Housing Doom

The reason given out for keeping the meeting venue a secret is security concerns. Even with the participation of US Federal Reserve and European Central Bank, the Asian central banks are expected to steal the thunder at the meeting. The Asian bankers are uniting under the leadership of the governor of the Central Bank of Malaysia, Zeti Akhtar Aziz. – Blog of India¹

How about that Tracy Porter Guy!  Oh well, while everyone was being distracted over the weekend, the big story in the world was happening at a secret location near Sydney, Australia with almost no media coverage.  Thanks to the Herald Sun and the above blogger in India a few hints are emerging, though.

Meanwhile, the folks at MW² inadvertently added a further piece to the puzzle through yet another one  of those 'Oh, must be OK then,' says son as cardiologist cuts short golfing vacation to rush to mother's side stories the financial press likes to perpetrate:

LONDON (MarketWatch) — Jean-Claude Trichet may not be flying to the rescue of Greece and other debt-troubled southern European nations, but news Tuesday that the European Central Bank president will leave Sydney earlier than initially planned to attend a meeting of European Union leaders in Brussels was enough to provide the euro and financial markets with a lift.

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What a sweetheart deal for One West Bank courtesy the American taxpayer:

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The document was an annual report on [minister Christian Paradis'] Public Works' massive real-estate portfolio, which contained factual information on high vacancy rates and weak returns on investment. Such reports had never been made public before. // The department's real-estate branch had consented to the full release, and the Access to Information office at Public Works had determined after extensive consultation that there was no legal basis to withhold any of the report. [however ...] – Canadian Press¹

This rather creepy straw-in-the-wind showed up as front page news this morning on Doom North's snowy front doorstep.

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WASHINGTON — Treasury Secretary Timothy Geithner said Sunday that the U.S. wasn't in danger of losing its triple-A bond rating, in the wake of a warning from Moody's Investors Services about the U.S.'s treasury-bond rating. – WSJ¹

Meet the Treasury Department's secret weapon …

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How in the world can Timothy Geithner make these claims with a straight face?

In an interview yesterday with Jake Tapper, Geithner was reminded of this quote from President Obama a year ago:

"Under this plan, lenders who participate will be required to reduce those payments to no more than 31 percent of a borrower's income. And this will enable as many as 3 to 4 million homeowners to modify the terms of their mortgages to avoid foreclosure."

Here's how the the interview went after that:

TAPPER: If a year ago I had told you that today I'd be sitting here, and only 66,000 Americans had permanent mortgage modifications, would you have said at the time that that was a success?

 

GEITHNER: Oh, Jake, I think it's very important to recognize this program is providing very, very substantial cash flow relief right now to more than three quarters of a million Americans. And we — we believe we're still on a path to be able to reach many, many more American households. And of course we're going to make sure that those temporary modifications translate into permanent modifications. But again…

 

(CROSSTALK)

 

TAPPER: But a lot of those temporary modifications were done verbally though. They weren't done with the paperwork that a lot of…

 

(CROSSTALK)

 

GEITHNER: No. We're — we're absolutely committed to make sure that translates into what we said it would, which is for eligible Americans — they're getting permanent modifications that substantially lower their monthly payment. Now, Jake, remember like, you know, again for the average household that translates into hundreds and hundreds of dollars every month for them.

 

That is real benefits — great — has greater income for them to meet their basic needs. But again step back for a sec. In February and March of last year house prices were falling off the cliff. People thought house prices might fall another 20 — 30 percent. And we've had six months now of early signs of stability in house prices. So what that means is millions and millions of Americans — middle class families across the country are now seeing more stability, and what is a basic source of financial security for all Americans.

 

Those programs were enormously effective in helping again pull a housing market that was in near collapse back to the point now where you're seeing the signs of stability. Read the rest of this entry »

Representatives from 24 central banks and monetary authorities, including the US Federal Reserve and European Central Bank, landed in Sydney [Australia] to meet tomorrow [Feb 7th] at an undisclosed location. – Herald Sun¹ — UPDATE: here's a re-post of the story with an embedded video

The heavy stuff always happens under cover of something like Super-Weekend, eh?  But the blogosphere never sleeps   Thanks for pointing me at this one, twist, I'd completely missed it with my own focus on Iqualoit.

It isn't every day the BIS sends up a flare like this.  So the spectacle of G7 finance ministers contemplating the prospect of raw whale blubber on the frozen shores of Frobisher Bay was, after all, only theatre.

Turns out the real story was unfolding quietly on the other side of the world.  Perhaps the MSM finally starting to cover the Agency Debt problem a few days ago was the last straw, but it's safe to go along with the Herald Sun's narrative, which is basically that the "World" crisis (which we'd all half forgotten by now) was in truth a lot more serious than we thought at the time.

