^ | 12/06/2013 | Anthony B. Sanders
    The S&P 500 stock market index rose a blistering +1.12% today on positive economic news, albeit much of it seasonal. The run up in stock prices following the collapse in 2008 (both stock market and house prices) has fueled speculation of another Hindenburg Omen event. That is, another stock market correction. But with Ben Bernanke and The Fed supporting asset bubbles with the expansion of The Fed’s Balance Sheet (green dotted line), investors continue to roll the dice on the stock market rising. Likewise, the Elliott Wave is being sustained by The Fed’s Balance Sheet. Let’s see what happens when...
  • 203k Nonfarm Payroll Jobs Added (Bartenders Lead Again), Personal Income Declines -0.1%

    12/06/2013 6:41:29 AM PST · by whitedog57 · 7 replies
    Confounded Interest ^ | 12/06/2013 | Anthony B. Sanders
    The November jobs report is out from the Department of Labor and nonfarm payrolls rose more than expected. 203,000 jobs were added versus the expectation of 185,000. However, most jobs added were low paying jobs and holiday season related. The unemployment rate fell to 7.0% while the underemployment rate dropped to 13.2%. Labor force participation rate rose to 63.0% from 62.8%. WHERE were the jobs created? The biggest winners were low paying jobs related to the Holiday season for the most part: Food services and drinking places 17.9 General Merchandise Stores 13.8 Temporary Help Services 16.4 Home Health Care Services...
  • On West Coast, Along With House Prices (Another Affordability Crisis In Housing?)

    12/05/2013 3:26:29 PM PST · by whitedog57 · 7 replies
    Confounded Interest ^ | 12/05/2013 | Anthony B. Sanders
    Trulia released its price and rent monitor today. In November, asking home prices rose 12.1 percent year-over-year (YoY), increasing in 98 of the 100 largest U.S. metro areas. Regaining a bit of steam since the slowdown began in July, asking prices rose 1.0 percent month-over-month (MoM) and 3.0 percent quarter-over-quarter (QoQ). In fact, the quarterly increase is the fastest in five months, though still lower than in the spring. The west coast along with Atlanta and … Detroit(?) are still growing in price at a rapid rate, but that rate is slowing down. askrpicertrulia Rents on the west coast are...
  • Big Trouble In Little Catskills? Chinese City Coming To Upstate New York (EB-1 Visa Scam?)

    12/05/2013 11:59:59 AM PST · by whitedog57 · 6 replies
    Confounded Interest ^ | 12/05/2013 | Anthony B. Sanders
    China’s legendary ghost cities are coming to the USA! Here is an excellent video on China’s ghost cities. China is known for building replicas of London and Paris in China to attract people. But like many of China’s efforts at planned cities, housing is quite expensive and has not caught on. And there is even a fake Epcot in China! Unfortunately, quite empty. ghost_arcade Senator Elizabeth Warren (MA-D) campaigned on centrally planned construction as a solution for the economy. Perhaps the Chinese are taking her advice. With the growing presence of Chinese in the U.S housing market, particularly on the...
  • Q3 Real GDP Rises To 3.6% While Personal Consumption Expenditures Drop To 1.4%

    12/05/2013 8:03:17 AM PST · by whitedog57 · 14 replies
    Confounded Interest ^ | 12/05/2013 | Anthony B. Sanders
    The good news. Real GDP growth was revised for Q3 up to 3.6%. The bad news. Personal consumption expenditures fell to 1.4% for Q3. There has been a steady decline in personal consumption expenditures since 1998. The good news. Private investment in residential real estate rose 13.0% in Q3! And nonresidential structures grew at 13.8%. The bad news. Real median household income (only through 2012) continues to decline. We have a “GINI Paradox.” Since 2007, real median household income has fallen while income inequality (GINI) has risen. AND we have rising residential real estate investment? The US needs real GDP...
  • Housing Finance Reform, Corker-Warner And The Rule Of Law (Federalist Society Panel)

