vboring

As commissioner David Stevens predicted, the FHA's reserves have fallen below their required 2% level due to the wave of foreclosures. An independent auditor concluded reserves would stay positive under most scenarios, but not the baseline, where prices fall another 6.5%. Stevens insists no bailout is required.

Who expects house prices will fall less than another 6.5%?

They're only just barely stable even though significant foreclosure stock is being held off market, the gov't is pulling demand forward by subsidizing purchases, and underwater "owners" are stuck in the headlights hoping for a subsidized workout.

President Obama's maiden voyage to Asia has all the looks of a come-to-banker meeting, says William Pesek - except the reality dawning on Asia is that Obama can't promise that the U.S. can repay its debt and keep the dollar from crashing. Let's hope they call in the loan in a smooth way.

Somebody hasn't been paying attention. The increase in treasury purchases has been mostly domestic, not Chinese.

Whatever happens on the upside, gold won't fall below $1,000/ounce again, says Marc Faber of Gloom, Boom & Doom Report: "Central banks are all the same. They are printers. Gold is maybe cheaper today than in 2001, given the interest rates." Gold now +1% to $1,113.80.

There is an internet full of alchemists who will be glad to prove him wrong.

Fannie Mae (FNM) rolls out its Deed for Lease program, allowing homeowners facing foreclosure to deed their property to the lender and stay in their homes as renters. The scheme is only for borrowers who have already missed a mortgage payment, and who aren't eligible for mortgage mods. Fannie's incentive? Buying time for a housing recovery, and preserving the value of its nonperforming assets.

Is it cheaper to pay for the lease or hire a lawyer?

There are so many stories of "owners" staying in the house for more than a year after their last payment at zero cost. So where is the incentive to pay for the right to stay put when you can do it for free?

Mike Shedlock has a hard time seeing why markets went giddy over today's Q3 GDP data: "The government sloshed trillions around and yet disposable income is down, jobs are horrendously weak, and the only reason GDP rose is wasteful government spending, cash-for-clunkers and extremely unaffordable housing tax credits whose effect is soon going to start diminishing."

Nah, the quality will still suck next year, but the YOY comparisons will be against one of the worst years on record so they won't look as bad.


On Oct 29 05:54 PM Stone Fox Capital wrote:

> it isn't about the quality but that the amount was better then expected.
> Fight the trend all you want. By Q4/Q1 the quality will be a lot
> better. What will the excuse be then?

Contrary to opinion, the stock market will embrace a tightening monetary policy, says Jeffries & Co. chief strategist Art Hogan. Rather than seeing higher corporate borrowing costs, he says, investors will know the moves are coming because of positive economic signals: "The Fed has a pretty good picture of the economy, and can usually see around the corner."

So the market likes rates being lowered and being raised?

If this is true, all the Fed has to do is constantly adjust rates and the market will go to infinity.

The government may have gone the wrong direction when it stopped printing bills bigger than $100, David Reilly says; the way things have gone, maybe a $1M bill is in order. But with whose face? Helicopter Ben? Bush? Nixon, who broke the link to gold?

Paper money is irrelevant for 99.95% of legal interactions.

They could get rid of 100's and 50's and the only people who would care are criminals and wannabes. I haven't used anything above a 20 in years.

Electronics and other general merchandise [EGM] now accounts for 43% of Amazon's (AMZN) sales, vs. 54% for media. The rate of EGM growth (44%) versus that of media (17%) highlights its rapid and successful transition from a bookseller to an "everything store," which will become even more pronounced once it completes acquiring Zappos in Q4. (read Amazon's Q3 earnings call transcript)

Amazon really stuck gold here. They took the convenience of ebay and cut out the creepiness and unreliability. They are the best place for specialized parts in everything. And the customer service is outstanding.

The government will reportedly order deep pay cuts from the biggest bailout recipients in a plan the Treasury will announce in the next few days. The seven companies that got the most assistance will have to cut cash payouts to their top 25 execs by an average of 90% - to be replaced by stock that they'll be restricted from immediately selling - and cut their total compensation by 50%.

All we need now is an 80% tax rate for the wealthy and we'll be well on our way to World Depression II.

Personally, I think bank execs should be paid with the lowest quality paper their bank owns, but paid based on how the bank currently values it.

The Service Employees International Union is urging government paymaster Kenneth Feinberg to stop retirement payments to Bank of America's (BAC) departing CEO Kenneth Lewis until the bank stops foreclosures and increases lending. Lewis' package includes $53.2M in benefits and $72.8M in accumulated stock and other compensation.

That is the trick to my suggestion. Instead of flat-out abandoning the contract, the gov't could just change what he is paid with. Instead of stock, he gets worthless junk that he decided the bank should pretend is worth something. If he thinks the two are equally valuable, he shouldn't mind the switch.

The Service Employees International Union is urging government paymaster Kenneth Feinberg to stop retirement payments to Bank of America's (BAC) departing CEO Kenneth Lewis until the bank stops foreclosures and increases lending. Lewis' package includes $53.2M in benefits and $72.8M in accumulated stock and other compensation.

What if you converted his retirement stock into mortgage backed securities backed by distressed properties instead?

If his bank wants to insist that the face value of these products are the correct accounting value, then he should be happy to accept them as payment - at face value.

That could actually be legal, unlike simply stopping payment.

GM's fling with eBay (EBAY) looks to be over, at least for now, as evidence suggests it drew a lot of lookers but not a lot of buyers. And some typical online-auction behavior: One bidder submitted a $2,500 bid on a $40,000 vehicle.

Maybe they should try a deal with Amazon. It is a much classier space, plus one click purchases and free shipping will seal the deal.

Now if they could just find a way to avoid sales taxes...

Edmunds.com predicts September car sales of just 8.8M/year, a 28-year low and a 38% plunge from August's CARS-induced 14.1M blowout. "Cash for Clunkers was supposed to prime the pump," Edmunds' Jeremy Anwyl says, "but that is a physics concept, and economics is quite different. Demand has dropped off significantly since the program ended."

What the bill didn't consider is that those of us without "clunkers" would never buy during the program,since it would just feel wrong being the one person there not getting free money.

A 22-year-old man has received 15 months in prison and must pay back $200,073 after trying to open more than 58,000 accounts with E-Trade (ETFC), Charles Schwab (SCHW) and Google (GOOG) in the names of characters from the King of the Hill TV show (among others). The scheme was to steal the "micro-deposits," from 1 cent to $2, that firms make to test account functionality.

Another crimes that earns you less time than stealing mp3s.

15 months for stealing $200k? Ridiculous.

The bad part of the U.S. employment situation, as we well know, are the droves of unemployed looking for jobs in a market where almost no one's hiring. The good part is that those that have jobs continue to enjoy pay increases almost as big as during the late 1990s boom.

Agreed. This article smells of BS. Maybe they didn't count furloughs, reduced hours for part time workers, and reduced benefits.

Or maybe it is a shift in the median. Maybe the layoffs were concentrated in low paying jobs, so the median salary has increased and they misunderstood this as evidence of pay raises.