Image via Wikipedia An interesting opinion piece in the Wall Street Journal, penned by Harvard Law School professor Mark J. Roe, argues that putting GM into Chapter 11 bankruptcy may not be as scary as GM management might want you to think: General Motors Corp. is back in Washington, this time asking for $12 billion to add to the $18 billion loan the government approved last year. The possibility of bankruptcy for GM is very real -- the company posted a loss of $30 billion in fiscal … [Read more...]
Mish's Open Letter to President Obama
February 27, 2009 By Leave a Comment
Image via Wikipedia Okay, Mish and I are not politically aligned, but I like his approach and I think this Obama budget is going to be a powder keg in both parties. Full of democratic policy initiatives, much like the economic stimulus package, this budget is going to drive Americans and politicians crazy with images of overusing political capital. In classic Mish fashion he captures the key points: With all due respect Mr. President, Tim Geithner and Ben Bernanke are offering the same … [Read more...]
Loan Modifications Getting Mixed Re-default Results
December 12, 2008 By 2 Comments
John Dugan, Comptroller of the Currency has people thinking about the potential risks of mortgage loan modifications. Releasing data earlier this week, Dugan revealed that over 50 percent of loan workouts re-default within the first six months. Meanwhile, FDIC Chairman Sheila Bair says, "not so fast, check your data." Bair points to how loan are modified as the key determinate of success. For example, lowering rates drops that re-default rate to 23 percent according to Credit Suisse survey. A … [Read more...]
What Will Obama's Job Stimulus Plan Look Like?
December 11, 2008 By Leave a Comment
A great analysis and compilation of President-elect Obama's potential Job Stimulus Plan. What do you think it might include or should include? … [Read more...]
Mortgage Rates Up, Mortgage Applications Down?
December 11, 2008 By Leave a Comment
Welcome to the unique conundrum of an economic mess we are in. Seems as though you solve one problem and you create more. Goes to my "too many artifical inputs, queers the economy" theory--okay so Adam Smith mentioned it first. Anyway, it looks like rising unemployment and tightening bank credit standards is working hard against the US Treasury plan to push mortgage rates to 4.5 percent, and maybe even 4 percent mortgage rates. MBA says mortgage applications drop 7 percent (17 percent for home … [Read more...]
Bair, Paulson Showdown Hits the (Public) Congressional Floor
November 19, 2008 By Leave a Comment
We knew this was coming...the Bair/Paulson Smackdown. This is truly a rare event to watch two government agencies open up a public battle for power and leadership. The sides are aligned: Treasury Secretary Paulson/White House versus FDIC Chairman Bair (a Bush appointee)/Congressional Democrats. The strategy seems clear--Paulson is playing to hold the line for the next 9 weeks and Bair is playing for a longer term opportunity with the new Obama White House. Paulson stuck to his reversal in … [Read more...]
TARP Reversal, Mortgage Servicers on Hot Seat, China Rapidly Slowing
November 13, 2008 By Leave a Comment
TARP Reversal, Paulson ADHD? Paulson leads his dramatic redirection of the Trouble Asset Relief Program (TARP) with an adaption of John Maynard Keynes, “When the facts change, I change my mind – what do you do, sir?”: Treasury Secretary Henry Paulson, whipping out his dead economist quote book, used this gem from John Maynard Keynes to justify his bombshell Troubled Asset Relief Program update and redirection: "I will never apologize for -- for changing an approach or a strategy when … [Read more...]
Loan Modifications Primer for Mortgage Industry
November 12, 2008 By 1 Comment
If you don't know loan modifications you are going to have a hard time surviving this mortgage business cycle. Despite all of the appealing government assistance and FHA mortgage refinance programs, banks and now the government is settling into massive programs to streamline loan modifications for troubled homeowners. Here is a quick primer on loan modifications to get you up to speed and help you spot opportunities for your mortgage business: FHFA endorsed Fannie Mae and Freddie Mac Loan … [Read more...]
AMEX Bank, ABA No New Regs, Big Bank Loan Modifications, Economist Turn Negative, 10 Benefits of Recession
November 11, 2008 By Leave a Comment
American Express Becomes a Bank American Express becomes a bank, getting unprecedented speedy approval to become a Federally chartered bank. This is likely a smart preemptive move by American Express to hedge mounting credit card troubles by gaining access to TARP bailout funds. The cautionary part of this tale--how bad might those mounting losses be for the Federal Reserve to waive even the cursory 30-day waiting period? Bad! American Express Co. won U.S. Federal Reserve approval to become a … [Read more...]
