When you spend $787 billion, there's a lot of pressure to show results. So, there's no surprise that success is being proclaimed across the country. States are saying that they've used the federal stimulus package money to create or save more than 388,000 jobs this year. Teachers, construction workers and other professions have realized the upside of stimulus cash according to reports from 33 states and Puerto Rico, with the remainder of the results being released on Friday.

Of course, the numbers "should be taken with a grain of salt," says Ethan Pollack of the Economic Policy Institute. The states were tasked to count the jobs created or protected, but the results have been of dubious accuracy. This doesn't mean the stats can't provide fodder to people on both sides of the aisle.

Columbia Business School's Frank Lichtenberg says the data shows a solid economic impact, and the Obama administration's Council of Economic Advisors believes the stimulus spending has taken care of between 600,000 and 1.1 million jobs.

And, there are those who disagree.

Continue reading Race to declare victory for stimulus

Race to declare victory for stimulus originally appeared on BloggingStocks on Wed, 28 Oct 2009 16:40:00 EST. Please see our terms for use of feeds.

• Banks were warned exotic mortgages were often inappropriate for buyers with bad credit. Anyone surprised about that?
• Banks that bundled and sold mortgages were told to be sure investors know what they were buying. We know that's not true. AAA ratings were given to much of this debt that proved to be of much lower quality and much more risky.
• Regulators urged banks to help buyers make responsible decisions and clearly advise people that interest rates might skyrocket and huge payments might be due sooner than expected. Do you believe that mortgage brokers or banks clearly warned people about the dangers of the loans they were taking? I don't.

Continue reading Bush administration ignored regulators' warnings of mortgage meltdown

Bush administration ignored regulators' warnings of mortgage meltdown originally appeared on BloggingStocks on Mon, 01 Dec 2008 10:10:00 EST. Please see our terms for use of feeds.

The real estate market is collapsing fast. Why? People borrowed more money than they could repay so they could "buy" houses they could otherwise not afford. And the banks that pushed those loans now find themselves the miserable owners of those death support systems for debt. The banks don't want these economic death traps -- so they'll dump them at a fraction of the price at which they were sold. (The Wall Street Journal reports that in June 2008, Credit Suisse sold a 1,230-square-foot home in Corona, CA for $198,000 that went for $450,000 in December 2006).

Bloomberg News reports some stunning statistics about how quickly banks are taking possession of those houses. U.S. foreclosure filings spiked 55% while bank seizures -- when a bank takes ownership of a house also known as real estate-owned (REO) -- skyrocketed 184%. Bloomberg says that "more than 272,000 properties, or one in 464 U.S. households, got a default notice, was warned of a pending auction or were foreclosed on."

This transfer of titles to banks is contributing to a massive loss of wealth. Bloomberg reports that home prices fell "15.8% in May, the most since at least 2001, according to the S&P/Case-Shiller home-price index." And Bloomberg indicates that 33% of home sellers in the second quarter lost money. Moreover, according to SeekingAlpha, 33% of houses bought in the last five years are worth less than the amount of their mortgages.

Continue reading 'Free markets' at work: Foreclosures +55%, bank seizures +184%

'Free markets' at work: Foreclosures +55%, bank seizures +184% originally appeared on BloggingStocks on Thu, 14 Aug 2008 10:25:00 EST. Please see our terms for use of feeds.

MAJOR PAPERS:

• The Wall Street Journal reported that it is the Bush Administration versus Democrats versus Republicans to decide the strategy to stabilize Federal National Mortgage Association (NYSE: FNM) -- Fannie Mae -- and Federal Home Loan Mortgage Corporation (NYSE: FRE) -- Freddie Mac. The Administration's plan would let the Treasury Department advance a credit line and the opportunity for the government to buy equity in either firm. A package is expected to pass but not before the political and economic ramifications are battled out. Democrats and Treasury want it to be a part of a housing rescue plan; Republications oppose it.
• The Clinton Foundation, headed by former President Clinton, believes it has a pricing agreement in place that it expects will make malaria drugs affordable and available to millions of poor people worldwide, the Wall Street Journal reported.
• The Financial Times reported that UBS AG (NYSE: UBS) and Liechtenstein's LGT Group will today be accused by U.S. Congressional investigators of using the "cloak of bank secrecy laws" to help American clients evade billions of dollars in taxes.