"This does feel like '08 and '07 all over again whereby we had these sorts of little fires pop up and they are supposedly contained but in reality they are not quite contained," said H3 Global Advisers chief executive Andrew Kaleel.

"Dubai should have been an isolated incident and now we are seeing issues with Greece, Portugal and Spain."

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Oh the irony.  The Mortgage Bankers Association just unloaded their headquarters- and boy were they upside down:

Like millions of American households, the Mortgage Bankers Association found itself stuck with real estate whose market value has plunged far below the amount it owed its lenders.

But the trade group for mortgage lenders is refusing to say exactly how it extracted itself from that predicament.

On Friday, CoStar Group Inc., a provider of commercial real estate data, announced that it had agreed to buy the MBA's 10-story headquarters building in Washington, D.C., for $41.3 million. The price is far below the $79 million the trade group says it paid for the glass-walled building in 2007, while it was still under construction. The price also is far below the $75 million financing that the MBA received from a group of banks led by PNC Financial Services Group Inc. to finance the purchase.

John Courson, chief executive officer of the trade group, declined in an interview Saturday to say whether the MBA would pay off the full loan amount. "We're not going to discuss the financing," he said. A spokeswoman for the MBA added that the MBA has reached "an agreement with all relevant parties" regarding the outstanding amount on that loan but declined to provide any details.

What were they thinking?  For one thing, here's their economic outlook from the Q1 2007 MBA data book:

While the outlook for the housing industry and the overall economy is still a bit cloudy (there are never any certainties in an assessment of the economic future), it still seems a good bet that a soft landing is achievable, and that is the judgment that has, and still does, underlie our forecast.

Apparently, like many Americans, they were a little too optimistic about the future of real estate.  They weren't counting on their property depreciating 48% in three years, or their own financial situation taking such a big hit.

In December the MBA's CEO John Courson was asked about the morality of walking away from a mortgage:

“It’s not for me to judge morality,” he says. “You probably have a legal obligation.” But, Mr. Courson says, defaults hurt neighborhoods by lowering property values and leaving homes abandoned and derelict. He says those considering a strategic default also should ask themselves this: “What about the message they will send to their family and their kids and their friends?”

So Mr. Courson, what is the message we should take away here?

UPDATE (John M): Take it away, Έλενα Παπαρίζου …

Instead of paying an estimated $2.5 million to $2.7 million per Super Bowl commercial, big brands are using social networking to connect with consumers — hoping to click in a more personal way. // "Social networking is the newest thing for marketers," says Vranica. "You've got 60 ads fighting for attention, so if you use social networking as a marketer and drum up some excitement, you'll have people specifically watching out for your commercial that night." – ABC¹

I wanted to be Sam Huff when I grew up.  Although we Ms lived in 02420 (still part of 02173 then) it was long enough ago that we counted as natural Giants fans.  Dad transferred his loyalties to the Pats even before amalgamation, but I never really did.

Did the kicker have some success as an announcer?  From hanging around grocery store checkouts there's some evidence that the utility guy's wife partnered for a while with a somebody Reagus on daytime TV.

There was another brief flurry of interest when Butkus was playing for the Bears.  A few years ago I picked up his auto-bio at the Salvation Army.  Weirdly, he mentioned the same play-sequence that I'd noticed when Page had dominated for about 5 minutes from right defensive end, of all things.

But I've completely lost track now.  There was something about Favre (Brent? Burt?) doing something unwholesome in the semis, so that means (I think) that one of the two teams isn't Green Bay, but that doesn't narrow it down very much.  I really haven't a clue who's playing tomorrow (it is tomorrow, isn't it?)

Seen a lot of stuff under Google Biz about the ads, though …

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I do believe your optimism accelerator is sticking …

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Jim Flaherty can serve seal heart to his buddies all day, and Greenpeace will never know

Plus, they'll all come back with the answer to that eternal riddle — What colour was the bear?

Astute Doomers will note that the south coast of Baffin Island is actually 2 degrees (C) warmer than Doom North this morning …

… and look where's the only place in the country above (well above ) freezing. That's what happens when you turn governance over to the Conservative-Reform Alliance Party …

UPDATE: I just can't shake the feeling that our government is simply playing an elaborate practical joke on the rest of the world.  This from a story in the Globe & Mail.¹

[Canadian Finance Minister] Mr. Flaherty spoke in front of a lit gas fireplace in a hotel nightspot with a white polar bear hide on the wall behind him. Above him, caribou antler chandeliers added to the image of an informal retreat setting that Mr. Flaherty has advocated.

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