    12/04/2013 2:54:18 PM PST · by whitedog57
    Confounded Interest ^ | 12/04/2013 | Anthony B. Sanders
    There was a tremendous panel discussion today in the U.S. Senate hosted by the Federalist Society. The discussion concerned the proposed Corker-Warner bill to “reform” the housing finance system. The moderator was Troy Paredes and the speakers included Ronald Case, Bernard Weinstein and myself. Going forward, what should happen to the mortgage giants Fannie Mae and Freddie Mac? Weinstein argued that they should be kept in place, but regulated to avoid Congress from forcing them to take on too much risk. Case gave an eloquent discussion of the necessity for the rule of law in whatever happens going forward. What...
  • ADP Jobs Report Beats Expectations Of +170k With +215k Print (Treasury Rates Rise)

    12/04/2013 6:27:43 AM PST · by whitedog57 · 8 replies
    Confounded Interest ^ | 12/04/2013 | Anthony B. Sanders
    The ADP employment report was released today and blew past expectations of 170,000 jobs added with a print of … 215,000 jobs added. Of course, we don’t know the composition of full-time versus part-time/temporary holiday employment, but at least employment increased. Change-in-Nonfarm-Private-Employment-November-2013 In fact, ADP job creation seems to be in a similar point to the previous decade in terms of level of ADP jobs added. Historical-Trend-Change-in-Total-Nonfarm-Private-Employment-November-2013 Here is the composition of jobs added. Notice that is mostly small firms. ADP Dec_0 Will The Fed begin tapering with this “good” news on employment? Well, interest rates are rising this morning...
  • Go East, Young Man! Real Median Household Income Is Falling, But Not In Washington DC!

    12/03/2013 12:38:34 PM PST · by whitedog57 · 5 replies
    Confounded Interest ^ | 12/03/2013 | Anthony B. Sanders
    “Go West, young man” is a popular quote from Horace Greeley in 1865. “Washington is not a place to live in. The rents are high, the food is bad, the dust is disgusting and the morals are deplorable. Go West, young man, go West and grow up with the country.” – Horace Greeley I see much hasn’t changed since 1865, but Greeley’s advice was wrong if we look at real median household income. The blue line is for the nation as a whole, the red line is for Washington DC. realmedhi So, go east young man, if you want to...
  • Deceleration Nation: Declining Real Income, Homeownership, Labor Force Participation And Velocity

    12/02/2013 5:08:38 PM PST · by whitedog57 · 10 replies
    Confounded Interest ^ | 12/02/2013 | Anthony B. Sanders
    Several economic indicators for the US show deceleration. Yet the stock market and house prices continue to grow. Here is a chart of three economic indicators with clear downward momentum: civilian labor force participation (blue), the US homeownership rate (red) and real median household income (green). homessss And Goldman Sachs just downgraded Q4 2013 real GDP growth to 1.3%. These downward indicators compliment the declining M1 Money Multiplier and M2 Money Velocity. m1m2vel120213 Why? There are enormous excess reserves in the Fed system that aren’t leaking out to Main Street. And The Fed’s Balance sheet has exploded! (in terms of...
  • Deceleration Nation: The Contrary Recovery, Government Regulation And Housing Finance Reform

    12/02/2013 12:50:43 PM PST · by whitedog57 · 1 replies
    Confounded Interest ^ | 12/02/2013 | Anthony B. Sanders
    It appears that the Corker-Warner housing finance bill is still leading in the reform derby, despite its obvious problems and omissions (like protecting the property rights of current investors). Anyone remember the beating General Motors bond investors took in the government bailout of GM? Corker-Warner does little to fix any housing market problems that exist. And that is because housing legislation can’t cure what ails the economy: decreasing labor force participation and real median household income. Here is a chart of three economic indicators with clear downward momentum: civilian labor force participation (blue), the US homeownership rate (red) and real...
  • Countryfried: Bank of America to pay Freddie Mac $404 million in mortgage settlement

