Obama foreclosure prevention plan lagging, new data shows (Nasiripour, HuffPo) More great work from Shahien….it appears someone on the Congressional Oversight Panel shared a letter written to them by Geithner in which the Treasury Secretary outlines the latest HAMP data. It doesn’t look good and just provides more evidence that only mods that reduce principal will work over time. As noted yesterday, it’s a very expensive proposition….see next link.

Second-lien writedowns (Konzcal) For the uninitiated, a second-lien loan on a house is one that’s junior to the first lien. For instance you take out a first mortgage to cover 80% of the cost of a new home (first lien) and supplement it with a second mortgage for the remaining 20% (second lien). The second lien is second because it is junior in terms of repayment. If the house’s value falls 20%, then the second lien is…theoretically…totally wiped out before the first lien loses a cent. The scary data is how deep underwater some homeowners with two mortgages are. Loans like option ARMs that allowed a minimum payment with unpaid interest added to the mortgage principal show that some now have mortgage debt equal to 169% of the current value of the home. In other words their mortgage is 69% larger than their home’s value.

PDF – Gensler speech on OTC derivative regulation reform (CFTC) One of our favorite regulators yesterday spoke out about the need for tighter derivatives regulation.

Must Read from 1977 — How inflation swindles the equity investor (Warren Buffett, ht Nick Gogerty) I’ve argued in this space against the conventional wisdom that inflation is good for stocks. Even if earnings are rising, the multiple at which they are capitalized compresses dramatically. Buffett offers much more on the topic. A long piece, but very good.

Can California declare bankruptcy? (Beam, Slate) The answer is no according to Beam, since there’s no part of the bankruptcy code that covers states. He says banks could theoretically end up in some kind of federally-sponsored receivership. Interesting thoughts to kick off a discussion.

Team Obama propoganda push reaches fever pitch (NakedCapitalism) Yves writes disapprovingly of recent articles profiling Tim Geithner, who says his bailouts worked to save the financial system. Sure, the bailouts prevented a steep decline in the short-run, but at the cost of a steeper decline later. The one place Geithner deserves credit is the stress test. He did force banks to raise more capital. He didn’t, however, force them to raise enough. Not when you look at the second-liens on their books!

China property price jump, highlighting bubble risk (Wong, Bloomberg)

Academy award winning movie trailer (YouTube) Hilarious.

Alpert on housing (ht Ed Harrison)….last bit is Dan

Treasury getting more comfortable with principal write-downs, sort of (Nasiripour, HuffPo) Principal writedowns are the only sure-fire way to slow foreclosures, but that means hitting banks’ capital big time. Consider, for instance, that three-quarters of the ~$1 trillion of second-lien mortgages in the U.S. are on commercial bank balance sheets. Writing down principal to some level that again gives folks equity in their home would wipe out a meaningful share of these second-liens. Many banks may not have the capital to withstand that. And if folks think principal writedowns will become official policy, suddenly many will just stop paying their mortgage. These are big reasons this is so controversial inside the administration. Nasiripour has done a great job outing that controversy…

Must Read – Finance: An exposed position (FT)

Strategic defaults on homes on the rise (Said, SF Chronicle….ht PK)

Dumping “dirt bonds” (Hart, Bloomberg) No sense waiting for a housing rebound that may not come till “the early 2030s.”

PDF – The Buffett short thesis (Raj Rajagopal) A Cornell MBA student forwards this presentation of his short thesis on Berkshire Hathaway. Good piece, though it lacks a catalyst. Buffett seems to be in very good health and is as active on the media circuit as ever. For me the short thesis is wrapped up in the fact that Buffett has totally flipped his investing style, focusing on capital intensive, lower-return businesses. I hope to have more on this later this week.

Brazil slaps trade sanctions on U.S. over cotton dispute (BBC)

China says committed to U.S. debt, wary on gold (Chiang/Wheatley, Reuters)

Video – MIT Prof on personalized solar energy (Vimeo, ht Reddit) Can a new process to split hydrogen and oxygen solve the world’s energy needs?

To kill or not to kill Shamu (Esterl, WSJ) Actually, euthanasia appears to be out of the question, even after SeaWorld’s biggest Orca was involved in perhaps his third death. Killer whales are very big business….

Betty White to do SNL (CNN) Prayers…answered.

