The Cap and Tax Fiction

Bill at Calculated Risk on Appraisals (good read)

Prieur du Plessis’ 25 June reading list here. 

Sub-5% Mortgage Rates Gone?

Even as conditions in many parts of the credit markets have improved, a big question mark hangs over one large part of the market that is still dysfunctional: the market for securities backed by commercial mortgages.

Behind the scenes, regulators are acutely aware that the commercial real estate market is one of the few potential remaining sources of systemic risk if the financing problems cannot be fixed.

William Dudley, president of the Federal Reserve Bank of New York, highlighted this this month: “The revival of the commercial mortgage-backed security market is essential to stabilising the commercial real estate market.

“If the availability of funding for this market is not restored, the downturn in commercial real estate valuation and the losses for the holders of these assets will be greater. This will, in turn, likely further constrain credit availability. That’s the vicious cycle we want to lean against.”

Read the full post here…..

Oil at a Peak?

Business Week – Mortgage Bankers Association Expects Mortgage Activity to Slow

Mish – The Big Inflationist Scare

From John Mauldin – A Tale of Two Depressions

EconompicData – Existing Home Sales (good graphs)

Very interesting piece from Calomiris, Longhofer, and Miles in the WSJ Real Time Economics blog today – The Mythical Housing Wealth Effect….

Much commentary in the financial press over the last several months has been concerned with the impact of falling house prices on consumer spending. While some see evidence of “green shoots” and hope for economic growth over the horizon, many still fear that lower home values will depress consumer spending. This “wealth effect,” a drop in home values that causes consumers to cut back on purchases, is thought to dampen economic growth and hamper any recovery.

At first glance, it seems reasonable to expect such a wealth effect. If consumers are less wealthy because of declines in the value of the assets they own, whether they be stocks or their homes — it seems logical that they would cut back on their spending. Indeed, many prominent economists have conducted research purporting to find large housing wealth effects, and often argue that the wealth effect from homes exceeds that from equities. Moreover, the Federal Reserve employs a model, which presumably guides its policies, that assumes the housing wealth effect is large.

A more careful look at the data, guided by economic theory, however, suggests that much of this evidence has been misinterpreted and that the reaction of consumption to housing wealth changes is probably very small….

Rivkin and Casey – Is Government Health Care Constitutional?

Hamilton – Gasoline Prices and Consumer Sentiment

Prier du Plessis:  Words from the Investment Wise and Current Readings
 
Steve Jobs – Liver Transplant?

Nation’s Girlfriends Unveil New Economic Plan: ‘Let’s Move In Together’

Too Big to Fail Doctrine Must End: FDIC’s Blair

Must read from Arnold Kling – What’s Wrong with the Financial Regulation White
Paper?

Good reads for the week from Prieur du Plessis here. 

From YS at NC:  Geithner’s Plan to Have a Reform Plan Skewered by Senate. 

Roubini – There is No Free Lunch….

Health care legislation watch – ObamaCare Sticker Shock and Dissecting the Kennedy Health Bill. 

Yesterday PC World published a summary of iPhone reviews – see them all here. 

A point of disclosure – I’m not personally an iPhone user, though am converting from PC to Mac (office, home, everything) shortly, and am considering an iPhone as well. 

Here are a couple of reviews that caught my eye –

Walt Mossberg, Wall Street Journal: “During my week of testing, the new model proved dramatically snappier in every way than my iPhone 3G. Its processor is 50% faster than in the prior model, and it sports a new graphics chip. Applications opened much more quickly. Web pages loaded far faster. The camera was ready to use almost instantly. And I never once saw the occasional, annoying iPhone behavior where you strike a key while typing and it sits there, seemingly stuck, before you can continue.”

David Pogue, New York Times: “The new iPhone doesn’t just catch up to its rivals — it vaults a year ahead of them. At this point, the usual list of 10 rational objections to the iPhone have been whittled down to about three: no physical keyboard, no way to swap the battery yourself and no way to avoid using AT&T as your cell company.”

AEI’s Peter Wallison – Too Big to Fail, or Succeed

Zero Hedge – Rosenberg: Era of Green Shoots Over

Ritholtz – Obama Reform Plan Fails to Fix What’s Broken

Biderman – US Economy Not Bottoming….

Steven Levitt – Zach the Cat as an Example of Why Businesses Should Experiment More

Ed Harrison via NC – A More Comprehensive Look at Obama’s Proposed Financial Reforms

Mish – States in Deep Trouble Over Plunging Income Tax Revenues

Via Tyler Durden at Zero Hedge….

UCLA Green St Advisor 2009 06 16

The health care debate deserves your attention – consider Health Reform and Competitiveness and The Death and Life of Health Reform.  You’ll see more and more commentary like this focusing on the ‘right of health care’; everyone has the right to access efficient and effective health care - the government’s ability to provide either is highly suspect. 

Must read from Mish today – Obama’s Blueprint for Reform Concentrates Still More Power in the Hands of the Fed.

Another must read today – Recycling, Larry Summers-Style.

Any time you can garner a lesson from Star Trek, we’re interested – see Ritholtz on Star Trek and Detroit Bailouts

From Bloomberg’s Jody Shenn – full story here….

June 16 (Bloomberg) — Prices for the most expensive U.S. homes may not reach bottom for another few years, according to JPMorgan Chase & Co. analysts.

The CHART OF THE DAY shows the supply of unsold homes by price in California, data that the mortgage-bond analysts including John Sim and Matthew Jozoff used in a June 12 report to illustrate the weakening market for the most-expensive residential properties. The supply of homes priced $750,000 to $1 million held steady while the supply of more expensive properties increased.

“Tighter lending standards and the lack of cheap financing for these borrowers continue to be key issues,” the New York- based analysts wrote, referring to “jumbo” mortgages. That’s after so-called interest-only and option adjustable-rate loans were a “major driver” of soaring values, they said.

The government’s moves to aid the housing market include the Federal Reserve’s mortgage-bond purchases to drive down interest rates; President Barack Obama’s “Home Affordable” loan modification and refinancing programs; and new tax credits for some first-time buyers. None of the U.S. initiatives “directly focused on helping the sales of these so-called millionaire homes,” the analysts wrote.

They go on to detail how they feel that home prices will bottom (looking at the aggregate national market) in 2011…..ongoing positive new for multifamily investor and operators. 

Late today – a slew of meetings this morning have kept us on the run….

Interesting piece / list on CR today - $13.9 Trillion Total Maximum Government Support Announced.

WaPo:  California Aid Request Spurned by US

John Mauldin:  Krugman Interview and Fears for a Lost Decade

Ritholtz: Second Half Recovery Nonsensical

Very Interesting Newsletter from TCW’s Jeff Gundlach (via Zero Hedge)…

Read all about it in today’s WSJ here. 

Venture Capital Bubble About to Burst?

Nice piece by James Hamilton – Do You See What I See?  He’s not seeing many green shoots out there. 

Must read today – Paul Samuelson’s Why No One Can Guess When Main Street Recovery Will Occur.

Good piece by Tyler Cowen – Something’s Got to Give in Medicare Spending. 

Prier du Plessis’ Words from the Investment Wise for this week. 

Two from Yves Smith at Naked Capitalism today – Prospects for Employment Recovery:  Less Than Cheery? And China Hectors US Again RE the Dollar. 

The IRS Phones Home

Must read on health-care:  The Public Plan Would Be the Only Plan