Q2 GDP revision

Update: 8:30 am Revision to 1.6%, est was 1.4% (original 2Q reading was 2.6%). This is only the first revision folks, it will get worse on the next print.

~How low can you go~ How can they get this number up without the Return of the American Consumer? They can’t. You need us TBTF face it.

Obama expects the Fed to save his bacon. Ummmmm bacon. Obama, unable to take responsibility, has nicely deflected the MFM to portray this as all on the Fed. Pfft. Consumers need $ to consume, period.

We have been calling for a double dip for over a year, and the fact that a trillion dollars in stimulus only got us 3 really good prints on GDP is, well, FRAKKIN PATHETIC!!!

WHAT A WASTE! Ugh! And what do we have to show for it? New infrastructure? Nooooo. I have no G-D idea what they did with all that $. At least when I blow through a wad of cash I can usually look around the house and SEE things I invested the dough in. Like a new door, or pavers, or a tankless water heater or something. These jokers can not even do that much.

Well back to the drawing board for the FED and TBTF and TPTB.

Hey maybe like Churchill said, ‘After they try EVERYTHING ELSE, they will do the right thing’ and you know, HELP CONSUMERS who are, you know, 70% OF GDP. G-D these people are stupid.

I know I know, you don’t want to help homeowners. But hey, HOUSING LED US INTO RECESSION. It will LEAD US INTO THE DOUBLE DIP (it is as we speak).
Stop throwing wads of cash at FIRE and TBTF and try listening to Scott Brown who tried to pass a WORKER PAYROLL TAX HOLIDAY. DEMOCRATS voted against it.

Gawd forbid we get to keep our money. I know lots of folks do not want to help homeowners they perceive as irresponsible but face it, THOSE PEOPLE SPEND LIKE CRAZY!

Give underwater homeowners already backed by the GSEs, who have already blown through 200B with nothing to show for it BTW, give them a 1 pg refi.

We ALREADY back the loan, we are losing nada, zip, zilch. But if they refi and free cash flow it will both stop the bleeding in foreclosures AND boost CONSUMER SPENDING! Leading to ..JOBS! You remember jobs!

But nooooooo, we cannot have all these trillions going to help ACTUAL CONSUMERS, far better to give it to BANKS who are sitting on it to the tune of 1 trillion, doing ABSOLUTELY NOTHING with it. The Fed can give away all the $ it wants, THERE IS NO VELOCITY PEOPLE!!

At least spenders, SPEND!

Consumers gotta spend.
We don’t have time for Obama’s magical export plan to kick in, even though they are crashing the USD as fast as they can to get there.

Address housing in a meaningful way. TPTB don’t seem to get that even if you are staying in your home, the PERCEIVED drop in value AFFECTS CONSUMER BEHAVIOR!!! It is our biggest asset! How could it not? (Well maybe if we were big spendthrifts like D.C. )

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August 27, 2010. Tags: , , , , , . Economy, Finance, Foreclosures, Housing, Obama Administration, Politics, Popular Culture, TARP, Taxes, Unemployment Statistics, Wall St. Comments off.

Housing/FinReg: $1B for Federal Bridge loans for unemployed homeowners – HEMAP

We covered the HEMAP plan and Barney Frank’s push for it. It was added  to the FinReg bill. It is absolutely the case that unemployment is driving housing defaults now and that the HAMP program does not help the unemployed, despite UE lasting for close to 99 weeks in most cases, the debt levels of those in default are just too high.

Barney Frank and Team Obama’s larger housing vision seems to be centred on a transition to Section 8 status for a majority of the foreclosures FAN FRED FHA are taking onto their books.

It began with FAN Deed4Lease program under which homeowners rent their homes back from Uncle Sam. And the Section 8 roll out is already underway and by the time we get 6 months into ’11 when Timmeh claims we will have an outline for their plan for FAN FRED FHA, it will be a fait accompli.

The problem I have with all these plans is the  g-d lenders who brought this tumbling down skate away with the taxpayers forced to eat the FAN FRED FHA losses which, don’t kid yourselves will be $1trillion easily IMO.