• Globes reported that Teva Pharmaceutical Industries Limited (NASDAQ: TEVA) is talks to acquire Barr Pharmaceuticals Inc (NYSE: BRL). The price tag is said to be between $7B and $7.5B.

Newspaper wrap-up: Fannie, Freddie stabilization becomes a game of political chicken originally appeared on BloggingStocks on Thu, 17 Jul 2008 08:00:00 EST. Please see our terms for use of feeds.

MAJOR PAPERS:

• To help stabilize the housing market, the Wall Street Journal reported that the Bush Administration is planning to help create fresh funding for mortgages. The plan, which still requires final approval, is said to ease an excess-capital requirement for government sponsored organizations Federal National Mortgage Association (NYSE: FNM), or Fannie Mae, Federal Home Loan Mortgage Corporation (NYSE: FRE), or Freddie Mac, and the Federal Housing Administration.
• The Wall Street Journal also reported that a merger between Northwest Airlines Corporation (NYSE: NWA) and Delta Air Lines Inc (NYSE: DAL) may be derailed after Delta pilots notified executives they remain unable to reach an agreement with Northwest pilots on how to integrate pilot ranks should the two combine.
• The Financial Times reported that BAE Systems Plc (OTC: BAESY) won a $715M order to supply nearly 1,500 mine-resistant vehicles from the U.S. government.

• The Chinese government has locked out Australian mining giants BHP Billiton Limited (NYSE: BHP) and Rio Tinto Plc (NYSE: RTP) from selling iron ore into its daily spot market, the Sydney Morning Herald reported. Mining sources said that the decision may have already cost Australia up to $300M in export profits.

Newspaper wrap-up: Bush plans more funds for mortgages originally appeared on BloggingStocks on Tue, 18 Mar 2008 09:00:00 EST. Please see our terms for use of feeds.

Continue reading Proposed, higher conforming mortgage limits seen aiding housing sector

Proposed, higher conforming mortgage limits seen aiding housing sector originally appeared on BloggingStocks on Thu, 31 Jan 2008 15:00:00 EST. Please see our terms for use of feeds.

I have been wondering lately if the sagging value of the dollar is actually going down through economic gyrations or being pushed down by design.

There are many repercussions. No one less than Rodrigo Rato, head of the International Monetary Fund, warned Monday of a potential "abrupt fall" in the US dollar that could roil the global economy. "There are risks that an abrupt fall in the dollar could either be triggered by, or itself trigger, a loss of confidence in dollar assets," Rato said at the close of annual meetings here of the IMF and the World Bank, according to news reports.

Here is what is really on his mind: Europe may take steps to temper the strong appreciation of the Euro, which is weighing on exports from the 13-nation bloc. "There is a risk that exchange rate appreciation in countries with flexible exchange rates -- including the Euro area -- could hurt their growth prospects, and that in these circumstances protectionist pressures could worsen," he said.

From my perspective I have wondered if the Bush administration is at least applauding the weak dollar as it improves U.S. trade imbalances, helps prop up the stock market and worried investment bankers, and strengthens American companies in many regards.

Continue reading Bush administration pushing dollar down or allowing it to fall? IMF chief sounds alarm

Bush administration pushing dollar down or allowing it to fall? IMF chief sounds alarm originally appeared on BloggingStocks on Wed, 24 Oct 2007 16:45:00 EST. Please see our terms for use of feeds.

Bad trade: Shockingly bad data originally appeared on BloggingStocks on Wed, 30 May 2007 16:00:00 EST. Please see our terms for use of feeds.

Sen. Graham: Wal-Mart's prices are too low originally appeared on BloggingStocks on Wed, 20 Dec 2006 13:13:00 EST. Please see our terms for use of feeds.