Baby hippo…

From reader CB:

Rolfe, as you likely know there is no cost of living increase in Social Security payments this year for the logical reason that there has been no increase in the cost of living.

Nevertheless, I just received this from AARP (their boldface):

We’re already months into 2010, and seniors still haven’t seen any relief because of the lack of a cost-of-living adjustment to their Social Security. For the first time in 35 years, the regular payment update they’ve depended on did not occur.

Congress must act quickly. Will you help us flood their offices with letters, demanding that lawmakers make relief a priority?

My point – nobody will give an inch at a time when everyone needs to. Seniors as a group are better off than any other age group and are now enjoying the huge Medicare part D entitlement.

The larger point here is that, at a certain point, the young simply can’t transfer more income to the old. Though many observers don’t worry much about the unfunded liabilities for Medicare and Social Security — “they’re far out on the time horizon and are just promises that can be legislated away” — seniors are a remarkably powerful voting bloc that won’t easily be convinced to accept lower/delayed benefits…

Gary Gensler — regulator and, yes, Goldman alum — has distinguished himself in Washington. As CFTC Chairman, he’s fought to impose stricter rules on OTC derivatives and recently proposed rules that would cut the leverage currency traders are allowed to deploy from 100:1 to 10:1. Lest we all forget how dangerous leverage can be when traders misuse it, there’s LTCM to serve as exhibit A. In a clear sign that Gensler is fighting the good fight, traders are screaming about the proposed rule. Fantastic.

From Carolyn Cui and Sarah Lynch at WSJ: Foes take on leverage curbs from CFTC

An attempt by regulators to protect investors from volatile global currency markets has triggered an uproar among lawmakers, currency dealers and thousands of small traders.

The Commodity Futures Trading Commission has proposed rules that would reduce the amount of borrowed funds that retail investors can use when investing in the U.S. foreign-exchange market to as much as 10-to-1, from the existing 100-to-1 for major currencies.

Under current rules, a customer putting up a security deposit of $1,000 in cash will be able to trade a notional amount of $100,000, a common contract size for currencies such as the dollar and the Japanese yen. The new rule would cap that amount at $10,000.

The rules also would require dealers to abide by new capital and disclosure requirements.

If the rules come into force, investors would be required to either put more capital in their accounts or pare their positions.

Unfortunately, what I’d like to start calling “the politics of easy credit” may get in the way of this sensible new rule:

“If our leverage rules are 10-to-1 and leverage rules elsewhere are 100-to-1, the business is going to move elsewhere,” House Agriculture committee member Jim Marshall (D., Ga.) said.

Thanks Congressman Marshall, for protecting American entrants in the race to the bottom.

As I argued yesterday, on the one hand we want tougher financial reforms, but reforms are related in the sense that they’re all designed to reduce the availability of credit. Call it what you want: leverage, credit, debt finance. Americans love the stuff because it magnifies rewards. The less you put down for an investment — whether you’re a bank, mortgagee or currency trader — the more juice that comes back to you if a trade goes right.

If the trade goes wrong you risk outright collapse, but bet big enough such that your failure is “systemically risky” and you can count on a bailout.

The article notes that the “huge risk-reward potential makes the [forex trading] market a hotbed for scams. From Dec. ‘00 to Sept. ‘09, more than 26k customers received $476m in restitution in 114 forex fraud cases pursued by CFTC.”

Over 106 months, 114 frauds. Yeah, we’re with Gensler on this one.

Sheila Bair has said publicly that more banks will fail this year than last (140), so we can expect bank failures to stay elevated.

Reader note: I’ve added a new bullet point for each failure. Because I’m a glutton for punishment on a Friday night? Possibly. But also because, technically, FDIC doesn’t pull the trigger to close a bank. The regulator closes the bank and appoints FDIC receiver. They do coordinate. And, of course, FDIC folks are the boots on the ground that repo the bank…

Check back for updates to this post as failures roll in tonight.

