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STORIES:
Fed official alleges Geithner may have alerted banks to rate
cut - (www.reuters.com) In the summer of 2007, as
storm clouds gathered over the world's financial system, then-New York Federal Reserve President Timothy
Geithner allegedly informed the Bank of America and otherbanks about the possibility the U.S.
central bank would lower one of its critical interest rates, according to a
senior Fed official. Jeffrey Lacker, the head of the Richmond Fed, originally raised the allegation
during a Fed conference call in August 2007, and he stuck to his 5-year-old
claim against the current U.S. treasury secretary in a statement
provided to Reuters on Friday.
Bob
Rubin’s Washington Reign Reaches 20 Years - (www.bloomberg.com) We are fast approaching an
important but underappreciated anniversary: Robert
Rubin’s 20th year of extraordinary proximity to political power in Washington.
This is not a milestone to be celebrated. Not only was Rubin secretary of the
Treasury under President Bill
Clinton, but the next three secretaries in Democratic
administrations -- Lawrence Summers, Tim
Geithner and (assuming he is confirmed) Jacob
Lew -- have Rubin’s fingerprints on them. This is a cause for
grave concern -- assuming, of course, you care about whether it’s right for
Rubin to have such a long stretch of political influence. I do, and here’s why:
When Rubin was an arbitrager at Goldman Sachs Group Inc. in the 1980s, and
again when he was in the executive office of Citigroup Inc. (C)in the 2000s, he was one
of the leading purveyors of the kind of irresponsible behavior that led to the
financial crisis of 2007 and 2008. Not only has Rubin refused to take a shred
of responsibility for his actions, but he has also managed to win the hearts
and minds of two of our last three presidents. That’s no mean feat, and it says
much about the cozy relationship between Washington and Wall Street.
Delinquent
jumbo loans in Coastal California pollute bank balance sheets - (www.ochousingnews.com) More than four years after
the financial crisis, many big banks have regained their footing. But Bank of
America and Citigroup remain dogged by the past. On Thursday, the two banks
disclosed that substantial legal costs undercut their fourth-quarter earnings.
The expenses, the banks said, stemmed from huge settlements involving their
mortgage businesses. … “The 2008 collapse was not the flu — it was a major
debilitating disease,” said Lawrence Remmel, a partner at the law firm Pryor
Cashman. “It takes time rebuilding your strength,” he said, and it is
“unpredictable when some of the institutions will fully recover.” …
Spain Recession Scars Exposed as Jobless Seen at 6 Mln - (www.bloomberg.com) Officials predict the
euro-area’s fourth-biggest economy faces a further slump this year at a time
when the government will struggle to meet its budget goals. Such a backdrop
hasn’t deterred investors, with the prospect of a European Central Bank
backstop in the event of a bailout enabling the Treasury to fast-track higher
2013 funding needs, selling 16 billion euros ($21 billion) at its first three
auctions at lower costs. “Unemployment will continue to rise this year,” said
Sara Balina, an analyst with Madrid-based consultancy firm Analistas
Financieros Internacionales. “Demand will deteriorate and outweigh the positive
contributors to growth that are tourism and exports.”
Rent
Crash Diary; Eastside Puget Sound - (www.seattletimes.com) Local landlords may have to
get used to more vacant apartments and smaller rent increases, a recent report
suggests. The average monthly rent in complexes with 50 or more units in King
and Snohomish counties fell slightly during the last quarter of 2012, to $1,140
from $1,142, after three straight quarters of “impressive” growth, according to
research firm Apartment Insights Washington. And, while the two-county vacancy
rate dropped from 4.85 to 4.75 percent, the decline was all Snohomish County’s
doing, said Tom Cain, who owns the research firm. King County vacancies were
unchanged. “The market is still very healthy” for landlords, Cain said, “but
it’s flattening out, and I’m concerned about the impact of all the new
construction in the pipeline.”
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