Nate Edel's blog
via Flyertalk: A housing crusade that went awry
Today, administration officials say it is fair to ask whether Bush’s ownership push backfired. Paulson said the administration, like others before it, “over-incented housing.”
Keith B. Hennessey, Bush’s current chief economics adviser, put it this way: “I would not say too much emphasis on expanding homeownership. I would say not enough early focus on easy lending practices.”
Also, another good site to look at is the Doctor Housing Bubble/ blog.
No quote: the linked-to site is billed as “humor”, and the lead-in and text are minimal, but it’s fascinating to put some pictures to the facts.
Latest news seems to be on $200M notes.
via AmericaBlog:
Somali Pirates in Discussions to Acquire Citigroup
November 20 (Bloomberg) — The Somali pirates, renegade Somalis known for hijacking ships for ransom in the Gulf of Aden, are negotiating a purchase of Citigroup.
The pirates would buy Citigroup with new debt and their existing cash stockpiles, earned most recently from hijacking numerous ships, including most recently a $200 million Saudi Arabian oil tanker. The Somali pirates are offering up to $0.10 per share for Citigroup, pirate spokesman Sugule Ali said earlier today. The negotiations have entered the final stage, Ali said.
“You may not like our price, but we are not in the business of paying for things. Be happy we are in the mood to offer the shareholders anything,” said Ali.
The pirates will finance part of the purchase by selling new Pirate Ransom Backed Securities. The PRBS’s are backed by the cash flows from future ransom payments from hijackings in the Gulf of Aden. Moody’s and S&P have already issued their top investment grade ratings for the PRBS’s.
Head pirate, Ubu Kalid Shandu, said: “We need a bank so that we have a place to keep all of our ransom money. Thankfully, the dislocations in the capital markets has allowed us to purchase Citigroup at an attractive valuation and to take advantage of TARP capital to grow the business even faster.”
Shandu added, “We don’t call ourselves pirates. We are coastguards and this will just allow us to guard our coasts better.”
Continue reading “Somali Pirates in Discussions to Acquire Citigroup”
Found via a post on the Flyertalk OMNI board:
04.28.08 | Chicago
Driven to the Brink
A new analysis shows that high gas prices are not only implicated in the bursting of the housing bubble, but that the higher cost of commuting has already re-shaped the landscape of real estate value between cities and suburbs. Housing values are falling fastest in distant suburban and exurban neighborhoods where affordability depended directly on cheap gas.
Read the press release here.
Download the full study here.
The full study is not super-long and is well worth a read.
Depression risk might force U.S. to buy assets
NEW YORK (Reuters) – Fear that a hobbled banking sector may set off another Great Depression could force the U.S. government and Federal Reserve to take the unprecedented step of buying a broad range of assets, including stocks, according to one of the most bearish market analysts.
Aren’t the Washington types still insisting we’re not yet in a recession?
No idea what to make of this, but in case it’s of interest to any of my readers:
Thailand Abandons Limits on Foreign Stock Investments (Update6)
By Suttinee Yuvejwattana and Margo Towie
Dec. 19 (Bloomberg) — Thailand scrapped currency controls on international stock investors one day after their imposition by the central bank prompted the biggest stock market plunge in 16 years.
The government lifted a requirement that banks lock up 30 percent of new foreign-currency deposits for a year for funds earmarked for stocks, Finance Minister Pridiyathorn Devakula said in Bangkok. The rule, intended to slow a 16 percent gain in the Thai currency this year that threatened exports and economic growth, sparked investor selling that wiped out $23 billion of market value in Thai stocks.
Via AMERICAblog:
Wholesale prices surge; Housing rebounds
WASHINGTON – Inflation at the wholesale level surged by the largest amount in more than three decades in November, reflecting higher prices for gasoline and a host of other items.
The Producer Price Index, which measures inflation pressures before they reach the consumer, was up 2 percent last month, the biggest advance since a similar increase in November 1974, the Labor Department reported Tuesday.
Economists had been expecting a rebound in wholesale prices following two months of big declines. However, the 2 percent jump was four times bigger than the 0.5 percent increase they had forecast. Even excluding volatile energy and food prices, core inflation posted a 1.3 percent advance, the biggest jump in 26 years.
Emphasis above is mine. What a great economy we’ve got, eh? Between this and the quagmire in Iraq war, Bush is looking like he is trying to out-Nixon Nixon.
Chris on AmericaBlog writes:
Scooter-mania hits the US
With the high cost of gas (though don’t worry, it just dropped under $73 today!) Americans are turning more and more to scooters. Over here in Europe, they’re everywhere and while I’ve always liked the look of a Vespa, there’s a price to pay for them. They always remind me of Rome, watching Quadrophenia or wading through piles of scooters in Saigon. The lawnmower whine is the most awful noise pollution that sort of blends in well enough in cities but in smaller towns is downright annoying as hell. I’ve always been told that scooters have limited emissions regulations which means they churn out plenty of traditional pollution as well. Besides that, what really scares me about them is the ugly accidents that I see all too often in Paris and let’s just say scooters and their drivers don’t hold up very well in those battles against cars and trucks.
The most striking thing from the AP article (linked inline above) to me are the sales figures:
A scooter boom has been under way over the last few years as the vehicles came back into fashion. Retail sales in the U.S. have shot up from 12,000 scooters in 1997 to 113,000 in 2005, according to the Motorcycle Industry Council, a promotional trade organization. But this spring, the boom has turned into a bonanza, with more and more people realizing that scooters can get up to 100 miles per gallon and can weave around traffic jams.
