Initial Reaction to the Obama Mortgage Bailout Plan

    He only announced it a few minutes ago in Mesa, Arizona, but let’s look at how the markets are reacting to Obama’s mortgage-relief plan. The idea is to spend about $275 billion to give more money to Fannie Mae and Freddie Mac, and to facilitate refinancings of distressed mortgages. It’s still too early to give you an actual analysis of the plan, but I did | Read More »

    Picking Winners and Losers Among The Large Banks

    Ok, so the Teacher And Firefighter Job-Preservation Act of 2009 is now law. Last week, President Obama told us that starting today, the stimulus would immediately speed saving succor to the US economy, using metaphors that suggested the stanching of an open wound. Are you feeling stimulated? A more true metaphor is that the stimulus will be like a fart in a windstorm. Why? Three | Read More »

    A Banking System Frozen in Amber

    One of the most critical problems facing the US economy is the “credit crunch,” which shows up as an extreme reluctance by banks and other financial intermediaries to lend money. Without a normal flow of credit, no sector of the economy can function up to its capacity, and that of course leads to lower output and higher unemployment. You’ve read a lot about the TARP | Read More »

    Taxpayer Bailouts

    Justin Taylor intervied David Kotter regarding our current banking crisis. With the Fannie/Freddie takeover, the $85 Billion bailout of AIG, and then this [huge bailout being discussed today that could cost up to a TRILLION dollars] (http://www.politico.com/news/stories/0908/13602.html). Kotter put the taxpayer cost into perspective (pre-Paulson plan): Last night the federal government committed to lend $85 billion to the insurer American International Group (AIG), on top | Read More »

    BREAKING: Bank Collapses. Feds cite Sen. Chuck Schumer as “immediate cause” of collapse

    Federal regulators just seized and shut down IndyMac, a major mortgage specialist. The Pasadena, Calif., thrift was one of the largest savings and loans in the country with about $32 billion in assets. It now joins an infamous list of collapsed banks, topped by Continental Illinois National Bank and Trust Co., which failed in 1984 with $40 billion of assets.IndyMac specialized in Alt-A loans, a | Read More »