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this is telling:

Obama is Losing Independent Voters

By Scott Rasmussen and Douglas E. Schoen

Nov. 16 (WSJ) — A look at more detailed data shows why Mr. Obama’s ratings are likely to drop even further.

A CNN poll released Nov. 6 found that 47% of Americans believe the top issue facing the country is the economy, while only 17% say its health care. However, the bulk of the president’s efforts over the past six months have been not on the economy but on health care, an issue in which he continues to draw negative ratings.

In a Rasmussen Reports poll taken after the House of Representatives passed health-care reform by the narrowest of margins last Saturday night, 54% of likely voters say they are opposed to the plan with only 45% in favor. Furthermore, in the all-important category of unaffiliated voters, 58% oppose the bill. That’s one of the reasons why so many moderate Democratic House members opposed it.

The CNN poll also shows that in addition to health care, a majority of Americans disapprove of how Mr. Obama is handling the economy, Afghanistan, Iraq, unemployment, illegal immigration and the federal budget deficit. Put simply, there isn’t a critical problem facing the country on which the president has positive ratings.

An NBC/Wall Street Journal poll conducted from Oct. 22-25 found that the president’s personal ratings have suffered a similar decline. His rating for being honest and straightforward has fallen eight points from January to 33% and his rating for being firm and decisive has fallen 10 points to 27%.

Even more fundamentally, a Washington Post/ABC News poll conducted from Oct. 15-18 shows that the president has now reached a point where less than a majority of Americans believe he will make the right decisions for the country.

Deficit reduction and reining in spending are critically important priorities for the vast majority of the electorate. Indeed, according to a Rasmussen Reports Poll conducted at the end of last month, voters say deficit reduction is most important and health care is a distant second.

Moreover, according to a poll released by the Kaufman Foundation in September, a plurality of voters (32%) think the federal government should cut tax rates on payrolls and businesses to stimulate employment, particularly at a time when unemployment is at double-digits. Mr. Obama campaigned on tax cuts for 95% of the American people, but according to a Rasmussen Reports poll released in mid-August, just 6% of likely voters expect to get a tax cut. Over 40% of respondents believe that they will get a tax increase.

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Yes, interesting that over 75% are still paying and probably will continue to pay for a variety of reasons, including they personally guaranteed the payments, their payments have, in many cases, gone down, they like living where they are living, and, not least, they believe in meeting their obligations.

A corrupting influence that, anecdotally, is widespread is that most assistance programs require you be delinquent. A friend of mine who is current on his mtg and intends to stay current was just told he could get assistance if he stopped making his payments.

When govt. implements programs with these kinds of incentives they induce a breakdown in the moral fabric of the society.
There have always been numerous examples of this, particularly with the income tax laws, but the last year has seen a disturbing increase in new legislation with counterproductive incentives.

This also begs for a payroll tax holiday and per capita federal revenue sharing for the states to enhance net incomes needed to make the mortage payments and ‘fix’ the economy from the bottom up.

Yet the entire Congress as well as the Administration seems silent on this issue.

Fitch Sees 60% of Current RMBS Borrowers Underwater

By Diana Galobay

Oct. 13 — The majority — 60% — of remaining performing borrowers within ‘06- and ‘07-vintage residential mortgage-backed securities (RMBS) bear negative home equity, meaning they are underwater on their mortgages and owe more than their houses are worth.

This overwhelming presence of negative equity is hampering sustained improvement in RMBS performance, according to Fitch Ratings.

“[N]egative equity reduces a borrower’s inventive to pay their mortgage and limits their options when faced with financial difficulties,” said senior director Grant Bailey in a statement.

The rate of previously performing borrowers rolling into delinquency status showed “notable improvement” in the first half of 2009 and stabilized during the summer at an elevated level. The percentage of previously performing borrowers rolling into delinquency “increased modestly” in September, Fitch said.

The rating agency expects US unemployment to peak at 10.3% in the middle of next year, further pressuring current borrowers. House prices will ultimately decline another 10% over the next year.

“Home price figures in recent months were temporarily helped by the reduced share of distressed property liquidations due to foreclosure moratoriums and servicers’ increased efforts to qualify borrowers for modifications,” Fitch said. “However, the number of distressed borrowers has continued to grow.”

The rating agency noted the number of non-agency borrowers 90 plus days delinquent reached 1.66m in September — the highest level on record.

“While increased modification efforts and an extension of the first time home buyer tax credit may help home prices, the ultimate increase in liquidations from the growing distressed inventory will likely cause a further price decline,” Bailey said.

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Tax Driven Money

By Mathew Forester

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On Mon, Sep 21, 2009 at 7:38 AM, Greg wrote:

Hi Warren

What are your thoughts regarding the scheme in Ireland announced this past week whereby the government takes real estate assets from the big banks in return for bonds (at a discount implying some sort of bank subsidy) and whereby said banks can in turn repo those bonds at the ECB for cash?

Of course the devil will be in the details but it seems to me this will require all of us to rethink garlic belt sov. risk, the Euro, and the ECB if it comes to fruition.

Haven’t seen the details but reads to me like the govt is simply purchasing real estate assets?

That leads to the usual questions of pricing, etc. the proved unworkable in the US and probably a lot of other places.

Banks are already public/private partnerships with govt guaranteeing the deposits.

So there are several other things the govt might do to get to the same end.

For example, allow the banks to put the designated assets in segregated accounts with specified capital set aside for those assets, wherein losses that exceed that capital specified for the seg account are covered by the govt and not the rest of the banks capital.

That way the govt still functionally owns the assets it’s trying buy but doesn’t have the servicing and accounting and brokerage issues associated with an actual purchase by the cb. and the banks are fully regulated and supervised.

The US govt could have done same with the mbs it has bought for itself and saved itself the accounting nightmare and expense and substantial fees to brokers from buying those secs directly.

And, as you say, in the Eurozone this adds a risk to the national govt itself. So far it seems markets aren’t disposed to challenge their liquidity, and the Fed rescued them last year with the unlimited dollar swap lines (unsecured loans) to the ECB that totalled maybe 600 billion globally.

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