Share
The Fed funds rate has been creeping up in recent days.  At first, many dismissed it as a technical quirk.  In early February, the effective Fed funds rate firmed to 14 bp as it did in early March.  However it did not stop there and yesterday was at 16 bp.  Dealers report a tight market [...]

Share
Sheila Bair is a straight shooter. And as such, she laid it on the line today in her prepared remarks before Congress.  Her remarks were on the money on several counts. I will highlight just a few with commentary followed by the relevant quotes. A link to the testimony is provided at the end. Notice [...]

Share
As a writer, Matt Taibbi is a lot more vitriolic than I am. He curses, makes some pretty over-the-top personal attacks, and divines a policymaker’s intent where I don’t think he can. But, this goes mostly to style.  Substantively speaking, he has a lot to say and we should take notice. 
I wanted to highlight [...]

Share
The dust has settled a bit on the Treasury’s recent decision to give Fannie Mae and Freddie Mac a green light to nationalize our mortgage problem. Calculated Risk says the move was not necessarily done on Christmas Eve to escape notice. And it was not done to socialize future losses via Fannie and Freddie. It [...]

Share
Before the Christmas break, I wrote a post to tie together my thoughts on why I have found the Obama economic program so unsatisfying despite some obvious success in stabilizing the economy. This first part framed the status quo as an unequal division of spoils that has become more and more unequal due to kleptocracy [...]

Share
Fannie Mae has the luxury of marking its accounts more accurately because they have no fear of being nationalized or going bust since they already have hit the wall.  So, when we read the latest quarterly results from Fannie Mae, we are not just seeing a glimpse of Fannie’s reckless financing, but of the American [...]

Share
Let’s say you’re an American named Maria living in Southern California.  The year is 2006.  You make $45,000 and your husband David makes another $40,000.  You have two children aged six and four and your two-bedroom apartment is getting too small.  So you decide to consider buying a house.  Eventually, you and your husband find [...]

Share
Apparently the answer to this question is yes.  CNBC is reporting that home ‘owners’ who refinance their mortgages through loans backed by Fannie and Freddie will be able to borrow up to 125% of their homes’ value (hat tip Marshall Auerback).  That’s not a typo: we’re talking no-money down and 25% cash back.  Sign me [...]

Share
Bloomberg has the goods on Fannie and they’re not good. Fannie’s regulator wants $19 billion from the U.S. government because the firm has negative capital. Fannie Mae had $23.2 billion in losses last quarter alone. And it says losses in 2009 will be worse than 2008.  Nice.
Here’s the money quote: “Fannie says it does [...]

In case you missed it, Freddie Mac and Fannie Mae have cost taxpayers tens of billions to date. The bill is still rising, however, as the two companies are looking for $50 billion more to avoid technical insolvency.

Then there is Citigroup who has had their hands out for $45 billion. They have also written down over $80 billion in bad assets. Yet, they are still splurging on corporate jets.

The video below reports on these events, on John Thain’s million-dollar office makeover and more. Needless to say, we have a clear case of banks behaving badly.