The $400B dollar scribble- It was DEMOCRATS who went apoplectic yesterday when the big banks called them wailing over GOP Rep Jeb Hensarling having penciled in FAN FRED as ‘financial institutions’ under the FinReg draft on banks paying to wind down big financials that fail. They FREAKED OUT at the THOUGHT of having to pay for the GIANT SMOKING CRATER THEY CREATED. And the Democrats ran to help them avoid that fate, leaving it ALL on US, the taxpayers.

It seems to be the end of the residential housing market as we jave known it. Frank is constantly stressing his affordable rental housing schtick nowadays.

If this helps some families get past the transition, it seems overall a small price to pay at $1B, the $85b in HAMP seems to have done absolutely nothing, worse than nothing the extend and pretend has been a PAINFULLY slow tearing off of the band aid, and we are only halfway through the process.But families be cautious, don’t put yourselves Back on the Chain Gang before next year, housing prices are still cratering and when Uncle Sam is done I don’t know what value the homes we are holding may be worth.

Who the hell knows. And IMAGINE what this will do to RENTAL HOUSING PRICES. Landlords will be competing with Uncle Sam setting ‘fair rental rates’ GOOD GAWD!

And that assumes we get some spending restraint and just restraint in general from the Congress and a new POTUS in ’10 and ’12. Let’s hope there is a housing market left to rehabilitate when we get there.

The shxtty part is again they added a tax to pay for this newest $1b program. Had they done HOLC but noooooo. Credit Suisse couldn’t have that! frakkers.

Why the hell not use the $$$ sitting in the HAMP TARP fund? That is how the funding was originally proposed. Frank tried also to use repaid TARP funds for this. Now it is funded by a bank tax IOW passed on to us in fees, shxt! Good Gawd Almighty what don’t they understand about no money left in the till..

WSJ:

Unemployed homeowners will be able to tap $1 billion in federal bridge loans to pay their mortgages, under a deal worked out by congressional negotiators in financial-overhaul legislation.Under the program, people who cannot make their mortgage payments because they are ill or out of work would get a stopgap loan from the government.

House members fought for $3 billion in such loans, but ultimately settled for $1 billion as negotiations ground on into Friday morning. Both chambers of Congress must now approve the deal worked out by the negotiators.

Joblessness has eclipsed risky mortgages as the biggest driver of U.S. foreclosures. Meanwhile, the rules of the Obama administration’s foreclosure-prevention effort make it difficult for the unemployed to get loan modifications under the program….

June 25, 2010. Tags: , , , , , , , , , , , , , , , , , , . Economy, Finance, Foreclosures, Housing, Obama Administration, Politics, TARP, Taxes, Unemployment Statistics, Wall St. 2 comments.

The Old Man and the Street -modified Volcker Rule survives FinReg negotiations ~ the Good, the Bad & the Ugly…

Dems did quite a hatchet job in the wee small hours of the morning. Here are the major provisions, they have left most of the implementation to regulators, (the heretofore Eeeevil Federal Reserve gets the Consumer Protection Agency!) and there is a 5 yr window on most changes

WSJ:

(…)VOLCKER RULE: Would curb propriety trading by the largest financial firms, though banks could make de minimus investments in hedge and private-equity funds. Those investments would be limited to 3% or less of a bank’s Tier 1 capital. Banks would be prohibited from bailing out a fund in which they are invested.

Scott Brown R-MA got this 3% for the mutual funds in MA. I cannot wait to hear the JPMChase conference call on earnings in July to see what Jamie Dimon has to say about this. He thought he had killed the Volcker Rule at least twice. The Tall Man always comes back!

DERIVATIVES: Would for the first time extend comprehensive regulation to the over-the-counter derivatives market, including the trading of the products and the companies that sell them. Would require many routine derivatives to be traded on exchanges and routed through clearinghouses. Customized swaps could still be traded over-the-counter, but they would have to be reported to central repositories so regulators could get a broader picture of what’s going on in the market. Would impose new capital, margin, reporting, record-keeping and business conduct rules on firms that deal in derivatives.

So this is the big exciting deal for Chicago! A whole new trading desk to establish, a clearinghouse. (FD-We hold CME shares). Looking to see what the deal is on Warren Buffet’s Berkshire holdings-does he have to put up capital or what? He lobbied HARD against it via Ben Nelson

DERIVATIVES SPIN-OFF: Would require banks to spin off only their riskiest derivatives trading operations into affiliates, in a late-night compromise struck to scale back a controversial provision championed by Sen. Blanche Lincoln (D., Ark.). Banks would be able to retain operations for interest-rate swaps, foreign-exchange swaps, and gold and silver swaps among others. Firms would be required to push trading in agriculture, uncleared commodities, most metals, and energy swaps to their affiliates.

