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Bernanke: Mission Accomplished?
Tweet Share on Facebook March 24, 2008 Comment (1)This is what Bernanke would look like if he did.
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The Crisis Hits Home for Bernanke
Tweet Share on Facebook March 21, 2008 Comment (1)Looks as though the housing downturn may have cost Ben Bernanke more than $250,000 in home equity. "Bernanke lives in Washington's Capitol Hill area in a four-bedroom, 2,600-square-foot house he bought new in May 2004 for $839,000," Bloomberg reports. Despite a likely run-up in value before the housing bubble burst, Bloomberg adds, "almost four years later, it may not be worth any more, according to real estate records and local agents."
From Bloomberg:
"Even though he's the Fed chairman, he's going to get hit—but I think [a] lot of people will in Washington,"' said William Wheaton, an economist at the Massachusetts Institute of Technology. The value of Bernanke's home "probably went up to $1.1 million and it's probably back down to $840,000," because prices in Washington just a couple years ago "got out of control," Wheaton said.
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You Can Save Bear but You Can't Save Me?
Tweet Share on Facebook March 20, 2008 Comment (3)David Wessel makes a great point in today's Wall Street Journal about how JPMorgan's government-assisted deal for Bear Stearns may have changed the political dynamics of a broader bailout for struggling homeowners:
No matter the merits or intellectual distinctions, it is nearly impossible for a politician to explain the following: Fed Chairman Ben Bernanke and Treasury Secretary Henry Paulson were willing to risk as much as $30 billion of taxpayer money—without congressional approval—so that J. P. Morgan Chase could buy Bear Stearns cheap at an auction in which it was the sole bidder. But a taxpayer-backed rescue of homeowners whose mortgages are worth more than their homes is unwise and unwarranted.
Full article is here.
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Real Estate, the Bargain of the Century?
Tweet Share on Facebook March 20, 2008 Comment (2)So says analyst Dick Bove of Punk Ziegel in a research note released this morning (bold is mine):
Every study I have read is convinced that housing prices will continue to drop for an extended period. This is as dead wrong as the reports that argued some years ago that housing prices would keep rising for an extended period. Think of this:
- Money supply is growing rapidly;
- Commodity prices are soaring;
- The dollar is falling sharply; and
- Real estate prices are falling.
Does this last line make sense? When was the last time real estate prices fell in a general period of commodity inflation?
I cannot think of such a time. I live in Florida where foreigners can and are buying prime real estate at deeply depressed prices with very, very cheap dollars. This may turn out to be the bargain of the century and I mean century.
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Roland E. Arnall, Founder of Former Subprime Giant Ameriquest, Dies at 68
Tweet Share on Facebook March 20, 2008 Comment (2)From today's Washington Post:
Once the nation's largest subprime mortgage lender, Ameriquest was shadowed by accusations that it engaged in improper practices that included lying about borrowers' income to qualify them for loans they couldn't afford. Ameriquest advertised heavily on television, sent blimps soaring above stadiums bearing the company's name and Liberty Bell logo and sponsored a Super Bowl halftime show and a Rolling Stones tour.
Former employees said Ameriquest ran "boiler rooms" of loan agents who socked borrowers with hidden fees and higher-than-promised interest rates while steering customers into loans they couldn't afford.
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A Housing Rescue in the Works?
Tweet Share on Facebook March 19, 2008 Comment (1)It was only last month that Treasury Secretary Paulson steadfastly rejected the government-funded housing rescue plans being kicked around by lawmakers, economists, and community groups, telling the Wall Street Journal: "I don't think I've seen any scenario where the American taxpayer needs to be stepping in with more taxpayer dollars."
But after the recent implosion of Bear Stearns and continued turmoil in the credit markets, it seems the Treasury Department has softened its position:
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Fannie: That Pricey Ski Chalet Can Now Be Yours!
Tweet Share on Facebook March 7, 2008 Comment (2)To everyone in well-to-do America putting off buying a new house because jumbo mortgage rates are way too high, take heart!
Thanks to the recent passage of the economic stimulus package—which includes a provision raising the limits on loans backed by mortgage giants Fannie Mae and Freddie Mac—folks in places like Vail, Colo., Washington, D.C., and Hawaii can look forward to interest rates that match those for cheaper houses.
Amid the credit crunch, rates on jumbo loans (which until today were defined as any mortgage over $417,000) jumped as high as a full percentage point above those that conformed to Fannie and Freddie's standards. That is, if you could secure one at all. Without a ready market for big-dollar mortgages, the jumbo market seized up last August as secondary-market buyers of such mortgages all but disappeared.
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The Next Shoe to Drop: Commercial Real Estate
Tweet Share on Facebook March 3, 2008 Comment (8)I try to stay ahead of the curve.
Which is why, nearly two years ago, I wrote a piece on the impacts of the housing bust on the job market.
In short, I noted that all those millions of people who chased the real-estate boom—the newly minted real-estate agents, the mortgage brokers, the developers, and the construction workers—had added more jobs to the economy than had any other industry, at its height accounting for about 1 in every 10 jobs: a record, according to Moody's Economy.com. (In California alone, the number of real-estate brokers rose to more than half a million workers—more than the total number of homes sold in the state last year.)
