Maybe the whole state of California isn’t going into default, but it’s starting to feel like it: [Thanks L!] About 1 in 10 Californians with a home loan is now in default, and there’s growing evidence that the mortgage meltdown is spreading to commercial real estate. The home mortgage delinquency rate — the percentage of borrowers who have missed several payments and are in the first stage of foreclosure — climbed in June to 9.5% in California and 9.9% in Los Angeles County, according to First American CoreLogic. The staggering number of home mortgage defaults probably will lead to large…
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To those who would claim the First-Time Homebuyer Credit without qualifying for it, beware: [Thanks T.M.!] WASHINGTON — The Internal Revenue Service today announced its first successful prosecution related to fraud involving the first-time homebuyer credit and warned taxpayers to beware of this type of scheme. On Thursday July 23, 2009, a Jacksonville, Fla.-tax preparer, James Otto Price III, pled guilty to falsely claiming the first-time homebuyer credit on a client’s federal tax return. Price faces the possibility of up to three years in jail, a fine of as much as $250,000, or both. To date, the IRS has executed…
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Foreign central bank holdings of Treasury Debt nudged past $2 trillion for the first time ever, but those buyers of US obligations mostly sat on their hands last week. This week’s Reuters report [1] chalked up just a $3.473 billion rise in total holdings, with both numbers improving slightly. The report was, as usual, based on the weekly update from the NY Fed’s H.4.1 table site.[2] Here is Doom’s updated CSV version of the agencies and treasuries foreign central bank holdings data set.[3] Treasuries rose $4.289 billion, not much better than last week. With massive supply of T-bills coming down…
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While the MSM is for the most part pretending that the crisis in real estate is over, we are really only starting to see the bigger problems in commercial real estate- and it sounds like the government is worried:  [Hat tip Freedom's Phoenix] Last week a story which gained very little traction hit the financial newswires.  The U.S. Treasury is working on an internal project informally called “Plan C” which seeks to deal with further problems in the economy before they occur.  The anonymous report came out stating the administration is reluctant to commit any additional money especially to the…
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The recent allegations of trade secret theft and trafficking against former Goldman Sachs programmer Sergey Aleynikov raise important questions of corporate security and policy to handle a new generation of attempted economic disruption. According to a deposition given by FBI Agent Michael McSwain, Aleynikov, a former programmer at Goldman Sachs, is purported to have uploaded proprietary trading code from Goldman Sachs’ offices in New York to a server located in Germany. [1] Regardless of the outcome of the Goldman case, such a potential leak has wider implications for the future of corporate and national security. It is doubtful this was…
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  Have you wondered where the TARP funds have gone?  Here’s one answer: [Hat tip Freedom's Phoenix and Cryptogon]

We’ve tallked about people being hurt by rising foreclosures and even pets, but there’s another population that’s being hurt by a declining housing market- horses are hurting too. That’s putting a real strain on horse rescue groups.  According to today’s Austin Statesman: Area horse rescue groups are reporting a growing number of neglected and abandoned horses in Central Texas, a troubling trend fed by the twin ravages of recession and drought. "It’s frightening," said Jennifer Williams, president of Bluebonnet. "If people have lost their jobs or are having trouble making ends meet, sometimes they are put in an impossible position."…
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The other key ingredient to the success of any HFT platform is low network latency. The platforms are greatly helped in this regard by the fact that many exchanges will let HFT platforms pay to co-locate their servers with those of the exchange itself, so that the HFT platform can get its order in ahead of the competition. Critics contend that such co-location deals provide avenues for potential front-running of orders, in which an HFT platform gets an advance peek at an incoming order that will move a stock’s price in a specific direction, and then uses that knowledge to…
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Housing Doom Word 4 the Day: ingenuous Reuters this morning.[1] A Goldman spokesman just emailed me a quick statement, trying to downplay the firm’s involvement in HFT. The spokesman notes that “even using the broadest definition, high frequency shares trading accounted for less than 1% of Goldman Sachs’ total revenue in the first half of 2009.” The spokesman goes on to note that Goldman’s proprietary trading HFT desk does not receive so-called “flash quotes” from stock exchanges. A flash quote is a controversial practice in which an exchange allows some hyperactive HFT desks to get a sneak peak of other…
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But the impact of the change is much larger. It makes some homeowners in foreclosure liable for the difference between their mortgage and what their lender can recoup from reselling the house. In the current housing market, the difference is generally more than $100,000 on the typical Valley foreclosure. [1] Twist and I have made something like a career out of harassing the Arizona real estate industry and the Arizona Republic’s Catherine Reagor in particular, but I don’t see too much separation between us on this one. [Update 7/27: however, see comment #4 below — thanks again to Ms Reagor…
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. . . . . .       What                Duhigg’s                      chart                  was telling us           is                           that Serge’s                                                          tarball                                    (inadvertently)                              threatened              to illuminate                the                                                                          churning                                                                 high-                                                 frequency                             flash trading              colocated                                          liquidity                              providers      stocking                                                             exchanges                                                                                     with nanopiraña                 nibbling                            bips                                   from naked                                                   thighs                                                             of pensioners                            turning      microseconds        …
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Back when the "swine flu" was just starting to threaten us in Texas and Nova Scotia, Doom posted a curious little article (April 24, 2009) that received a surprisingly large readership.  After some H1N1 web resources were added to the post in early May it became very popular, and has now seen over 14,000 unique visitors in just 3 months. The story continues to be important as the public health challenge formerly known as "swine flu" has evolved into a level 6 global pandemic, and that old post has once again been renovated and now rebranded as Housing Doom blog’s…
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In high-frequency trading, computers buy and sell stocks lightning fast. Some marketplaces, like Nasdaq, often offer such traders a peek at orders for 30 milliseconds — 0.03 seconds — before they are shown to everyone else. This allows traders to profit by very quickly trading shares they know will soon be in high demand. Each trade earns pennies, sometimes millions of times a day. [1] Charles Duhigg’s killer graphic at [1] is a must-see.  It blows this story, which a lot of powerful figures have been trying to keep quiet, wide open. MoJo [2] has picked up the tale, contributing…
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Bond buyers basking by beach as bank bulge build below billion!! Sometimes it’s just a bit harder to make H.4.1 sound exciting; however … This week’s Reuters report [1] documented a very sharp drop in central banks’ growth in Treasury Debt holdings, now just south of $2 trillion. Meanwhile, their purging of Agency Debt holdings continued inexorably, but at a still slower pace than last week. The report was, as usual, based on the weekly update from the NY Fed’s H.4.1 table site.[2] Here is Doom’s updated CSV version of the agencies and treasuries foreign central bank holdings data set.[3]…
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It’s Friday, and a euphoric stock market closed up 188 yesterday, in part because of the excitement of a "rebounding" housing market. Their optimism was misplaced.  Lawrence Yun chief economist of the National Association of Realtors said: The increase in existing-home sales occurred in all major regions of the country,” he said. “We expect a gradual uptrend in sales to continue due to tax credit incentives and historically high affordability conditions.  Here’s a picture of what the "increase" in home sales looked like: Yes, once more the NAR and the markets are focused on seasonal variability rather than the more…
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