#23

—Failed bank: Sun American Bank, Boca Raton FL
—Regulator: Florida Office of Financial Regulation
—Acquiring bank: First Citizens Bank & Trust Co, Raleigh NC
—Vitals: at 12/31/09, assets of $536 million, deposits of $444 million
—Estimated DIF damage: $104 million

#24

—Failed bank: Bank of Illinois, Normal IL
—Regulator: Illinois Department of Financial Professional Regulation – Division of Banking
—Acquiring bank: Heartland Bank & Trust Co, Bloomington IL
—Vitals: at 12/31/09, assets of $212 million, deposits of $199 million
—Estimated DIF damage: $54 million

#25

—Failed bank: Waterfield Bank, Germantown MD
—Regulator: OTS
—Acquiring bank: None
—Vitals: at 12/31/09, assets of $156 million, deposits of $156 million
—Estimated DIF damage: $51 million

#26

—Failed bank: Centennial Bank, Ogden UT
—Regulator: Utah Department of Financial Institutions
—Acquiring bank: None…payout transaction
—Vitals: at 12/31/09, assets of $215 million, deposits of $205 million
—Estimated DIF damage: $96 million

Analyst: Fannie and Freddie will force banks to eat $21 billion of soured loans this year (Keoun) Very interesting thread to follow. Remember, Fan and Fred guarantee loans meeting their underwriting standards that are originated by banks. Bad underwriting often means these loans are pushed back to the originating bank. Why care? Because banks have literally trillions of off balance sheet exposure to Fan and Fred loans. Wells Fargo alone has over $1 trillion (see page 52 of its 10-k). Of course the vast majority aren’t going to be put back to them, but only a fraction need be to cause material losses. There are even vulture funds in the market looking for loans they can push back to banks. Meanwhile, the new accounting standard that forced banks to bring off B/S items back on balance sheet — FAS 166 and 167 — allows them to avoid all recognition of their Fan/Fred loan exposure.

Betting on the blind side (Lewis, Vanity Fair) Excerpts from Michael Lewis new book, of which I have a manuscript and am enjoying very much. Also looking forward to Roger Lowenstein’s new book.

Fannie was declared insolvent in 1981 (Scion Cap, ht Nick Gogerty) Nick forwards a link that, ironically, comes from the same guy profiled in the Vanity Fair article above.

PDF–An extended interview with Jim Rickards (Welling) The Welling@Weeden series is fantastic. Readers who liked Jim Rickards’ two columns in this space will like this a lot.

The “staple” is back (Lattman/McCracken, WSJ) “It is the surest sign yet that corporate credit markets are roaring anew.”

HBO picks up rights to Sorkin’s “Too Big to Fail” (Fleming, Deadline) Can’t wait. Hopefully they don’t take as charitable a view as Sorkin of all the characters involved in the drama.

For psychic, suit came as a surprise (de la Merced, NYT) This guy’s website is a hoot. I recall, during my interlude as musical theater actor here in NYC, a guy who was doing seminars like this trying to sell people on the idea that covered calls could make them rich. Total scam artist, but the people he targeted — actors — were vulnerable, uninformed and poor.

Graphic–Consumer Credit rises for first time in a year (Culp, Reuters) The statistical release from the Fed is here. This doesn’t include mortgage debt. Are consumers re-levering?

Busted (Hayes, CBS)

Those calling for financial reform aren’t being upfront about its costs, making it impossible to achieve. This was again evident at the Roosevelt Institute’s otherwise very good conference at Time Warner Center yesterday.

First the good. The purpose of the gathering was to galvanize support for deeper reforms than lawmakers have proposed. Roosevelt’s Chief Economist Rob Johnson and his murderer’s row of thinkers — including Simon Johnson, Elizabeth Warren, Frank Partnoy, Rick Carnell, Josh Rosner and others — presented a very good white paper outlining how best to clean up the financial system. Other attendees were George Soros, Brooksley Born, Jim Chanos, Joe Stiglitz. Even Eliot Spitzer showed up.

When it comes to reform, they all argued, nibbling around the edges ain’t gonna cut it.

Banks need more capital, Fannie and Freddie need to be wound down, banks’ risky activities must be corralled, tax incentives that encourage borrowing must be done away with. Most importantly, perhaps, we need to end the cycle by which the financial system lends too much and too easily only to be bailed out by a compliant Fed when things go wrong.

Throughout there was much indignation as to why such sensible reforms haven’t been enacted. Wall Street’s lobby machine got most of the blame, the rest went to “the people” for their perceived lack of outrage. But of course people are mad, and though the lobby machine is strong, it’s not the real obstacle to reform.

We are.

We don’t really want it. More to the point, people care more about their jobs than they do about reform.