    12/02/2013 8:08:29 AM PST · by whitedog57 · 13 replies
    Confounded Interest ^ | 12/02/2013 | Anthony B. Sanders
    Bank of America has agreed to pay Freddie Mac $404 million in a mortgage settlement over 716,000 loans, many purchased from Countrywide. This is one of many lawsuits by the Federal government over Countrywide and related mortgages. One wonders when the litigation will end. Here is the thing. These suits are largely about representations and warranties between the loan seller and the loan purchaser concerning underwriting standards. The reps and warranties provide relief to the loan purchaser if the underwriting of the loans by the loan seller proves to be misleading or false. But there is another issue called causality....
  • House Prices, Home Ownership And Real Income - Why Housing Is Still Weak And Investor Dependent

    12/01/2013 10:57:26 AM PST · by whitedog57 · 11 replies
    Confounded Interest ^ | 12/01/2013 | Anthony B. Sanders
    There is a lot of talk about a new housing bubble. If you look at a chart of house prices, you can see why. cs2009 This is a faster acceleration rate in house prices than during the much-discussed housing bubble of the last decade. csindices112613 Can it continue to accelerate? There are a couple of factors that say no. First, real median household income has been falling since 2000 and particularly since 2009. It is difficult to maintain price growth under these conditions once investors pull out. csrealinc Second, home ownership rates continue to fall …. along with real median...
  • Gov't World: Less Choice, Higher Prices (Healthcare, Mortgage Markets And Corker-Warner)

    12/01/2013 8:47:43 AM PST · by whitedog57 · 6 replies
    Confounded Interest ^ | 12/01/2013 | Anthony B. Sanders
    I fondly remember the days of Milton Friedman with his book and PBS series “Free to Choose.” That was in 1980 at the end of Carter-era and the beginning of the Reagan Revolution. Fast forward to 2013. We now have less freedom of choice, thanks to Congress and the Administration. Take for example healthcare insurance. Now, everyone must have healthcare insurance, even if you don’t want it. I went to healthcare.gov and saw that my choices were slim and my insurance premium rose to $1,366 per month. And no subsidy. Plus, I get to pay for sex change operations, Sandra...
  • Two Excellent Reasons To Keep DeMarco As FHFA Director, NOT Mel Watt

    11/30/2013 10:37:39 AM PST · by whitedog57 · 4 replies
    Confounded Interest ^ | 11/30/2013 | Anthony B. Sanders
    The Senate will likely take up the confirmation of Mel Watt (D-NC) as Director of the Fannie Mae and Freddie Mac regulator, the Federal Housing Finance Agency (FHFA). Now that Harry Reid (D-NV) triggered the nuclear option allowing Democrats to use simple majority voting on most appointments, it is likely that Watt, who has no regulatory experience, will be confirmed as FHFA Director. What has Ed DeMarco accomplished as a regulator? Many things including, • Significant progress has been made on the development and initial testing of the Common Securitization Platform (CSP); however challenges, including necessary changes to Fannie Mae’s...
  • Bad Government Policies Or Stupidity? GINI Coefficient Keeps Rising While Real Income Falls

    11/29/2013 5:15:21 AM PST · by whitedog57 · 10 replies
    Confounded Interest ^ | 11/29/2013 | Anthony B. Sanders
    Boris Johnson, the mayor of London, caused a flap where he pronounced that some people are too stupid to get ahead. But unless people are getting more stupid over time, it is likely bad government policies that are preventing people from getting ahead. Government policies including the Fed monetary expansion have seemingly made matters worse for the average American family. Particularly since 2007. The GINI coefficent is a measure of income distribution in country. And it has been skyrocketing since 2007 when Democrats took control of Congress and 2009 when they achieved a majority in both the House and Senate...
  • Obama and Democrat Policies Harm Minorities And The Middle Class (Krugman Is Krazy!)

