Bill Bonner is exactly correct, Bernanke won't start out to bring about hyperinflation, if it does occur, it will sneak up on Bernanke and most of the American people.
That people continue to pay attention to those who have been so wrong in the run up to this melt down continues to amaze.
Seems to me a simple test- if you didn't warn about what could happen you should sit quite in the corner- and unlike Victorian children be neither heard nor seen.
I often find myself defending the Ivies here on CR.
but there simply is no defense of the Harvard reports.
If I recall, almost every supporter of these Harvard groups was directly related to RE. (realtor groups, NAHB, builders, etc)
(I edited... my browser didn't load Harvards' 2009 report initially)
How big a loan can one get without putting too much capital down nowadays? on the FHA mortgage website: https://entp.hud.gov/idapp/html/hicostlook.cfm. It shows a max of 700k for a one-family house loan. at 3% down, that's 21k. with the 8k back, that's 15k. So 15k leveraging 700k.
Are there any other loans that has a bigger leverage?
Remember...its not what you know, it's whether you'll sell your soul. These folks are bought and sold by the industry.
The only remaining question is, what is wrong about Harvard's ethics instruction that so many of their graduates who end up anywhere around money, manage to get bought by the system?
Or perhaps it's selection bias. The people that get in their are a large part of the system to begin with, and have been corrupted by money from the days of their youth. Maybe then any pointers they get on ethics are just ignored.
There are no penalties from being disastrously wrong on anything of importance in our culture anymore, if you're in the priveleged class, of course. In fact, those people still tend to get rewarded the most despite such incompetence. Tyranny of the Incompetent (hat tip to leftback over at TBP) indeed.
The only remaining question is, what is wrong about Harvard's ethics instruction that so many of their graduates who end up anywhere around money, manage to get bought by the system?
My guess: The fact that 1/3 of each incoming class is a "legacy" admit = some relative (who donated money) got them in. That's a helluva moral standard to set.
Or let me put it to you this way...if it is your job to say the types of non-factual things that prop the status quo, you will be rewarded for doing your job. You will be drummed out of the system otherwise. So when you turn out to be wrong, you are only wrong as measured by a comparison to reality. But whether you retain your position is a matter of whether you support the aims of those you serve. If they want you to revise your analysis, or disregard history, you do so. Otherwise, you give up your paycheck.
Despite the current cool-down, the long-term outlook for housing is bright.
The degree of brightness is concomitant with income levels of Americans which appears to be trending down.
Do economists know how to do multivariate analysis?
"My guess: The fact that 1/3 of each incoming class is a "legacy" admit = some relative (who donated money) got them in. That's a helluva moral standard to set."
Harvard is about making contacts more than anything. In my briefish career as a hiring manager, I found that Harvard grads really wanted you to know that they were Harvard grads. In case somebody else in their Mafia was the hiring manager.
How is this guy not arrested yet??? what a scheme....creates things that destroy the market, then sells things that promise to fix it.
Ex-Countrywide Exec's PennyMac Files For An IPO
First, there are knives still to catch.
Second, we have every reason to believe that there many future knives to be caught, by many people.
Moreover, while knife catching has slowed, natural and regulatory conditions continue to persist that will ensure the longterm viability of knife catching. In fact we are optimistic that a large portion of the population will have the opportunity to catch 2, 3, or many more knives given the range of knife-catching products previously unavailable to them.
What is funny is, with all that supposed talent there, you should be able to field a team of grad students there who are eager to do this kind of research, and do it well. But instead you get a funded organization, captured by the industry it is supposed to analyze.
The saddest part is, when you go line by line state by state, the imbalances are enormous. Amazing all this big money floating around over the last 8 years and not one state saved for a rainy day.
Now all they want is more money out of our pockets...with no possible raises, and pay cuts, they come to take more from us.....Bull shit!.
And I will also add WHERE DID THE MONEY GO?!!!!!!!!!!!!!!!!!!!!!!
The thing about Harvard dolts is that it truly shocks them to find out they are wrong...they are deeply, personally shocked. Their RE reports have been amusingly offkilter for years. But for all out entertainment, check out the RE missives from the RE center at George Mason University. Went to find some links, and found this at their website...you really can't make this stuff up...
"Producing Real Estate Leaders of Tomorrow
Introduction
George Mason University is pleased to announce the launch of a university-wide initiative which will produce the real estate professionals of tomorrow and will further the educational and professional opportunities of real estate industry professionals.
Our newest degree, the Master of Real Estate Development begins September 2009. We are extremely excited about this new program, and are starting to accept applications. We are seeking only 20 outstanding students, so apply now!"
These folks/entities never had to admit their wrong. They just move onto the next pump and dump racket and hope they leave J6P holding the steaming bag of turd once again. It will probably work too.......until it doesn't and then things will get UGLY.
