Thursday Links Trying to Recover

The conservative reconstruction of history – billy blog

So if you understand the true nature of the crisis and the fact that it was the culmination of a few decades of neo-liberal policy changes then you will realise that trying to reconstruct it as a fiscal crisis of the state is ludicrous.

Less Than One Percent Of Modified Mortgages In Obama Foreclosure Plan Involve Principal Cuts – HuffPo

Research by state regulators, academics, and by the Federal Reserve shows that principal reductions lead to more sustainable loan modifications. In other words, they’re the best way to ensure that troubled borrowers don’t lose their homes.

But of the nearly 121,000 troubled loans that have been modified by large banks and thrifts under the administration’s Home Affordable Modification Program through March, just 120 of them involved a cut in principal, according to the report by the Office of the Comptroller of the Currency and Office of Thrift Supervision.

Underwater and the Strategic Default PR Campaign, 1: Fannie and a 7-year penalty. – Mike Konczal

HAMP, the Obama adminstration’s foreclosure prevention program, has gone from “look busy” to “not working” to utter, complete disaster. A complete waste of time, resources and energy. And Fannie now wants to replicate it. Let’s see how this goes.

Illinois Leaps Ahead of California in Default Risk, Better than Iraq, Worse than Portugal; Pension Fraud in Milwaukee – Mish

I was not in favor of bank bailouts and I am not in favor of excessive military spending. However, neither bank bailouts nor absurd military spending makes it right for public unions to rape taxpayers day in and day out.

Home Sales: Distressing Gap – Calculated Risk

On Wall Street, So Much Cash, So Little Time – NYT

So for now buyout artists are searching for their next act. Public pension funds, university endowments, insurance companies and other institutions have pledged to invest many billions with them — provided the deal makers can find companies to buy.

Cutting Off the Unemployed – NYT

Back in session for nearly three weeks, the Senate still has not acted. That means that 900,000 jobless workers have already lost their benefits, a number that will swell to an estimated 1.6 million people if an extension is not passed by the July Fourth holiday. Lost benefits — the average check is $309 a week — deprives struggling Americans of cash they need for buying food, paying the rent or mortgage and other essentials.

All indications are that when the Senate finally does pass a bill, it will be stingy and cynical — hacking away at jobless benefits and fiscal aid to cash-strapped states, while preserving tax breaks for the wealthy and other well-connected political donors.

We Cannot Afford to Double Dip – Case Research (must read)

The problem is that our supposed saviors are all out of tools to help the economy climb out of the deep, dark hole we now find it in. The tool belt of any monetary regime is limited to begin with. Nothing more than loosening up the debt purse strings with unrestrained interest rate policy and some additional lending from the central coffers to add to liquidity. These tools are the economic equivalent of performing reconstructive dentistry with a sledgehammer and monkey wrench, effective but not exactly precise.And as Goldman Sachs recently pointed out to a number of its clients, the world’s leading developed nations have all but exhausted the few tools available to them…

So many lots, so few houses – St. Cloud Times

The Times collected data on almost 60 stalled developments in St. Cloud, Sauk Rapids, Sartell, St. Augusta, St. Joseph, Kimball, Rice, Clear Lake and Avon. All have at least 10 vacant lots; some have dozens; a few, more than 100. In many developments, just a tiny fraction of the planned homes have been built. A few developments stand empty.

The housing-market recession is not over – MarketWatch

After years of hearing how home prices are plummeting and foreclosures are mounting, consumers want to feel hopeful about the housing market — but maybe they’re being too optimistic.

Redfin CEO and Others Pull Back on Housing – CNBC, Diana Olick

“The real estate market is like a fat man that can’t get up,” Kelman begins. “The U.S. government has modified loans, extended tax credits, lowered interest rates; we’ve fired a lot of our guns, and at this point the market is just going to have a long slow period of decline.”

Levi’s Features a Town Trying to Recover – NYT

“We wanted to show people who were really doing the work, the hard work, to rebuild after the recession,” he added, and it is serendipitous that “they need a good, sturdy pair of jeans or a trucker jacket to get down to work.”