NEW YORK (Reuters) – The percentage of U.S. homeowners who owe more than their house is worth will nearly double to 48 percent in 2011 from 26 percent at the end of March, portending another blow to the housing market, Deutsche Bank said on Wednesday.
[…]Covering 100 U.S. metropolitan areas, Deutsche Bank in June forecast home prices would fall 14 percent through the first quarter of 2011, for a total drop of 41.7 percent.
[…]Homeowners with the riskiest mortgages taken out during the housing boom have seen the greatest erosion in equity, in part because they were “affordability products” originated at the housing peak, Deutsche said. They include subprime loans, of which 69 percent will be underwater in 2011, up from 50 percent in March, Deutsche said,
Of option adjustable-rate mortgages — which cut payments by allowing principal balances to rise — 89 percent will be underwater in 2011, up from 77 percent, the report said.
Regions suffering the worst negative equity are areas in California, Florida, Arizona, Nevada, Ohio, Michigan, Illinois, Wisconsin, Massachusetts and West Virginia. Las Vegas and parts of Florida and California will see 90 percent or more of their loans underwater by 2011, it added.
Socialism destroys economic growth. There is no way around it.
* Political pressure led to the erosion of responsible lending practices:
In the early 1990s, Fannie and Freddie began to come under considerable political pressure to lower their underwriting standards, particularly on the size of down payments and the credit quality of borrowers. (p.6)
* Lower down payments led to housing prices that outpaced income growth: Once government-sponsored efforts to decrease down payments spread to the wider market, home prices became increasingly untethered from any kind of demand limited by borrowers’ ability to pay. Instead, borrowers could just make smaller down payments and take on higher debt, allowing home prices to continue their unrestrained rise. Some statistics help illustrate how this occurred. Between 2001 and 2006, median home prices increased by an inflation-adjusted 50 percent, yet at the same time Americans’ income failed to keep up. (p. 11)
* Members of an “affordable housing” coalition shared profits with political allies to help legitimize their business practices: Fannie Mae created and used The Fannie Mae Foundation to spread millions of dollars around to politically-connected organizations like the Congressional Hispanic Caucus Institute. It also hired well-known academics to give an aura of academic rigor to policy positions favorable to Fannie Mae. One paper coauthored by now-Director of the Office of Management and Budget Peter Orszag, concluded that the chance was minimal that the GSEs were not holding sufficient capital to cover their losses in the event of a severe economic shock. The authors suggested that “the risk to the government from a potential default on GSE debt is effectively zero,” and that “the expected cost to the government of providing an explicit government guarantee on $1 trillion in GSE debt is just $2 million.” (p.7)
* The Government Sponsored Enterprises led the way into the housing crisis: Fannie Mae and Freddie Mac were leaders in risky mortgage lending. According to an analysis presented to the Committee, between 2002 and 2007, Fannie and Freddie purchased $1.9 trillion of mortgages made to borrowers with credit scores below 660, one of the definitions of “subprime” used by federal banking regulators. This represents over 54% of all such mortgages purchased during those years. (p.24)
My comprehensive post on this issue is here. In that post, I collected videos of Democrats admitting that their plan was to force banks to make loans to unqualified borrowers, as well as news articles by the New York Times and Los Angeles Times on the topic.
Polar bear numbers in Canada have increased in 11 of 13 regions in recent years.
Another report shows that polar bear encounters on the North Slope oil fields have risen to record levels the last two years. The global warming religionists blame the increase in polar bear sightings on shrinking ice flows. So, now the alarmists are blaming manmade global warming on both increased and decreased polar bear populations.
There are 5 times as many polar bears today as there were 50 years ago…
In August 2008 Alaska Governor Sarah Palin sued the federal government seeking to reverse the decision to put the polar bear on the threatened species list.
The U.S. Fish & Wildlife Service estimates that the polar bear population is currently at 20,000 to 25,000 bears, up from as low as 5,000-10,000 bears in the 1950s and 1960s.
But it’s much worse than that.
The suppression of the evidence
Not only is the number of polar bears 5 times higher than it was 50 years ago, but the research of the most prestigious scientists is being suppressed.
Over the coming days a curiously revealing event will be taking place in Copenhagen. Top of the agenda at a meeting of the Polar Bear Specialist Group (set up under the International Union for the Conservation of Nature/Species Survival Commission) will be the need to produce a suitably scary report on how polar bears are being threatened with extinction by man-made global warming.
This is one of a steady drizzle of events planned to stoke up alarm in the run-up to the UN’s major conference on climate change in Copenhagen next December. But one of the world’s leading experts on polar bears has been told to stay away from this week’s meeting, specifically because his views on global warming do not accord with those of the rest of the group.
Dr Taylor… was voted down by its members because of his views on global warming. The chairman, Dr Andy Derocher, a former university pupil of Dr Taylor’s, frankly explained in an email (which I was not sent by Dr Taylor) that his rejection had nothing to do with his undoubted expertise on polar bears: “it was the position you’ve taken on global warming that brought opposition”.
Dr Taylor was told that his views running “counter to human-induced climate change are extremely unhelpful”. His signing of the Manhattan Declaration – a statement by 500 scientists that the causes of climate change are not CO2 but natural, such as changes in the radiation of the sun and ocean currents – was “inconsistent with the position taken by the PBSG”.
WINTERY KNIGHT 