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Nouriel Roubini Confirms Double Dip In Housing
I noted last week that there is a double-dip in housing.
Today, Nouriel Roubini agreed:
The
country’s real estate problems are “underappreciated,” and banks could
face another $1 trillion in housing-related losses, Mr. Roubini said
in a phone interview with DealBook on Monday. At the same time, he
played down the issues in Ireland, Greece, Portugal and Spain, calling
the matter “contained” for now.
The United States “real estate market, for sure, is double dipping,”
Mr. Roubini said. “The apparent increase in prices has been fully
reversed, demand is falling, and supply is going to increase.”
As I've previously pointed out:
PhD economists John Hussman and Dean Baker
(and fund manager and financial writer Barry Ritholtz) say that the
only reason the government keeps giving billions to Fannie and
Freddie is that it is really a huge, ongoing, back-door bailout of the
big banks.
Many also accuse Obama's foreclosure relief programs as being backdoor bailouts for the banks. (See this, this and this).
The
failure to prosecute fraud and the stubborn drive to prop up the too
big to fail banks at all costs is what has prevented real action that
would have helped stabilize the housing market. See this, this, this, this, this, this, this, this and this.
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YAWN......
What's up with all this housing double dip and foreclosure talk? I guess I'll repeat myself until another crisis of the day pulls ZH off the housing topic.
There is nothing to see here. Banks will get richer, lawyers will get richer and those in default will eventually lose the house and become a section 8 dependent of the government.
There will be no one of any import that will get in trouble and we will all go to bed knowing we have been royally screwed.
Not a thing any of us can do about it. The Fed is a bank; they care only about banks. The banks own everyone in DC (and statehouses for that matter) and as such there is nothing the DC guys will do to hurt banks.
Get over it and move on to something that is not a foregone conclusion. It may be that the DOW wil not hit 36K; now that would be an interesting topic.
Roubini and Larry Summers (and Ritholtz)
first Roubini and Summers separated at birth:
http://online.wsj.com/public/resources/documents/disclosure-LSummers04032009.pdf
and then this clever piece by Mr. Wall Street himself Barry R. who appears to miss the partnership between Roubini and Summers in the aforementioned WhiteHouse disclosures:
http://www.roubini.com/us-monitor/256283/larry_summers__wrong_man_for_the_job
Roubini does what's good for Roubini, period!
the day a big bank has to take responsibility for its incompetent management and investment decisions is the days pigs fly and horses have feathers..
when the trillion usd losses become manifest, more accounting fraud will be dished up by fasb and congress to bail out the losers.
banking means never having to say you're wromg, sorry, stupid, or a terrorist....
Fundamental error not to nationalize these bankster pricks. At least their phony profits would have accrued to the US, their assets might finally be worth something in 2025 or so, and we could have cut their salaries and bonuses down to law partner size. Oh well...now we pay forever.
so much for the bernank and housing can't get much weaker hypothesis
Whoops! Forgot the new terms of the maintenance regime:
important, exception, community (which means the objective interrelation of important facts--this means that what is in FACT the better argument wins, with no discretion in the political system to choose the worse argument), scope, core.
i think what you are saying is that the courts work for money?
is that close?
PhD economists John Hussman and Dean Baker (and fund manager and financial writer Barry Ritholtz) say that the only reason the government keeps giving billions to Fannie and Freddie is that it is really a huge, ongoing, back-door bailout of the big banks.
Smoke this George and tell me if ya think this template has been broadened throughout the mega servicer arena to help with this back door funding. Makes me wonder what % of the feds MBS holdings are encumbered with this kind of impairment to cash flow...
Cheers
http://www.ft.com/cms/s/2/a6f6db88-7aee-11de-8c34-00144feabdc0.htmlWhat all you clowns fail to understand is that, through U.S. ownership of interests in banks (creating a Fifth Amendment Due Process right to a modification), and U.S. agreements with servicers (creating a third party right to a modification), the United States has raised the level of scrutiny for housing above Lindsey v. Normet minimum scrutiny. This is a revolution in America because it means the end of the West Coast Hotel v. Parrish/United States v. Carolene Products "scrutiny" regime (already announced in District of Columbia v. Heller and then just affirmed in McDonald v. Chicago).