Okay so JPMChase’s silver position is still in the game, they called in like 15 people to surround Blanche last night pushing her to cave, impressed she got anything to go through on this frankly, the pressure was enormous.

CONSUMER AGENCY: Would create a new Consumer Financial Protection Bureau within the Federal Reserve, with rulemaking and some enforcement power over banks and non-banks that offer consumer financial products or services such as credit cards, mortgages and other loans. The new watchdog would have authority to examine and enforce regulations for all mortgage-related businesses; banks and credit unions with assets of more than $10 billion in assets; pay day lenders, check cashers and certain other non-bank financial firms. Auto dealers won a hard-fought exemption from the Bureau’s reach.

Yes Auto Dealers are exempt. Cuz used car salesmen are known far and wide as honest individuals looking out for the consumer -HA HA! And of course it is seated within the Fed.

BANK CAPITAL STANDARDS: Would set new size- and risk-based capital standards, including a prohibition on large bank holding companies treating trust-preferred securities as Tier 1 capital, a key measure of a bank’s strength. Would grandfather trust-preferred securities for banks with less than $15 billion in assets, enabling them to continue treating the securities as Tier 1 capital. Larger banks would have five years to phase-out trust-preferred securities as Tier 1 capital.

Now this provision was raised to $15b to cover one Arkansas bank for Blanche. Hey this needed to be done, Tier 1 should really be Tier 1.

Here is a twofer, they gutted the most important part IMO

MORTGAGES: Would establish new national minimum underwriting standards for home mortgages. Lenders would be required for the first time to ensure that a borrower is able to repay a home loan by verifying the borrower’s income, credit history and job status. Would ban payments to brokers for steering borrowers to high-priced loans.

Well! What a novel idea! VERIFYING INCOME, CREDIT AND EMPLOYMENT before underwriting a mortgage! Why didn’t anyone think of this sooner? Frakkin maroons.

SECURITIZATION: Banks that package loans would, broadly, be required to keep 5% of the credit risk on their balance sheets. Would direct bank regulators to exempt from the rules a class of low-risk mortgages that meet certain minimum standards. Regulators could permit alternative risk-retention arrangements for the commercial mortgage-backed securities market.

They do NOT have to retain 5% of the credit risk on ‘plain vanilla mortgages’. Listen IMO they should ABSOLUTELY HAVE TO RETAIN A MINIMAL EXPOSURE ON EVERY SINGLE MORTGAGE THEY WRITE.  Skin in the game for them as well as the home buyer. Ya dig? But noooooo…

The details are left to the regulators throughout, so the fox is guarding the henhouse again – regulatory capture baby. This TBTF issue is alive and well as we enter the second leg down in housing and UE remains elevated at 10%. Our stress tests did not foresee the continued decline in housing values coupled with extended prolonged 10% UE. These guys need more capital. Treasury wanted authority to do bail outs and it looks like they still have it.:

NEW REGULATORY AUTHORITY: Gives federal regulators new authority to seize and break up large troubled financial firms without taxpayer bailouts in cases where the firm’s collapse could destabilize the financial system. Sets up a liquidation procedure run by the FDIC. Treasury would supply funds to cover the up-front costs of winding down the failed firm, but the government would have to put a “repayment plan” in place. Regulators would recoup any losses incurred from the wind-down afterwards by assessing fees on financial firms with more than $50 billion in assets.

FINANCIAL STABILITY COUNCIL: Would establish a new, 10-member Financial Stability Oversight Council, comprising existing regulators charged with monitoring and addressing system-wide risks to the nation’s financial stability. Among its duties, the council would recommend to the Fed stricter capital, leverage and other rules for large, complex financial firms that are judged to threaten the financial system. In extreme cases, it would have the power to break up financial firms.

We wait for further drill down on details and regulatory implementation timelines. JPMChase seems to have taken the biggest hit IMO, and ha ha ha since Jamie Dimon LOOOOVED him some Obama. Maroons.

