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Archive for the ‘Housing Policy’ Category

This is it for me, at least for this chapter.  I am off to join some people who don’t much appreciate voices singing out of key, and while they might be able to get over my public disdain for coaches who punt in opposing territory, it would be rather awkward to continue to point out the incompetence of the administration.  So for now, it’s probably best to hang it up.

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Affordability

Steve Dodson over at the Idea Locker sent me this map and asked for my take.  The site is an interesting mapping mashup that goes neighborhood by neighborhood in New York and tries to measure median income and housing affordability.  Call it TIGER for dummies.

The problem is in the text overlay essentially complaining that NY has a dearth of affordable housing.  The site proceeds to advocate more affordable housing programs.  It’s a shame, because it is exactly these affordable housing programs that have created the high costs in the first place. (more…)

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If I may quote myself, from September 4:

When you find yourself in a hole, stop digging. Except the Bernanke/Summers/Geithner team, who seem to believe you try to dig your way through to the other side of the earth. Call it the Martingale Strategy of government finance.

Like every other problem gambler, this team is discovering that the law of large numbers does not work in favor of bad bets: (more…)

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James Kwak over at Baseline has an post about the accounting treatment of Bank of America and Fannie Mae; quoting John Hempton:

If Bank of America were to provide at the same rate its quarterly losses would be 50-80 billion and it would be completely bereft of capital – it would be totally cactus. It would be – like Fannie Mae – a zombie government property.

Hempton claims that BAC has the right recognition policy and Fannie is being crushed by regulatory conservatism.  I think that’s about as likely as the Easter Bunny, but Hempton deserves credit for thinking outside the box. (more…)

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William Voegeli has an LA Times article on the two different models of large state – Texas and California:

California and Texas are not perfect representatives of the alternative deals, but they come close. Overall, the Census Bureau’s latest data show that state and local government expenditures for all purposes in 2005-06 were 46.8% higher in California than in Texas: $10,070 per person compared with $6,858. Only three states and the District of Columbia saw higher per capita government outlays than California, while those expenditures in Texas were lower than in all but seven states. California ranked 10th in overall taxes levied by state and local governments, on a per capita basis, while Texas, one of only seven states with no individual income tax, was 38th.

California is not exactly a high-tax, high-service state – it is more of a high borrowing, medium service state, at least when compared with the corner solutions (CT, NJ, HI) – but the contrast with Texas is apt.  What is the root of the difference? (more…)

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Two Russians, Ivan and Peter, struggle to survive in farm country. Eventually Ivan gets a goat. His life improves; he has milk and help with the grasses. A genie comes to Peter and says “I can grant you your deepest wish.” Peter is shocked. “You’re going to kill Ivan’s goat?”

That was always the gallows humor about Russia: the country was made for communism because the population was so consumed with envy that it preferred the company of mutual poverty.

I wonder if we couldn’t use a bit of that pessimism. At least some acceptance of finite resources that was not used as a blind support of the status quo. (more…)

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Mike Konczal has an interesting post that is popping up all over the place (here, here, and here, and probably somewhere else by now) analyzing a throwaway human interest piece on a woman named Karen King from the Wall Street Journal:

Her biggest chunk of debt, $26,000, stems from student loans to pay for her two-year associate’s degree from a community college — loans now in the hands of collectors. The remaining $10,000 or so includes old credit-card balances, debt to a store that rents furniture, utility bills and back taxes. Another obligation is $400 a month she contributes to the rent on her grandfather’s two-bedroom apartment, where her mother, uncle and sister also live. (more…)

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Courtesy of Mike Konczal at Rortybomb (itself a thoughtful compilation of a variety of articles, especially this one from Interfluidity), this gem from the Mortgage Bankers Association:

The centerpiece of MBA’s recommendation is the creation of a new line of mortgage-backed securities (MBS).  Each security would have two components – a loan level guarantee provided by a privately-owned, government-chartered and regulated mortgage credit-guarantor entity (MCGE) and a security-level, federal government-guaranteed wrap.  The wrap would be an explicit government guarantee focused on the credit risk of these mortgage securities.

That takes balls.  Know what takes even more balls?  The self-congratulatory blurb at the end of the press release: (more…)

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Not long after saying that health care was more important than lobbying for the Olympics, Barack Obama decided to make the trip to Copenhagen to lobby to put the 2016 Olympics in Chicago.

On this one, here’s hoping he loses. (more…)

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Courtesy of Calculated Risk, a fantastic example of the government’s inability to grasp the root cause of our economic woes:

The Federal Housing Administration, hit by increasing mortgage-related losses, is in danger of seeing its reserves fall below the level demanded by Congress…”They’re probably going to need a bailout at some point because they’re making loans in a riskier environment,” says Edward Pinto, a mortgage-industry consultant and former chief credit officer at Fannie Mae. “…I’ve never seen an entity successfully outrun a situation like this.”

In the past two years, the number of loans insured by the FHA has soared and its market share reached 23% in the second quarter, up from 2.7% in 2006, according to Inside Mortgage Finance. FHA-backed loans outstanding totaled $429 billion in fiscal 2008, a number projected to hit $627 billion this year.

When you find yourself in a hole, stop digging.  Except the Bernanke/Summers/Geithner team, who seem to believe you try to dig your way through to the other side of the earth.  Call it the Martingale Strategy of government finance.

(more…)

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