It doesn't matter that the United States SAYS modifications are at the discretion of the Government, and it doesn't matter that the United States SAYS the payments should be 31% of income.
These new rights mean that persons fighting for a modification can demand that they pay no more than what is in FACT the minimization of the risk of housing loss.
You will see more attorneys using these arguments once they are better understood. Part of the problem is
1) there is an assumption that we are still in the scrutiny regime, and so, even if the U.S. has raised the level of scrutiny for housing, we don't know what that is: minimum scrutiny plus? intermediate scrutiny? strict scrutiny?
2) neither attorneys nor (as the appellant's brief points out in Heller 2 now before the District of Columbia Court of Appeals) the Courts know what the terms are of the new regime.
Well, here they are:
1. the following scrutiny regime terms are banished: scrutiny, minimum, intermediate, strict, fundamental, penumbral, discretion, deference, health and welfare.
2. the new regime is the "maintenance" regime, based on the idea that the Constitution does one thing ONLY: it maintains important facts. This is not as radical as it seems, since both West Coast Hotel AND--nota bene--Carolene Products EXPLICITLY use the concept of "maintenance."
What IS new is the test of an important fact. The prongs of the test come from West Virginia v. Barnette, but they had not yet been reduced to a step-test. Now they have been. An important fact is
1. a fact of human experience
2. which history demonstrates
3. is not affected by attempts to affect it.
In other words, the fact is robust and resilient in the face of assault. This is the test the Court used for Second Amendment facts in Heller.
The important point is that housing was subjected to this same test by the United States Government, passed it, and that is why the United States Government bought into banks and created servicing agreements.
The scrutiny regime had MANY opponents (particularly among conservatives). However, what had to happen was that the United States Government had to be caught in a contradiction: SAYING that the scrutiny regime--and the political system's power over the facts--was intact, but DOING something entirely different (buying stakes in banks and creating third party servicing agreements).
In short, in contradicting itself, the United States revealed that it ITSELf had raised the level of scrutiny for housing. This, in turn, created an entitlement in the general public, i.e., a new individually enforceable right.
An interesting case to read is the Judge's opinion refusing to dismiss in Huxtable v. Geithner (online), and Marques v. Wells Fargo (also online).
This is why the United States will feel free to proceed with bailouts in the amount of $70 trillion, because it is defending the new Constitutional regime, the maintenance regime.
Holy shit.
Well I ain't no lawyer, so most of that is fuckin' fancy-talk gobbedly-gook to me, but I went and read layman's summaries of the cases you reference and went back over this.
My addled interpretation of what you're saying goes something like this:
A person whose house is currently sitting at a "real" equity value which is lower than the mortgage principal, AND/OR whose mortgage is at an interest rate higher than the prevailing rate for similar mortgages, has a legally-recognized "right" to demand mortgage terms modification which bring the principal in-line with the current market value and/or the interest rate in-line with the existing mortgage market.
Is that about right?
If so, could this apply in reverse as well? Would a mortgage-holder, if he held a note for a house which had appreciated greatly in value or for which the interest rate was far below current effective market rate have any "right" to demand modification?
If so, we live in an absolute, complete totalitarian state.
Actually, either way we do.
Time to leave in droves.
You do realize that you can submit articles to ZH? This is probably worthy of such, especially if you can write to a non-lawyer audience.
You can also edit your posts up until someone replies. No need for a subsequent post correcting it, until someone replies.
Hate to be stupid, but I have never seen a ZH email address. . Ya see, my mother told me I stunk at finding things....
There's a box half way down on the right hand part of the front page that one could start with. Search the front page for the word "tips".
Roubini's been 80% right about this crisis, so there's a good chance this is a smart call -- it's true he missed the resilience of the BRICs, which runs much deeper than mere decoupling, but that's OK, that was a political misreading rather than a strictly economic call (i.e. noone realized just how powerful the developmental states had become).
