Titanic
failure of American housing policy, house ownership rate hits 18-year low - (www.ochousingnews.com) The
goals of US government housing policy are to increase in resale value of houses
and maximize the home ownership rate. Buying a home is characterized as the
best investment a middle-class family can make, and home ownership has become
synonymous with the American Dream. During the early 00s, on the surface
conditions looked great. House prices were appreciating rapidly, mortgage
equity withdrawal was fueling an economic boom, subprime lending was providing
home ownership opportunities to everyone, and the American Dream was being
recognized by a record number of Americans. For government officials, this was
touted as the success of their policies. Critics of these policies were mocked
or widely ignored as the ravings of madmen. Yesterday, I detailed how Housing
subsidies are detrimental to America. Evidence of this epic failure is the collapse
in home prices and the resulting 7-year economic malaise caused by the
withdrawal of the HELOC abuse stimulus from the American economy. Now we can
show their failure was complete as the home ownership rate recently hit an
18-year low. American Dream Slipping as Homeownership at 18-Year Low: The U.S. homeownership rate, which soared to
a record high 69.2 percent in 2004, is back where it was two decades ago,
before the housing bubble inflated…. Like home prices, the home ownership rate
is only supposed to go up. Hitting an 18-year low is unprecedented and an
undeniable sign of failure by policy makers.
Eminent
Domain Battle Pits Homeowner Against Hospital – (www.bloomberg.com) Robert
and Patricia Castillo, a California couple who have already had their monthly
mortgage payments cut by almost 60 percent, want the city of Richmond to reduce
their debt by using its powers of eminent domain. That could be bad for
hospitals in Missouri.
The Castillos owe $436,500 on two loans on a three-bedroom home that’s now
worth about $125,000. The hospitals are members of a mutual insurer that’s
among investors in the Pimco High Yield Fund, which owns a slice of bonds
backed by loans including the Castillos’. Richmond Mayor Gayle McLaughlin said
“it’s our community that’s at stake here,” and the eminent domain plan is
needed to help her city stem its foreclosure crisis.
“There’s no way we’re going to back down on this” under threats from “Wall
Street lobbyists,” she said on a call this week with reporters. At least a
dozen cities, still dealing with the fallout of the housing bust,
are studying proposals to confiscate home loans and write them down to help
homeowners escape oversized debt burdens. Pacific Investment Management Co.,
which is known as Pimco and manages the world’s largest bond fund,
is among mortgage-securities investors organizing a coalition to take legal
action to oppose the push, according to three people with knowledge of the
discussions.
SAC
Capital CEO Steven Cohen Throws A Party Despite Indictment - (www.huffingtonpost.com) Hedge
fund billionaire Steven A. Cohen did not let the filing of criminal charges
against his $14 billion SAC Capital Advisors get in the way of a party this
weekend at his vacation estate in tony East Hampton, New York. The Saturday
night party at Cohen's 10-bedroom home on Further Lane took place two days
after federal prosecutors in New York announced a five-count criminal
indictment against SAC Capital that portrayed the 21-year-old Stamford,
Conn.-based fund as a breeding ground for unlawful insider trading. The lavish
affair, which one source said included delivery of $2,000 worth of tuna from a
local fish store to Cohen's home, was planned before the charges were filed. A
person familiar with the event said the party, attended by a few dozen people,
was intended by the 57-year-old manager to show support for ovarian cancer
research, though it was not a fundraiser.
Rajoy
Rejects Early Vote as Opposition Calls Him Liar - (www.bloomberg.com) Spanish
Prime Minister Mariano
Rajoy,
derided as a liar by the opposition leader, rebuffed calls that he resign as he
confronted corruption allegations in Parliament.Rajoy denied any wrongdoing and
said opposition leader Alfredo Perez Rubalcaba was jeopardizing Spain’s financial stability by slamming the
government over reports the governingPeople’s
Party operated
a slush fund for senior officials. “I made a mistake in continuing to trust
someone who we now know didn’t merit that,” Rajoy told the Spanish parliament
during an extraordinary debate in Madrid today. “I trusted him and I supported
him. That has been the sum total of my role.” Former party treasurer Luis
Barcenas told the National Court last month that he helped manage a secret fund
for 20 years. He named Rajoy among the officials who received payments and gave
the court handwritten ledgers. The scandal has helped wipe out Rajoy’s lead in
opinion polls and cast doubt over the government’s ability to see through its
economic reform program.
SEC Says Largest U.S. Hedge Funds’ Debt Tops $1
Trillion - (www.bloomberg.com) The
nation’s largest hedge funds had $1.47 trillion in net assets and more than $1
trillion in borrowings as of the fourth quarter, according to the first report
compiled on confidential data they provided to the U.S. Securities and Exchange
Commission. The SEC’s Division of Investment Management issued the report to Congress last week
using figures from money managers who run private funds with gross assets of at
least $150 million, including borrowed capital, and the agency broke out data
for the biggest firms. Congress ordered the SEC to collect information from
private-equity and hedge-fund managers under a provision of the 2010 Dodd-Frank
Act designed to help regulators monitor risk in the financial system.
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