    11/28/2013 3:13:52 PM PST · by whitedog57 · 5 replies
    Confounded Interest ^ | 11/28/2013 | Anthony B. Sanders
    Government policies including the Fed monetary expansion have seemingly made matters worse for the average American family. Particularly since 2007. The GINI coefficent is a measure of income distribution in country. And it has been skyrocketing since 2007 when Democrats took control of Congress and 2009 when they achieved a majority in both the House and Senate AND the Presidency. But for all the talk of income redistribution and “leveling the playing field,” things have only gotten worse for the average American household. Here is the GINI coefficent for the USA since 2005. Note the decline from 2006 to 2007,...
  • Putting The GINI Back In The Bottle: GINI Coefficient Keeps Rising While Real Income Falls

    11/28/2013 11:04:45 AM PST · by whitedog57 · 3 replies
    Confounded Interest ^ | 11/28/2013 | Anthony B. Sanders
    Government policies including the Fed monetary expansion have seeming made matters worse for the average American family. Particularly since 2007. The GINI coefficent is a measure of income distribution in country. And it has been skyrocketing since 2007 when Democrats took control of Congress and 2009 when they achieved a majority in both the House and Senate AND the Presidency. But for all the talk of income redistribution and “leveling the playing field,” things have only gotten worse for the average American household. Here is the GINI coefficent for the USA since 2005. Note the decline from 2006 to 2007,...
  • Obama To Turkey: "If you like your head, you can keep it!" (Grants Amnesty By Executive Decree)

    11/28/2013 9:47:31 AM PST · by whitedog57 · 4 replies
    Confounded Interest ^ | 11/28/2013 | Anthony B. Sanders
    President Obama has granted amnesty to the turkey in Washington DC. Much like his non-enforcement of immigration laws is defacto amnesty to illegal immigrants. turkey_pardon Obama to turkey: “If you like your head, you can keep it!” Unfortunately, American citizens are not so lucky. They received no amnesty from Obamacare, the biggest turkey of all government programs. Millions losing their healthcare insurance, doctor shortages, government cronies making millions, a non-functioning web site. The list goes on and on. Obamacare-health-ins.-cc2-565x5651 Mr. President and Democrats. Please kill the Obamacare turkey and grant amnesty from it to American citizens instead. obamacaretitanic
  • Obama To Turkey: "If you like your head, you can keep it!" (Grants Amnesty By Executive Decree)

    11/27/2013 4:12:03 PM PST · by whitedog57 · 8 replies
    Confounded Interest ^ | 11/27/2013 | Anthony B. Sanders
    President Obama has granted amnesty to the turkey in Washington DC. Much like his non-enforcement of immigration laws is defacto amnesty to illegal immigrants. turkey_pardon Obama to turkey: “If you like your head, you can keep it!” Unfortunately, American citizens are not so lucky. They received no amnesty from Obamacare, the biggest turkey of all government programs. Obamacare-health-ins.-cc2-565x5651 Mr. President and Democrats. Please kill the Obamacare turkey and grant amnesty from it to American citizens instead.
  • Hawaiian Eye: 2014 Fannie, Freddie Conforming Loan Limits Highest In Hawaii (Mostly Blue States)

    11/27/2013 3:47:35 AM PST · by whitedog57 · 1 replies
    Confounded Interest ^ | 11/27/2013 | Anthony B. Sanders
    FHFA has released the Fannie Mae and Freddie Mac conforming loan limits for 2014. The big winners? Hawaii! fanniefreddicll Second is Alaska (AK). Fortunately, there aren’t enough people in the Aleutians to cause taxpayers serious problems if the unemployment spikes and/or housing prices collapse. Third on the list are Guam, the Virgin Islands and … West Virginia. West Virginia?? California, Washington DC (Maryland, Virginia), Wall Street (New York, New Jersey), Carolina Coast vacation hub (Kitty Hawk) and Idaho. Somehow, I don’t think it is Napoleon Dynamite’s hometown that is among the costliest housing in the USA. Napoleon-Dynamite-napoleon-dynamite-117744_720_540 Once again, I...
  • Runaway Stock Market: Thank Rising Margin Accounts and Fed Stimulus (NOT Falling Real Income)

    11/26/2013 3:50:26 PM PST · by whitedog57 · 18 replies
    Confounded Interest ^ | 11/26/2013 | Anthony B. Sanders
    What is driving the stock market to dizzying heights? Try stock margin accounts and Fed Monetary easing. Here is a chart of NYSE Member Firms Debit Balances in Margin Accounts and the Standard and Poor’s Index. margindebtspx And here is a chart of the SPX against The Fed’s Balance Sheet size. spxfedbal You must admit, there seems to be a pattern here. Particularly since real median household income seems to be shrinking (although house prices are rising). cs20realmedhinc Margin accounts + easy Fed money = bubbles.
  • Bankrupty Detroit Leads Case-Shiller House Price Growth For September (Followed By Southwest)

