Items of Interest:
Home Prices Continued Their Decline in March -- Home sales may be up in many parts of the country but prices continue to scrape along the floor, raising fresh doubts about the recovery of a critical sector.
Prices in 20 major metropolitan areas dropped by 18.7 percent in March when compared with the same month a year ago, according to the Standard & Poor’s Case-Shiller Home Price Index that was released Tuesday. That was about the same as February and just shy of January’s record plunge of 19 percent.
“Foreclosures have picked up, and that seems to be pushing prices down,” said David M. Blitzer, chairman of S.& P.’s index committee. “The recession is really biting.” ...
Standard & Poors:
Nationally, Home Prices Began 2009 with Record Declines
Homes: Almost 20% cheaper -- The home price slide accelerated during the first three months of 2009, according to a report issued Tuesday...
The Big Picture:
Why a Housing Recovery Requires Lower Prices
More Job Losses = Greater Foreclosures
Housing Hitting Bottom Means Fewest Starts Since 1945 -- The slump in the U.S. housing market that caused the median value of homes to decline 24 percent since 2006 may bottom next month without any prospect of a rebound for another year, according to estimates from chief economists at Fannie Mae and Freddie Mac, the Mortgage Bankers Association and national realtors and homebuilder groups.
Existing home sales probably won’t reach pre-boom levels until the third quarter of 2010 and housing starts won’t surpass 1 million until 2011, a barrier last broken six decades ago, the economists said...
Job Losses Push Safer Mortgages to Foreclosure -- As job losses rise, growing numbers of American homeowners with once solid credit are falling behind on their mortgages, amplifying a wave of foreclosures.
In the latest phase of the nation’s real estate disaster, the locus of trouble has shifted from subprime loans — those extended to home buyers with troubled credit — to the far more numerous prime loans issued to those with decent financial histories...
Unemployment at 8 Percent Is the New Normal as Growth Slows -- Americans may have to get used to unemployment greater than 8 percent for the first time since 1983 and an economy that won’t grow much beyond 2 percent as a consequence of the lost confidence in consumer credit that shattered financial markets.
By this time next year, “the market will realize that potential growth for the U.S. is no longer 3 percent, but is 2 percent or under,” Mohamed El-Erian, chief executive officer of Pacific Investment Management Co., said in an interview with Bloomberg Radio.
“We are transitioning to what we call at Pimco a new normal,” El-Erian said...
Greenspan Says Banks Still Have a ‘Large’ Capital Requirement -- Former Federal Reserve Chairman Alan Greenspan signaled that the financial crisis has yet to end even as borrowing costs tumble, warning that U.S. banks must raise “large” amounts of money.
“There is still a very large unfunded capital requirement in the commercial banking system in the United States and that’s got to be funded,” Greenspan said...
Greenspan’s comments suggest he sees a bigger capital shortfall in the banking system than reflected in regulators’ stress tests on the 19 biggest U.S. lenders...
Conor Clarke / The Atlantic Business Channel: Why The Wall Street Journal Should Like Progressive Taxes
Felix Salmon: Revisiting WaMu — JP Morgan, having lopped $29.4 billion off …Calculated Risk: Revisiting the JPMorgan / WaMu AcquisitionJoe Weisenthal / Clusterstock: JPMorgan's $29 Billion WaMu Windfall Turns Up The Heat On Sheila BairRyan Avent / The Washington Independent: Recapturing Writedowns — Here's a fun accounting term to remember: accretable yield.
Nostalgianomics -- Liberal economists pine for days no liberal should want to revisit.
“The America I grew up in was a relatively equal middle-class society. Over the past generation, however, the country has returned to Gilded Age levels of inequality.” So sighs Paul Krugman, the Nobel Prize–winning Princeton economist and New York Times columnist, in his recent book The Conscience of a Liberal.
The sentiment is nothing new. Political progressives such as Krugman have been decrying increases in income inequality for many years now. But Krugman has added a novel twist...
- Two Cheers for Obama - Irwin Stelzer, The Weekly Standard
- Mr. President, Show Me the Stimulus Money - Irwin Kellner, MarketWatch
- China's Wants Out From Dollar Trap - Sebastian Mallaby, Washington Post
- China's Yuan: The Next Reserve Currency? - Steve LeVine, Business Week
- Moody’s Opens Pandora’s Box on AAA Debt - William Pesek, Bloomberg
- Fiscal Fear: Gone But Not Forgotten - Andy Busch, CNBC
- The Volatility Index Will Rise Again - Robert Engle, Financial Times
- Beware the Beijing Model of Capitalism - The Economist
- How Geithner Got His Groove Back - Mike Allen & Eamon Javers, Politico
- Jeff Bezos and Amazon's Next Revolution - Jeffrey O'Brien, Fortune
- 10 Contrarian Ideas for the Summer - John Lounsbury, TheStreet.com
- Why You're Not Beating the Stock Market - Scott Burns, MSN Money
- With Biofuels, It's a Lose-Lose Scenario - Ted Gayer, The American
- California's Crash Is Europe's Warning - Carl Mortished, Times of London
- The U.S.'s Governance Reform Must Not Be Ducked - Anne Simpson, FT
- Why Don't Board Members Do Better? - James Surowiecki, The New Yorker
- The Brave New World of Restricted Credit - Richard Epstein, Forbes
- Our Crumbling Economic Foundation - Bob Herbert, New York Times
- Business and the Supreme Court - Bernie Marcus, Wall Street Journal