I actually wrote one of the "Harvard"-type real estate reports for the Johns Hopkins Real Estate program as a grad student there at the beginning of this decade. We interviewed a number of leading real estate experts in the DC area. About 90% of them were wrong on the 2001-3 commercial slowdown, and but slowing strong growth was still what we printed. It is the heard mentality...no one wants to be the outlier. Even the guys who sensed this blowup in their gut would never admit to anyone but the people closest to them.
It gives me a certain satisfaction they did not accept my application. Too bad I ended up at LSE which turned out to be just as enthralled by the banking industry. Like Mick Jaeger, a LSE droupout, I could get no satisfaction.
As CR noted, there were enough caveats in both reports to claim they at least mentioned the risk, albeit painting that risk as likely as a life-sterilizing meteor strike. I mean it's right there, if unemployment goes up and if the economy slows, I mean, that's like totally impossible, but they said it... /snarkoff
"It will take much longer than that for the Chinese to rival Americans as consumers: Chinese incomes are about one tenth those in America, and total consumer spending in dollar terms was about $1.7 trillion in 2007, compared with $12 trillion in the U.S."
"More problematic are the U.S. and the U.K., where relatively low debt loads are rapidly rising thanks to the financial crisis. U.S. debt now stands at 81 percent of GDP; Britain's is 61 percent. But the U.K.'s debt has been increasing faster than that of any other big nation, rich or poor—between 2006 and 2010, Britain's gross debt will have grown by nearly 59 percent."
We sort of wrote our reports the same way at JHU, the trend will continue, and if everything impacting real estate gets more positive real estate will be more positive, and if everything impacting real estate gets more negative real estate will be more negative. It was the first time I wrote a report like that and the game was not too tough to figure out.
Over the weekend, I rediscovered a box of "older" books in a closet. Among them was a political cartoon book - best political cartoons of 2006. In this book was a whole chapter of political cartoons poking fun of the housing bubble, including images of homeless people hawking cardboard box homes for $400,000, Snoopy advertising his house at an outrageous price, images of bubbles and more. Cartoonists (not trained in finance) knew then that a housing bubble existed ... Just for perspective on who knew what when.
I follow the housing market closely and have always noticed that the underlying premise of all predictions of demand are based on demographics showing that population is growing and supply is inadequate to meet demand. This fundamental error in economics is at the base of the Harvard annual reports. Not surprising since Harvard is at the center of econometric methodology which has been notoriously wrong on many, many fronts. If "demand outstripped production" were the correct way to measure potential growth then we'd have continuous growth in almost everything. Funny that's never happened. http://www.dailycapitalist.com.
If the truth were being reported we'd be having riots in the streets. And meanwhile the top
execs in banks and brokerages that caused such a mess are STILL employed and making
millions while laying off THOUSANDS of people that actually do work. If you know anyone in
banking that's still employed, odds are they are doing the work of three people so the top
execs can show 'savings' and continue collecting mega-incomes.
Firsty !
Bill Bonner is exactly correct, Bernanke won't start out to bring about hyperinflation, if it does occur, it will sneak up on Bernanke and most of the American people.
Well, it's good to know that the US mortgage finance system is now well integrated into global capital markets. That'll let me sleep at night.
Whew.... glad the bottom's in the stock market now!
That people continue to pay attention to those who have been so wrong in the run up to this melt down continues to amaze.
Seems to me a simple test- if you didn't warn about what could happen you should sit quite in the corner- and unlike Victorian children be neither heard nor seen.
I often find myself defending the Ivies here on CR.
but there simply is no defense of the Harvard reports.
If I recall, almost every supporter of these Harvard groups was directly related to RE. (realtor groups, NAHB, builders, etc)
(I edited... my browser didn't load Harvards' 2009 report initially)
How big a loan can one get without putting too much capital down nowadays? on the FHA mortgage website: https://entp.hud.gov/idapp/html/hicostlook.cfm
. It shows a max of 700k for a one-family house loan. at 3% down, that's 21k. with the 8k back, that's 15k. So 15k leveraging 700k.
Are there any other loans that has a bigger leverage?
Still clueless after all these years...
But then again. Not really. Just look at who funds them. That will tell you all you need to know.
"Trust me; I'm from Harvard."
A great example of our "best & brightest" hard at work. Those Ivy Leaguers are so smart, aren't they?
Remember...its not what you know, it's whether you'll sell your soul. These folks are bought and sold by the industry.
The only remaining question is, what is wrong about Harvard's ethics instruction that so many of their graduates who end up anywhere around money, manage to get bought by the system?