Still, what worries me is that there's been so little real deleveraging in the US economy, thanks to the utterly half-assed and completely incompetent rule of Wall Street. You can't even call it a bailout, which implies actual resolution of the problem. What we got was a giant bail-in -- FASB was gutted, risk was socialized, bonuses privatized, and somewhere between $6 to $8 trillion of rotting assets (securitized paper spun off the bubble) are still lurking on the books.
Ironically, the US caught a break because of the Eurocrisis, which scared flight capital back to T-bills. But if the EU ever decides to issue eurobonds and either monetize or haircut its excess debt, then the US suddenly becomes the weakest link in the global credit chain at the exact moment the current account is blowing out. This could get massively ugly.
reminiscent of , is the, "ugly bank". the fed has become the ugly bank
of the world. full faith and credit of ......
no one. fiat paradise, a derivative hologram.
.
John Prine : Paradise (2010)
http://www.youtube.com/watch?v=bDCsc3CU5ww
.
Christmas in Prison - John Prine
http://www.youtube.com/watch?v=G28ApRNb-7U
"See this, this, this, this, this, this, this, this and this."
Dude... lay off the caffiene.
XLF-(S&P Financials) $15.18 = 61.8% bounce from 11/5 to last week's lows.
11/5 highs = 61.8% bounce from 4/15-7/1 lows. I'm just saying.
With ALL the money that The Fed is blowing into The Banks, how come their stocks are THE ONLY ONES not inflating???
Bonuses. :)
Watch the video and exlcusive interview of Infamous Washington Crook Ben Bernanke "Rare CBS Interview!! Ben Bernanke 100% Certain of Economic Recovery – Just like in 2007” at (http://www.youtube.com/watch?v=jtl_jHhNXWo).
by Anonymous
And that is a? spot on answer. Bendover and grab your ankles America.
Ben Dover? And his wife Ilene? You know them?
didn't he leave her for a Scotsman. Phillip McCavity, I think it was?
I'm really thissed off.
This dip will be painful.
Roubini bo bini...what a phucking hack. He lost all credibility when denigrating gold saying it had no intrinsic value unlike the dollar...insinuating that pretty pieces of colored paper printed as promises of professional liars had intrinsic value...what a dick.
bingo. Roubini may have gotten some things correct and perhaps this one as well, however he is part and parcel of the circular firing squad of 'economists' who's purpose is to put forth 'professional opinions' in service of the paper money gods.
Yes i was a subscriber of his for a couple of months till i found him being very Keynesian economics in EU then i had to throw in the towel lol but he does gets somethings right
The Bernanke Put will put a smack down to any stock double dip.
Who called Ben a Two Pump Chump? Better step back Homie!
Flaccid day in the markets today but JPM is up again. If the indexes break out to the upside, it's on - stampede time, one last mad rush across the prairie, led by the BLACKHAWK, to the edge of the cliff!
g,
you are right. ben lives in a world, his public mind, where there is no fraud
and everyone knows that is nowhere. he just sounds naive and silly.
another thing roubini nailed, months ago, is the agreement between dems and repubs
to spend and not pay for anything, tax cut continuation and unemployment
extension. i guess total irresponsible financial policy cannot be divorced
from fiat fractional reserve lending as it exists (in its present form).
i think roubini said this would cause the double dip (continued depression).
Neil Young - Everybody Knows This is Nowhere
http://www.youtube.com/watch?v=pesIGuV9DDk&feature=related
very nice piece of surgical, blindman............
And if you are not already pissed off beyond the capacity of your blood pressure medication's ability to keep containment of your vessels, wait until they attempt to use these stupid zombie banks yet again to move this market.
It looks to me that the commodities related shares cannot move much more...obviously over extended. Retailers...Black Friday pump on in full...oil...ridiculous. Nope, the market knows it needs the banks to move the ponzi scheme further.
Watch for it. They will sell down the commodities and pump the banks with the prodeeds. This, instead of actually arresting folks for systemic fraud.
We've been watching for it. For months. The fact that you're still gunning for a crash means you could still give up and go long........ more "money on the sidelines", lol.
