Economics and Finance
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In today's pictures, a U.S. service member is buried at Arlington National Cemetery, a boy plays in the mud in Myanmar, Peyton Manning joins the Denver Broncos, and more. Britain's Queen Elizabeth II reaffirmed her dedication to serve in an address to Parliament Tuesday marking her six decades on the throne. A fresh wave of sanctions that is feeding panic in Iran's economy is also hitting businesses in NATO-ally Turkey, upending a boom in bilateral trade that was underpinned by improving diplomatic ties. This five-bedroom property, believed to date back to 1860, has been restored to a family home after being subdivided into apartments for many years.Calculated Risk
On a nationwide basis, Fannie Mae and Freddie Mac own or guarantee 60 percent of the mortgages outstanding, but they account for only 29 percent of seriously delinquent loans, obviously a much lower proportion than their share of the market. Even though the Enterprises have a smaller share of seriously delinquent loans than other market participants, they account for just over half of all Home Affordable Modification Program, or HAMP modifications. Between HAMP modifications and their own proprietary loan modifications, Fannie Mae and Freddie Mac have completed more than 1.1 million loan modifications since the fourth quarter of 2008. It has been well-publicized that there is one form of loan modification that FHFA has not embraced, that being principal forgiveness . To be clear, the disagreement is not about helping borrowers.
Articles
All this week, we are looking at the Housing Recovery theme, challenging assumptions that make up the bullish argument. Monday, we began with Debunking the Housing Recovery Story , starting with Shadow inventory. On Tuesday, it was Reality Check on Home Affordability . Yesterday, we looked at the Problem With Home Prices . Today in part 4, we take a closer look at F oreclosures — how many more are likely to occur, and what that means for future of any Housing recovery. Before we get into the details of Foreclosures, a caveat : As housing analysts, strategists, economists, we need to separate the concept of foreclosure as it should be practiced from the recent robosigning scandals .
The Big Picture
Going as far back as Andrew Weiss’s survey paper , there are various attempts to argue that the two theories make the same predictions about earnings and education. A randomly elevated individual will earn more money but is this from having learned more or from being pooled with a more productive set of peers? To explore this, let’s pursue the very good question asked by Bryan Caplan : Our story begins with a 22-year-old high school graduate with a B average.
Marginal Revolution
Links 10/6/10 « naked capitalism
Bailout Loss Estimated at $29 Billion Louise Story, New York Times. The Treasury says $29 billion, estimates by other governmental bodies say $36 to $50 billion. Who would you believe?