KeNo's Housing and Economic Portal: Thursday September 29 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

SOLYNDRA-GATE: Emails suggest White House pressured OMB to make $535 million loan to bankrupt solar company - (www.businessinsider.com) The scandal surrounding the $535 million federal loan to the now-bankrupt Solyndra, is now knocking on the doors of the West Wing. Internal emails obtained by The Washington Post show that White House officials tried to rush the review of the loan — so that Vice President Joe Biden could announce the award at the groundbreaking of the solar company's factory in September 2009. One official from the Office of Management and Budget charged with providing final review of the loan wrote of “the time pressure we are under to sign-off on Solyndra.” A second raised a red flag, saying “There isn’t time to negotiate.” Fox News reports that the Bush administration turned down a loan request from the company two weeks before Obama came into office. "This deal is NOT ready for prime time," one OMB staffer wrote in a March 10, 2009 email obtained by ABC News, nine days before the administration formally announced the loan. Another official said “We have ended up with a situation of having to do rushed approvals on a couple of occasions (and we are worried about Solyndra at the end of the week)." Sent on August 31, 2009, the message sent to Biden’s domestic policy adviser Terrell P. McSweeny, closed with, “We would prefer to have sufficient time to do our due diligence reviews.” Bloomberg reported last week that just two months before the loan was awarded, auditors found significant financial troubles — enough to “raise substantial doubt about its ability to continue as a going concern.” The White House has denied for weeks that it displayed anything more than interest in the timing of the loan — and maintains it did not pressure OMB or the Department of Energy to make the loan.

European leaders try to calm fears of a Greek default - (www.washingtonpost.com) European leaders closed ranks on Tuesday to insist that Greece will not default on its bonds, trying to quell speculation that divisions within the euro area are becoming irreparable. Speaking in Washington, Christine Lagarde, the International Monetary Fund’s managing director, said she was “very, very hopeful” that Greece can stick to the plan laid out under a bailout agreement with the IMF and other European countries. The IMF this month broke off talks with Greece over budget cuts and other measures required for the IMF to release the next installment of loans to the country. Lagarde said an IMF team had returned to the country to resume work with Greek officials. Without loans from the IMF and other European countries, Greece would not be able to make payments on its bonds. The prospect of a Greek default has loomed for a year and a half as the economy has been stuck in recession. A default by the Athens government could rock many European banks, which hold large amounts of Greek bonds, and unsettle global financial markets.

ECB Lends Dollars to European Banks as Markets Tighten - (www.bloomberg.com) The European Central Bank said it will lend dollars to two euro-area banks tomorrow, a sign they are finding it difficult to borrow the U.S. currency in markets. The ECB allotted $575 million in a regular seven-day liquidity-providing operation at a fixed rate of 1.1 percent. It’s the first time since Aug. 17 that a lender requested dollars from the ECB. The spot rate was $1.3625. An ECB spokesman declined to comment on which banks borrowed the funds. The premium European banks pay to borrow in dollars through the swaps market is close to the highest level in almost three years. The cost of converting euro-based payments into dollars, as measured by the one-year cross-currency basis swap, was 99.1 basis points below the euro interbank offered rate, or Euribor, at 12:24 p.m. in Frankfurt, indicating a premium to buy the greenback. It widened to as much as 112.6 basis points earlier this week, the most since Dec. 2, 2008, according to data compiled by Bloomberg. U.S. money-market funds “have stopped rolling over dollar loans of European banks,” said Stephen Gallo, head of market analysis at Schneider Foreign Exchange in London. “I wouldn’t be surprised if demand increased in the next weeks.”

So Much For "Pass This Bill Now": Senate Won't Act On Obama's Jobs Plan Before October - (www.businessinsider.com) Senate Majority Leader Harry Reid said the upper chamber won't take up President Barack Obama's jobs bill until the next legislative work period which begins in October — at earliest. Obama has repeatedly called on Congress to take up his jobs plan immediately — saying there should be "No games. No politics. No delays." Reid's lack of urgency is surprising, given how central the jobs plan has become to Obama's political fortunes. Reid has said the Senate has other priorities over the next two weeks — including more funding for FEMA disaster relief, and extension of a key highway bill and the passage of trade agreements. The Senate must also act along with the House to fund the government into the next fiscal year, which begins on October 1.

Obama disapproval rating hits new high - (www.cnn.com) President Barack Obama's disapproval rating has reached a new high of 55% while the number of Americans who think he is a strong leader has dropped to a new low, 48%, according to a CNN/ORC poll released Tuesday. And a familiar pattern in public opinion on Obama again asserts itself: Americans don't like his track record on major issues while they continue to like him personally. Nearly eight in 10 respondents say Obama is likeable; large majorities believe he is compassionate, hard-working, and has a vision for the country's future. Three-quarters think he fights for his beliefs. But only 39% approve of how he is handling unemployment, and just 36% approve of the way he is handling the economy, not surprising when more than eight in 10 think the economy is in poor shape.