Doom recycles I’m blaming Crispy for this one.  Here’s an extract from his recent post "Stop paying your mortgage?"  Why should [anybody] pay their mortgage now? Why not just ask your lender for a reduction in the balance due or threaten them to walk away? What if ten million home-debtors did it, then what are they going to do? Why should only the most reckless financially among us get a bailout? … Leaving aside the possibility we’re all about to be sentenced to relearning "The Little Red Hen" and "The Ant and the Grasshopper," Here’s what one of Wall Street’s…
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"Our inaction did not hamper credit markets — it helped to destroy them." – Former FASB Board Member Last week the testimony by FHFA chief Jim Lockhart, and the immediate correction that went up on the regulator’s web site, did much to clarify the status of the government guarantee on Agency Debt (now officially "effective"). This week a Bloomberg story [1] gives us invaluable insight into how accounting rules contributed to the present disaster. Accounting rule SFAS 140 and the QSPE off-balance-sheet deals they govern are supposed to constitute a risk management package. For years I had suspected that there…
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It’s Friday, and I’ve been impressed with the novel approach to home loans expressed by former Treasury secretary, Paul O’Neil:  [Thanks L!]   WASHINGTON, D.C – Former treasury secretary, Paul O’Neill said that congress should scrap plans for a new economic stimulus package and instead simply require mortgage lenders to only make loans for people with a 20% or higher down payment. On Tuesday, O’Neill addressed reports and indicated that he was not surprised that neither presidential candidate supported his position. O[Neill had this to say about the $700 billion dollar bailout:

Herbie Goes Bananas indeed! Telegraph’s Gordon Rayner tells the sad story [1] of how the world’s hedge funds piled into a naked short play on VW stock and, starting last Sunday afternoon, got given given their heads in their hands to play with to the tune of almost $40 billion. Here are a few choice quotes from the article (well worth reading the whole thing!) "I liked the whole fear factor," [Cohen] said … The biters have been well and truly bitten, and in a week full of ironies it was Porsche, manufacturer of the hedge fund managers’ transport of…
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"That should take about four phone calls and three email messages to get going! (Are you reading this Barney. Chris, and Chuck??)" Doom friend Bill Maloni has recently posted an article on the upcoming election, but this hasn’t stopped him from dealing with a housing related issue in part of his piece. We’ve abstracted the relevant bits and present them here for your enjoyment. It seems to me that Secretary Paulson is working to have his old peers from the investment banking world and enterprises like bond companies take the lead in the big bailout. Bill’s simple observation is that…
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Doom friend One Salient Oversight is a world away from MISH in all senses.  Just sit back with something hot and have a look at the view from tomorrow.   A Deflationless Depression? by OSO Logic can be a bad weapon when the equation isn’t finished. Think back to the Great Depression. Long lines of unemployment, years of economic contraction, suffering, etc. One big thing that happened during that period was deflation – a continual falling of prices. Goods and services dropped in value on a daily basis. The problem was chronic, and policy makers at the time either didn’t…
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"It should be obvious to anyone that we are approaching the apogee of the Treasury bubble, with the credit bubble having broken already."   The lead quote is taken from Jesse’s Café Américain and a recent post there that we are taking the liberty of reproducing below in its entirety. Doomers will appreciate Jesse’s further thoughts on the divergence of our chart’s yellow and red lines. In 2009 the US Will Be Forced to Selectively Default and Devalue Its Debt Jessie   We have seen estimates that next year the US will have to finance a $2 Trillion annual deficit….
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The tidal wave of foreclosures seems to be unstoppable.  According to CNBC this morning: [Thanks L!] Foreclosures—a multi-stage process that begins with a homeowner falling behind in their mortgage payments and can end with them losing their home—soared 71 percent in the third quarter, to an average of more than 8,500 homes a day. There’s been a lot of press about government programs to encourage workouts, but there’s a couple of problems.  One- it’s more difficult for the banks than many people think and two- workouts don’t seem to be working: Why is this happening—especially when the last thing most…
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Foreclosure brings out different reactions from different people.  Some people walk before the "notice of foreclosure" ever shows up.  Others chain themselves to their house and refuse to go: Embedded video from CNN Video

L told me this morning that the rumor mill had it that Brown Family Communities, a Tempe-based homebuilder had closed their doors. I just found the story from the East Valley Tribune:  [Thanks L!] Citing the toughest lending environment he has seen in his 33 years in the homebuilding business, Dave Brown said Monday he has closed his Tempe-based company, Brown Family Communities. "The banks have called in all my loans," he said, adding that after paying off most of his bills, "I’ve been left with nothing." Brown said he has laid off about 55 employees. He also said he…
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Many people have dealt with rising healthcare costs by borrowing against their home.  Now that’s gotten tougher, and so is paying the medical bills. [Thanks L!] TUESDAY, Oct. 28 (HealthDay News) –Since 1999, Keith and Deborah Krinsky of Magalia, Calif., have seen their health insurance deductible soar from $1,000 to $10,000. And their health-care costs have put them in a financial hole. A combination of Keith’s chronic asthma and potential heart problems, Deborah’s connective tissue disorder and fallen arches, and their kids’ various scrapes and stumbles led them to amass a pile of credit card debt and forced them to…
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I guess we should have a good dose of nonsense first thing in the morning so we can get it over with.  From presidential hopeful John McCain this morning: Republican presidential candidate John McCain told CNBC that the government’s top priority in the financial crisis should be on buying bad mortgages to keep Americans in their homes. "The administration is not doing what I think they should do, and that’s go in and buy out these bad mortgages, give people mortgages they can afford, stabilize home values and start them back up again," McCain said in a live interview with…
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New homes sales were down 33% year-over-year, but that was a detail that was barely worth mentioning by the press when discussing yesterday’s New Home Sales Report by the Commerce Department: WASHINGTON (AP) — Sales of new homes recorded an unexpected increase in September as median home prices dropped to the lowest level in four years, the Commerce Department reported Monday. Sales of new single-family homes rose by 2.7 percent last month to a seasonally adjusted annual rate of 464,000 homes, Commerce said. Economists had expected sales would drop from the August level. The median price of a new home…
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Housing Doom introduces … Ken Griffin Housing Doom: We haven’t seen you around much lately.  Why the high profile all of a sudden? Ken Griffin:  I’m really passionate about our new product line. HD: Does it deal with volatility well? KG: We’re specialists — we thrive on the ups and downs. HD: What about your hedging strategy? KG: I get up close and personal with our hedges on a daily basis. HD: Please tell us about your risk management. KG: We always know just when to bail.  Our products come highly recommended by RopeWays.Net HD: But what about the present…
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Some time ago Amy Hoak, perhaps the MSM’s most unreflective RE journalist, reported one of the classic quotes from the peak of the housing bubble: "The downside of real estate is better than the downside on just about anything else." Now Eric M passes along a story [1] that suggests a strong upside to the cargo imbalances that have now become World Depression II’s collapse in international trade volumes Atlanta’s Eco Home guy has something for everyone, even the Twists’ chickens!