June 25, 2010. Tags: , , , , , , , , , , , . CITI, citigroup, Economy, FDIC, Finance, Housing, Obama Administration, Politics, TARP, Taxes, Wall St. Comments off.

Ben Bernanke: ‘Joblessness, foreclosures pose hurdles to economic recovery’ in other Earth shattering news, water is wet!

But he still denies that overly loose Fed policy has anything to do with the housing bubble V1…

…meanwhile Greenspan told the ‘Crisis Cmte’, lol, that it was Congress’ that pushed the Fed to allow all those loose lending standards and predatory products, and no regulator could have caught it, yeah whatevs Alan, you abandoned your Randian views and tanked the economy with not one but 2 bubbles, the dot com bust thanks to your loose rates and later the housing bubble…

James Grant, editor of Grant’s Interest Rate Observer,  absolutely annihilated Greenspan on Bloomberg today during the hearing coverage-go to bloomberg for entire interview it is must see TV…

The lights actually went out in the Crisis Panel hearing with Greenspan, they continued in the dark for a bit, a metaphor from God surely, heh…

Bloomberg:

…Federal Reserve Chairman Ben S. Bernanke said joblessness, home foreclosures and weak lending to small businesses pose challenges to the economy as it recovers from the worst recession since the 1930s.

“We are far from being out of the woods,” Bernanke said today in a speech in Dallas. While the financial crisis has abated and economic growth will probably reduce unemployment (MiM here, italics mine) over the next year, the U.S. faces hurdles including the lack of a sustained rebound in housing, a “troubled” commercial real estate market and “very weak” hiring, he said.

The remarks reflect concerns by Fed officials at their meeting last month that the job market and tight credit would restrain consumer spending. At the session, Bernanke and his colleagues reiterated interest rates will stay very low for an “extended period.” He didn’t repeat that in today’s speech, while saying the Fed’s “stimulative” rates will aid growth.

“The economy has stabilized and is growing again, although we can hardly be satisfied when one out of every 10 U.S. workers is unemployed and family finances remain under great stress,” Bernanke said in prepared remarks to the Dallas Regional Chamber…

April 7, 2010. Tags: , , , , , , , , , . Economy, Finance, Foreclosures, Housing, Labor Department, Obama Administration, Politics, TARP, Taxes, Uncategorized, Unemployment Statistics, Wall St. Comments off.

Update 3: Rangel Presser 9:00am; Charlie says hell no he won’t go; Charlie Rangel stepping down as Chair of House Ways & Means Cmte!!

Update 4: Charlie taking ‘leave of absence’ from chairmanship

Wednesday 8:45am Update 3: Rangel has a presser in about 15 mins…

Above the post Update 2: HotAir covers news that Charlie refuses to step down..oh boy…

Update: The plot thickens!

Charlie Rangel emerged from a closed-door meeting in Nancy Pelosi’s office Tuesday night to declare that he’s still the chairman of the Ways and Means Committee and hasn’t agreed to give up his gavel – even as some media outlets were reporting that he’d done just that.

But asked whether he’d still be the chairman tomorrow and in the coming days, Rangel said: “I can’t make all those promises at my age.”

And when Pelosi was asked whether Rangel was resigning, she said “no comment.”

When Roll Call asked him if he’ll still be chairman, he said, “You bet your life.” Looks like we’re going to have to do this the hard way. On to the floor vote! Just one question: Who leaked the bogus news that he had quit? Was that the Dems’ way of trying to pressure him into leaving, knowing that if it looked like he had changed his mind and was trying to hold on, irritated caucus members would be more likely to abandon him?

Wow! Breaking on the CNBC Chyron now…cant stand the heat! get out of the kitchen!!! Charlie BTW was the one on the conference call to HRC telling her she must withdraw and not go to a roll call count at the convention and fight in the RBC….cough cough karma cough cough cough

hey who gets that Cmte gavel now???

giving his gavel away, hey he has made it through countless shenanigans before,  I would never have believed he step down…

He lost our AZ mod Dems already, my Rep Harry Mitchell and Gabby Giffords in Tucson both said they would vote against him tomorrow

Update: Chuck Todd on Kudlow now says SANDER LEVIN D-MI, Carl Levins bro will be taking over the gavel, he is 3 in seniority, but number 2 is PETE STARK! Who is apparently ill, sorry for that but Stark would be a DISASTER OMG! Hey MI Dems have to answer for Pres Barack Carter Obama too! they stopped the revote….