What the reforms in paragraph 4 all have in common is that they reduce the availability of debt finance. That’s smart because our chief economic problem is that we’ve too much of the stuff.

But said another way, the reforms reduce credit. Like a lot. And that means deep and prolonged recession. Crucially, it means higher unemployment.

Just for instance, try to imagine winding down Fannie and Freddie. Doing so means housing finance — all of it — goes away. The economic implications are so dire no one is even contemplating how to do it, even though all know it must be done.

Yet the most vocal supporters of financial reform, which should properly be called “lending reform,” also whine that banks and the government aren’t lending enough!

We can’t have it both ways.

Real reform means cutting lending, it means more jobs will be lost. And Americans aren’t yet willing to make that trade, no matter how mad they are about bailouts.

Today we got a new report out of CBO, which may kill the highly sensible bank tax proposed by the Obama administration with the following sentence:

The fee would probably lower the total supply of credit in the financial system to a slight degree. It would also probably slightly decrease the availability of credit for small businesses.

Despite the “slight” qualifier and comments elsewhere that the fee would help level the playing field for small banks, the loss of any credit whatsoever for “small businesses” is something Congress hasn’t been able to stomach.

——–

A reason we got substantive financial reform in the mid ’30s is that folks had nothing left to lose. Real output fell 30% peak to trough during the Great Depression.

During last year’s recession, output fell just 3%. If you compare debt levels today with those leading up to the Depression — and consider that de-leveraging is the proximate cause of the decline — we’ve much further to fall.

That’s not to suggest that reform isn’t necessary. It absolutely is. But it will cost jobs and output. The speakers at Roosevelt Institute’s conference did a disservice to their audience by not discussing these costs. Some even suggested the credit engine can magically be made to run at close to full speed even as it’s in the shop for repairs.

Luckily, Roosevelt is led by the very capable Johnson, who has no illusions about the costs of bank reform. He acknowledges that financial fixes will reduce lending and output, but speaks about the need to control the velocity of that decline.

The test of his leadership, and of Roosevelt’s relevance, will be whether they can convince America to put up with any decline at all. The last thing we want is a rerun of the Depression. A great set of banking rules came out of it, but only after the economy collapsed into a smoldering pile of rubble allowing us the freedom to start from scratch.

We want proactive, not reactive reform. But it won’t happen unless voters and Congress are convinced to prioritize it over credit creation and, yes, jobs.

Hi folks….Vikram Pandit is scheduled to testify for Congress starting at 10AM. We’re live-blogging it here on Reuters.com, but you can also watch it yourself on C-Span 3.

Here’s a copy of his testimony.

Larry Fink’s $12 trillion shadow (Andrews, Vanity Fair) One of the most powerful men on Wall Street that most have never heard of.

FDIC to grease mortgage market with $1.8 billion deal (Yoon, Reuters) The FDIC is collecting toxic assets by the bucket load as they seize banks. One way to get rid of them is to turn them into securities and sell them to investors. But the deal is private. Why not do a public transaction?

Deal near on new banking rules (Paletta, WSJ) In a plan likely to be a non-starter with others in Congress, Dodd and Corker would put consumer protection inside the Fed.

Wherein John Dugan says we should “err on the side of safety and soundness” (OCC) The Comptroller of the Currency talks about the new Basel proposals designed to strengthen capital and liquidity requirements. Dugan has been much maligned, perhaps appropriately, for using his power as Comptroller to preempt state efforts to, for instance, clamp down on predatory lending. Good to hear that he agrees a stronger financial sector is necessary and that to achieve it we need stronger capital requirements, but it remains to be seen where new capital standards will be set. He says the 7.9% aggregate Tier 1 Common ratio at national bank holding companies on 12/31 is a big improvement relative the 5.1% level where it was in March. But that’s not enough, not with the huge embedded losses banks are likely sitting on…

Uncle Sam’s housing stock keeps growing! (CR) Very interesting chart shows how much foreclosed property is sitting on the balance sheets of Fannie, Freddie and FHA. And this dramatically understates the total housing inventory on the government’s balance sheet when you consider that these agencies guarantee the vast majority of mortgage debt offered in the market. Ultimately the collateral behind these loans — i.e. homes — is on their balance sheet. That is to say, it’s on Uncle Sam’s…

Internet overtakes print news consumption among Americans (ars technica)

Disney/Cablevision fight over cost of “free” (Kramer, PaidContent) When it comes to consumers paying for free content, the sexy story is newspapers erecting new paywalls. But the bigger fight in dollar terms may be cable networks and broadcast companies battling cable companies for higher carriage fees, a cost that is simply passed on to cable customers.