    11/26/2013 7:56:24 AM PST · by whitedog57 · 8 replies
    Confounded Interest ^ | 11/26/2013 | Anthony B. Sanders
    The S&P Case-Shiller repeat sales house price indices were released this morning. The U.S. National Home Price Index rose 3.2% in the third quarter of 2013 and 11.2% over the last four quarters. Call me crazy, but the recent expansion of house prices (red) looks faster than the rapid expansion during the housing bubble (orange). The recent rapid expansion of house prices coincides with the unprecedented monetary stimulus by The Federal Reserve. csindices112613 The big winner from August to September? Bankrupt Detroit! And in the LPS house price report from yesterday, bankrupt Modesto showed a good gain. Other winners in...
  • Corker-Warner GSE Reform: The Obamacare For Housing Finance (Small Lenders Left Out In The Cold)

    11/25/2013 3:25:50 PM PST · by whitedog57
    Confounded Interest ^ | 11/25/2013 | Anthony B. Sanders
    As we all are painfully aware, the Affordable Care Act (aka, Obamacare) had a disastrous launch. Not to mention $940 million to CGI for a non-working website. Obamacare is so complex that it is likely unworkable … and unpopular once everyone gets a load of how their insurance premiums and deductibles have risen. obamacarecontractors Who in their right mind would design such a disaster? An overly complex mess that is unworkable. obamacare_chart_LGa The government, of course, and their cronies and apparatchiks. Like it or not, it is the insertion of government into the system that causes the problem. Just like...
  • Take A Giant Step: The New Fair Deal Banking And Housing Stability Act of 2013

    11/25/2013 12:48:07 PM PST · by whitedog57 · 1 replies
    Confounded Interest ^ | 11/25/2013 | Anthony B. Sanders
    There are a plethora of housing finance bills being written or circulating. These include the deeply flawed Corker-Warner bill, the Crapo-Johnson bill (that I have not seen), the PATH Act from the House. Now we have another House GSE reform bill, The New Fair Deal Banking And Housing Stability Act of 2013, from Representatives Justin Amash (sponsor), Jeff Duncan, Jim Jordan, Doug Lamborn, Tom McClintock, Mark Meadows, Tom Price and Matt Salmon. The New Fair Deal Banking and Housing Stability Act of 2013 takes decisive action to end the cycle of booms and busts, of bad behavior and bailouts: -...
  • Vacation Home Comeback! House Price Index Increased 0.2% In September, +9.0% YoY (SC, NV, FL)

    11/25/2013 11:23:19 AM PST · by whitedog57 · 1 replies
    Confounded Interest ^ | 11/25/2013 | Anthony B. Sanders
    Lender Processing Services (LPS) released its latest LPS Home Price Index (HPI) report, based on September 2013 residential real estate transactions.According to the report, U.S. Home Prices rose 0.2% in September, up 9.0% Year-Over-Year (YoY). LPS HPI – September 2013 The big winners? Nevada, Georgia and South Carolina. The big losers? NE “blue states”: Connecticut, New Hampshire and Massachusetts. lpshpisept13 On a metro level, Myrtle Beach SC, Charleston SC, Atlanta GA, Miami and Naples FL were the big winners. The big losers? Most of Connecticut and Springfield MA. bigmetro Hey, at least bankrupt Modesto CA is making a comeback! So...
  • Economic Recovery? Pending Home Sales Fall To May 2011 Levels (Falling Real Income)

    11/25/2013 8:15:58 AM PST · by whitedog57 · 1 replies
    Confounded Interest ^ | 11/25/2013 | Anthony B. Sanders
    According to the National Association of Realtors, pending home sales dropped 0.6% in October. The West led the decline with -4.1%. Year-over-year (YoY), pending home sales fell -2.2%, the lowest print since May 2011. Was it interest rate increases? Partly, at least in May and June. But since a recent high on August 22nd, the Freddie Mac 30 year mortgage commitment rate has been falling along with pending home sales. Rising house prices combined with declining real median household income isn’t helping home sales. And, of course, falling labor force participation isn’t helping, although house prices continue to rise in...
  • Sperling Says No Nein To Private Recapitalization Of Fannie And Freddie (Same Day As Reid)

