Wolraich: Obama at the Gates of... Gates
Dr. C: In Praise of Writing Binges
Maiello: Gatsby Doesn't Grate
Shortly before Obama's jobs speech I posted that it should include a Mortgage Refinancing program. What actually happened was a 15 second reference in the speech to working with the FHFA to facilitate more refinancing. The next day a CBO report, a generic study of refinance obviously on-going before O's speech, underwhelmed the entire idea of Refinance, particularly in scope and possible stimulative effect. Others stated in the Senate Housing Subcommittee hearing two days ago that the CBO's "take-up" estimates of 2.9 million borrowers were far too conservative.
The fact is that the existing stakeholders in the mortgage mess constitute a circular firing squad, each entity trying to maximize its own agenda against the interests of others. Until a consensus is formed which balances all of the interests, including tax payers and borrowers, any movement in mortgage refinance is going to be limited. Leadership from Obama is essential, but so also is action from Congress. Here are some of the stakeholders, their positions and some other facts.  [Read more]
Richard Fisher is the President of the Dallas Fed and I would like to have overheard his personal reactions to Ponzi Perry's physical threat against the mild mannered Fed Chairman, Ben Bernanke. It seems that Ponzi and the Tea Party just love to beat up on the Fed, particularly, QE2. Actually, Richard Fisher doesn't care much for QE2. And as a Dissenter at the the Fed's FOMC meeting in August, Richard Fisher has become an instant hero of tea baggers who have positioned him as a rough riding adversary of Uncle Ben and the librul FOMC. [Read more]
Before the shot clock rules took effect in the NBA and Collegiate basketball, the practice of "freezing the ball" was used to sit on a lead in the last minutes of the game. I don't think there was anything more frustrating than the losing team being unable to get their hands on the ball. It seemed somehow unfair, un-American, even.
I thought one of the most effective lines in Obama's speech was the one, "We've got 14 months to go. The American people can't wait for 14 months".
If the Republicans stonewall Obama's efforts to increase hiring and to help those who are unemployed I think they are taking a huge risk. Fourteen months is a long time to try and freeze the ball. Think about how much time 14 months is. For example, the NFL just started. This season will end and we'll be in week eight of the next NFL season in 14 months. Think about that, Republicans! [Read more]
I doubt if anyone would argue that a world wide asset bubble created the financial crisis, the worst component of which was residential mortgage abuse.
Inferior and fraudulent RMBS's and bad servicer practices were the essential problem of the economy in 2009 and remain so today. The banks have an incentive to foreclose instead of modify loans, but consumers have learned how to fight foreclosures. When foreclosure inventory is still overhanging the market, consumers are smart enough to know we haven't hit bottom on prices, so they hold off on purchases. Loan modifications haven't worked very well, but the issue goes back to bank incentives, not to mention continued fraudulent practices.
The lack of a housing industry rebound is the single biggest factor in high unemployment. No less than Buffet has said that when new housing starts get up into the range of a million units a year, unemployment will drop to 7%. The log jam in foreclosures and the disincentives of banks to modify loans are helping to keep the economy in limbo. [Read more]
(or perhaps, the reverse?)
Why the suits and huge potential fines? The timing pertained to a statute of limitations. But is there a subplot relating to a refinancing program?
The FHFA bank suit is aimed at 17 banks and recovering nearly $160B in losses based upon banks' faulty originating, securitizing and servicing of RMBSs. Because of these abuses, the tax payer had to bail out the GSEs. This is payback time.  [Read more]
It is being reported that the Fannie and Freddie conservator known as FHFA will sue B of A and about 10 other banks for losses stemming from improper origination and servicing of loans. Goldman, JPM, Deutshe Bank and others are expected to be included. The FHFA has a deadline of next Tuesday to file the suits. The deadline is a statute of limitations provision in the formation of FHFA itself on Sept 7, 2008. FHFA was given six years to bring actions under Contract law and three years for tort claims. [Read more]
There is a tangled web of litigation against B of A/Countrywide which preceded the FDIC's decision to intervene in a $8.5B settlement between B of A and a group of 22 "investors" in MBS's securitized by Countrywide.
In February a group of investors (known as Walnut Place) in Countrywide MBSs (three MBS trusts) filed an action against BNY Mellon - who is the Trustee. The action is meant to force the Trustee to sue Countrywide to take back the non performing MBS's. The case was assigned to Judge Kapnick in the New York Supreme Court.
On June 29, an $8.5B Settlement between B of A /CW and 22 large investors, engineered by BNY Mellon, was announced; simultaneously BNY Mellon filed a petition with the NYSSC to approve the settlement. The 22 investors represent less than 51% of all the investors in the subject 530 trusts. The petition was filed under Article 77 for the purpose of trying to make the settlement binding on all the investors in a total of 530 trusts, including those in the 3 trusts at issue in the Walnut Place filing. BNYM requested Judge Kapnick to be assigned, under the premise that Walnut Place's prior filing re three trusts would be adjudicated under the overall $8.5B settlement for all 530 trusts. [Read more]
A few minutes ago Fox News announced an on-line survey: "Will the appointment of Alan Krueger make any difference at all?--the words in italics delivered by the blonde dim witted woman in the smarmy, sarcasm-dripping-monotone voice typical of Fox News.
Here is my response to Fox News. YES. But not for the reasons you think. [Read more]
Buffet is swimming in more Bank of America cross currents than an ocean salmon fighting his way up the Rogue River to spawn.
Buffet's announcement today of a $5B investment in preferred shares of BOA is a monumental event in a raucous day on the stock market. Despite the gyrations today, partly on European news and party positioning for Bernanke's speech tomorrow, Buffet's actions should have near term favorable implications for BOA, bank stocks in general, the stock market in general, and as all boats are lifted and affluent consumers step up to the Christmas season, the re-election of Obama--and the pressures on Ben Bernanke. [Read more]
I use the word "secular" to differentiate between Christian Theocracy candidates such as Rick Perry and candidates who do not carry the cross of Jesus Christ around with them on the campaign trail.(I mean a very very large cross, the kind you need a bus to carry)
And I mean Thomas E. Dewey, not George Pataki. But Pataki is going to Iowa and may be called to Christ in a corn field--which may erase even the faintest resemblance to Dewey.
From a March, 1948, article about Dewey in Life Magazine. [Read more]