2012 January 13 | timiacono.com

Bulk REO Sales a Hot New Topic in 2012

The idea of selling foreclosed properties in bulk seems to be gaining lots of interest in both New York and Washington, at least  according to this story at CNBC, and Rick Sharga (formerly of Realty Trac, but now venturing out on his own) talks about how he has a half billion dollars in investor money looking for a good deal.

It’s hard not to conclude that any new efforts to aid the nation’s housing market this year will be about as successful as the ones already taken since the housing bubble burst a half-decade ago, but that probably won’t stop them from trying.

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Sorry, but after downloading the transcript(.pdf) for the January 31st, 2006 FOMC meeting with the intention of looking at all the praise heaped on Alan Greenspan on his last day as Fed Chairman in order to relay selected misguided quotes in this post, the 78 page length of the document proved too daunting, especially after all the joking around in the beginning of the document at a time that the central bank could actually have done something to prevent or mitigate the financial market disaster that followed a few years later.

Instead, relying on the many poor souls in the financial media who had to slog through transcripts for all eight meeting that year, we find that Treasury Secretary Tim Geithner (New York Fed President at the time) appears to have been the most misguided as to the legacy of the outgoing Fed chief when he noted:

I’d like the record to show that I think you’re pretty terrific, too. [Laughter] And thinking in terms of probabilities, I think the risk that we decide in the future that you’re even better than we think is higher than the alternative. [Laughter]

Surely you can understand better now…

More confirmation of the Peter Principle and that economists are particularly ill-suited to run an economy were provided in this assessment of the Greenspan tenure at the Fed by San Francisco Fed President Janet Yellen who, since, has been promoted to Fed Vice Chair:

Needless to say, it’s fitting for Chairman Greenspan to leave office with the economy in such solid shape. And if I might torture a simile, I would say, Mr. Chairman, that the situation you’re handing off to your successor is a lot like a tennis racquet with a gigantic sweet spot. [Laughter]

Again with the laughter.

(more…)

Federal Reserve Blissfully Unaware in 2006

The intertubes were abuzz yesterday after the release of the Federal Reserve’s 2006 policy committee meeting minutes in which it seems the central bank was blissfully unaware of the trouble ahead for housing and credit markets, a point nicely illustrated below from the Wall Street Journal’s Little Alarm Shown at Fed At Dawn of Housing Bust($).

“So far we are seeing, at worst, an orderly decline in the housing market,” he said.

Mr. Bernanke predicted a “soft landing” for the economy as 2006 ended, not a housing bust that would trigger the worst financial crisis since the Great Depression.

Timothy Geithner, then president of the New York Fed and now Treasury Secretary, playfully offered this forecast about Mr. Greenspan’s legacy: “I think the risk that we decide in the future that you’re even better than we think is higher than the alternative.”

Amazing stuff (no, not really)… For those still playing catch-up on this, some more links:

FOMC: Transcripts and Other Historical Materials, 2006 – Federal Reserve
Inside the Fed in 2006: A Coming Crisis, and Banter – NY Times
Fed 2006 Transcript: Riding Housing Roller Coaster With Eyes Shut – WSJ
Fed’s image tarnished by newly released documents – Washington Post
Richard Fisher Compares the Housing Bubble to Brad Pitt’s Baby – WSJ
On bank self-regulation and other Greenspan fairy tales – Credit Writedowns
The Fed’s Undistinguished Macro Discussions Circa Jan 2006 – Capital Spectator
Comments from FOMC meetings which resulted in laughter – Economist
So This Central Banker Walks Into a Bar…. – Crossing Wall Street
The Federal Reserve Is…Gasp…Funny – NetNet

Friday (the 13th) Morning Links

MUST READS
Italy bond auction fails to match Spanish success – Reuters
Draghi: Crisis Strategy Working, ‘Armageddon’ Postponed – Bloomberg
ECB sees “substantial” effect from cheap money – Reuters
Obama requests $1.2T increase in debt ceiling – Fox News
Inside the Fed in 2006: A Coming Crisis, and Banter – NY Times
Fed 2006 Transcript: Riding Housing Roller Coaster With Eyes Shut – WSJ
Fed’s image tarnished by newly released documents – Washington Post
Bank of America mulls trimming ops in U.S.: WSJ – MarketWatch
Budget Cuts Hamper the IRS in Efforts to Collect Billions – NY Times
GOP Rivals: Drop “One Percent, Trumpet “Negative Four Percent” – aucontrarian
Is This What President Obama’s ‘Change’ Looks Like? – Sense on Cents
Election 2012: How rich are these guys? – CNN/Money

MARKETS/INVESTING
Crude slips below $99 on Iran embargo delays – AP
Gold eases as euro dips, heads for weekly gain – Reuters
Why, At 28, I’m Going With Dividends – Seeking Alpha
Goldman: Increasing Risk of Rising Oil Prices – BusinessWeek
China Gold Hoarding Turns Traders Most Bullish in Two Months – Bloomberg
Is it the People’s Bank of China that is doing all the gold buying? – Mineweb
Gold’s Recent Move Down And Up Displays Classic Technical Pattern – HAI
Are China’s gold imports reaching panic proportions? – Mineweb
Silver Coin Sales May Signal Bear-Market End – BusinessWeek
Why gold may be losing its glitter – MarketWatch

ECONOMY/WORLD/HOUSING/BANKING
Austrian Economics Hits the Headlines – The Freeman
An Upside-Down Recovery Goes Back to Square One – Bloomberg
The recovery and the election: That 2004 feeling – Economist
China reports unusual decline in foreign reserves – AP
China: Inflation and Exchange Rate Watch – EconBrowser
World from Berlin: German Economic Success ‘On Shaky Ground’ – Spiegel
Hungarian Bonds Drop as IMF Demands ‘Tangible Steps’ on Debt – Bloomberg
Greek Euro Exit Weighed By German Lawmakers, Seen as Manageable – BusinessWeek
Bulk Foreclosure Sales Could Cause Bigger Bank Write-Downs – CNBC
Ex-Doomsayer: ‘It’s a great time to buy a home’ – O.C. Register
On bank self-regulation and other Greenspan fairy tales – Credit Writedowns
The Fed’s Undistinguished Macro Discussions Circa Jan 2006 – Capital Spectator

 
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