Thursday, August 19, 2010

Billions spent on housing tax breaks accomplish little, experts say

The U.S. government spent $230 billion last year to support homeownership but accomplished almost nothing beyond putting money into the pocket of the rich, experts told a conference on housing policy. The rate of homeownership in the U.S.
is about the same as in Canada and less than that of Australia, Britain, Ireland and Spain, which all offer little in the way of homeownership tax breaks. The Urban Institute said tax incentives for U.S. mortgage holders are worth $5,459 a year to people making more than $250,000 but only $91 a year to those earning less than $40,000. USA TODAY
No one working on FNM/FRE is even paying attention to this it seems (click on heading to read the full article)

Fed might no longer have control of the fed-funds rate

Worth thinking about who might be in control when the Fed loses it? Mr. Market? Politicians? Burocrats? Heaven help us!

Benn Steil and Paul Swartz, director of international economics and an analyst, respectively, at the Council on Foreign Relations, explain how the Federal Reserve has sustained "extraordinary lending and monetary policies," as Chairman
Ben Bernanke put it, by reinvesting proceeds from its mortgage-bond portfolio. Eventually, the Fed must exit from such stimulus, with the strategy involving a transformation, Steil and Swartz write. The plan also implies that the central bank will not be able to control any interest rate, including the federal-funds rate.
The Wall Street Journal (click on heading above for full article)

Wednesday, August 18, 2010

Maintaining Cofidence in the Dollar is our responsibility

The growth in foreign dollar holdings has placed upon the United States a special responsibility--that of maintaining the dollar as the principal reserve currency of the free world. This required that the dollar be considered by many countries to be as good as gold. It is our responsibility to sustain this confidence. - President John F. Kennedy days after he took office in January, 1961

Tuesday, August 17, 2010

Copper looks good

The outlook for the copper market remains robust with the supply demand roughly balanced this year and moving into deficit in 2011

"Our price forecast for copper is $3.70 for 2011 - at this point we're sticking with it and this price basically suggests that we're going to have considerable supply deficits where we're likely looking at some 280,000 tonnes deficit in 2011 - and on average, a balanced market in 2010 that could very easily move into deficit territory as we move closer to the conclusion of the year. So we're quite optimistic for copper with prices up $3.70 considerably beyond the cost curve, mainly because of the very tight and tightening supply-demand conditions."

This is a quote from Bart Melek: Commodity strategist, BMO Capital Markets and the full interview can be read, and listened to, by clicking on the heading above.

Santelli rant on housing

Rick Santelli tells it like it is. Again.

The problem he points to is that a further collapse of the housing in dustry is inevitable as long as the Fed continues to meddle.

It is an axiom of economics that the longer you interfere and distort a market the harsher the ultimate inevitable correction becomes.

The interest rate on the mortgage is irrelevant if there is no equity left to lend against..even for well qualified borrowers with a job and an income.

Sunday, August 15, 2010

From Visual A periodic Table of Visualization Methods

(Click on heading to get a brainload full)
Thanks to Barry ritholz for pointing me at this. He's is cool!