News Leaks of $1 Billion Blackstone Investment in Foreclosed Properties… Just in Tampa Bay

By: Monday September 24, 2012 8:20 am

I’ve been obsessed lately with the growing evidence of the next speculative housing bubble – the mass quantities of distressed and foreclosed properties being scooped up by hedge funds and other institutional investors, who plan to rent them out for a few years. We see the shift to single-family home rentals in the American Community [...]

More Positive Stats for Housing Ignores Realities on the Ground

By: Wednesday September 19, 2012 11:36 am

The housing analyst community is enthralled again today by good topline news reports. Housing starts increased according to the Census Bureau, though there’s substantial margin for error in that report, plus or minus 10%. The estimate of 750,000 seasonally adjusted annual housing starts was actually below expectations of 768,000, but up year over year. Then [...]

Big Banks Increasing Spread on Mortgage Profits, Not Funneling Cheaper Rates to Customers

By: Wednesday September 19, 2012 8:25 am

Banks are making more off mortgages than ever before, refusing to pass on lowered interest rates from federal policy, including the purchase of trillions in mortgage-backed securities by the Federal Reserve, to consumers. This isn’t really the enigma that the New York Times’ Dealbook makes it out to be. It’s simple collusion. Nobody offers 2.8% mortgage rates, so nobody gets them. As a result, the spread that banks capture on their mortgages widens.

Anti-Union Ads in Chicago Paid for By Hedge Funds, Billionaires

By: Wednesday September 19, 2012 6:17 am

I wish I had known about this before the Chicago Teachers Union suspended their strike and returned to work, but it may shed some light on the timing of the suspension. At the least, it provides a little more context for what teachers unions have to deal with on the ground. Apparently the above anti-union [...]

The Investor-Purchase Housing Bubble Inflates Some More

By: Monday September 17, 2012 10:27 am

Analysts have tried to parcel out whether QE3 will really help the economy. I’ve done the same thing myself. The way almost everyone looks at this is about the impact on housing, specifically mortgage prices. But mortgage rates haven’t changed at all since the announcement of QE3, and if the Fed was trying to influence [...]

Judge Blocks Provisions of the STOCK Act

By: Friday September 14, 2012 8:55 am

A federal judge blocked a provision of the STOCK Act, the law passed earlier this year cracking down on insider trading. While the law originally pertained solely to members of Congress and their staffs, House Republicans extended that to members of the executive branch. Judge Alexander Williams gave a preliminary injunction to block enforcement of [...]

The Worst Idea in the World: Securitizing Rental Revenue

By: Sunday August 26, 2012 10:20 am

The last financial crisis can be blamed in large part on runaway securitization. Wall Street giants sliced and diced mortgage loans into bonds that they sold around the world. They claimed that they diversified the mortgage pools so that even a few defaults would not undermine the value of the securities, and they offered tranches [...]

Housing Recovery Narrative Surges Forward, But Reasons for Price Rise More Sinister

By: Wednesday August 8, 2012 7:37 am

The “housing is back” narrative got another boost with a story in the Wall street Journal that simultaneously makes an unequivocal statement about home prices, and then acknowledges wild variance in the data set. Home prices rose by their largest percentage in at least seven years during the second quarter, propelled by low inventories of [...]

Wall Street Analyst Views Used for Hedge Fund Insider Trading

By: Monday July 16, 2012 12:34 pm

The US Attorney’s office in Manhattan has been on a tear recently over insider trading, arresting and convicting several high-profile investors and making the issue a hallmark of criminal justice around the financial industry. But Preet Bharara will be busy for the rest of his life if he thinks he can clean up the markets [...]

Adventures in Corporate PR: JPMorgan Chase About To Pull Off Fail Whale Bait and Switch

By: Wednesday July 11, 2012 8:55 am

Here’s a classic example of how corporations manage expectations. A couple weeks ago, on the same day as the Supreme Court ruling on the Affordable Care Act, the New York Times reported that JPMorgan Chase’s losses from the Fail Whale trades could reach as high as $9 billion. Their sources were “people who have been [...]

Dimon’s Testimony Has Implications for Volcker Rule Implementation

By: Wednesday June 13, 2012 1:25 pm

I certainly recognize that the so-called “grilling” of JPMorgan Chase CEO Jamie Dimon today was more like a pillow fight, with more Senators asking Dimon’s opinion on things than trying to get to the bottom of what happened at the Chief Investment Office. I don’t know what people expected. For all intents and purposes, members [...]

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