Google reading your e-mail isn’t all bad… (imgur)

Vacation… (imgur) Good wallpaper for a stressed-out desktop.

NASA scientist: Chile quake shortens day, shifts earth’s axis (BusinessWeek, Morales) Bigger quakes have had bigger impacts…

Buffett’s ‘09 letter to shareholders — pdf (Berkshire Hathaway)

Kohn retiring from Fed in June (Hilsenrath/Wessel, WSJ) The Economist once wrote a leader that Don Kohn should have been the guy to replace Greenspan…

Declaring victory at half-time (Steve Keen)

People won’t take free umbrellas in rainstorm (Rubenstein, SF Chronicle) Interesting story, but not really that surprising. People running around a busy city are so assaulted with stimuli — traffic, other pedestrians, folks asking for money or handing things out (here in Times Square the worst are Scientologists handing out Dianetics flyers and guys hawking comedy tickets) — that they can only function by actively blocking out everything around them, including offers of free stuff.

The end of business class? (Economist)

Rising threat of infections unfazed by antibiotics (Pollack, NYT)

Dodd’s proposed compromise… (Andrews) …will include a neutered CFPA. More from Felix.

Network news at a crossroads (Stelter/Carter, NYT) [ABC News President David] Westin said high-priced and purely cosmetic talent would become an increasingly endangered species. “There have been people in television news — very successful people — who do not write,” he said. “We are going to definitely require more of our journalists.”

Florida AG investigating Cash4Gold (Sun Sentinel) This blog once got a letter from the Cash4Gold folks after we warned readers to avoid them.

Official language fail (imgur)

Reader note: Some Internet troubles over the weekend delayed this post. Apologies.

#21

• Failed bank: Carson River Community Bank, Carson City NV
• Acquiring bank: Heritage Bank of Nevada, Reno NV
• Vitals: as of 12/31, assets of $51.1 million, deposits of $50 million
• Estimated DIF damage: $7.9 million

#22

• Failed bank: Rainier Pacific Bank, Tacoma WA
• Acquiring bank: Umpqua Bank, Roseburg OR
• Vitals: as of 12/31, assets of $718 million, deposits of $446 million
• Estimated DIF damage: $95.2 million

Existing home sales/more existing home sales (Calculated Risk) Existing homes sales were down sharply from November, but the Nov number was high because of folks rushing to take advantage of the first time homebuyers tax credit, which has since been extended. Anyway, existing home sales were actually up versus January ‘09.

Schadenfreude alert: AIG cut 20,000 jobs in 2009 on asset sales, defections, layoffs (Son, Bloomberg)

FDIC to test principal reduction for underwater borrowers (Merle, WaPo) Small program to start….it’s only on mortgages acquired by FDIC as part of bank failures, which is less than 1% of mortgages.

Bernanke delivers blunt warning on U.S. debt (Hill, Wash Times) He says the Fed won’t monetize debt, but it already has. It’s probably the economy will be fighting deflation for years to the degree that credit losses continue to make it hard for banks to create credit money….see Japan. As that cycle continues, the Fed will be forced into successive rounds of quantitative easing, which likely means more Treasury bond purchases down the line. It’s good that Bernanke is being vocal about unsustainable deficits, but it’s all just talk until he actually puts monetary policy where his mouth is…

China buying IMF gold story unfounded: author (Miles, Reuters) Gold was up 1% on a false rumor yesterday….

…of the river… (imgur) subtle and brilliant

North Korean stoplights (flickr) Reuters wrote a good story on this a while back. The video makes the story even more interesting.

The Dawning of Aquarius in South Dakota (Discover Mag) I’m guessing astrology doesn’t have an impact on climate…

The Euro’s final battleground: Spain (Fidler, WSJ) The folks at Variant Perception warned the world about the impending disaster in Spain last August. Here’s a copy of their report, which they’ve graciously allowed me to share. (Though they’re famous for that one, they do write about more than Spain.) Anyway, Spain’s economic problems are prompting mainstream discussion that the euro could actually collapse. Greece is small enough that it can be rescued by Germany and France. Spain not so much.

