Image by Getty Images via Daylife Major financial institutions, like Bear Stearns and AIG are demostrating their enormous potential impact on the US and even global economies. However, there is little or no coordinated supervision or insolvency path should they begin to fail. US Treasury Secretary Timothy Geithner begin revealing his plan for a "new era of regulation." Meanwhile, Roubini takes his shot at crafting a response and framework for what he thinks would be most effective: Blueprint for … [Read more...]
Roubini Looks at Insolvency Regime for Non-Banks and Holding Companies
March 27, 2009 By Leave a Comment
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 recent … [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 purchase … [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 TARP … [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 the … [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 Modification … [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 commercial … [Read more...]
Obama Reviewed, China, TARP Update, Bank of England, Wal-Mart Indicator
November 6, 2008 By Leave a Comment
Obama Election Reviewed Everyone is jumping in with there review and assessment of President-elect Obama. Here is what the financial services wonks are saying: Blown Mortgage is tracking Obama's Housing Promises Henry Blodget on the Yahoo! TechTicker is noting Obama already reseting expectations Wall Street Journal is ttracking Economists reactions to Obama Paul Kedrosky says Wall Street doesn't care China Crash Debated Economist Nouriel Roubini, noted economic doomsdayer often attributed with … [Read more...]
Obama Wins, New Treasury Secretary, Making Your Own Success
November 5, 2008 By 2 Comments
Obama Wins Historic Election, Now What? No question this was a historic election on many counts. However, the big question looms: We are beyond the campaign promises, now what do we really get? This was a campaign filled with a boat-load of promises, walking into a fist full of problems. I hope the "Hope" American's elected delivers the hope we expected--we will certainly get change. Handicapping the New Treasury Secretary We have already jumped into the Cabinet guessing game. Dealbreaker is looking … [Read more...]
Small Bank Bailouts, The Great Recession, JP Morgan Loan Modifications, Global ZIRP, PMI Losses, GM No Bailout Merger
November 3, 2008 By Leave a Comment
Small Bank Bailouts Financial market calamity was narrowly averted today as Farmers National Bank of Emlenton is expected to get a much needed capital injection from the US government. William Marsh, CEO led with this, "they were giving out free stuff"-type quote in the WSJ: "It seemed like the consensus in the industry was...go out and get this," said William Marsh, president and chief executive of Farmers National Bank of Emlenton, in Emlenton, Pa. Mr. Marsh said his bank is healthy and viable … [Read more...]