Todd indicating Rangel not to resign seat, but will likely retire this yr if he doesnt get gavel back after end of ethics investigations…..

March 2, 2010. Tags: , , , , , , . Economy, Finance, Obama Administration, Politics, Taxes, Wall St. Comments off.

Jamie Dimon fights back against UK Banker Bonus Tax

Jamie was one of our picks for Treasury Secretary to replace the tax challenged Timmeh (see our March post). Plus since we are shoveling money into,  and making all our policy based on,  protecting the banks, why not have someone with actual private sector banking experience?! Plus Jamie is actually, you know, SUCCESSFUL!

Jamie talks reality to Alistair Darling. JPMChase is about to enter a ginormous HQ on Canary Wharf in London. Maybe the ingenius Banker Bonus Tax that Gordon Brown and Alistair Darling have floated is NOT the best way to keep London as the European center of trading….

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December 30, 2009. Tags: , , , , , , . Finance, Politics, Wall St. Comments off.

Sen Gregg vs Ron Paul on Auditing the Fed

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Rep. Paul starts great and then begins talking about ending currency regulation and letting people coin their own money too. NOT a good idea!! Imagine! sigh. and CNBC: Keeping the Federal Reserve accountable, with Rep. Ron Paul, R-Texas and Frederic Mishkin, Columbia University professor.

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December 15, 2009. Tags: , , , , , , , , , , , , , . Economy, Finance, Obama Administration, Politics, Warner Bros.. Comments off.

Financial Regulatory Reform: Did Jamie Dimon stop the re-enactment of Glass-Steagall?

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Update: Oh this is  rich, Andy Stern and SEIU are having an ‘end too big to fail’ rally outside Golden Slacks, it sounds like they are actually supporting the Dodd position which the WH is NOT supporting but we know Andy Stern is there (WH) more than anyone else…so are they ‘accidentally’ using the same words as Jamie? Are they helping to keep Golden Slacks’ negative profile so high they don’t bid on taking any of the assets in the FDIC bank seizure sales? (Jamie is against the Dodd too big to fail legislation because he reportedly wants to buy some of those assets and Golden is a competitor…is the WH not really against the Dodd legislation and lying to Jamie? Is Stern just greedy or is this planned? man oh man…)

…a couple hundred of them — led by Service Unions International Union president Andy Stern — plan to gather outside of Goldman Sachs’ Washington offices Monday morning to protest the firm’s mega-bonuses, and demand the end of the “too big to fail” doctrine, according to a press release.

The event will be held outside 101 Constitution Ave. N.W., an office building that’s home to many of the most powerful lobbyists and corporations in town, including Goldman. It’s also where you can find POLITICO’s Capitol Hill bureau (in the basement).

Among their demands, the protesters will say that Goldman bankers should donate their reported $23 billion in bonuses to foreclosure prevention programs….

jamieboxing

wow. We supported Jamie Dimon for Treasury Secretary. Face it Geithner already gave billions to the banks via AIG and CITI, may as well have a TOUGH fox guarding the hen house, and Jamie is the toughest. Paul Volcker who gets wheeled out for the occasional photo-op is clearly being ignored, treated like the ‘crazy Uncle’,  as Charlie Gasparino puts it.  Obama is listening to only one banker it seems, Jamie who has vested interests in keeping things as they are.

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Airtime-Fri. Nov. 13 2009 – 12:50 PM ET – CNBC’s Charlie Gasparino has the details on whether Jamie Dimon is too powerful.

Jamie Dimon-  ‘No Bank Should be Considered Too Big to Fail’

…Dimon, in a Washington Post opinion piece, said the government shouldn’t provide artificial life support to banks that don’t perform. “The term ‘too big to fail’ must be excised from our vocabulary,'” Dimon wrote in Friday’s Post.Yet he said it shouldn’t be the size of the institution that drives the new regulatory policies being considered in Congress but rather their ability to manage risk and provide the best services for customers.

(more…)

November 13, 2009. Tags: , , , , , , , , , , , , , , , , , , , , , , , , , . Economy, FDIC, Finance, Obama Administration, Politics, TARP, Wall St. 1 comment.

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