What Greece tells us about Europe (Defterios, CNN) “It is not often discussed, but many [striking] government workers enjoy preferential tax rates, can retire at the age of 54 (in some cases earlier) and enjoy 14 months of pay for 12 months worked.”

Detroit Mayor emphasizes need to shrink city (MacDonald, Detroit News) Detroit is at the forefront of dealing with economic decline. The U.S. economy is overgrown and collapsing under its own weight. More to the point, we don’t have the resources to support all of our commitments. Some mode of shrinkage is necessary. Doing it proactively, as Mayor Bing seeks to do in Detroit, is better than the alternative….

Cash-strapped L.A. goes after unlicensed dogs (AP)

Madoff whistleblower Markopolos says he thought about killing Madoff in new book (Baram, HuffPo)

Idol winners: not just fame but big bucks (Wyatt, NYT) And you don’t have to win Idol to cash in….you just need to finish near the top.

Henderson back at GM, for $3,000 an hour (Taylor, Fortune)

Stand up while you read this (Judson, Opinionator) “Your chair is your enemy.”

Cringeworthy video resume…(more examples at Gawker)…be sure to check out the Michael Cera parody at the bottom. Disappointed that Gawker forgot the most infamous video resume of all time.

Rogoff says China crisis may trigger regional slump (Ito/Rial, Bloomberg)

Fed to get $200 billion boost (Hilsenrath, WSJ) The Treasury will borrow the money and put it on deposit at the Fed. Bernanke could use that money to fund Fed interventions in the economy instead of printing more money.

The extended period continues (Bernanke) In his semiannual monetary policy report for the House, Bernanke reiterates that rates will stay low for an “extended period.” Go the the “monetary policy” section of the speech.

New home sales fall to record low in January (CR) “…another extremely weak report.” And imagine what will happen to home sales if the extended period ever ends…

Greenspan: U.S. recovery extremely unbalanced (Lawder, Reuters) He also says that the 10-year yield is the one stat he looks at morning and afternoon….higher rates will surely nip the recovery in the bud.

Second strike paralyzes Greece (Kitsantonis, NYT) Greece may be bankrupt, but Greek workers won’t settle for pay cuts.

Italy’s worse, and the Nazis stole our gold (Reuters, ht Stacy-Marie Ishmael) Meanwhile, Greece’s deputy prime minister is making excuses.

The Bankruptcy Boys (Krugman, NYT) Krugman is entirely correct that Republicans are all talk and no action when it comes to deficit control. And he doesn’t even mention that the biggest recent increase to America’s long-term obligations was the Medicare drug benefit signed by George Bush.

Happy birthday! (imgur)

Floating, ice-breaking backhoe (imgur) This looks like a lot of fun…

You don’t keep paying for something that you own.

From FirstAmerican Core Logic:

…more than 11.3 million, or 24 percent, of all residential properties with mortgages were in negative equity at the end of the fourth quarter of 2009, up from 10.7 million and 23 percent at the end of the third quarter of 2009. An additional 2.3 million mortgages were approaching negative equity at the end of last year, meaning they had less than five percent equity. Together, negative equity and near-negative equity mortgages accounted for nearly 29 percent of all residential properties with a mortgage nationwide.

Negative equity means the mortgage balance is higher than the value of the home.

The bulk of underwater properties are concentrated in five states: California, Florida, Nevada, Arizona and Michigan. Nevada leads the way in terms of most homes with negative equity at a whopping 70 percent.

“Home-ownership” is badly defined by, for instance, the Census Bureau, which considers all “owner-occupied housing units” in its calculation of the home-ownership rate.

But the rate would be far lower if one simply calculated the amount of equity that Americans have in their homes. Since this is the portion of real estate for which they don’t pay anything, it is the only portion that is truly “owned.”

Subtract folks who owe more on their homes than they are worth and the home-ownership rate drops from 67% to 43%.

Update: Reader Dan Hess offers a better calculation in the comments. He correctly notes that underwater homes are 24% of homes with mortgages, not 24% of all homes as I implied in the math above. Backing out these homes would reduce the homeownership rate to 57%. Though backing out ALL mortgage debt, even on homes with owner equity, would lower the ownership rate even more.

This isn’t merely academic. Having equity in their homes is a big reason homeowners keep paying their mortgage, which is necessary for banks to stay solvent.