More Housing Games

by Larry Levin

I have recently written about some wild things happening in the housing market thanks to government intrusion.

Do you remember "Cash for Caulkers" when I said...President Obama proposed a new program Tuesday that would reimburse homeowners for energy-efficient appliances and insulation, part of a broader plan to stimulate the economy.

There was also the White House idea of "homes for the unemployed." The old notion of renting is so old-school now and the failure of the HAMP program.

There is a now another new idea from the White House: Pay homeowners to sell at a loss. Is there anyone at the White House who has any clue on housing? How many hundreds of billions of dollars need to be wasted before they just let the market fix the problem on its own?

From the NYT: http://www.nytimes.com/2010/03/08/business/08short.html?pagewanted=1&src=twr

In an effort to end the foreclosure crisis, the Obama administration has been trying to keep defaulting owners in their homes. Now it will take a new approach: paying some of them to leave.

This latest program, which will allow owners to sell for less than they owe and will give them a little cash to speed them on their way, is one of the administration's most aggressive attempts to grapple with a problem that has defied solutions.

Under the new program, the servicing bank, as with all modifications, will get $1,000. Another $1,000 can go toward a second loan, if there is one. And for the first time the government would give money to the distressed homeowners themselves. They will get $1,500 in "relocation assistance."

Short sales are "tailor-made for fraud," said Mr. Lawler, a former executive at the mortgage finance company Fannie Mae.

Under the new federal program, a lender will use real estate agents to determine the value of a home and thus the minimum to accept. This figure will not be shared with the owner, but if an offer comes in that is equal to or higher than this amount, the lender must take it.

Brilliant, eh?



Previous Day's Trading Room Results:

Trade Date: 3/10/10

E-Mini S&P Trades*
(before fees and commissions):


1) OTF buy @ 10:39am at 1146.50 = -1.25 (1 lot)

2) FT buy @ 10:53am at 1144.75 = b/e & +1.00 (2 lot)

3) 80% sell @ 11:49am at 1142.75 = -1.25 & -1.25 (2 lot)

4) FT buy @ 2:00pm at 1145.00 = +.75 & +.50 (2 lot)

3) Algorithm positions (2)

4) "Reading the Tape" positions (4) ...combined Secret's, Algo, & "Reading the Tape" total...-1.25



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