    11/24/2013 2:56:47 PM PST · by whitedog57 · 1 replies
    Confounded Interest ^ | 11/24/2013 | Anthony B. Sanders
    As many are painfully aware, the mortgage giants Fannie Mae and Freddie Mac collapsed in price from Q4 2007 to Q4 2008. Fannie Mae stock was trading at $60.81 on September 28, 2007 and fell to $1.71 by September 30, 2008. That is quite a drop. But Fannie Mae’s equity is now at $2.73 while Freddie Mac’s is at $2.52 per share. Both started showing signs of life in March 2013, spiked on May 28th, fell again, but has regained upward momentum since September. Who is in the running to purchase Fannie Mae and Freddie Mac and provide private market...
  • Janet Yellen And The Fed Caught In a Bear (Liquidity) Trap And Why Interest Rates Will Remain Low

    11/24/2013 10:04:06 AM PST · by whitedog57 · 30 replies
    Confounded Interest ^ | 11/24/2013 | Anthony B. Sanders
    The recent confusion from The Fed over the future of quantitative easing (or money printing) can be addressed with a few charts. Here is a chart of real GDP growth PER CAPITA since 1960. Real, of course, indicates that it is Gross Domestic Product adjusted for inflation. Note that Q1 1984 was the peak of real GDP growth … and it has been a steady decline since then. realgdppercap I added the S&P 500 index to the real GDP per capita chart and you can see that the S&P 500 index spikes when real GDP growth is higher than average...
  • Fallout From Senate's Nuclear Option: Mel Watt Likely To Be Confirmed As FHFA Director

    11/23/2013 3:28:32 AM PST · by whitedog57 · 7 replies
    Confounded Interest ^ | 11/23/2013 | Anthony B. Sanders
    There is already fallout from Harry Reid (D-NV) and The Democrats use of the “nuclear option” to change confirmation hearings to a simple majority vote. Of course, this means that the Democrats can force horrible choices on America without the possibility of a filibuster. While most people have focused on the judicial appointments, one person in the housing finance arena stands to benefits: Mel Watt (D-NC). Watt would be a disastrous choice as Federal Housing Finance Agency (FHFA) Director. He has NO regulatory experience, did not know what Tier 1 capital was (the lack of which sank Fannie Mae and...
  • Why HARP Is Almost Dead: U.S. Negative Equity Rate Falls at Fastest Pace Ever

    11/22/2013 4:30:40 AM PST · by whitedog57 · 11 replies
    Confounded Interest ^ | 11/22/2013 | Anthony B. Sanders
    According to Zillow, the U.S. negative equity rate fell at the fastest pace ever in Q3 2013. That is good news … if you own a mortgage or a home. But not great news if you are one of America’s growing renters. Leading the recovery, due to house price recovery, is California. And second is Nebraska? In general, the West which was so hammered by the housing bubble burst is recovering nicely. zillownegeqmap11222013 Here is a map of counties regarding negative equity. Red is “bad”, blue is “good”. You can see that the West and select counties around the nation...
  • Et Tu, Brute? Corker Fundraiser/Donor Savages Corker-Warner GSE Reform Bill

    11/21/2013 1:26:30 PM PST · by whitedog57
    Confounded Interest ^ | 11/21/2013 | Anthony B. Sanders
    Today, the US Senate held a hearing on “Housing Finance Reform: Powers and Structure of a Strong Regulator.” If I had been testifying, I would have thrown in a Medal of Freddom for Edward DeMarco, the acting Director of the Federal Housing Finance Agency (FHFA), the regulator for Fannie Mae and Freddie Mac. But alas, the panel that spoke today were largely regulators and/or attorneys. But the most interesting aspect of the hearing was what happened AFTER the hearing. Tim Pagliara, the CEO of CapWealth Advisors and longtime fundraiser/donor for US Sen. Bob Corker (of the infamous Corker-Warner housing reform...
  • Treasury To Sell Remaining GM Shares - Whither Fannie Mae and Freddie Mac??

