Have nothing to do with the [evil] things that people do, things that belong to the darkness. Instead, bring them out to the light... [For] when all things are brought out into the light, then their true nature is clearly revealed...

-Ephesians 5:11-13

Tag Archives: Housing Market

Foreclosure Settlement Bails Out the Big Banks

English: Wells Fargo Center

The report from The New York Times on Wednesday about the foreclosure settlement reached between five big banks and 49 states’ attorneys general made it appear that justice was being served. The $26 billion to be paid out to some 2 million homeowners (former and current) “could provide relief” to them under the terms of the settlement. It would also remove a cloud of uncertainty from the banks’ liability and might help in “halting the housing market’s downward slide.”

States’ attorneys general started an investigation in the fall of 2010 into the mortgage servicing industry when it was discovered that homeowners were being evicted or penalized through improper, incorrect or false paperwork emanating from Bank of America, JPMorgan Chase, Wells Fargo, Citigroup, Ally Financial (formerly GMAC) with the help of Mortgage Electronic Registration Systems, Inc. (MERS).

Over the 14-month investigation the scope broadened and deepened as the extent of the costs and fraudulent abuses was revealed. The settlement means that, on the surface, the money will go to help homeowners affected by the fraud. A million homeowners can expect to have their existing mortgages reduced or their interest rates reduced. Another 750,000 former homeowners will receive, over the next three years, checks estimated to be about $2,000.

The size of the settlement fades into insignificance in light of the fact that there are more than

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Housing: Prices and Ownership Still Correcting

CoreLogic

Just when CoreLogic, the California-based mortgage data provider, began to wax optimistic about the housing market, the Census Bureau and the S&P/Case-Shiller index doused their enthusiasm with some cold facts and daunting data.

CoreLogic noted in its January report that single-family permits and starts rose at a 15-percent annual rate over the six months ending November 2011. In addition, existing home sales appeared to be trending higher as well, increasing by about 12 percent from January to November. The tone in their note to clients was guardedly optimistic:

While we cannot say with a high degree of certainty what 2012 has in store for us, indications based on the latter part of 2011 are that both the broad economy and the housing market are moving toward positive growth in 2012.

And then, on January 31, the Census Bureau released its fourth-quarter report on home ownership: the rate was 66 percent, extending the decline from the 69 percent reached in 2005, just before the housing bubble burst, and rivaling the rate last seen in 1997, 14 years ago. Economist Mark Perry developed a visually stunning graph for his blog and concluded: 

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Latest Housing Numbers May be an Aberration

English: Foreclosure Sign, Mortgage Crisis

The spate of good news about the economy, headed up by the National Association of Realtors (NAR)’s report that pending home sales increased by 7.3 percent in November from October, has resulted in improved outlooks by many observers, along with warnings from others not to get overly confident.

Even Lawrence Yun, NAR’s chief economist, was cautious in his announcement, perhaps chastened by NAR’s admission last week that they had overstated sales for the past five years: “Housing affordability conditions are at a record high and there is a pent-up demand from buyers who’ve been on the sidelines, but contract failures have been running unusually high.” And to avoid making the same mistake twice, Yun said that some of the increase in pending home sales may be people who couldn’t qualify before who are attempting to make another purchase now.

The pending home sales index hit 100.1, the first time it has been over 100 since April of 2010 when sales were goosed by the expiration of the government’s homeowner tax credit. Actual home sales were up in November as well, hitting a seven-month high, according to the Commerce Department.

New construction activity is inching higher along with builder confidence while the inventory of homes for sale is declining. Aaron Smith, an economist at Moody’s Analytics, was cautious: “It looks like buyers are

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Is Economists’ Gloom Marking the Start of the Recovery?

The clouds were amazing this afternoon during ...

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With the announcement from the Commerce Department that the sale of new homes in August fell by 2.3 percent compared to July, the Los Angeles Times took on a decidedly gloomy tone, concluding, “Sales of newly built homes in the U.S. appear to be stuck at the bottom.” The report noted that the August numbers translated into an annual rate of 295,000 sales, which is close to the low of 278,000 recorded in August last year, and down from the 1.3 million new homes sold in 2005.

