Here’s a good article he wrote for this month’s Atlantic on bubbles, real estate and otherwise.
Daily Archives: December 2, 2008
‘You should never have made those loans groups like us pressured you to make!’The National Community Reinvestment Coalition, a “community-based organization,” is suing Wall Street ratings services for approving bonds backed by home loans to African American and Latino home purchasers with “insufficient borrower income levels.”
The firms “knew or should have known” that subprime loans disproportionately were marketed to minority consumers — a process known as “reverse redlining” — and that those borrowers would ultimately default and go into foreclosure at high rates, according to the coalition’s complaint.
Hmmm. Didn’t community-based organizations push for exactly this sort of reverse-redlining?I think they did. It’s one thing to argue that they maybe weren’t the major cause of the subprime meltdown. It’s another for them to pose as victims wronged by the very system they worked hard to set up (including the securitization that enabled banks to keep up “reverse redlining”). …
Carl Ichan says it is. This NYT blog seems to sympathise with the financier’s argument but the courts have yet to rule.
According to Henry Blodgett, the S&P 500 is back to its historical norm and it’s now safe to go back in the water. You can see the chart he uses to defend this thesis here. I know next to nothing about charts or the stock market but looking at these numbers, it seems to me that the market hit the same norm in 1970 and then dropped below it and stayed below it until 1990, when it came back up. That’s a long time to hold your breath.
This developer writing for the Huffington Post thinks not. I’d feel better about his optimism if the reasons he gives to support his confidence weren’t contradicted by what I’ve witnessed here in Greenwich. He says, for instance, that commercial real estate deals are governed by numbers, not emotion: if a deal isn’t profitable, it isn’t done. I know of one developer in town who consistently outbid its competitors by 2:1. The losing bidders couldn’t figure out what set of numbers the developer was using and as these deals shut down one-by-one like so many birthday candles, it seems that the numbers were irrelevant: management fees (and banking fees for the lenders) were.
Personal recourse: the author says that, unlike single family homes, borrowers can’t walk away from loans go bad. Well, the reason that mortgages for primary residences carried lower interest rates than those for second homes is that “nobody defaults on his family’s house”. That proved wrong and I think Donald Trump is about to demonstrate the error of that thinking in his failed Chicago tower project.
And so on. Anyway, feel free to hit the link and decide for yourself.
NPR has a good summary of how we’ve wasted billions of dollars on”Homeland Security” and, maybe, how to start again.No news here to anyone who’s watched gray-haired old ladies in wheel chairs being strip-searched by federal security agents at Kennedy, but heck – the Obama crowd listens to NPR – maybe they’ll listen to this.
[A]dvice for the incoming administration? “I would say worry about the greatest threat to homeland security, and that’s the U.S. Congress,” he [Carafano] says.
Funding For Homeland Security
More than a hundred committees and subcommittees have some piece of the Homeland Security pie.
Carafano says that has led to lots of pork barrel spending and mandates that the fledgling agency change direction to respond to the crisis du jour — immigration or hurricanes or the threat of a biological attack. He says it has also meant repeated efforts to reorganize the new department before it has had a chance to make the current structure work.
“All Congress wants to do is to fixate on the Department of Homeland Security and pretend like it’s a little rat trapped in the corner that it can just poke with a stick and watch it jump up and down,” he says.