TOP
STORIES:
Lower mortage rates are unlikely, banks say - (www.washingtonpost.com) Fed actions to reduce
mortgage rates may be helping banks more than borrowers. JPMorgan Chase and Wells Fargo, the nation’s
largest mortgage lenders, said Friday they won’t make home loans much cheaper
for consumers, even as they reported booming profits from that business. Those
bottom lines have been padded by federal initiatives to stimulate the economy.
The Federal Reserve is spending $40 billion a month to reduce mortgage
rates to encourage Americans to buy homes. Instead, its policies may be
generating more benefits for banks than borrowers. A new study suggests that
the Fed shouldn't have just cut interest rates. It should have made them
negative. “The government can’t force banks to give out loans at lower rates
any more than they can force Macy’s to sell me sheets for a dollar,” said Karen
Shaw Petrou, managing partner at consulting firm Federal Financial Analytics.
S&P cuts Spain credit rating to near junk - (www.reuters.com) Standard & Poor's on
Wednesday cut Spain's sovereign credit rating to BBB-minus, just above junk
territory, citing a deepening economic recession that is limiting the
government's policy options to arrest the slide. The S&P downgrade comes
with a negative outlook reflecting the credit ratings agency's view that there
are significant risks to economic growth and budgetary performance, plus a lack
of clear direction in euro zone
policies. "In our view, the capacity of Spain's political institutions
(both domestic and multilateral) to deal with the severe challenges posed by
the current economic and financial crisis is declining," S&P said in a
statement.
Doomsday cycle targets America next - (www.marketwatch.com) Warning bells, alarms scream louder. But our
banks and politicians can’t hear, are deaf, in denial. Won’t take action ...
not until it is too late. That’s the latest from Simon Johnson and Peter Boone
in “The Doomsday Cycle Turns: Who’s Next?” Who is next? America, Japan, the
euro zone are the triple threat next in the line of fire, in danger of
collapsing, thanks to a doomsday conspiracy where global “political and
financial systems have aligned to build these dangers rather than suppress
them.” Three years ago, the first warning: “The Doomsday Cycle.” Since then
Simon Johnson, former IMF chief economist, co-authored two bestsellers, “13
Bankers: The Wall Street Takeover and the Next Financial Meltdown,” and
recently, “White House Burning.” Peter Boone is a research associate at the
London School of Economics, which published their doomsday warnings.
Questions from a bailout eyewitness - (www.nytimes.com) IT has become almost unpatriotic to question
the many and munificent bank rescues of 2008 and beyond. If you have the
temerity to do so, you’re likely to hear that the bailouts were the only thing
standing between us and financial obliteration. You will also be told that, four
years on, many of the bailouts have made money. It’s hard to argue against this
narrative, not knowing what would have happened had cooler heads prevailed. But Sheila
C. Bair, former chairwoman of the Federal
Deposit Insurance Corporation, is well positioned to question the
dogma of the bailout brigade. And she does so repeatedly in “Bull
by the Horns,” her new book about the crisis. As one of the main
participants in the battles surrounding the rescues, and perhaps the coolest
head in attendance, Ms. Bair provides some straight talk that represents an
important piece of history and a rebuttal to the conventional wisdom.
The self-destruction of the 1 percent - (www.nytimes.com) IN the early 14th century,
Venice was one of the richest cities in Europe. At the heart of its economy was
the colleganza, a basic form of joint-stock company created to finance a single
trade expedition. The brilliance of the colleganza was that it opened the
economy to new entrants, allowing risk-taking entrepreneurs to share in the
financial upside with the established businessmen who financed their merchant
voyages. Venice’s elites were the chief beneficiaries. Like all open economies,
theirs was turbulent. Today, we think of social mobility as a good thing. But
if you are on top, mobility also means competition. In 1315, when the Venetian
city-state was at the height of its economic powers, the upper class acted to
lock in its privileges, putting a formal stop to social mobility with the
publication of the Libro d’Oro, or Book of Gold, an official register of the
nobility.
No comments:
Post a Comment