If Nouriel did research on the 90210, then he knows we gots problems........like more and more 7-figure writedowns coming right up. Really big home of genius in Beverly Hills.
www.doctorhousingbubble.com
Thanks for the link! I live in Newport Coast, which is referred to as last week's big home genius. Thankfully I have never leveraged up my place as an ATM machine and bought all the way back in 1994. I always wondered where all the money came from for all the AMGs and other exotics that run around this place. Not to mention all of the silicon, botox and latest fashion that one sees in the grocery store. This could get exciting as these Alt-As and ARMs blow up. Must be all those PIMCO financial engineers that thought leverage was the way to go?
If I were a banker/servicer swallowing mucho "walking dead" losses I'd try to digest the smaller carcasses for sure. But, alas, the gimmick financing buffet is now open........line closes 2013 !!
Anecdotal only: have read that most banks have in fact "written off" damn little of anything, let alone the McMansions. Even those actually forclosed listed in some black hole catagory. Ergo: a shit-load of $ "value" not even in the equation yet - somebody have some stats/facts?
90210 ... Hey, I live there ... don't tread on me. I've seen 7 figures that I'd like to take down, but writedowns ... no way. The banks take all the hit, so my neighbors only live in paradise for free.
One very key thing which is missing is that Roubini declared, about a year ago IIRC, that there was not going to be a double dip. Now, perhaps he was just talking about the economy, I don't recall. But it is suggestive of housing as well.
I know of at least two people personally who got suckered by the housing tax credit con-job, and used some of the numbers as proof that we were at the bottom. And opinions like Roubini's were also suggestive.
One year later, and people are down more than 8% in housing. Plus the fools who bought in April missed out on getting the subsequent lower rates (since one has to wait 6 months in order to refi).
Ah well. Thanks, Nouriel, for finally stating the obvious now.
I believe I have been quite consistent in my proclamations since 2006, and more accurate than most.
The 3rd Quarter in Review, and More Importantly How the Shadow Inventory System in the US is Disguising the Equivalent of a Dozen Ambac Bankruptcies!Wednesday, November 10th, 2010
Banks, Monolines, and Ratings Agencies As The Three Card Monte (Wall)Street Hustlers! Its a Sucker’s Bet, Who’s Going to Fall for it in QE2?Tuesday, November 9th, 2010
As Earnings Season is Here, I Reiterate My Warning That Big Banks Will Pay for Optimism Driven Reduction of ReservesTuesday, October 12th, 2010
The Robo-Signing Mess Is Just the Tip of the Iceberg, Mortgage Putbacks Will Be the Harbinger of the Collapse of Big Banks that Will Dwarf 2008!Tuesday, October 12th, 2010
The Truth Goes Viral, Pt 1: Housing Prices, Economic Sales and the State of DepressionTuesday, October 5th, 2010
Reggie
Thanks for your brilliance and your integrity.
Reggie, what is your take on the direction of markets and sectors with the proposed Tax Break, 2% payroll tax reduction "holiday" and the Extension of UE benefits for aone Trillion dollars over 2 years.
What effect long term and effect on consurmers and housing?
Heh. Hi Reggie. Good to see you. Yes, you came to mind while I was writing that.
So Roubini's a new client, I take it? :)
Who knew the Founding Fathers' had it exactly right!
+1000
Gov't announces $12B profit on Citigroup http://finance.yahoo.com/news/Govt-announces-12B-profit-on-apf-775287489...
The Treasury Department said that a final offering of about 2.4 billion shares of Citigroup Inc. common stock had been priced at $4.35 per share. With the proceeds of the sale, the government will have realized $57 billion on its bailout package for the big bank. Citigroup received $45 billion in taxpayer support late in 2008 in one of the largest bank rescues as the government struggled to contain the worst financial crisis to hit the country since the 1930s.
Washington’s Blog - Dec 5 Posting: The big banks claim that they have paid back all of the bailout money they received, and that the taxpayers have actually made money on the bailouts. However, as Barry Ritholtz notes: Pro Publica has been maintaining a list of bailout recipients, updating the amount lent versus what was repaid.
So far, 938 Recipients have had $607,822,512,238 dollars committed to them, with $553,918,968,267 disbursed. Of that $554b disbursed, less than half — $220,782,546,084 — has been returned.
Whenever you hear pronunciations of how much money the TARP is making, check back and look at this list. It shows the TARP is deeply underwater.