Big things are happening!
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Big things are happening!
Here is your late Thursday (hey, it's August) news dump from the Obama administration -- pretty juicy stuff.
Christina Romer, chairwoman of Pres. Obama's Council of Economic Advisers, has decided to resign, according to a source familiar with her plans.
Romer, an economics professor at the University of California (Berkeley) before taking the key admin post, did not respond to repeated calls to her office.
"She has been frustrated," a source with insight into the WH economics team said. "She doesn't feel that she has a direct line to the president. She would be giving different advice than Larry Summers [director of the National Economic Council], who does have a direct line to the president."
Main Street may be about to get its own gigantic bailout. Rumors are running wild from Washington to Wall Street that the Obama administration is about to order government-controlled lenders Fannie Mae and Freddie Mac to forgive a portion of the mortgage debt of millions of Americans who owe more than what their homes are worth. An estimated 15 million U.S. mortgages – one in five – are underwater with negative equity of some $800 billion. Recall that on Christmas Eve 2009, the Treasury Department waived a $400 billion limit on financial assistance to Fannie and Freddie, pledging unlimited help. The actual vehicle for the bailout could be the Bush-era Home Affordable Refinance Program, or HARP, a sister program to Obama’s loan modification effort. HARP was just extended through June 30, 2011.
The move, if it happens, would be a stunning political and economic bombshell less than 100 days before a midterm election in which Democrats are currently expected to suffer massive, if not historic losses. The key date to watch is August 17 when the Treasury Department holds a much-hyped meeting on the future of Fannie and Freddie.
As for Thing 1...not good. If Romer was trying to give Obama the opposite advice of what he was getting from Summers, then Romer should have stayed and Summers should have left. On the other hand, this news of a Main Street bailout seems at odds with Thing 1 (maybe it's not happening, and that's why Romer left?) The right-wing reaction will be priceless if it does go off.
At the end of the day, something must be done -- I (and much more importantly most economists) would have preferred Stimulus 2, but the Gang of 41 won't let that happen, so Obama is faced with doing nothing -- which is not a very good plan as unemployment creeps back toward 10 percent -- or doing something that will inflame the Rick Santellis of the world more than they've ever been inflamed before, but will bring some relief to everyday Americans.
I hope he brings it on.
Federal Reserve Board data show that: •More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions. •Private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year. •Only one of the top 25 subprime lenders in 2006 was directly subject to the housing law that's being lambasted by conservative critics. Read more: http://www.mcclatchydc.com/2008/10/12/53802/private-sector-loans-not-fannie.html— Les Ismore
Les it would help if you knew exactly what Freddie and Fannie do. By the way, since youre a fountain of statistics, what per centage of subprime loans were underwritten by fannie? Let me ask you an even more direct question. Do you think Fannie needed to tighten up their underwrtiting standards?— tr88- If F&F weren't the problem, I'd love an explanation of why their bailout is higher than any other firm?— RG
- November is going to be great. The leaves have turned, college football is in full swing, and the American people will send the "Progressives" in Congress back to the private sector in droves. Funny word "Progressive". It implies that their agenda is the right one. Who could be against progress, right? Essentially, it came from a focus group that said "democratic socialism" doesn't test well with the average American. Let's call ourselves "Progressives". The trouble is if you call a turd "filet mignon" you'll fool some people into ordering it, but the word will spread quickly that it's really just a turd. The "Progressives" will have another decade or so to plot how to rebrand the turd. Come on November!!!— pjsz1261
- Look, morons, if ONE house on your street goes into foreclosure, your property values go down by 30%. And the Wall St. Journal, a noted Commie rag, says more homes in foreclosure had prime loans, not sub-prime. Unemployment is a much bigger factor. Biggest of all were the "no money down" mortgages -- you know, the ones pushed by the Bush administration? Just keep moving those goalposts so you can blame it on Democrats! http://online.wsj.com/article/NA_WSJ_PUB:SB124657539489189043.html
If the mortgage forgiveness thing goes ahead, it is going to end very, very badly for Obama and the Democrats.- So Susie you are saying this is the Democrats fault for being unable to bring back the jobs? I agree with that. Where are the jobs Susie? You know Susie, this could have been worse. Where are the jobs Susie? Why didn't the stimulus work Susie?
- Susie sure is smart. Look, she called everyone morons. She must be smart. So Susie, you're claim is that the Dems had nothing to do with the housing bubble? Clinton, Dodd, Frank, Fannie, Freddie? None of them had anything to do with it? Well, you're smarter than me, so I'll just take you're word for it. Thanks for setting my mind at ease.— pjsz1261
- "Essentially, it came from a focus group that said "democratic socialism" doesn't test well with the average American. " And neither does Republican Facism, hence the word "Conservative"— Les Ismore
- "Do you think Fannie needed to tighten up their underwrtiting standards?" Absolutely, just like every other lender. What makes you think they are exempt from the rules, because they WEREN'T the leading cause of the failure?— Les Ismore
- "Absolutely, just like every other lender." Fannie doesn't lend, you don't seem to understand this. Once again, if F&F weren't the main problem, why is thir bailout larger than the others?— RG
- "Biggest of all were the "no money down" mortgages -- you know, the ones pushed by the Bush administration?" Citation please. "Just keep moving those goalposts so you can blame it on Democrats!" Its a bipartisan mess, but lets not forget who was running Fannie and what benefits they got. "Countrywide Financial Corp. makes mortgage loans through a vast network of offices, brokers and call centers. But a few customers have gotten their loans a special way: through Countrywide Chief Executive Angelo Mozilo. These borrowers, known internally as "friends of Angelo" or FoA, include two former CEOs of Fannie Mae, the biggest buyer of Countrywide's mortgages, say people familiar with the matter. One was James Johnson, a longtime Democratic Party power and an adviser to Sen. Barack Obama's campaign, who this past week was named to a panel that is vetting running-mate possibilities for the presumed nominee. Another was Franklin Raines, a onetime Clinton administration budget director, who left Fannie Mae amid an accounting scandal in 2004." http://online.wsj.com/article/SB121279970984353933.html?loc=interstitialskip— RG
Comment removed.- "The corporation's purpose is to expand the secondary mortgage market by securitizing mortgages in the form of mortgage-backed securities,[3] allowing lenders to reinvest their assets into more lending and in effect increasing the number of lenders in the mortgage market by reducing the reliance on thrifts." By holding the mortgage, they are the lender. Duh!— Les Ismore
///And neither does Republican Facism/// Whenever anyone refers to Republicans or Democrats as Facist or Facism, it shows a gross misunderstanding of what Fascism really is.
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