Here is Housing Doom’s sixth installment of our unauthorized annotated transcript of the American Enterprise Institute’s October 30, 2008 seminar "The Deflating Mortgage and Housing Bubble, Part IV: Where Is the Bottom?" [1] This is the presentation by John Makin. He does not make use of a slide deck. Here is the official transcript. There is a video and an audio-only recording of the event at the event site. Highlights   "The supply of liquidity in the US is not growing because the multiplier is falling so fast, even though the Fed is injecting tons of money." "So in an…
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Bill Gross, the co-chief investment officer at Pimco who has persistently said Treasurys are overvalued, increased the holdings of U.S. government debt in the Pimco Total Return Fund to 28% of market value last month from 15% in February, according to the company’s Web site. In January, the weighted market value of Treasurys in the fund was negative 2%. Still, it is too early to judge whether the shift constitutes a new trend. … … In contrast, Gross cut holdings of mortgage-backed securities last month to 65% of market value, after lifting it to 86% in February, the highest since…
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It’s Friday, and according to our sys admin, John and I have gotten a little carried away.  I went to update the sidebar last night, and was given the following message: Fatal error:  Allowed memory size of 1342117728 bytes exhausted (tried to allocate 7680 bytes) Translation:  We’ve got way, way too many links! I spoke with our sys admin who said, "No one, NO ONE puts that many links on their site. You are hammering my server, please, have pity." [You only see the most recent 40 or so links, but they are all still there in our link library. Personally,…
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as quoted in BoingBoing … "Strovel: And we’re an A.P. affiliate for crying out loud! I stumped him on that one. . . . What is really shocking is that they were shocked that they’ve got a YouTube channel that people are embedding on their Websites. He seemed shocked by that. ‘Oh, I am going to have to look into that" is what he told me." [1] Thanks (and hugs) to Alice M for sending the link along. I believe the technical term for something like that is "own goal." In 1954-55, after a year away from Broadway, he rejoined…
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Last night Nouriel Roubini was interviewed on the general interest late-night CBC TV talk program The Hour.  The full video encounter is archived here (runs a bit over 10 minutes).  The following is the explanatory matter CBC put on the video site. About this Video Nouriel Roubini, AKA ‘Dr. Doom’, predicted our current credit crisis way back in 2005 and it’s not the first time. He also called the stock market crash of 1987. A lot of banks made a lot of bad loans, to people who shouldn’t have got them. When the housing market collapsed, those people missed payments…
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From this morning’s Wall Street Journal: Pulte Homes Inc. (PHM) will acquire Centex Corp. (CTX) in a $1.3 billion stock deal that the companies say would form the largest U.S. home builder, as the sector looks to stay afloat amid the still-worsening housing market. Home builders have been struggling to navigate the worst downturn in decades, made worse by rising unemployment and the financial crisis, which has weakened the availability of credit for would-be buyers and hurt consumer confidence. The combined company will be the largest U.S. home builder by market capitalization and volume. Pulte and Centex said Wednesday that…
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As we rebuild our economy, I do hope we keep in mind the value of openness, especially in industries that have rarely had it. Whether it’s in health care reform or energy innovation, the largest payoffs will come not from what the stimulus package pays for directly, but from the huge vistas we open up for others to explore. [1] Monday was the 40th anniversary of the internet. And the text above is from an Op-Ed in that day’s NYT, written by the author of R.F.C.1, the very first permanent record of its development. It was indeed an exercise in…
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In the days of Prohibition, gangs dealt in bootleg liquor.  In more recent years, it’s been drugs. In what is surely a sign of the times though, one gang decided to venture into a less traditional crime- mortgage fraud: [Hat tip T.M.!] Two dozen people have been charged with racketeering in a fraudulent mortgage scheme allegedly run by a street gang member, according to an indictment unsealed in San Diego federal court today. The group allegedly profited from loans arranged for amounts in excess of the price of the housing, among other tactics. The homes quickly went into foreclosure, according to the indictment. The alleged…
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Here on Doom, we’ve talked a lot about there being too many houses out there.   Houses aren’t the only excess commodity in the market, though.  There are too many apartments as well: [Thanks L!] NEW YORK (Reuters) – The vacancy rate for U.S. apartments hit a three-year high in the first quarter and asking rents dropped the most in at least 10 years as the number of excess apartments on the market ballooned, according to real estate research firm Reis Inc. And the figures are forecast to get even worse as more apartment buildings are expected to open this year,…
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Apparently, interest in the Treasury’s Public Private Investment Program (PPIP) has been lower than the Treasury anticipated.  They have now decided to relax their guidelines: WASHINGTON – As part of an ongoing effort to refine the guidelines and enhance the effectiveness of the Financial Stability Plan programs, the Treasury Department today released additional guidance for potential investors in the securities portion of the Public Private Investment Program (PPIP). The new guidance extends the deadline for application to the program and clarifies that participation criteria will be viewed holistically — failure to meet any one criterion will not necessarily disqualify a…
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The Associated Press and its member newspapers will take legal action against Web sites that use newspaper articles without legal permission, the group said on Monday … [1] Is this the beginning of the end?  In a lot of ways I’d rather be crafting poems about catch basins and studying Robert Fludd if the MSM is going to start shooting at us for feeding the sidebar. Thoughts?

If the PPIP passes in its current form, my wife and I are pulling the rip cord, liquidating all our assets and leaving the country post-haste. [1] Well, it did.[2] The US government has and will have an implicit and often explicit ongoing liability to guarantee US banks against runs, so just live with it. God’s in his Heaven – All’s right with the world! Right? Well old Bob knew corruption.  He knew that in times like these the worst stuff would be happening behind the topiary in the best homes in places like The Hamptons.  Among the nicest looking…
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Hat tip to Freedom’s Phoenix for this one:

Nowadays he supplies oysters to some of the best restaurants in Manhattan. But in his previous incarnation, Mr Osinski played a crucial, if inadvertent, role in stirring up the financial whirlwind that has battered the world. As the top computer programmer for the titans of Wall Street, he wrote the complex software that bundled home mortgages into bonds, making possible the subprime loans collapse that sparked the global meltdown. [1] It’s official, truth really is stranger than fiction.  And meanwhile the WSJ is confirming that this is indeed what destroyed the planet.[2]

I’m taking a rare break from my computer and leaving things in John and Igor’s capable hands.  I should be back Wednesday. Oh John, there’s a couple of extra cans of spam in the pantry if Igor gets hungry. See everyone later– twist