http://wallstreetexaminer.com Be prepared. Stay ahead of the herd. Fri, 10 Feb 2012 21:00:31 +0000 en hourly 1 http://wordpress.org/?v=3.3.1 http://wallstreetexaminer.com/2012/01/31/the-trouble-with-case-shiller-again/ http://wallstreetexaminer.com/2012/01/31/the-trouble-with-case-shiller-again/#comments Tue, 31 Jan 2012 17:07:12 +0000 Lee Adler http://wallstreetexaminer.com/?p=71501 http://wallstreetexaminer.com/2012/01/31/the-trouble-with-case-shiller-again/feed/ 1 http://wallstreetexaminer.com/2012/01/29/obama-bluffs-on-refi/ http://wallstreetexaminer.com/2012/01/29/obama-bluffs-on-refi/#comments Sun, 29 Jan 2012 14:19:00 +0000 Bruce Krasting http://wallstreetexaminer.com/?guid=f90355f79246e8770060e1d8f3fa3ca1 http://wallstreetexaminer.com/2012/01/29/obama-bluffs-on-refi/feed/ 0 http://wallstreetexaminer.com/2012/01/20/spx-update-a-discussion-on-qe3-and-the-markets-potential-for-disappointment/ http://wallstreetexaminer.com/2012/01/20/spx-update-a-discussion-on-qe3-and-the-markets-potential-for-disappointment/#comments Fri, 20 Jan 2012 13:33:00 +0000 Pretzel Logic http://wallstreetexaminer.com/?guid=eeec53692d30d500d41f252aaf1f79dd http://wallstreetexaminer.com/2012/01/20/spx-update-a-discussion-on-qe3-and-the-markets-potential-for-disappointment/feed/ 0 http://forums.wallstreetexaminer.com/topic/1032702-canadas-housing-bubble-could-burst-this-year/ http://forums.wallstreetexaminer.com/topic/1032702-canadas-housing-bubble-could-burst-this-year/#comments Wed, 11 Jan 2012 18:09:01 +0000 Bears Chat at The Wall Street Examiner http://forums.wallstreetexaminer.com/topic/1032702-canadas-housing-bubble-could-burst-this-year/ http://wallstreetexaminer.com/2012/01/11/canadas-housing-bubble-could-burst-this-year/feed/ 0 http://forums.wallstreetexaminer.com/topic/1032345-fed-urges-entrapment-of-more-americans-with-mortgage-debt/ http://forums.wallstreetexaminer.com/topic/1032345-fed-urges-entrapment-of-more-americans-with-mortgage-debt/#comments Tue, 10 Jan 2012 12:43:34 +0000 Bears Chat at The Wall Street Examiner http://forums.wallstreetexaminer.com/topic/1032345-fed-urges-entrapment-of-more-americans-with-mortgage-debt/ http://wallstreetexaminer.com/2012/01/10/fed-urges-entrapment-of-more-americans-with-mortgage-debt/feed/ 0 http://wallstreetexaminer.com/2012/01/06/the-feds-sleazy-idea-of-transparency/ http://wallstreetexaminer.com/2012/01/06/the-feds-sleazy-idea-of-transparency/#comments Fri, 06 Jan 2012 22:22:55 +0000 The Implode-o-Meter Blog http://blog.ml-implode.com/?p=1585 http://wallstreetexaminer.com/2012/01/06/the-feds-sleazy-idea-of-transparency/feed/ 0 http://wallstreetexaminer.com/2011/12/13/out-of-answers-federal-reserve-can-only-offer-empty-rhetoric/ http://wallstreetexaminer.com/2011/12/13/out-of-answers-federal-reserve-can-only-offer-empty-rhetoric/#comments Tue, 13 Dec 2011 10:00:05 +0000 David Zeiler http://moneymorning.com/?p=60482
Indeed, with few options remaining, the Fed is expected to produce little more than a statement designed to reassure the markets following today's meeting.

"If the Fed were smart, they would use this meeting to take decisive action," said Money Morning Chief Investment Strategist Keith Fitz-Gerald. "Sadly, though, I think they'll lay low and issue yet more hollow statements filled with information that at this point constitutes less than fluff."

At this point, few bullets remain in the Fed's chamber; interest rates have been near-zero for almost three years, and two programs of "quantitative easing" over the past two years have pumped $2.3 trillion into the U.S. economy.

In an attempt to show it was doing something to help the economy, the central bank said last summer that it would maintain rates at that level until mid-2013.

And while the Federal Reserve is not expected to announce immediate plans for more quantitative easing - QE3 - many believe some sort of accommodation, probably directed at the housing market, is coming next year.

"There is a 75% chance the Fed will buy mortgage-backed securities in the first half of the year, possibly by January," Lou Crandall, chief economist at Wrightson ICAP LLC, told MarketWatch.

