November 22

CoreLogic: Shadow Housing Inventory pushes total unsold inventory to 6.3 million units. Calculated Risk.

Banks face another mortgage crisis. Barron's.
But Chris Whalen of IRA thinks the exposure of the banks is much greater than Barron's says.

Fannie Mae, Freddie Mac and the Coming Wave of Foreclosure Buybacks. RealtyTrac.

There will be blood. Paul Krugman.

Call Their Bluff, Mr. President. David Cay Johnston.



sorta related fare:
Obama the house negro --- pity the man who walks on his knees (and the nation he leads from that position). Evert Cilliers aka Adam Ash, 3QD.

However, this was but a screwup in a teacup compared to what the Dems did, which was wreck their chances for making any more “reforms” for the next two years or more. And a silent fart in a huge cathedral compared to what our President has wrought, which was wreck his chances for re-election. Just like the Republicans have successfully obstructed anything that can do the country any good over the last two years so they can blame everything wrong on the Democrats, they are now going to make damn sure nothing good happens at all so they can blame everything wrong on the president, and replace him with Mitt Romney (maybe even Sarah Palin). Simple election strategy, and amazingly effective.

totally other fare, especially for basketball lovers:
When David beats Goliath: When underdogs break the rules. Malcolm Gladwell, The New Yorker.

October 18

this basically reflects what I opined in my last post, but much more amusingly:
Through the looking glass again. Ultimi Barbarorum.

if anyone tells you they have a clear view on what is going to happen to the econo-world from here, walk away briskly. As Ed Hyman of ISI puts it, with the now imminent onset of QE2 we are in “scary times”, a world of “unintended consequences”. The only intellectually honest position to take at this point, it seems, is to admit we haven’t a clue.

he goes on to discuss many of the factors in play
The Recklessness of Quantitative Easing. John Hussman.
Hussman says that QE didn't save us from the crisis --- lying about asset prices did --- but, unfortunately, the benefits about this "suspension of truthful disclosure" don't solve the underlying solvency problems

Presently, the U.S. financial sector is essentially opacity masquerading as solvency. As Meredith Whitney has observed, the "recovery" of the U.S. financial sector has been a two stage process - massive writeups of troubled assets on balance sheets, followed by large reductions in loan loss reserves on income statements. This activity has not only driven the improvement in operating earnings reported by banks, but has been one of the primary contributors to the recovery in the aggregate earnings of the S&P 500 Index. It is not a process that should be extrapolated.

Why foreclosure fraud is so dangerous to property rights. Barry Ritholtz.

The foreclosure mess. David Kotok.

Bank restructurings likely as foreclosures overwhelm big banks. video of Chris Whalen at AEI.

more video of Whalen on panel at AEI here, with Roubini and others; Whalen starts at 1:07 (fast forward to one-hour, seven-minute mark)

October 8

Janet Tavakoli: On the "biggest fraud in the history of the capital markets". interview with Ezra Klein of Washington Post, via zerohedge.

When we had the financial crisis, the first thing the banks did was run to Congress and ask for accounting relief. They asked to be able to avoid pricing this stuff at the price where people would buy them. So no one can tell you the size of the hole in these balance sheets. We’ve thrown a lot of money at it. TARP was just the tip of the iceberg. We’ve given them guarantees on debts, low-cost funding from the Fed. But a lot of these mortgages just cannot be saved. Had we acknowledged this problem in 2005, we could’ve cleaned it up for a few hundred billion dollars. But we didn’t. Banks were lying and committing fraud, and our regulators were covering them and so a bad problem has become a hellacious one....
This can be done with a resolution trust corporation, the way we cleaned up the S&Ls. The system got back on its feet faster because we grappled with the problems. The shareholders would be wiped out and the debt holders would have to take a discount on their debt and they’d get a debt-for-equity swap. Instead we poured TARP money into a pit and meanwhile the banks are paying huge bonuses to some people who should be made accountable for fraud. The financial crisis was a product of our irrational reaction, which protected crony capitalism rather than capitalism. In capitalism, the shareholders who took the risk would be wiped out and the debt holders would take a discount but banking would go on.

The true nature of our balance sheet recession. Bob Bronson, via dshort.
includes link to Richard Koo's presentation

Pictures of deflation. Chris Whalen presentation to AEI.

The largest U.S. banks remain insolvent and must continue to shrink. Failure by the Obama administrationto restructure the largest banks during 2007 to 2009 only means that this process is going to occur over the next 3 to 5 years --- whether we like it or not. The issue is recognizing existing losses --- not if a loss occurred.

Japan Launches Global Quantitative Easing. John Makin, AEI.
the article is alright, but actually not that informative; but it is noteworthy if only for this quote:

"The experimental-drug phase of monetary policy has begun."

October 6

Foreclosure fraud reveals structural and legal crisis. Barry Ritholtz.

gold biggest beneficiary of continuing competitive global currency devaluation:

Global central bank action may follow BoJ moves on rates. Bloomberg.
RBA surprised by holding rates steady, and Japan is back to ZIRP and more QE;
BoE and ECB tomorrow

Why it doesn't feel like a recovery. Washington Post.
neat graphics showing economic growth vs potential growth and implications for output gap

Credit for the Recovery. Daniel Gross, NYT.
includes this quote of the day:

the decline in personal debt is driven less by Americans giving up on credit cards than on credit card issuers giving up on Americans

Will America come to envy Japan's lost decade? Ezra Klein, Washington Post.

Hatzius Says Fed Easing Measures Will Probably `Fall Short'. Bloomberg.

Mexico issues 100-year bond. Reuters.

Canadian Housing Observer 2010. CMHC.

October 4

IMF admits that the West is stuck in near depression. Ambrose Evans-Pritchard, Telegraph.

UK tiptoeing towards Japan, warn consultants. Telegraph.

Is China getting religion on restructuring its economy? Yves Smith.

5 positive and 5 negative investment themes from Gary Shilling. Pragmatic Capitalism.

Flawed Paperwork Aggravates a Foreclosure Crisis. Gretchen Morgenson, NYT.
and the negative consequences of this mortgage mess will be exacerbated if it leads to more strategic defaults

4ClosureFraud posts Lender Processing Services mortgage document fabrication price sheet. Yves Smith.

Economic measures continue to slow. John Hussman.

Based on the data that we've observed in recent months, my view remains that a fresh downturn in the economy remains a not only a possibility but a likelihood. Little of the economic improvement we've observed since 2009 appears intrinsic, but instead appears driven by enormous government interventions that are now trailing off. Still, while I believe that there is a second shoe that has not dropped, I recognize that the full force of government policy is to obscure, stimulate, intervene and borrow in every effort to kick that can down the road. I believe that the unaddressed and unresolved problems relating to debt service, employment conditions and housing are too large for this to be successful

other fare:
amusing maps of Europe: mapping sterotypes

September 30

FASB to fold on mark-to-market. Bruce Krasting.

And does FASB have one more reason to fold?
Seems so, as Mortgage-Gate could be getting serious --- so far, GMAC and JPMorgan have been implicated in foreclosing on mortgages without titles, but quite likely this is endemic, and so will affect the entire mortgage origination industry as more and more of those foreclosed upon begin to challenge the process

Are The 250,000 Foreclosure Sales From Q2 About To Be Reversed, As Fitch Prepares To Downgrade Foreclosure Fraud Companies. zerohedge.

Chris Whalen on banks and mortgages. King World News.