Foreclosure filings dropped 27% – the biggest drop recorded yet.

Much of that decrease is attributed to the month of February, as February foreclosure filings were 14% lower than a month earlier.

However, not all of that is necessarily from improving home markets.

“Allegations of improper foreclosure processing continued to dog the mortgage servicing industry and disrupt court dockets,” RealtyTrac CEO James Saccacio said. “The industry is in the midst of a major overhaul that has severely restricted its capacity to process foreclosures.”

For the month, there were still over 225,000 foreclosures filed.

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(Compliments to Le Fly)

Minicipal bond issuance is looking to have a terrible year, as new issues are at their lowest level since the turn of the millennium. Since March 4, muni issuers have only managed to sell around $31.5 billion in debt.

In the tumultuous early days of 2000, $39.1 billion in muni bonds were sold. The lack of sales spells continued austerity as pressure mounts on state and local governments.

The decline has been in part attributed to the end of the Build America Bond Program, which helped to subsidize municipal borrowing activity. However, such a powerful drop off has even some of those expecting decreased activity in a state of disbelief.

The question that should be on the minds of market participants: is this market drawdown because municipalities aren’t issuing new debt, or because no one wants to buy it?

In conjunction with the powerful political grassroots movements calling for spending reform across the country, the inability of municipalities to restructure their debt may give further ammunition to those calling for government austerity.

Which has everyone else wondering, what will that do to national asset prices?

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32% of all homes purchased in January were paid for in cash, a huge increase from the 26% a year ago, says the National Association of Realtors.

Roughly 30% of all home sales in Southern California were paid for in cash, in January of this year. In distressed markets of Pheonix and Las Vegas, cash sales were over 50% of the market.

The appeal of cash deals is obvious, as cash means not having to wait for banks or appraisals, and increases the chance that the deal goes through. As such, people are often willing to accept less money, as long as the deal is paid for up front.

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Republicans Thursday used a committee loophole to remove all spending measures from legislation, which the Senate approved minutes later. The need for a quorom being denied by the 14 AWOL Democrats was at that point unnecessary and the bill went through to the Governor, Scott Walker.

“In 30 minutes, 18 state senators undid 50 years of civil rights in Wisconsin. Their disrespect for the people of Wisconsin and their rights is an outrage that will never be forgotten,” said Democratic Senate Minority Leader Mark Miller, one of the jackasses who has spent the last several weeks in hiding precisely so democracy could not take place.

“Tonight, 18 Senate Republicans conspired to take government away from the people.”

I’m sure the taxpayers of this country, who were being expected to continuously shoulder the burden of government workers, regardless of whether they were meeting expectations or not, will not care for very long.

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Bunge Limited announced that their wholly owned finance arm will be pricing $500 million aggregate principal with a yield of 4.1%. The notes come due in 2016.

The stated purpose of this money is for simple corporate purposes and working capital. The timing coincides with record global grain prices, export bans in several countries, calamitous weather in several major grain exporting countries, and riots in the Middle East.

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Speaking on Friday March 4, Janet Yellen of the Federal Reserve Open Market Committee offered words on the state of global monetary policy which, as of yet, I have been unable to decipher for any trace of discernable thought.

Throughout the decent length speech, she touched on many subjects, including the abolishment of the Bretton Woods system, the trade imbalance with China, and Keynesian rationale for deficit spending. However, reading through it, one would be forgiven if they didn’t pick up on any of this.

The one thing this Federal Reserve member seems most keen on is keeping things the same.
On the nature of deficit spending and gross liabilities in the U.S. leading into the housing crisis, Mrs. Yellen seems to feel that the fault rests with the trade imbalances between foreign partners.

“Strong capital outflows from countries with chronic current account surpluses–in part reflecting heavily managed exchange rates, reserve accumulation, and other shortcomings in the operation of the international monetary system–put downward pressure on real interest rates, in turn boosting asset prices (particularly for housing) and enhancing the availability of credit.”

Such an argument is new to my ears. While certainly it is true that large differentials in trade, coupled with reinvestment on the part of the surplus running country into that of the deficit running country, could create and foster a cheap money environment which could lead to wild asset bubbles – well, couldn’t the same thing be said about all forms of debt?

Lenders by their nature cause real interest rates to be lowered. To suggest that such a cause is merely on the hands of trade imbalances, while certainly nestled around a grain of truth, seems to miss the larger issue.

Janet Yellen continues, despite overlooking this obvious fact, by – almost psychologically – going on the defensive of debt and deficits as a whole.

“These developments contributed significantly to the buildup of financial imbalances, but they were not, on their own, sufficient to have engendered the massive financial crisis we experienced.
Had the additional domestic credit associated with these capital inflows been used effectively, the imbalances need not have led to financial ruin.”

Well yes, that would be the ideal setting, wouldn’t it? Where all faith and trust are met to the fullest of expectations and more; however, it is worth noting that to count on fulfillment of promises as a matter of policy is somewhat naïve.

What should be apparent to everyone, after almost a century of continuous disappointment by Keynesian economists, is that the fractional reserve banking system is not a blessing or a boon to those who reside beneath it.

This implies one party with ownership to one asset and well defined obligations of any counterparties. Not a continuation of the same system over a larger and more continuous jurisdiction (same problems, but now they affect more people).

The only aspect of Mrs. Yeller’s speech that she seemed to nail was the general suggestion that things have to change. However, in referring to China in hushed tones as “countries with chronic current account surpluses,” ambiguous terminology like “flexible exchange rates” (a buzzword never explained in terms of real transactions), and half-hearted calls that we somehow make everyone to be sensible and follow the rules, you may be left wondering just when all this change will be occurring.

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