CSPAN linky here. Hearing has begun.
Finally. Yeah the ‘core’ number is total BS and Jim Grant, a witness, will testify to just that!
ZeroHedge has it:
..The much anticipated hearing on “The Relationship of Monetary Policy and Rising Prices” chaired by Ron Paul..
witness list consists of:
What do you do for $:Fed reveals partial data on emergency lending facilities, still mum on discount window
Update: Well, it would appear absolutely EVERYONE got a bailout except the middle class. And I do mean everyone.
Zero Hedge breaks down the 35 foreign banks that the Fed bailed out here.
…$1.27 trillion in agency MBS was traded by foreign banks…
led by the $410 billion by German-based Deutsche Bank ..
…the $382 billion by the Switzerland-based Credit Suisse.
Other highlights of the disclosure include that GE among other commercial endeavors got $ from the Fed, and that the Fed has essentially been taking all the polluted assets from everyone with a pulse (again, except for the US middle class consumer/homeowner who has been lectured about ‘moral hazard’ and whose house has been foreclosed upon):
.the Federal Reserve purchased $1.25 trillion in agency MBS from all participating banks.
Goldman Sachs borrowed 84 times from Fed’s dealer facility (PDCF) from Sept. 15 to 11/26/08 for amounts ranging from $100m to $8b
Bank of America borrowed 118 times from the PDCF from Sept 18 2008 to May 2009, in amount ranging from $375 million to $11 billion.
And even CA Pension funds got in on the bail out action, per ZeroHedge:
Looking at the TALF data, we see that the biggest borrower by subscription is Calpers, with a total of about $5.4 billion
…The data released Wednesday include short-term liquidity moves for financial institutions and companies made as part of the Fed’s traditional role as lender of last resort, liquidity injections directly to borrowers and investors in key credit markets and financial support for Bear Stearns Cos. and American International Group Inc. (See all the data from the Fed)
Fed officials reported details on more than 21,000 transactions from December 2007 to July 2010. The emergency programs caused the size of the Fed’s balance sheet to swell. (See a history of the Fed’s lending)…
Update : FOMC announces $600B targeted toward the ‘long end’ 5-6 yrs, if they do it all yr + the reinvestment of previous purchases per NYFRB they should hit 1 Trillion.
ElErian says it will backfire and lead to QE3, PIMCO seems pixxed.
Update 11:15am ET: Gold is getting absolutely hammered. Down $25 to $1331.70. Appears the street thinks the Fed will pull its punch and disappoint. You know what I say? Good time to buy!
Were I the Fed I would move big now before Rand Paul takes my money printing machine away. Of course I think we should end the Fed at this point, they are propping up TBTF balance sheets and killing the middle class.
QE2 is expected to depart the Federal Reserve steaming toward the TBTF balance sheets at a clip of $500B and further purchase announcements ‘as needed’ at 2:15 pm ET!
All Aboard for falling US Dollar and rising commodities!
I for one cannot WAIT for Ben Bernanke to face the righteous wrath of Senator Rand Paul on this monetizing and taking on worthless paper to bail out TBTF.Senator Paul will no doubt ask where Bernanke thinks he gets this authority and how it helps fulfill his dual mandate of price stability and full employment, which it does not.
Since the Dems were letting the middle class go down I say we all go down or not on our merits. Let the chips fall where they may, Damn the torpedoes! Full speed ahead! Let the TBTF frakkers fail~
As the guys on the street say, we need Potted Palms on the Trading Floor now that we are monetizing the debt a la Argentina pre collapse~
And the TERRIBLE AWFUL economic data continues to roll in. What will Team Obama do now?
Video: Chris Whalen – more on MBS FraudGate, Pension Fund suits, Securities Law and the markets need to restructure these TBTF banks
The risks are high, and Mr Market is asleep, methinks that Uncle Sam has given the TBTF the all clear, leaving taxpayers holding the bag, again.
Courtesy of Market-Ticker:
“This is cancer – this isn’t a sudden crisis that is going to erupt out of the ground.”
“We’re going to wait until well-into this, and then we’re going to do the right thing – which is restructuring.”
“MBS…. are calling their lawyers. Trustees may or may not have the note.“
“There are a lot of investors out there who don’t know what they own… they may own unsecured loans….. trustees that were supposed to do things under state law (and didn’t)… even Fannie and Freddie have issues with this.”
“…. this is not minutia; this is the letter of the law.“
“The dealer has to deliver to the trustee the notes (under NY State Law)”
…After reviewing the data, the S&P/Case-Shiller Home Price Index Committee believes that, for the present, the unadjusted series is a more reliable indicator and, thus, reports should focus on the year-over-year changes where seasonal shifts are not a factor. Additionally, if monthly changes are considered, the unadjusted series should be used….
this is unlike any other housing drop, in terms of severity and government intervention, so any series cannot capture where prices are going..
…On an unadjusted basis, prices dropped 0.9 percent in February, worse than the estimated 0.3 percent decline and following a 0.4 percent downturn in January….
…The report suggests more price erosion is possible before prices start rising on a sustained basis, S&P said. The price improvement can be attributed to momentum from the federal homebuyer tax credits, which expire on April 30, and prices could be pressured further by foreclosure sales….
More on falling prices from First Logic via Calculated Risk:
…On a month-over-month basis, the national average home price index fell by 2.0 percent in February 2010 compared to January 2010, which was steeper than the previous one-month decline of 1.6 percent from December to January…
Best financials analyst on the street Meredith Whitney’s latest comments on financials and housing via CNBC:
Beleaguered banking giant Goldman Sachs has lost much of the edge it had over competitors due to the recent government charges and is a stock investors should avoid, analyst Meredith Whitney told CNBC.
…(GS) faces a future in which its brand has been tainted and it will lose business to small competitors, said Whitney, who doesn’t have a “buy” rating on Goldman or any of the other big banks…
…The company’s stock should trade around book value, Whitney added, which would place the price just above $120….
Reasserts the double dip in housing-
…On other issues, Whitney called proposed new financial reform regulations “squishy” but said the result will be banks shrinking their balance sheets and consumers forced to seek predatory lenders for credit.
She also renewed her prediction that the housing market would see a double dip as more inventory is forced back onto the market.
Update: CSPAN3 livestreaming the hearing here
The Senate seems to have quite a bit of evidence suggesting the WaMu team deliberately securitized bad bad bad loans as ‘great!’ loans..
WSJ live blogging it here
“The worst managed business I had seen in my career.” That is how Washington Mutual’s former president described his company’s home loan division.
The mortgage lending practices at the Seattle thrift take center stage at a Senate hearing this morning.
The Senate Permanent Subcommittee on Investigations says WaMu did little to stop the loan fraud and generally risky and highly defective securitization practices in its mortgage business
WaMu’s defense? Former CEO Kerry Killinger says he reigned in his company’s mortgage business and blames his thrift’s collapse on unfair and biased regulators who were willing to save Wall Street firms, but not his own
- 7:11 am
- by Michael Corkery
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Levin: Killinger made $11 million to $20 million a year, from 2003 to 2007. He was paid $25 million when he stepped down in 2008, as his thrift was going down the tubes. Killinger may have complained about not being part of the Wall Street club (see earlier Deal Journal post). But he sure was paid like one of club.