Posts filed under “Credit”

Why Does Everyone Hate Home Ownership ?

U.S. homeownership falls to the lowest levels in almost 20 years, blared the headlines. Lots of articles explained “Why Your Home is Not a Good Investment” and why Americans think owning a home is better for them than it is. It seems that America’s former love affair with real estate is over.

Blame the recency effect. People have a disconcerting tendency to give more weight to what just happened than long-term trends. This is why the monthly jobs report, a very rough estimate, has such an outsize impact on the markets. This same effect is what is driving people toward renting over buying.

A little context is needed.

Let me preface this by noting I was very bearish on U.S. residential real estate in the last decade. All the metrics — median income to median home price, cost of renting versus owning, residential real estate value relative to gross domestic product — showed an extremely overvalued market by two to three standard deviations. Before it was all over, economists Carmen Reinhart and Ken Rogoff argued that we were in a credit bubble and housing was due for a 35 percent crash. Continues here

 

Category: Credit, Data Analysis, Real Estate

The Liquidity Stress Ratio: Measuring Liquidity Mismatch on Banks’ Balance Sheets Dong Beom Choi and Lily Zhou This post is the fourth in a series of six Liberty Street Economics posts on liquidity issues. Liquidity transformation—funding longer-term assets with short-term liabilities—is one of the main functions that banks provide. However, this liquidity mismatch exposes banks…Read More

Category: Bailouts, Credit, Think Tank

The Refi Boom Is Over

Mortgage lending declined to the lowest level in 14 years as homeowners pulled back sharply from refinancing and house hunters showed little appetite for new loans. Nick Timiraos joins MoneyBeat.

 

 

Category: Credit, Real Estate, Video

Declining Migration Within the U.S.: The Role of the Labor Market

Category: Credit, Employment, Real Estate, Think Tank

Depositor Discipline of Risk-Taking by U.S. Banks

Depositor Discipline of Risk-Taking by U.S. Banks Stavros Peristiani and João Santos Liberty Street Economics April 14, 2014   This post is the second in a series of six Liberty Street Economics posts on liquidity issues. The recent financial crisis caused the largest rise in the number of bank failures since the unprecedented banking crisis…Read More

Category: Credit, Federal Reserve, Regulation, Think Tank

The Mystery of the Missing Home Buyers

This week, the New York Times launched The Upshot, combining aspects of the Washington Post’s Wonkblog with Nate Silver’s 538. Edited by Pulitzer Prize winner and former economics columnist David Leonhardt, we linked to the inaugural piece “America’s Middle Class Is No Longer the World’s Richest.” This morning, I want to direct your attention to…Read More

Category: Credit, Real Estate

To Whom Does the U.S. Government Owe Money?

Over at Political Calculations, they have updated an excellent graphic showing the various folsk Uncle Sam owes money to: click for larger graphic Source: Political Calculations  

Category: Credit, Digital Media, Taxes and Policy

Category: Credit, Think Tank

A New Idea on Bank Capital

A New Idea on Bank Capital Hamid Mehran and Anjan Thakor Liberty Street Economics  April 07, 2014     How does any firm decide on its capital structure—how much equity (capital) to use, how much debt? And what does research tell us about why banks have so much more financial leverage than other firms? How…Read More

Category: Credit, Think Tank

The Stability of Funding Models

Category: Credit, Think Tank