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Bank’s Bad Math – Home Price Indexing Responsible - The Case-Shiller Index below shows exactly why all raters and banks modeling systems are incorrect. This is why values of securities are thought to be higher in value then the street is willing to pay. … The Fix…  Instead of doing away with mark-to-market they should be mandating that all banks and raters use a universal modeling system in which Home Price Indexing was done on a zip code basis. – excellent post by MR Mortgage

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Regulatory Capital Standards - Proposed Deduction of Goodwill Net of Associated Deferred Tax Liability – … seeking comment on whether to allow goodwill, which must be deducted from Tier 1 capital, to be reduced by the amount of any associated deferred tax liability.  … – FDIC.gov 

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Fall 2008 Housing Review Now Available – The Fall 2008 newsletter is now available at JCHS Havard 

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They Just Don’t Get It – Steven Pearlstein – Too many people don’t understand the seriousness of the current financial meltdown, Steven Pearlstein writes in a Washington Post commentary. The country is facing a decade of little or no economic growth, yet politicians are more concerned with political posturing, financiers haven’t owned up to their mistakes and foreign leaders still think the meltdown is an American problem. “In the coming weeks and months, all of these people will come to understand how deep the hole really is and how we’re all in it together,” Pearlstein writes. -  The Washington Post

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The Worst Financial Services Deal Of The Decade  – Vernon Hill  – The Wachovia-Golden West transaction was a disaster without peer  – bankstocks.com 

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FORECASTS & TRENDS E-LETTER – Gary D. Halbert – IN THIS ISSUE: 1. The Latest $700 Billion Bailout Package  2. What Could Go Wrong? Potentially A Lot  3. What Could Go Right, If We’re Lucky?  4. What Would Happen To The Profits, If Any?   5. A “Main Street” Backlash To Come? -   Pro Futures

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Panic Is Spreading – Brian S. Wesbury and Bob Stein – Blame government failure, not market failure – Forbes

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The Credit Crunch is a Network Failure – John Rutledge – … The asset-backed securities market has a fatal flaw. The securities are created by using historical correlation coefficients to slice a pool of mortgage’s cash flow into pieces with different risk characteristics. The work is done with the Black-Scholes theorem which, like modern portfolio theory and CAPM, assumes that the market for the securities IS ALWAYS IN EQUILIBRIUM, i.e., that there is never a situation of nonprice clearing, never a network failure. But network failures happen … – Dr. John Rutledge Blog

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Weighing Wells’ Alternatives as Top Competitors Scale Up – American Banker – By Paul Davis – On Wall Street

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As Financial Bailout Hangs, Distressed Loan Buyers Wait – Paul Jackson – The failure of a key vote to pass bailout legislation on Monday has more than a few distressed mortgage investors stuck in a holding pattern, as they await a proposal that more so than most directly impacts their business models. Many of these investors and traders as of late have focused their efforts thus far on negotiating purchases of sub and non-performing whole loans from troubled lenders and… – housingwire

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Carlos SLIM: BUFFETT’S GOLDMAN STAKE MAY SERVE AS A MODEL – Bloomberg – NY Post

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Bank of America Offers LIBOR Reverse Mortgage Product – John Yedinak – Bank of America recently announced that they will be offering LIBOR based reverse mortgage products to wholesale brokers.  According to the announcement, Bank of America still believes that the CMT index is better for you and you customer but they realize the spreads between LIBOR and CMT are volatile and may reverse course in … – Reverse Mortgage Daily

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A Federal Probe of Fannie and Freddie – Keith Epstein  – The mortgage giants have received grand-jury subpoenas on accounting and governance matters as the FBI widens its financial probe  – BusinessWeek 

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Fannie and Freddie Break Up Their Powerhouse Lobbying Operations -  Zachary A. Goldfarb -  Mortgage finance giants Fannie Mae and Freddie Mac have dismantled their powerful lobbying corps, removing two dozen people who made …  Washington Post 

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SEC, FASB Issue Fair Value Guidance – Paul Jackson -  Rarely have accounting standards generated so much attention as in the current financial crisis. The Securities and Exchange Commission and the Federal Accounting Standards Board, acting on growing pressure from banks and other sources, moved on Tuesday evening to provide guidance on the use of fair value accounting in inactive markets, just in time to ostensibly affect third quarter earnings. -  housingwire