Missing was any attention, however, to two important pieces of the economic housing puzzle in that report. First, the trend for new home sales has been

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The Fed: QE3 is All but Certain

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The latest report from the Board of Governors of the Federal Reserve System confirms what every sentient being already knows: The economy is in the dumper, with little improvement expected. The report used words like “considerably slower,” “deterioration,” “flattened out,” “weak,” and “depressed” to describe current conditions, and it even noted that excuses such as bad weather and the earthquake in Japan “appear[ed] to account for only some of the current weakness in economic activity.” (Emphasis added.)

In other words, the Board had a BFO (blinding flash of the obvious) and

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U.S. Credit Rating Still at Risk

Crisis

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Moody’s announcement on Tuesday that it would retain its AAA rating of U.S. government sovereign debt as a result of the debt-limit agreement came with a warning: the government must rein in spending or risk a downgrade anyway. The deal “virtually eliminated the risk of [a] default,” but the agency warned that “Should the new mechanism put in place by the Budget Control Act prove ineffective, this could affect the rating negatively.” Moody’s added that it wanted to see the United States lower its debt-to-GDP ratio, now approaching 100 percent, to around

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Looking for Green Shoots in the Economy

Cracked Mud Texture

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Just a month ago one of the most accurate economic forecasters on the planet looked at the economy and concluded that another recession is 99 percent certain.

David Rosenberg of Gluskin Sheff, a Canadian private money management firm, noted at the time that consumers were still trying to reduce their debt load, which reduces their ability to purchase consumer goods and services. That continued reduction in demand is being felt all across the economy with no end in sight:

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Economists Are at a Loss; So Are Jobs

Pink Slip

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Once the awful job numbers announced by the Bureau of Labor Statistics on Friday were digested, it was clear that the clairvoyant economists looking into their crystal balls were dead wrong—again.

Most economists were expecting a pickup from May, with job growth estimates ranging from 100,000 to 175,000, and an upward revision on the May numbers as well. Neither happened. A mere 18,000 jobs were created in June, and the May numbers were revised downward from

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The Fed’s Projections Are Too Rosy, Again

Seal of the United States Federal Reserve Syst...

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The economic projections released by the Federal Reserve on Wednesday estimated that in less than two years the unemployment rate would be down to 7 to 7 ½ percent, with the economy growing at an inflation-adjusted rate of nearly 4 percent. And in the next three to five years, the unemployment rate would likely be back to normal: between 5.2 and 5.6 percent.

This is wishful thinking. Okun’s Law (or rule of thumb) says that it’s going to take

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The Economy Also Weakens Obama’s Reelection Hopes

Obama leaves the stage

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The trickle of bad news about the economy has turned into a torrent, and is now threatening Barack Obama’s chances at reelection. On Wednesday the Institute for Supply Management issued its manufacturing index, which was expected to rise. Instead, it fell, to 53.5, perilously close to the edge of recession in manufacturing. John Silva, an economist at Wells Fargo, was blunt:

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Fair Tax? Flat Tax? The Case for No Tax

Exterior of the Internal Revenue Service offic...

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Stephen Moore’s math in his Wall Street Journal article is compelling: by the time the Democrats’ proposed three-percent surtax on incomes over $1 million a year is added to all the other taxes people pay, those at the high end would be paying 62 percent of their income in federal and state income taxes.

He adds together the current 35 percent top income tax bracket to the three percent surtax, along with the expected repeal of the Bush “tax cuts” in 2012, payroll taxes, Social Security and Medicare taxes, the 0.9 percent Medicare surtax, the hidden 3.8 percent sales tax in ObamaCare which begins in 2014, and state income taxes, and he comes out, inevitably, to

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What’s Wrong with Insider Trading? Ask Raj Rajaratnam

NEW YORK, NY - APRIL 12:  Billionaire Galleon ...

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When Raj Rajaratnam, founder of Galleon Management, was convicted on all 14 counts of insider trading earlier this month, it made the phones ring in lawyers’ offices all across the country. Rajaratnam was only one of 47 people charged but he was by far the biggest fish caught in the net set by United States attorney for Manhattan, Preet Bharara. It took Bharara’s office 9 months of wire-tapping Rajaratnam’s phone, and 18 months of additional investigative work to get the convictions, and Bharara was ecstatic: “The message today is clear–there are rules and there are laws, and they apply to everyone, no matter who you are or how much money you have.”

