Unemployment Benefits Are Stimulus

Robert Reich has a good column on”why deficit hawks are killing the recovery.” Consumer spending is 70 percent of the American economy, so if consumers can’t or won’t spend we’re back in the soup. Yet the government just reported that consumer spending stalled in April – the first month consumers didn’t up their spending since [...]

The Subprime Student Loan Crisis

The New York Times’ Ron Lieber has an excellent column on the severe hangover left by the cocktail of cheap credit and spiraling college tuitions: the tens of thousands of young people saddled with tens of thousands of dollars of what is, effectively, subprime student loan debt. In some cases, that student debt is more [...]

The Crisis of Long-Term Unemployment

This week, Jesse Rothstein, the chief economist at the Labor Department, spoke at the Economic Policy Institute, and the organization just posted the slides. Congress is losing its stomach for funding extended benefits. But, as the slides show, long-term unemployment remains a major problem. The chart underscores this point: For the economy to really start [...]

Congress Considers Funding Failing Pensions

Yesterday, the Senate Committee on Health, Education, Labor and Pensions, or HELP, held a hearing to weigh the costs and benefits of funding certain ailing pension funds. Sen. Bob Casey (D-Pa.) has proposed legislation to aid some pension funds fed by multiple employers, such as some Teamsters benefit plans. Sen. Tom Harkin (D-Iowa), who heads [...]

FCIC Has to Force Buffett to Testify on Ratings Agencies

Fortune has a great story up: The Financial Crisis Inquiry Commission requested that Warren Buffett, the head of investment giant Berkshire Hathaway, come testify. He declined. The panel — charged with investigating the causes of the financial crisis and known for its aggressive and public grilling of Wall Street executives — asked again, this time [...]

Clinton Says the Wealthy ‘Are Not Paying Their Fair Share’

An excellent catch from Ben Smith at Politico — today, Secretary of State Hillary Rodham Clinton made a rare comment on the domestic economic situation: “The rich are not paying their fair share in any nation that is facing the kind of employment issues [America currently does] — whether it’s individual, corporate or whatever [form [...]

Where Job Searches Take the Longest

The Economic Policy Institute has posted a new study of the average duration of unemployment by state. The report shows that workers wait longest for jobs in Michigan and South Carolina, and that last month “the median length of unemployment in the United States was 21.6 weeks, up from 15.1 weeks in 2009 and well [...]

How to Stop Lobbying in Conference Committee

The House-Senate financial reform conference committee is gearing up, with the House due to name its members some time next week and the process due to be done by July 4. But the negotiations to merge the House and Senate versions of the financial regulation bill — under intense lobbying efforts already — will happen [...]

Treasury’s Wolin: Five Things Worth Fighting for in FinReg

Today, Neal Wolin, the deputy secretary of the Treasury, gave a speech to the Financial Industry Regulatory Authority’s annual conference in Baltimore, and outlined five things Treasury will push for as the House and Senate financial regulatory reform bills go through conference committee. First, we remain focused on an issue that I know is of [...]

Unemployment Claims Continue Plateau

Weekly initial jobless claims fell to 460,000, down 14,000 from the prior week, the Labor Department announced this morning. Economists had expected unemployment claims to fall to 455,000. The four-week average fell a bit to 456,500. The drop is good news, in some sense, but the plateau in new jobless claims is worrying. The unemployment [...]

GDP Grows Less Than Expected in 1Q

This morning, the Bureau of Economic Analysis announced that the United States’ gross domestic product, the largest measure of how much the economy is growing, gained at an annual rate of 3 percent in the first quarter. The number is decent, but the government had estimated the rate at 3.2 percent last month and economists [...]

How Payday Lenders Spent Millions to Win Every Battle – Only to Lose the War

Sen. Kay Hagan (D-N.C.) By all accounts, Sen. Kay Hagan’s (D-N.C.) amendment to Sen. Chris Dodd’s (D-Conn.) financial regulatory reform bill was an excellent one. The first-term senator had a long-standing reputation in her home state for fighting payday lending, the $42 billion a year industry that offers easy-to-get short-term loans in exchange for hefty [...]

Warren, Head of TARP Oversight Panel, Criticizes Bailout of ‘Frankenstein’ AIG

Today, the Congressional Oversight Panel for the Treasury’s Troubled Asset Relief Program, headed by Elizabeth Warren, is holding a set of hearings on failed insurer AIG. Warren takes AIG to task for its blatant disregard for sound practices. “The company was a corporate Frankenstein, a conglomeration of banking and insurance and investment interests that defied [...]

New Home Sales Spike Much More Than Expected in April

This morning, the Census Bureau and Department of Housing and Urban Development announced that sales of new homes spiked in April. They also revised their March sales estimates upward: Sales of new one-family houses in April 2010 were at a seasonally adjusted annual rate of 504,000, according to estimates released jointly today by the U.S. [...]