Or perhaps it's selection bias. The people that get in their are a large part of the system to begin with, and have been corrupted by money from the days of their youth. Maybe then any pointers they get on ethics are just ignored.
"Are there any other loans that has a bigger leverage?"
There's bound to be a way to take on existing underwater mortgages from the 'owners'.
There are no penalties from being disastrously wrong on anything of importance in our culture anymore, if you're in the priveleged class, of course. In fact, those people still tend to get rewarded the most despite such incompetence. Tyranny of the Incompetent (hat tip to leftback over at TBP) indeed.
YtL,
In defense of Harvard, the last I had heard their endowment fund owned 1,500 rental units. Why talk down your bread and butter?
The only remaining question is, what is wrong about Harvard's ethics instruction that so many of their graduates who end up anywhere around money, manage to get bought by the system?
My guess: The fact that 1/3 of each incoming class is a "legacy" admit = some relative (who donated money) got them in. That's a helluva moral standard to set.
Who wants to bet on the 3 p.m. stick save today?
I hope we see much more of such retrospective reporting.
It would be nice to hold supposed "experts" accountable for their incompentence and/or conflicts of interest.
nate and scrooge-
See "pennymac".......
Ciao
MS
Or let me put it to you this way...if it is your job to say the types of non-factual things that prop the status quo, you will be rewarded for doing your job. You will be drummed out of the system otherwise. So when you turn out to be wrong, you are only wrong as measured by a comparison to reality. But whether you retain your position is a matter of whether you support the aims of those you serve. If they want you to revise your analysis, or disregard history, you do so. Otherwise, you give up your paycheck.
"My guess: The fact that 1/3 of each incoming class is a "legacy" admit = some relative (who donated money) got them in. That's a helluva moral standard to set."
Harvard is about making contacts more than anything. In my briefish career as a hiring manager, I found that Harvard grads really wanted you to know that they were Harvard grads. In case somebody else in their Mafia was the hiring manager.
"It is difficult to get a man to understand something when his job depends on not understanding it."
--Upton Sinclair
@MS
How is this guy not arrested yet??? what a scheme....creates things that destroy the market, then sells things that promise to fix it.
Ex-Countrywide Exec's PennyMac Files For An IPO
Ex-Countrywide Exec's PennyMac Files For An IPO
THE JOINT CENTER FOR HOUSING STUDIES OF HARVARD UNIVERSITY should be placed on academic probation for plagiarizing the Anderson School at UCLA.
IOW this isn't 'contained' to the Ivies.
Personally I love Harvard, these dopes have made me a lot of money in the last couple years.
Who knows, maybe now that the home builders can no longer afford to fund Havard's "housing research" it will be more relevant?
/paraphrase
First, there are knives still to catch.
Second, we have every reason to believe that there many future knives to be caught, by many people.
Moreover, while knife catching has slowed, natural and regulatory conditions continue to persist that will ensure the longterm viability of knife catching. In fact we are optimistic that a large portion of the population will have the opportunity to catch 2, 3, or many more knives given the range of knife-catching products previously unavailable to them.
/end
--bh
You can always tell a Harvard man .... you just can't tell him much.
What is funny is, with all that supposed talent there, you should be able to field a team of grad students there who are eager to do this kind of research, and do it well. But instead you get a funded organization, captured by the industry it is supposed to analyze.
Interest Only / Negative Amortization / Stated Income / Stated Asset
Plus a million Casey Serins to abuse them
I was in the Harvard camp until the story of Casey Serin came out.
Then I knew if he could commit such fraud on such a scale, the bubble was largely fraud-based and would not souffle down nicely.
The saddest part is, when you go line by line state by state, the imbalances are enormous. Amazing all this big money floating around over the last 8 years and not one state saved for a rainy day.
Now all they want is more money out of our pockets...with no possible raises, and pay cuts, they come to take more from us.....Bull shit!.
And I will also add WHERE DID THE MONEY GO?!!!!!!!!!!!!!!!!!!!!!!
You mean there was a housing bubble? When?
This failure of Harvard makes me smile. As a Yalie, I can tell you we would have predicted the housing bubble. LOL!
At least unless we were being paid not to, like Harvard.
The thing about Harvard dolts is that it truly shocks them to find out they are wrong...they are deeply, personally shocked. Their RE reports have been amusingly offkilter for years. But for all out entertainment, check out the RE missives from the RE center at George Mason University. Went to find some links, and found this at their website...you really can't make this stuff up...
"Producing Real Estate Leaders of Tomorrow
Introduction
George Mason University is pleased to announce the launch of a university-wide initiative which will produce the real estate professionals of tomorrow and will further the educational and professional opportunities of real estate industry professionals.
Our newest degree, the Master of Real Estate Development begins September 2009. We are extremely excited about this new program, and are starting to accept applications. We are seeking only 20 outstanding students, so apply now!"