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Bureau of Consumer Financial Protection Looms

electrical tape

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Tuesday’s hearing of the House Oversight Committee gave Chairman Patrick McHenry (R-N.C.) a chance to vent, and witness Elizabeth Warren, President Obama’s Special Advisor for the Bureau of Consumer Financial Protection (BCFP), a chance to defend, and for the entire hearing to accomplish nothing. The BCFP was the brainchild of Warren, and the centerpiece of the Dodd-Frank Wall Street Reform and Consumer Protection Act which was signed into law last July. Its Orwellian title hides the fact that the new agency will do little to reform Wall Street and nothing at all to protect the consumer.

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How the Heritage Foundation Plans to Save the American Dream

Stars and Stripes, NYSE

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When Peter G. Peterson sold his interest in his investment company the Blackstone Group in 2007, he took $1 billion of his gains to fund his foundation, which has concentrated on creating awareness of the dangers of deficits and the national debt in the United States. One of his recent grantees is The Heritage Foundation, which was tasked with the challenge of developing a plan and a strategy to put the country back on a sustainable and responsible fiscal path. Similar grants were given to The American Enterprise Institute, the Bipartisan Policy Center, the Center for American Progress, the Economic Policy Institute, and the Roosevelt Institute Campus Network.

“Saving the American Dream” is Heritage’s entry, which will be presented at

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Trump Fires The Donald, Ends Presidential Bid

Donald Trump

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Few were surprised, and many were relieved, at Donald Trump’s announcement on Monday that he was ending his campaign for the Presidency:

After considerable deliberation and reflection, I have decided not to pursue the office of the Presidency. This decision does not come easily or without regret; especially when my potential candidacy continues to be validated by ranking at the top of the Republican contenders in polls across the country. I maintain the strong conviction that

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Runaway Inflation on the Cusp?

2012  VOTE LIKE YOUR LIFE DEPENDS ON IT ..BECA...

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Buried in the latest report from the Bureau of Labor Statistics (BLS) on the Consumer Price Index was some disconcerting news. On the surface, there appeared to be little to be concerned about, with the index “for all items, less food and energy” rising just 0.2 percent in April. On an annual basis, the BLS “all items” index increased just 3.2 percent over the past 12 months.

However, that 3.2 percent was the highest since October of 2008, reflecting increases in energy of

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Evidence for Double Dip is Growing

Recession

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Establishment economists and other economic cheerleaders were disappointed to learn that, despite the government’s best efforts to revive the economy through Keynesian interventions and stimuli, the GDP (Gross Domestic Product) for the first quarter of 2011 was half the rate of growth in the last quarter of 2010.

As noted by the Wall Street Journal,

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Speculators and High Oil Prices Explained

Super Contrails as the 767 flies through cloud...

Super Contrails as the 767 flies through cloud… (Photo credit: AvgeekJoe)

Last Thursday, speaking in Reno, Nevada, President Obama announced that the Department of Justice was going to examine the role of “traders and speculators in the gasoline and oil markets,” and how they contribute to high gas prices.

The Attorney General [is] putting together a team whose job it is to root out any cases of fraud or manipulation in the oil markets that might affect gas prices, and that includes the role of traders and speculators. We are going to make sure that no one is taking advantage of American consumers for their own short-term gain.

What do speculators do? Here is a cogent explanation by Victor Niederhoffer, a well-known speculator and author of The Education of a Speculator:

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Donald Trump: The Art of Bankruptcy

Donald Trump

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As ABC’s Amy Bingham pointed out on Thursday, Donald Trump has “built an American empire from Las Vegas to New York,” but has sought bankruptcy four times along the way.

Trump told George Stephanopoulos last Friday, “I’ve used the laws of this country to pare debt…. We’ll have the company [that’s in financial trouble]…we’ll throw it into a chapter [11 bankruptcy]. We’ll negotiate with the banks. We’ll make a fantastic deal. You know, it’s like on The Apprentice: It’s not personal. It’s just business.”

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Donald Trump’s Ideology

Donald Trump

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When potential Presidential candidate Donald Trump was asked by George Stephanopoulos, host of ABC’s “Good Morning America”, what he would do, as President, about soaring gasoline prices, he replied:

Look at what’s going on with your gasoline prices. They’re going to go to $5, $6, $7 and we don’t have anybody in Washington that calls OPEC and says, “Fellas, it’s time. It’s over. You’re not going to do it anymore.”

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Many of the articles on Light from the Right first appeared on either The New American or the McAlvany Intelligence Advisor.
Copyright © 2018 Bob Adelmann