Update: 4/17/11~ Question Asked, Question Answered~ (emphasis from original)
…Stunningly, today we learn that to keep long rates low, the Fed may have resorted to nothing short of the same suicidal trade that destroyed AIG FP and brought the entire system to its knees. Namely, Ben Bernanke is now quite possibly the second coming of Joe Cassano, since in order to keep rates low, Bernanke is forced to a last resort action of selling billions upon billions of Treasury puts to “pin” rates low contrary to natural supply-demand mechanics…
Housing Double Dip revealed as New Sales plunge 17% m/m down 28% y/y to record low ~ Let the TBTF Games Begin!
Update at end of post
American Homeowners are Home Alone while Benny and the Feds continue to PROTECT TBTF BANKS as their ONE AND ONLY MANDATE.
New sales of single-family homes fell nearly 17% in February from a month earlier, coming in well below analysts’ estimates and at the lowest level recorded….
…February sales are down 28% from a year earlier….
And as we have been saying til we’re blue in the face, it is now NATIONWIDE:
In the Northeast in February, new homes sales cratered, falling 57% from January, according to the joint release from the Census Bureau and the Department of Housing and Urban Development.
Okay you say, how about prices? What is the delta, the RATE of change? It is ACCELERATING TO THE DOWNSIDE~lowest price since December 2003~
…The median sales price of new homes sold last month was $202,100, down nearly 14% from January, representing the largest monthly decline yet….
Tiny Tim and Bankster Ben have been in full save the banks, ‘extend and pretend’ on housing mode for THREE YEARS.
And where has that gotten the REAL ECONOMY~ The Main St economy? Absolutely nowhere.
Where has that gotten the TBTF? They will still fail if they take the losses they NEED to take, but they have lots of nice bonuses and dividends (Except for BofA which is the redhaired stepchild and is allowed to wither on the vine sans dividends) and Jamie Dimon was even able to produce a $20Billion line of credit for ATT to become Ma Bell, again.
The economy on Main St will NOT RECOVER until housing is addressed in a MEANINGFUL way that allows consumers to correct their balance sheets.
You know, the way the TBTF are allowed to. The way CRE is allowed to. The way every Wall St firm is allowed to, by RESTRUCTURING THE DEBT. HOLC or real mods, pick your poison.
Or we can keep IGNORING the real problem and let the banks who MADE THE STUPID LOANS be the ONLY ONES who get off with NO LOSSES TAKEN while the US consumer continues to struggle for years under the housing morass as Ben prints to infinity and beyond like a deranged Buzz Lightyear.
Update: Oh lookee here!! Chris Whalen says FAN FRED are hiding ANOTHER 100B in losses on their books! But TPTB and TBTF are claiming writing down homeowners principal will cost taxpayers? Bullshit. And don;t EVEN talk to me about moral hazard after the shxt the Fed is doing for the banks.
…Both investors and Congress need a lot more details about the purchases of defaulted loans by Fannie and Freddie. We need to know exactly how many dud loans have migrated back to the GSEs, what their loan loss reserve is, how much of that loan loss reserve is “covered” by the MIs and how much “capital” the MIs have against these exposures. The GSE are letting dead loans sit on their books in part to avoid recognizing the losses, an event that would drive many of the MIs into bankruptcy. If you look at how slow the process of final loss recognition by Fannie and Freddie is proceeding, then you’ll understand why the publicly disclosed loss rates reported by Fannie and Freddie have been falling.
Instead of demanding insurance payments, the GSEs are doing everything in their power to keep the MIs looking like going concerns so that they can count the MI “receivable” as a good asset. This is why the GSEs direct LTV based LLPAs to the MIs, to keep some cash flowing their way, and…
If there was a proper mark-to-market on the MIs (like all proper insurance/reinsurance businesses do), then the MIs would be massively insolvent. The GSEs would have to take another huge amount of capital from Treasury. Geithner and the GSEs are trying to avoid it, and to date are getting away with it….