Can Cities Use Eminent Domain To Seize Mortgage Loans?
Almost 24% of homes with a mortgage in the United States are underwater, meaning that more is owed on the loan than the property is currently worth. A new company known as Mortgage Resolution Partners is proposing to work with municipal governments to use eminent domain to seize underwater mortgage loans and restructure them at a discount to the borrower. Eminent domain has never been used to obtain mortgage loans. Richard Leland and Robert Hockett talk with Bloomberg Law’s Lee Pacchia about the legalities surrounding this plan.
Must see video below.
Lazy and Transitional
Some market thoughts by Peter Tchir that has been rather spot on with regards to the market lately.
Lazy and Transitional describes both me and the market. Today I will be extremely lazy and just resend what I sent out Monday.
We are getting very close to my 1,385 “target”. The squeeze is running its course. Investors are still underinvested and I continue to see signs of strength in housing but I’ve been selling into this run up and will continue to sell now as I shift for the next phase of this market.
The next phase will be that the U.S. comes into focus. After a year or more of complaining about why 17 countries can’t accomplish anything quickly, 17 countries will wonder why 1 country can’t get its act together easily. We have ignored the internal politics of the individual countries. We have overreacted to statements from Merkel that aren’t indicative of intent, just pandering to her base. But all of that is slowly receding to the background as we take center stage.
Will the U.S. disappoint or will we somehow get our act together and create policies that are good for this country, and by extension, the entire world?
I am shifting my risk to be ever more specific. Playing the demise of Europe through the S&P 500 has been a bad idea. If you thought Spain was going to be in trouble, you should have shorted Spanish stocks or bonds. I think spending time ensuring that your investment (long or short) actually matches your view will be key. If you like high yield, be long high yield, don’t buy stocks because you think the high yield market will do well. If you like Spain and thing the worst is priced in (as I do for stocks), then buy Spain, not S&P 500.
Record bottom yields
With yields hitting new lows, we present a few charts.
Truly impressive work by Mr Bernanke.
Charts below.
Corporate Profits Surge At Expense Of Workers
Guest post by Lance Roberts of Streettalklive.
There was an interesting article out this morning from Reuters stating: “From the companies’ point of view, it makes perfect sense these days to hoard cash. First, Congress lets overseas profits accumulate untaxed, so long as offshore subsidiaries own the cash. Second, companies have a hard time putting cash to work because fewer jobs and lower wages mean less demand for products and services. Third, a thick pile of cash gives risk-averse CEOs a nice cushion if the economy worsens.
Given the enduring hard times, you might think that corporations have used up their cash since 2009.But real pretax corporate profits have soared, from less than $1.5 trillion in 2009 to $1.9 trillion in 2010 and almost $2 trillion in 2011, data from the federal Bureau of Economic Analysis shows.”
200 years of US yields
Small reminder of where yields have been over the past 200 years.
Chart from a piece SG put out last year.
This time is different, or?
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