Thursday, July 12, 2012

Today's links

 1--Libor scandal explained, The Big Picture (Graphic)

2--Overnight deposits flee ECB, Bloomberg

Banks in the 17-nation euro region parked 324.9 billion euros ($397.2 billion) at the ECB yesterday, down from 808.5 billion euros the previous day, the Frankfurt-based institution said. That’s the least since Dec. 21.

Financial institutions are no longer remunerated for the money they deposit at the ECB overnight after last week’s interest-rate cuts took effect yesterday. Policy makers reduced the main refinancing rate on July 5 to a record low of 0.75 percent and cut the deposit rate to zero to stimulate credit supply and lending.
“It’s a miracle that banks used the facility at all,” Christoph Rieger, head of fixed-income strategy at Commerzbank AG in Frankfurt, said in an interview. “Most banks are putting their money into reserve accounts instead. There’s no reason to believe that excess liquidity is declining.

3--Economic report card--FAIL, Burning Platform

After three and a half years, Obama’s policies have led to 11 million less full-time workers and 8 million more part-time workers – just like he drew it up on the board when he committed $800 billion of your tax dollars to saving our economy through classic Keynesianism. Obama declared the stimulus would be a two year jolt to get our economy back on track. Federal government spending was $2.7 trillion in 2006, $2.7 trillion in 2007 and $3.0 trillion in 2008, the last three years of Bush’s administration. If spending stayed on a standard trajectory, it would have been $3.1 trillion in 2009, $3.2 trillion in 2010, $3.3 trillion in 2011 and $3.4 trillion in 2012. With the end of the Iraq occupation in 2010, it should have dropped by $200 billion, resulting in total spending of $3.1 trillion in 2011 and $3.2 trillion in 2012.

Obama declared the stimulus would be short-term. Federal government spending should have risen to $3.5 trillion in 2009, $3.6 trillion in 2010 ($300 billion stimulus – $200 billion Iraq withdrawal), and then revert back to $3.3 trillion in 2011 and $3.4 trillion in 2012. Let’s see whether Obama was honest in his promises:

4--Libor scandal to hit US, MSNBC

5--CHANOS: China's Credit Situation Is Worse Than Greece And Spain, Business Insider

6--A Failing Grade for school "Reform", NYRB

7--Pointless Pain In Spain, Paul Krugman, NY Times 

8--Housing Passes a Milestone, WSJ

The housing market has turned—at last.

The U.S. finally has moved beyond attention-grabbing predictions from housing "experts" that housing is bottoming. The numbers are now convincing.

Nearly seven years after the housing bubble burst, most indexes of house prices are bending up. "We finally saw some rising home prices," S&P's David Blitzer said a few weeks ago as he reported the first monthly increase in the slow-moving S&P/Case-Shiller house-price data after seven months of declines

9--Has Housing Hit Bottom on Your Street, WSJ

Generally speaking, home prices are rising again in more markets because demand is up strongly from one and two years ago, while the number of homes for sale is down sharply.

Moreover, the share of homes being sold out of foreclosure is down significantly in many markets. That doesn’t mean foreclosures are history. What it does mean is that foreclosures are accounting for a smaller share of all sales. When the “distressed” share of sales drops, prices can rise.

10--1001 days to foreclose in NY, Housingwire

Foreclosure completion time was up in the second quarter, increasing to 378 days from the initial foreclosure notice to the completed foreclosure, compared to the first quarter's 378 days. The number is a record high going back to the first quarter of 2007.

A few states with some of the longest foreclosure timelines, however, saw their average foreclosure time decrease. The average time to foreclosure in New York was down from 1,056 days in the first quarter to 1,001 days in the second quarter — a 5% drop — though the state still has the longest foreclosure timeline nationwide....

The report shows a total of 1.05 million properties with foreclosure filings, including default notices, auction sale notices and bank repossessions, in the first half of the year, up 2%  from the previous six months, down 11% from the first half of 2011.

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