Chris’s points about safety inspired me to write the following as a comment, though:
Scooters aren’t so bad; first, the noise level and emmisions problems are limited to the cheapest, 50cc 2-stroke varieties. OK, both of the scooters I’ve owned (since 2001) have been 50cc two-strokes, but I’m cheap; the first was an actual Honda (1987 Aero 50) and relatively emmisions-clean, which I can’t say about the rather smokey MZI own now. Newer Honda 50cc ones are 4-stroke, and cleaner, and I imagine that Yamaha may well be going in that direction… and pretty much everything bigger than 50cc is 4-stroke these days.
50cc 4-stroke, sadly, is too weak for even much city traffic here in the states (even the 2-strokes, which are more powerful, are pretty much red lined at ~35-40mph with this 235lb guy on ’em), but there are some great 125cc or similar 4-stroke ones which can keep up with pretty much any non-freeway traffic.
Yes, safety is a concern, but the easiest way here in California to get a motorcycle license (necessary to ride a scooter, at least here) is to take a Motorcycle Safety Foundation course. With decent safety gear, and good driving on scooterists’ part, the only really dangerous variable is car and truck drivers – and there, more scooters and more visibility will help (as would adequate enforcemnt on drivers who DO carelessly put us in danger.)
The biggest downside to scooters, really, is the perception that they’re easier to ride than a motorcycle (they’re harder) or safer or to be taken less seriously.
But very generally, anything that gets more people into light, fuel-efficient two wheelers, and out of vehicles larger than they need (in many cases, that’s ANY car) is a good thing.
Older story, but worth reposting here….
Calif. housing bubble seen deflating
UCLA researchers see prices flattening
Updated: 5:37 p.m. ET June 21, 2005
SAN FRANCISCO – California has a housing bubble, but it may not pop with a bang, UCLA researchers said in a quarterly economic forecast.
Sounds like wishful thingking. I’ll believe it when I see it.
A two-bedroom, two-bathroom mobile home perched on a lot in Malibu is selling for $1.4 million. This isn’t a greedy seller asking a ridiculous amount no one will pay. Two others sold in the area recently for $1.3 million and $1.1 million. Another, at $1.8 million, is in escrow. Nearby, another lists for $2.7 million.
This is JUST for the trailer itself — you still have to pay RENT on the land that you do not own (nearly $3k a month on top of the million). I do like California weather, but I think I’ll take a little bit of snow for sanity in housing prices.
American homeowners have made a trillion-dollar bet that mortgage rates will remain near record lows for at least a few more years. But with some interest rates already rising, economists worry that the bet could turn bad.
The problem is that new types of mortgages that hold down monthly payments for families – helping many buy homes that they would not otherwise be able to afford – also require potentially far higher payments in future years.
The bill will soon start to come due in a serious way, as the initial period of fixed payments, typically set at artificially low rates, expires for millions of homeowners with adjustable-rate mortgages.
This year, only about $80 billion, or 1 percent, of mortgage debt will switch to an adjustable rate based largely on prevailing interest rates, according to an analysis by Deutsche Bank in New York. Next year, some $300 billion of mortgage debt will be similarly adjusted.
But in 2007, the portion will soar, with $1 trillion of the nation’s mortgage debt – or about 12 percent of it – switching to adjustable payments, according to the analysis.
The 2007 adjustments will almost certainly be the largest such turnover that has ever occurred.
via Escaton(“2007 could be a very bad year.”) and Brad DeLong
Via a guest-blogger posting on Bitch.Ph.D, we get an link to Affordable Family Formation–The Neglected Key To GOP’s Future
The key reason why some states vote Republican, I’ve found, can be summed up in the three-word phrase:
Affordable Family Formation.
In parts of the country where it is economical to buy a house with a yard in a neighborhood with a decent public school, you’ll generally find more Republicans.
You’ll find less in regions where it’s expensive.
It’s a stereotype that a mortgage, marriage, and babies tend to make people more conservative.
But it’s a true stereotype.
Emphases his; links removed. Goes on to show a set of demographics which correlate reasonably strongly between Republican-leaning and Democratic-leaning states… cost of living, “years married”(*) , and total fertility rate (**). All of these could be a sign that he’s right that “a mortgage, marriage, and babies tend to make people more conservative.”
But personally, I think this is a case of confusing correlation with causation — and that, especially in combination, the lifestyle choices these imply are often the result of a conservative social world view. To stretch a metaphor early marriage and a high total fertility can be taken as a human choice for a sort of r-selection…
Similarly, late marriage (generally following greater personal development) and fewer children (with consequently more time and effort put into raising each), can be taken as a sort of K-selection… and oddly enough, this sort of lifestyle tends to correlate with social liberals. Add in other, unrelated lifestyle choices that correlate, and these you can see where the geographic factor comes in.
Now, obviously these analogies aren’t perfect: I know a fair number of social liberals who paired up relatively young, and a modest number with large families… and there are social conservatives who marry late and have small families. And social issues don’t always correlate perfectly with one’s voting, even if they often do. But I do think that the author of that piece manages to put the cart before the horse in assuming that those factors drive or even help determine one’s views/lifestyle/cultural orientation, rather than being signs driven by it.
(* for 18-44 y/o white women, a particularly silly measure given the cut-off age, IMO: it mainly measures age at first marriage, not the actually divorce rate… which as we’ve seen is lowest in some very blue states)
(** here’s that “white women” thing again. Do you think this guy may have race issues?)