Dude, Where’s My $23.7 Trillion?

Ben Bernanke, Chairman of the Federal Reserve, doesn’t think it is a good idea to audit the Fed. Speaking Monday he said,

… the Fed chairman also took a moment to repeat his objections to a bill in the House to audit the Fed. Much as he said during his confirmation hearing, Bernanke stressed periodic audits of monetary policy would subject those important decisions to undue political pressures.
“The Fed Reserve fully agrees the Congress should have access to all of our financial transactions …” he said. “Our concern would be that we would take some action on monetary policy that would be unpopular in certain quarters, and Congress, by taking some action with that audit, would [be able to overturn them].”

If just knowing what the Fed is doing would subject the Fed to “political pressure” then what they are doing must be pretty darn alarming.
A lot of money is at stake here. The American People have a right to know what is going on.
Campaign for America’s Future says, Before You Appoint Ben, Audit Ben!
I am a Fellow with Campaign for America’s Future.

Today’s Housing Bubble Post – Foreclosures Double

Ypu’ll be seeing this headline every month for a while, I expect: Foreclosures nearly double from year ago: report,

Cities in California, Florida and Ohio dominated the 25 U.S. metro areas with the highest home foreclosure rates, though rates jumped in most of the top regions during the third quarter, RealtyTrac said on Wednesday.
. . . A broad credit and liquidity crisis during the third quarter exacerbated U.S. housing industry troubles, pushing sales sharply lower and unsold inventory to record highs.
Overall, residential foreclosure filings nearly doubled in the third quarter from a year earlier, RealtyTrac reported earlier this month.

HOW many foreclosures?

Stockton’s rate of one foreclosure filing for every 31 households, the highest of the metro areas, was a surge of more than 30 percent from the prior quarter. A total of 7,116 filings on 4,409 properties were reported in the metro area during the quarter.
In Detroit, the foreclosure rate of one filing for every 33 households ranked second and was more than double the number of filings reported in the previous quarter, RealtyTrac said. A total of 25,708 filings on 16,079 properties were reported.

Today’s Housing Bubble Post -Foreclosures Double

UPDATE 1-US Q3 foreclosures almost doubled from ’06 -report,

U.S. residential foreclosure filings nearly doubled last quarter from a year earlier, and appear set to increase into 2008, a report said on Thursday.
Foreclosure filings for July-September rose to 635,159, representing one in every 196 households and a 30 percent jump from the second quarter, according to RealtyTrac, a marketer of foreclosure properties based in Irvine, California.

One results: soon there will be many more homes on the market. And remember, MOST of the “ARM resets” – loans with low “teaser” or “qualifying” initial rates that reset to high interest rates – happen into next year. So expect the foreclosures to continue to increase for at least a year. The housing market is nowhere near a “bottom.”

Today’s Housing Bubble Post – What A Bank Run Looks Like

This is filed under Housing Bubble, because this is more fallout from the bubble’s bursting. Here’s the deal: financial institutions loan out money to people (and companies and countries, etc.) who, because of the “credit crunch,” might not be able to pay it back. That means that the financial institutions might not be able to pay back the money THEY owe, including to depositors.
It’s housing bubble burst time – do you know where YOUR money is?
Calculated Risk: Northern Rock Bank Run, with photos:

From Bloomberg: Northern Rock Customers Crowd London Branches, Withdraw Money

Hundreds of Northern Rock Plc customers crowded into branches in London today to pull out their savings after the mortgage-loan provider sought emergency funding from the Bank of England …

A bank run happens when people feel that a bank might be having trouble, and realize they might not be able to get THEIR money out of the bank if they don’t hurry. Everyone knows that a bank (money market, stockbroker, etc.) only keeps so much cash on hand. So they show up to withdraw their money before it is too late. It is a “run” because you have to run down to the bank to get your cash before other people get their cash. Only the first people in line are going to get their money.
In the US bank deposits up to $100,000 are insured by the government, so if the worst happens you will eventually get your money (up to $100,000) — after all the paperwork gets done. So if you feel like running down to the bank, you don’t really need to take out more than you will need to pay you bills for a few months.

Today’s Housing Bubble Post – Big Houses Cost More To Heat And Cool, Bad For Environment

Here is one more problem from the housing bubble – all those big houses they built cost much more to heat and cool than regular houses. As utility costs rise this will compound the monthly-payment problem. Then, on top of that there’s the maintenance costs like eventually re-roofing them, watering the lawns, etc.
And then there is the terrible environmental impact. Very few were built withing walking distance of stores and public transportation so cars are required. How many of the world’s trees were cut down to build them?
And, if the public somehow manages to regain their senses, these house monstrosities – like the huge, pre-oil-embargo land-barge cars of the 1970s – will become even harder to sell.
AlterNet: Environment: Big Houses Are Not Green: America’s McMansion Problem,

The just-popped housing bubble has left behind a couple of million families in danger of losing their homes to foreclosure. It has also spawned a new generation of big, deluxe, under-occupied houses bulked up on low-interest steroids.
The National Association of Home Builders (NAHB) estimates that 42 percent of newly built houses now have more than 2,400 square feet of floorspace, compared with only 10 percent in 1970. In 1970 there were so few three-bathroom houses that they didn’t even to show up in NAHB statistics. By 2005, one out of every four new houses had at least three bathrooms.
…the manufacture and transportation of concrete to build a typical 2,500-square-foot house generates the equivalent of 36 metric tons of carbon dioxide.

Continue reading

Today’s Housing Bubble Post – Foreclosures Set record

New Mortgage Foreclosures Set Record,

The number of homeowners receiving foreclosure notices hit a record high in the spring, driven up by problems with subprime mortgages.
The Mortgage Bankers Association reported Thursday that mortgage-holders starting the foreclosure process in the April-June quarter reached 0.65 percent, marking the third consecutive quarter that this figure has set an all-time high.
The delinquency rate, which tracks the number of people who are behind in their payments but have not yet entered the foreclosure process, was also up sharply during the spring, rising to 5.12 percent of all loans, up nearly three-fourths of a percentage point from the same period a year ago.

And don’t forget, NEXT year is when MOST adjustable mortgages reset upwards, greatly increasing monthly payments. This is just the very tip of what is coming.