Items of Interest:
'Son of Subprime' Strikes
Kevin G. Hall / McClatchy Washington Bureau:
Worse than subprime? Other mortgages imploding slowly -- Call it son of subprime. Experts warn that a new wave of mortgage foreclosures may be coming soon and could rival the default rates for subprime mortgages and slow efforts to find bottom in a prolonged national housing slump.
The mortgages in question are $230 billion of option adjustable-rate mortgages, creative lending products that flourished at the height of the housing boom. In an option ARM, a borrower can opt to pay less than his or her monthly balance due, and the difference is tacked onto the outstanding loan balance.
Many experts had expected an explosion of defaults in the springtime on these roughly 564,000 outstanding mortgages. However, interest rates dropped to historic lows, and that delayed the detonation of what many housing analysts still see as a ticking time bomb....
Labor Weekly Claims Report -- In the week ending June 13, the advance figure for seasonally adjusted initial claims was 608,000, an increase of 3,000 from the previous week's revised figure of 605,000. The 4-week moving average was 615,750, a decrease of 7,000 from the previous week's revised average of 622,750.
The advance seasonally adjusted insured unemployment rate was 5.0 percent for the week ending June 6, a decrease of 0.1 percentage point from the prior week's unrevised rate of 5.1 percent.
The advance number for seasonally adjusted insured unemployment during the week ending June 6 was 6,687,000, a decrease of 148,000 from the preceding week's revised level of 6,835,000. The 4-week moving average was 6,757,500, an increase of 2,250 from the preceding week's revised average of 6,755,250...
Mish's Global Economic Analysis: Continuing Claims Drop First Time In 21 Weeks. Is This Worth Getting Excited Over?
Eddie Bauer Files for Bankruptcy -- Eddie Bauer, the outdoor-clothing chain that sold goose-down coats to Mount Everest mountaineers and college students alike, filed for Chapter 11 bankruptcy protection on Wednesday and said it planned to sell itself for $202 million to CCMP Capital Advisors, a private equity firm.
The company filed for Chapter 11 protection in Delaware, and said that Bank of America, GE Capital and the CIT Group have agreed to provide up to $100 million in financing during the bankruptcy case...
June 2009 Consumer Price Index (CPI) -- After a near decade of an aggressive rising inflation level, we are still in a period of Deflation. As someone else (David Rosenberg perhaps?) has said, as of right now, “Deflation is a fact; Inflation is an Opinion.”
David Goldman / Inner Workings:
The Stealth Deterioration in Asset Quality -- The deadly downdraft of falling demand will continue for years. The government cannot effectively substitute for private expenditures, especially not when government funds are spent to placate high-cost organized labor constituencies.
High savings rates are deflationary...
Noam Scheiber / The New Republic: Christina Romer Is Making Sense
Brad DeLong / Grasping Reality with Both Hands:
Felix Salmon: Unemployment datapoint of the daydiscussion:
Humble Anaheim home draws 63 offers -- Talk about your Cinderella story. The belle of the ball in the Orange County housing market last month wasn’t a beach-front manor with an eight-figure price tag. Or even a hill-top mansion with killer views.
Instead it was a modest three-bedroom, two-bath bungalow in Anaheim with a brick-lined planter and a dried-up lawn....
But buyers weren’t so much attracted to this home’s features (laminate faux-wood floors, nearly new cherry wood cabinets, granite counter tops). It was the lender’s aggressive asking price of $299,250 and its location in a quiet neighborhood, Johnson said. The home sold for $608,000 at the market peak some 2-plus years ago...
Former NFL Player Indicted on Mortgage Fraud Charges -- Arthur James Marshall, Jr. has been charged in a twenty-two-count indictment with fraud and money laundering in his real estate ventures. It was reported in news coverage of the April 3, 2009 execution of a search warrant by the Federal Bureau of Investigation on Marshall's former office building that Marshall was a local high school football star who later played at the University of Georgia and thereafter spent five years in the National Football League [as a wide receiver with the Denver Broncos and New York Giants]...
Mafia blamed for $134bn fake Treasury bills -- Italian and US secret services concluded that $134bn in US Treasury bills found in a false-bottom suitcase were the handiwork of the Italian Mafia...
discussion:Dealbreaker: So, You Know Those Fake Bonds?
- False Signs of an Economic Rebound - Reshma Kapadia, SmartMoney
- Complacency Is Back in the Financial Markets - Jonathan Weil, Bloomberg
- How Hedge Fund Wives Are Learning to Cope - T. Boncompagni, Times
- Will Commodity Investors Have Summer Fun? - Michael Kahn, Barron's
- Who Wins Under Obama’s Financial Reforms? - Rick Newman, US News
- Healthcare Rationing Rhetoric Overlooks Reality - David Leonhardt, NYT
- Wealth-Care Reform: Economics vs. Health - Ezra Klein, American Prospect
- Fed’s Soup Kitchen Is a Magnet for Lobbyists - Caroline Baum, Bloomberg
- The President Fears the Free Market - Peter Wallison, Wall Street Journal
- Obama's Money Men Finally Get It Right - Robert Scheer, The Nation
- Let's Not Rush Toward Regulatory Reform - Robert Bench, Forbes
- This Financial Fix Is Charitably Fake - Mark Calabria, New York Post
- Wall Street Isn't Buying Obama's Plan - Hamilton & Puzzanghera, LA Times
- Only a Hint of FDR in Financial Overhaul - Joe Nocera, New York Times
- Obama's Overhaul is Bold in Some Parts, Timid in Others - The Economist
- Band-Aids Won’t Fix Bank Ills Fit for Surgery - Mark Gilbert, Bloomberg
- A VAT Tax Is Not the Answer - Diana Furchtgott-Roth, RealClearMarkets
- U.S. Should Also Look to Its Fiscal Health - Kenneth Rogoff, Financial Times
- Healthcare Could Break America - Anatole Kaletsky, Times of London
- Betting on Inflation is a Bad Bet for Your Portfolio - Beth Kowitt, Fortune
- The Media's Mask Is Slipping As Deficits Surge - L. Brent Bozell, IBD
- An Interview With Paul Samuelson, Part One - Conor Clarke, The Atlantic
- Which Educated Workers Are Unemployed? - M. Mandel, Econ Unbound
- Is This The Beginning of the End of Free Checking? - Real Time Economics
- So Much for "Not Letting a Crisis Go To Waste" - Barry Ritholtz, Big Picture
- Sorry, America, The Financial Overhaul Will Probably Fail - Clusterstock
- Bankers Rally Around Troubled Watchdog - Colin Barr, Fortune