Breaking: Homeless Have No Homes

An odd feature at NYT reports that homeless shelters are seeing a rise in former home owners who were foreclosed on. Only three years ago, foreclosure was rarely a factor in how people became homeless. But among the homeless people that social service agencies have helped over the last year, an average of 10 percent lost homes to foreclosure, according to ...

Some More Numbers on the Geithner Plan

Were you wondering if yesterday's big rally was related to the Geithner plan? Well, it probably was. The Treasury helpfully provides an example, which I reproduce here: Step 1: If a bank has a pool of residential mortgages with $100 face value that it is seeking to divest, the bank would approach the FDIC. Step 2: The FDIC would determine, according to ...

Why Small Things Get Big Attention

Steven Taylor makes a point I made on Wednesday's edition of OTB Radio ("AIG Bonus Brouhaha") about why seemingly minor matters resonate with the public while major issues often don't. [W]hile broad and complicated policy may not fully register in the minds of the public, a smaller, specific and easier to understand action can capture public attention and lead to substantial ...

Renogiating Mortages

Eric Posner has a Slate piece offering a novel plan for "renegotiat[ing] all those bad loans at no cost to the taxpayer." The solution to this problem is for the government to force renegotiations to occur. A simple plan could do this. The plan would give all homeowners who live in a ZIP code where house prices have dropped more than ...

Obama’s Secret Plan: Inflation?

Michael Kinsley has a rather rambling column about the "upside-down economics" of the stimulus plan that's subtitled (or, whatever one calls the SEO-driven title tag that appears at the top of the browser and in search results) "Recession Economics - How Do We Repay the Stimulus Spree?" But even if the stimulus is a magnificent success, the money still has to ...

Housing Affordability at All-Time High

Ezra Klein is a bit bemused: In a further signal that economic indices have a taste for irony, an index released by the National Association of Realtors shows that housing affordability was at an all-time high in December. A family earning the median income has 158.8 percent of the income needed to qualify for the mortgage on a median-priced house. And ...

Defaulting Homeowners Default Again After Relief

Roughly three in five people who got bailed after failing to pay back home loans are back in trouble in short order according to a shocking government report.  (Well, shocking to government officials.  Otherwise, entirely predictable.) Recent data suggests that many borrowers who received help with mortgage modifications earlier this year tended to re-default on their payments, a top U.S. ...

Lehman Brothers: Who Gets Hurt?

Matt Yglesias snarks, Unlike the guy who runs Lehman Brothers, the guys who clean the bathrooms in the Lehman Brothers office have, as best one can tell, been doing an excellent job. And yet if the company going under results in everyone involved losing their jobs, the guy who runs Lehman will wind up being better off than the guys who ...

The ‘Too Big to Fail’ Problem

Now that Freddie Mac and Fannie Mae have joined the "too big to fail" club, isn't it high time we started thinking about how to avoid allowing companies and other quasi-private agencies to get into these problems in the first place? It seems that over the past few decades, the Federal government has pretty much given carte blanche for ...

Fannie Mae and Freddie Mac Bailout Debacle

The widespread rumors of a government bailout of Fannie Mae and Freddie Mac have already had dramatic consequences, perhaps creating a self-fulfilling prophecy. Iain Dey and Dominic Rushe, writing for The Times of London, note that, "The two companies lost almost half their market value last week as rumours of a government bail-out swept the stock markets, hammering share ...

Obama’s ‘Sweetheart’ Home Loan

The Manufactured Outrage of the Day comes to us from Joe Stephens and his page A3 piece for today's Washington Post, "Obama Got Discount on Home Loan." Shortly after joining the U.S. Senate and while enjoying a surge in income, Barack Obama bought a $1.65 million restored Georgian mansion in an upscale Chicago neighborhood. To finance the purchase, he secured a ...

Subsidizing Home Ownership

Ezra Klein jumps on a growing meme the home ownership isn't all it's cracked up to be and that the government should stop subsidizing it. He points to Paul Krugman, who argues in today's NYT that it's time to rethink our decades-long bipartisan consensus that home ownership should be encouraged. While everyone stresses the advantages of owning ...

Getting to Know Obama

Howard Fineman thinks we have learned a lot about Barack Obama from the Jim Johnson incident. We know John McCain: as formed and familiar as a well-worn boot. But we don't know Barack Obama very well, and getting to know him has been and remains the basic national task of 2008. With less than five months until Election Day, there isn't ...

Chrysler Cashflow Crisis

Frank Williams reports that Chrysler is having serious cashflow problems and has taken a novel approach to dealing with it: "Chrysler will now be taking five percent off all [purchase orders] PO's and will take 60 days to pay instead of 45." This applies "to all existing orders, not just future orders." I would love to implement such a system ...

President of the United States: Chief Job Placement Official

It's not change when he offers four more years of Bush economic policies that have failed to create well-paying jobs,… --Barack Obama, Remarks of Senator Barack Obama: Final Primary Night I heard that and the first thought that went through my head was, “Since when did the President of the United States become in charge of placing people in well paying jobs?” ...