KeNo's Housing and Economic Portal: Wednesday August 24 Housing and Economic stories

Tuesday, August 23, 2011

Wednesday August 24 Housing and Economic stories

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TOP STORIES:

Banker sends plane over the S&P building with the banner: "Thanks for the downgrade, you should all be fired!" - (www.businessinsider.com) At about 11:30 AM on Tuesday, a plane flew by the S&P offices in New York dragging a banner behind it saying: "THANKS FOR THE DOWNGRADE. YOU SHOULD ALL BE FIRED." Awesome. UPDATE: It was a lady broker named Lucy Nobbe who hired the plane, according to the Daily. She's a VP for the brokerage side of Wedbush, an investment bank.

Germany Opposes Larger Rescue Fund - (online.wsj.com) Barely 12 hours after a reluctant European Central Bank breathed new life into the euro project, German politics dashed hopes that Europe would soon receive a bigger bulwark against a spreading government-debt crisis. A spokesman for German Chancellor Angela Merkel, Christoph Steegmans, removed hopes of a more robust European Financial Stability Facility, saying the fund will stay as agreed at a July 21 European Union summit. "The EFSF will remain what it is, and keep the volume it had before July 21," Mr. Steegmans said at a regular government press conference. The ECB Sunday made a landmark decision to expand its bond-buying program to include Italian and Spanish government debt, a step aimed at stopping a market sell-off that threatened to send their borrowing costs to unsustainable peaks. The ECB hesitated last week to take such a step, which greatly expands its role as an underwriter of government finances. But it was deemed critical to buy time until an improved bailout fund, the EFSF, could be ratified and implemented before October. The changes to the EFSF mandate would allow the fund to buy government bonds in the secondary market.

Rogoff Says Fed Will Embark on QE3, Act ‘Decisively’ on Economy - (www.bloomberg.com) Federal Reserve policy makers are likely to embark on a third round of large-scale asset purchases, moving “more decisively” to secure the U.S. recovery, said Harvard University economist Kenneth Rogoff. “They certainly should do something right away,” said Rogoff, a former International Monetary Fund chief economist who attended graduate school with Fed Chairman Ben S. Bernanke. It’s “hard to know” if Bernanke would immediately be able to gain the support of Federal Open Market Committee members, Rogoff said in an interview today on Bloomberg Television. The FOMC meets today in Washington a day after the worst day for U.S. stocks since December 2008. Bernanke last month outlined policy options including additional asset purchases or strengthening the commitment to low interest rates after the first two rounds of so-called quantitative easing failed to keep the unemployment rate below 9 percent.

Cameron Cuts Short Vacation Amid U.K. Riots - (www.bloomberg.com) Police deployed extra forces on the streets of London to prevent a fourth night of unrest after 563 people were arrested in Britain’s worst rioting since the 1980s. Prime Minister David Cameron recalled Parliament. The prime minister, speaking outside his Downing Street office in London after a meeting with ministers and security chiefs, said there will be 16,000 officers on duty in London tonight, up from 6,000 last night. Police leave was canceled and Metropolitan Police Deputy Assistant Commissioner Stephen Kavanagh said the London force was preparing for “mass disorder again tonight.” The House of Commons will meet in emergency session on Aug. 11. “I’m determined, the government is determined, that justice will be done,” Cameron said. “This is criminality pure and simple, and it has to be confronted and defeated.”

Worst day for world markets since ’08 - (www.washingtonpost.com) World markets plunged Monday in the worst trading day since the financial crisis, eradicating hundreds of billions of dollars of wealth in a setback to the struggling U.S. economic recovery. Despite efforts by world leaders to reassure markets, investors remained alarmed over the mounting economic woes in the United States and a spreading debt crisis in Europe. The Dow Jones Industrial Average fell 635 points, or 5.55 percent, to 10,810. But in the first trading day since the United States was downgraded Friday by Standard & Poor’s, which said U.S. Treasury bonds have become a riskier bet because of the government’s failure to tackle its debt burden, investors actually poured money into U.S. bonds. With concerns spiking about a global economic slowdown, investors were treating the Treasury bond as the safest haven in a time of turmoil.