Mortgage bailout not over, FHA to draw $1.7
billion - (www.cnbc.com) The
Federal Housing Administration, the government insurer of low down-payment
loans, told Congress on Friday it needs $1.7 billion from the Treasury to pad
its insurance fund. This is higher than expected, due to the fact that FHA is
now insuring fewer loans. "This amount is higher than the estimate
provided in the president's budget because of a decline in FHA endorsement
volume in the last few months of the fiscal year—consistent with the trend in
the broader housing market in response to higher interest rates," FHA
Commissioner Carol Galante wrote in the request to Congress. This is the first
time in the FHA's 79-year history that it has required money from taxpayers for
its Mutual Mortgage Insurance Fund (MMIF). The letter is a courtesy, as the FHA
has budget authority and does not need congressional approval.
Greece's
democracy in danger, warns Demos, as Greek reservists call for coup - (www.theguardian.com) Greece
'backsliding in democracy' in face of joblessness, social unrest, corruption
and disillusion with politicians, says think tank. No country has displayed
more of a "backslide in democracy" thanGreece, the British thinktank Demos has said in a study highlighting the crisis-plagued country's
slide into economic, social and political disarray. Released on the same day
that judicial authorities ordered an investigation into a blog posting by a
group of reservists in the elite special forces calling for a coup d'etat, the
study singled out Greece and Hungary for being "the most significant
democratic backsliders" in the EU. "Researchers found Greece
overwhelmed by high unemployment, social unrest, endemic corruption and a
severe disillusionment with the political establishment," it said. The
report, commissioned by the European parliament, noted that Greece was the most
corrupt state in the 28-nation bloc and voiced fears over the rise of far-right
extremism in the country.
Blackstone: We're in an 'epic credit bubble' - (www.cnbc.com) One
of the world's largest investment firms believes the financial system is overly
leveraged. "We are in the middle of an epic credit bubble, in my opinion,
the likes of which I haven't seen in my career in private equity," Joseph
Baratta, The Blackstone Group's global head of private equity, said Thursday
night at the Dow Jones Private Equity Analyst Conference in New York City.
"The cost of a high yield bond on an absolute coupon basis is as low as
it's ever been." Baratta said Blackstone is "bullish" on the
U.S. economy, but the "valuations we have to pay relative to the growth
prospects are out of whack right now."
[Sloan] A
payment plan no better than Madoff’s - (www.washingtonpost.com) Do
you think it would be a good idea for the federal government to act like Bernie
Madoff? To take money from people for decades, only to say “Sorry, I’m out of
cash” when it comes time to pay them what they’re owed? It’s hard to imagine
anyone who would think that this is a good idea. However, it’s exactly what’s
being proposed by people I’ll call extremists, in order to be polite. These
folks think that it’s a great idea to not raise the government’s debt ceiling.
The wrinkle some of them are proposing this time is that the United States
avoid defaulting on its debt by paying interest and principal on its borrowings
when they come due but not making other payments that it’s supposed to make. I’ve
seen a lot of stupid things in Washington, but this proposal is absolutely the
stupidest. Not to mention the most immoral. Why? In two words, “Social
Security.” Social Security is an earned benefit. Beneficiaries (including my
wife and me) have paid serious money in Social Security taxes for decades and
decades in return for the promise of benefits when we qualify for them. Unless
Congress has the nerve to modify what current Social Security recipients are
supposed to get — fat chance of that happening! — not making Social Security
payments when they’re due would be defaulting on a governmental promise to pay.
California
Teacher Pension Gap Poses Risk, Auditor Says - (www.bloomberg.com) The
California State Teachers’ Retirement System’s financing has declined below a
prudent level and poses a “high risk” to the state, according to an audit. The
ratio of funding to obligations for the second-biggest U.S. pension fell to 67
percent in 2012 from 98 percent in 2001, “well below the 80 percent
considered fiscally sound,” auditor Elaine Howle said in an annual report.
“At the current contribution rate and actuarially estimated rate of return on
investments, the defined benefit program’s funding ratio will continue to drop
and assets will eventually be depleted,” Howle said today. Pension costs for
retired public employees are mounting nationwide while resources have declined.
Unlike the California Public Employees’ Retirement System, the largest U.S. pension with $270 billion of
assets, the Calstrs board doesn’t have the authority to set contribution rates
from teachers, school districts and the state. Changes can only be made through
legislation.
[Washington
Post] Many big cities face serious pension debt, report says - (www.washingtonpost.com)
Political uncertainty in Italy deepens over Berlusconi threats - (www.reuters.com)
Political uncertainty in Italy deepens over Berlusconi threats - (www.reuters.com)
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