    11/21/2013 12:13:22 PM PST · by whitedog57 · 1 replies
    Anthony B. Sanders ^ | 11/21/2013 | Anthony B. Sanders
    The U.S. Treasury Department said it expected to sell its remaining shares of General Motors by the end of the year, a plan that may leave taxpayers with a shortfall of about $10 billion on the automaker’s 2009 bailout. It must be nice to be bailed out by Uncle Sam. Most companies go through the bankruptcy process without the Federal government interfering with the proceedings. But what about Fannie Mae and Freddie Mac, the beleaguered mortgage giants held in conservatorship by the Federal Housing Finance Agency (FHFA)? More to the point, why didn’t the failed giants go into bankruptcy instead?...
  • Yellen Approved By Senate Banking Panel, Philly Fed Index Plunges To 6.5

    11/21/2013 8:31:15 AM PST · by whitedog57 · 7 replies
    Confounded Interest ^ | 11/21/2013 | Anthony B. Sanders
    Janet Yellen has been approved as Federal Reserve Chair by the US Senate Banking Panel. And the Philadelphia Fed Index plunged to 6.5 in November from 19.8 in October. Economists were expecting a read of 15. Philly Fed Nov More troubling in the Philadelphia Fed report is the decline in average employee workweek. Philly Fed Details Oct Of course, Janet Yellen being approved by the Senate Banking Panel has nothing to do with the Philly Fed Index plunge. Or does it? Yellen has been on the Bernanke QE team and we know that it has not been successful restoring life...
  • The Fed's Forward (Mis)Guidance - Muddy Water Clarity On QE

    11/20/2013 6:03:26 PM PST · by whitedog57 · 2 replies
    Confounded Interest ^ | 11/20/2013 | Anthony B. Sanders
    The Federal Reserve released the minutes of the most recent meeting today. The prognosis? Clear as a muddied lake. As clear as smog-covered sky of a thermal inversion summer. In other words, total confusion. The Federal Reserve of Chicago’s Charles Evan tweeted yesterday his opinion: #CharlesLEvans our purchases will continue to be open ended. We may need to purchase 1.5 trillion in assets until January 2015. Now for the minutes and the possibility of a taper: “During this general discussion of policy strategy and tactics, participants reviewed issues specific to the Committee’s asset purchase program. They generally expected that the...
  • Housing Finance Reform: Lessons From The Obamacare Debacle (Government Takeover Of Insurance)

    11/20/2013 8:17:09 AM PST · by whitedog57
    Anthony B. Sanders ^ | 11/20/2013 | Anthony B. Sanders
    As Congress mulls over the “reform” of Fannie Mae, Freddie Mac and even the Federal Housing Administration (FHA), it is important to remember that these entities are INSURANCE COMPANIES that compete directly with private mortgage insurers like MGIC. So when we consider housing finance “reform,” consider the debacle from the recent “reform” of insurance: The Affordable Care Act. Please visit the Affordable Care Act (aka, Obamacare) at this site and try to enroll. Another similarity between housing finance reform and healthcare reform is that they are both focused on “affordable” delivery on housing finance and healthcare. The Corker-Warner Senate legislation...
  • Chicago Fed's Evans: $1.5 Trillion MORE QE By January 2015 (Stalled Economic Growth)

    11/19/2013 7:30:42 PM PST · by whitedog57 · 5 replies
    Confounded Interest ^ | 11/19/2013 | Anthony B. Sanders
    The Chicago Fed’s President Charles Evans sent this Tweet today: #CharlesLEvans our purchases will continue to be open ended. We may need to purchase 1.5 trillion in assets until January 2015. Well, that’s not good. Although he is only one person, this seems to be the mindset of soon-to-be-Fed Chair Janet “Bubbles” Yellen. This is a statement about how markets are addicted to the sugar high of easy money and declining expectations of inflation (at least how the Federal government measures it). In other words, lethargic growth is in our economic future. Here is a chart on nominal GDP growth...