REwired

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Open commentary on everything impacting the U.S. housing economy. The opinions expressed here represent the author's alone.

The NPA numbers game

The WSJ takes on alleged improprieties at banks, which isn't exactly a novel topic these days. The story zeroes in on the games played with non-performing assets -- a subject near and dear to HW's own editorial heart these days, given that we've been suggesting that many banks are under-reserving relative to the level of reported NPAs on the books. But when is an NPA not an NPA? Answer -- when you get to pick the definition:
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Prepayment modelers can't keep up

A secondary mortgage market expert I think extremely highly of emailed me last night with the following terse take on the state of the financial markets: I think we're on the cusp of another sewer break on the news front ... get your waders on ...
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Paulson says credit crisis far from over

No, no that Paulson. Instead, we're talking about John Paulson, the hedge fund manager that moved to the top of the class by shorting subprime in 2007 -- and the now-iconic investor thinks the crisis yet has legs. At the GAIM International 2008 hedge fund conference in Monaco, Paulson said a recession was coming, and that a huge opportunity in distressed debt was on the horizon. Via Reuters:
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Dodd gets testy

News that Senator Christopher Dodd (D-CT), chairman of the Senate Committee on Banking, Housing and Urban Affairs, allegedly received a sweetheart mortgage deal from Countrywide's tan-man CEO Angelo Mozilo has sent the good Senator into outright denial mode. And one that might even be considered humorous, too: At a tense news conference, [Dodd] flatly denied seeking or receiving any discount from the lender.
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Oh, the indignity of it all

It's bad enough these days to be an out-of-work former bank CEO. But it's just adding insult to injury whenever a former bank CEO can't sell his house, isn't it? Perhaps. It also might be a form of poetic justice, but that's not for us to decide. We bring this up, because the word out of New York today is that former Citi chief Chuck Prince III is having a hard time unloading his 2.3 acre mansion in gilded Greenwich. Via Bloomberg's Sharon Lynch:
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Glitzy OC reels in foreclosures

The Orange County Register's Mathew Padilla notes that foreclosures in Orange County -- which includes such glamorous spots as Newport Beach and Laguna Beach -- are soaring. In fact, it only took the first five months of 2008 to surpass the total number of foreclosures filed during all of 2007. A look at a scary graph that would be good news if it were profits, and not foreclosures:
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NAR's numbers proven wrong in New Jersey

File this under too good to pass up: it turns out the National Association of Realtors got their quarterly sales numbers wrong in New Jersey, and not just by a little bit. On May 13, the NAR's first quarter sales summary was released with the requisite highlighting of those few remaining "pockets of strength" in key metropolitan areas. One such area was New Jersey, which apparently had seen sales jump 4 percent on a year-over-year basis. Except for one problem: they didn't.
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Is walking away helping consumer spending?

Here's an interesting thought: walking away from your unaffordable mortgage might actually prop up consumer spending. At least, that's the conclusion of Tom Lee, chief U.S. equity strategist at JPMorgan Securities. Via Reuters: "In a perverse way, people who are leaving homes are actually helping the consumer spending picture," Lee told the Reuters Investment Outlook Summit on New York.
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