A series of relatively positive economic reports in recent weeks - unemployment recently dropped to 8.6%, while consumer spending and manufacturing have edged upward - has eased the pressure on the Fed to take any more action this year.

As part of its strategy to maintain optimism in the markets, the FOMC will likely promise to pump more money into the U.S. economy at some point next year.

"The numbers are getting better, but not enough to keep [the FOMC] complacent," Crandalltold MarketWatch.

Word Games

Recognizing that its options are limited, the Federal Reserve instead will focus today on the one thing it can provide in near-limitless supply - words. Today's meeting is expected to focus on a new communications strategy that will offer more details on the Fed's goals for inflation and unemployment - its dual mandate - and how it plans to meet them.

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]]> http://wallstreetexaminer.com/2011/12/13/out-of-answers-federal-reserve-can-only-offer-empty-rhetoric/feed/ 0 http://forums.wallstreetexaminer.com/topic/1017341-the-housing-market-is-still-in-a-depression/ http://forums.wallstreetexaminer.com/topic/1017341-the-housing-market-is-still-in-a-depression/#comments Wed, 16 Nov 2011 14:31:47 +0000 Bears Chat at The Wall Street Examiner http://forums.wallstreetexaminer.com/topic/1017341-the-housing-market-is-still-in-a-depression/ http://wallstreetexaminer.com/2011/11/16/the-housing-market-is-still-in-a-depression/feed/ 0 http://forums.wallstreetexaminer.com/topic/1016642-warren-buffett-on-cnbc-not-clear-europe-has-will-or-ability-to-resolve-crisis/ http://forums.wallstreetexaminer.com/topic/1016642-warren-buffett-on-cnbc-not-clear-europe-has-will-or-ability-to-resolve-crisis/#comments Mon, 14 Nov 2011 12:29:04 +0000 Bears Chat at The Wall Street Examiner http://forums.wallstreetexaminer.com/topic/1016642-warren-buffett-on-cnbc-not-clear-europe-has-will-or-ability-to-resolve-crisis/ http://wallstreetexaminer.com/2011/11/14/warren-buffett-on-cnbc-not-clear-europe-has-will-or-ability-to-resolve-crisis/feed/ 0 http://wallstreetexaminer.com/2011/11/14/mortgages-for-the-middle-rich-are-class-warfare-ammunition/ http://wallstreetexaminer.com/2011/11/14/mortgages-for-the-middle-rich-are-class-warfare-ammunition/#comments Mon, 14 Nov 2011 10:00:15 +0000 Shah Gilani http://moneymorning.com/?p=58469 the markets are broken.

Now I'm going to prove it.

Today I'm talking about the housing market. It's broken. The truth is Congress broke it. Of course, it had help from mortgage originators, banks, and a deliriously greedy public.

But now, amidst all the rhetoric about class warfare, wouldn't you know it, some congressmen want to further grease the wheels of an already slippery housing market for a class of homebuyers I call the "middle-rich."

It's just plain stupid. And not only will it add to our housing woes, it's ammunition for middle-class Americans, who rightly recognize they are the biggest losers in a class warfare battle they never imagined would undermine the American dream.

A Good Idea Gone Terribly Wrong

What's being debated in Congress is the maximum size of mortgages that Fannie Mae and Freddie Mac can guarantee.

The previous maximum mortgage eligible to be backed by the Government Sponsored Entities (GSEs) was $625,000. In the aftermath of the credit crisis and housing bust lobbyists easily got that maximum raised to $729,750.

The increased limit expired on September 30, 2011. But the usual lobbying forces - in this case that would be banks, mortgage originators, realtors, home builders and financial intermediaries that trade mortgage pools guaranteed by taxpayers - are pushing to extend the higher limit until at least the end of 2013.

It doesn't make sense for the government, or taxpayers, to guarantee mortgages at all. The whole scheme, which originated in the Great Depression and made good sense at that time, should have been phased out decades ago. Instead, it mushroomed.

The idea is simple enough. In order to drive money towards housing finance, the government establishes "conforming" criteria for mortgages. When mortgages conform they are believed to be of a certain standard and quality and can be packaged into mortgage-backed pools. The government guarantees the payment of principal and interest on those pools. Investors buy the pools because they are guaranteed, and the money they pay banks and originators for the mortgages in the pools goes back to originators and banks, which now have more money to make more loans to more homebuyers.

Taken at face value this isn't a bad idea. But as is so often the case with even the best ideas, there are unintended consequences. In the case of the government guaranteeing mortgages, there are plenty of very negative unintended consequences, like "moral hazard," for example.

That's why, after the horror of the Great Depression had passed, government guarantee programs should have been phased out, so that private markets could freely price the risk of originating and holding mortgages.

Unfortunately, that didn't happen. That's why we find ourselves in the situation we do today.

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