Wednesday, September 15, 2010

Today's Best Reads

1--U.S. Home Prices Face 3-Year Drop as Inventory Surge Looms, Bloomberg Excerpt:The slide in U.S. home prices may have another three years to go as sellers add as many as 12 million more properties to the market.

Shadow inventory -- the supply of homes in default or foreclosure that may be offered for sale -- is preventing prices from bottoming after a 28 percent plunge from 2006, according to analysts from Moody’s Analytics Inc., Fannie Mae, Morgan Stanley and Barclays Plc. Those properties are in addition to houses that are vacant or that may soon be put on the market by owners.

“The best thing that could happen is for prices to get to a level that clears the market,” said Shapiro, who predicts prices may fall another 10 percent to 15 percent. “Right now, buyers know it hasn’t hit bottom, so they’re sitting on the sidelines.”

2--TARP was not a success, Marshall Auerback, naked capitalism
Key quote: "Virtually all of the goals of TARP could have been achieved via regulatory forbearance, rather than government bailouts. Money was “repaid”, not because the banks were accumulating massive profits as a consequence of their revival, but largely as an outgrowth of the accounting tricks sanctioned by Congress and the White House in the wake of the 2008 financial crisis. Why did the governments simply not temporarily suspend capital requirements?"

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