HOUSING CRISIS DEEPENS

The Office of the Comptroller of the Currency and Office of Thrift Supervision reported today that mortgages in delinquency rose 30 percent in the fourth quarter.  In all, more than 10 percent of all mortgages are delinquent.

The report also contains data that confirms mortgage loan modification programs will not significantly reduce the unprecedented number of nonperforming mortgage loans, or reduce the mortgage foreclosure rate. The Obama administration should abandon the Treasury Department’s mortgage modification plan.

As I concluded in an earlier blog related to mortgage modification, the housing crisis will resolve itself the old-fashioned way. Delinquent borrowers will lose their houses through foreclosure. This will increase the housing inventory, which will cause housing prices to decline. At some point, prices will fall far enough for qualified borrowers to buy the houses.

Margaret Chadbourn and Kathleen Hayes published an article today on Bloomerg.com, which provides an excellent summary of The Office of the Comptroller of the Currency and Office of Thrift Supervision’s report (Link to Article).

© 2009, by John Butrus, All Rights Reserved

DICK MORRIS – EXAGGERATED MONEY SUPPLY FIGURES?

In Fox television appearances, and in a March 3, 2009 article published on TheHill.com Dick Morris made the following claim: “In the past five months, according to the Federal Reserve Board, the money supply in the United States has increased by 271 percent.” [Emphasis added].  This highly inaccurate statement serves as the basis for  Mr. Morris’s prediction that hyperinflation will coincide with economic recovery.