As a Yalie, I can tell you we would have predicted the housing bubble. LOL!
Yep, Shiller predicted the bust, but what about the Yale model for endowment investing...
These folks/entities never had to admit their wrong. They just move onto the next pump and dump racket and hope they leave J6P holding the steaming bag of turd once again. It will probably work too.......until it doesn't and then things will get UGLY.
scrooge-
If anyone fit the bill as having the appearance of a greasy POS...these guys are it.
Ciao
MS
The MBA just announced a new estimate of mortgage originations for 2009 - 2.03T.
Compare that to the Fed's purchase of MBS, which started in early January, and runs through the end of the year - $1.25T.
FAQs: MBS Purchase Program - Federal Reserve Bank of New York
Not a complete apples-to-apples comparison (since there is some delay in getting mortgages pooled to sell), but roughly, 1.25/2.03 = 61.6%.
So the Fed will buy the equivalent of almost 2/3rds of all mortgages originated this year.
http://www.sling.com/blog/2536/Harvard's-'09-'10-Acceptance-Rate:-SEVEN-PERCENT
Harvard's 09-10 Acceptance Rate: 7%
I actually wrote one of the "Harvard"-type real estate reports for the Johns Hopkins Real Estate program as a grad student there at the beginning of this decade. We interviewed a number of leading real estate experts in the DC area. About 90% of them were wrong on the 2001-3 commercial slowdown, and but slowing strong growth was still what we printed. It is the heard mentality...no one wants to be the outlier. Even the guys who sensed this blowup in their gut would never admit to anyone but the people closest to them.
It gives me a certain satisfaction they did not accept my application. Too bad I ended up at LSE which turned out to be just as enthralled by the banking industry. Like Mick Jaeger, a LSE droupout, I could get no satisfaction.
As CR noted, there were enough caveats in both reports to claim they at least mentioned the risk, albeit painting that risk as likely as a life-sterilizing meteor strike. I mean it's right there, if unemployment goes up and if the economy slows, I mean, that's like totally impossible, but they said it... /snarkoff
--bh
Hey Little Spender!
Chinese Consumers Won't Save Us | Newsweek Business | Newsweek.com
"It will take much longer than that for the Chinese to rival Americans as consumers: Chinese incomes are about one tenth those in America, and total consumer spending in dollar terms was about $1.7 trillion in 2007, compared with $12 trillion in the U.S."
Forgive Us Our Debts As we have not forgiven our debtors
Which Country Has the Most Debt? | Newsweek Business | Newsweek.com
"More problematic are the U.S. and the U.K., where relatively low debt loads are rapidly rising thanks to the financial crisis. U.S. debt now stands at 81 percent of GDP; Britain's is 61 percent. But the U.K.'s debt has been increasing faster than that of any other big nation, rich or poor—between 2006 and 2010, Britain's gross debt will have grown by nearly 59 percent."
We sort of wrote our reports the same way at JHU, the trend will continue, and if everything impacting real estate gets more positive real estate will be more positive, and if everything impacting real estate gets more negative real estate will be more negative. It was the first time I wrote a report like that and the game was not too tough to figure out.
Personally, I think CRU has the best program available today. And it's free! Almost free.
Go CRU!
(CR University)
Over the weekend, I rediscovered a box of "older" books in a closet. Among them was a political cartoon book - best political cartoons of 2006. In this book was a whole chapter of political cartoons poking fun of the housing bubble, including images of homeless people hawking cardboard box homes for $400,000, Snoopy advertising his house at an outrageous price, images of bubbles and more. Cartoonists (not trained in finance) knew then that a housing bubble existed ... Just for perspective on who knew what when.
Pennymac SEC filing here:
http://www.sec.gov/Archives/edgar/data/1464423/000104746909005923/a2193225zs-11.htm
I follow the housing market closely and have always noticed that the underlying premise of all predictions of demand are based on demographics showing that population is growing and supply is inadequate to meet demand. This fundamental error in economics is at the base of the Harvard annual reports. Not surprising since Harvard is at the center of econometric methodology which has been notoriously wrong on many, many fronts. If "demand outstripped production" were the correct way to measure potential growth then we'd have continuous growth in almost everything. Funny that's never happened. http://www.dailycapitalist.com.
So when the Fed buys these mortgages it is pure "printing", yes?
If the truth were being reported we'd be having riots in the streets. And meanwhile the top
execs in banks and brokerages that caused such a mess are STILL employed and making
millions while laying off THOUSANDS of people that actually do work. If you know anyone in
banking that's still employed, odds are they are doing the work of three people so the top
execs can show 'savings' and continue collecting mega-incomes.
good articles: Financial Opinions Updated Daily iamned.com