Frank Outlines Plan for Conference Committee

Politico’s Morning Money has the text of a memo by Rep. Barney Frank (D-Mass.), outlining his plans for the upcoming conference committee to reconcile the House and Senate financial regulatory reform bills. Frank, who is heading the committee, apologizes to the members who will not make it on and warns that the White House has [...]

Three Fed Presidents Recommend Interest-Rate Increase

Today, the Federal Reserve released the minutes of its Board of Governors meetings to discuss the United States’ monetary policy in April. In February, all twelve Federal Reserve regional bank presidents requested to keep the primary credit rate at 0.75 percent. In March, eleven banks voted for 0.75 percent, but the Federal Reserve Bank of [...]

Local Governments Warn of Devastating Job Cuts

The National League of Cities, a nonprofit that represents 19,000 towns and cities with a combined population of 220 million, released a report indicating devastating local-government job and service cuts. In the 2010 State of America’s Cities survey, 63 percent of city officials say poverty has worsened in the past year — the highest proportion [...]

Senate Leadership Announces FinReg Conferees

From the Banking Committee, they are Sens. Chris Dodd (D-Conn.), Tim Johnson (D-S.D.), Jack Reid (D-R.I.), Charles Schumer (D-N.Y.), Richard Shelby (R-Ala.), Mike Crapo (R-Idaho), Bob Corker (R-Tenn.) and Judd Gregg (R-N.H.). From the Agriculture Committee, they are Sens. Blanche Lincoln (D-Ark.), Tom Harkin (D-Iowa), Patrick Leahy (D-Vt.), Tom Carper (D-Del.) and Saxby Chambliss (R-Ga.). [...]

Consumer Confidence Surges

Well, it won’t be all doom and gloom here today. Consumer confidence — an important bellwether of increasing household spending — shot up last month. The Conference Board says that consumers’ expectations about today’s and tomorrow’s economic conditions continue to improve from low lows. Consumers’ six-month outlook climbed to the highest it has been since [...]

Home Price Index Shows Weakening Market

Today, the S&P/Case Shiller Housing Index shows some worrying, if unsurprising, statistics about the housing market. The good news is that the year-on-year index, the most-watched metric, gained, as from from March 2009 to March 2010 housing prices rose 2.35 percent. Economists had expected a gain of 2.5 percent. The bad news is housing prices [...]

Goldman Fears Lincoln’s Derivatives Language

Morning Money has posted a Goldman Sachs research report, and it seems the investment bank is spooked by just one thing in the financial regulatory reform bill: Sen. Blanche Lincoln’s (D-Ark.) derivatives spin-off language. To the extent that strains in European sovereign debt and short-term money markets cause broader risk deleveraging, U.S. financials are not [...]

Obama to Create Small Business Lending Fund

Today, President Barack Obama is formally unveiling a spate of initiatives to improve hiring at and bolster lending to small businesses, pushing again for a priority first announced last winter. The centerpiece is the new $30 billion Small Business Lending Fund, which will offer funding to small community banks. (It will be separate from a [...]

Senate Recommends Brownback Auto Lending Exemption

The Senate just voted to recommend that its conferees working to reconcile the House and Senate financial regulatory reform bills include Sen. Sam Brownback’s (R-Kans.) language exempting auto dealers that make loans from Consumer Financial Protection Agency oversight. The nonbinding motion was agreed to by a surprisingly high margin, 60 to 30. Still, due to [...]

The Government Is the Housing Market

As if we needed more evidence that not all is well in the housing market: Bloomberg reports that the Federal Housing Administration “may be involved in more home-purchase transactions than borrowing financed by Fannie Mae and Freddie Mac.” “This is a market purely on life support, sustained by the federal government,” [David Stevens, the head [...]

White House Hits at Brownback Autodealer Loans Amendment

Just hours before the Senate is due to vote on a non-binding directive to its committee conferees on exempting loan-issuing car dealers from financial regulatory reform, Jen Psaki, the White House deputy communications director, has written a blog post slamming the measure: The President has been clear on this issue, repeatedly urging members of the [...]

Frank Says FinReg Conference Committee Will Be Mostly Closed-Door

Sunlight is the best disinfectant. For that reason, Rep. Barney Frank (D-Mass.) has endorsed airing on C-SPAN the conference committee’s negotiations, as the panel of legislators merges the House and Senate versions of financial regulatory reform. But wait! Now it seems the conference committee might not air negotiations — just the discussions right before the [...]

Frank to Head Financial Regulatory Reform Conference Committee

Rep. Barney Frank (D-Mass.) will head the conference committee charged with reconciling the House and Senate versions of financial regulatory reform. The committee is comprised of legislators who worked on the initial bills, from the Senate Banking Committee, House Financial Services Committee and Senate Agriculture committee. The Senate might name its members as soon as today, [...]

Wall Street: Impact of Dodd Bill on Profits Negligible in Long Run

Tucked in this New York Times piece on Wall Street’s reaction to Sen. Chris Dodd’s (D-Conn.) financial regulatory reform bill, now moving into conference committee for reconciliation with the House version, an anonymous Wall Street worker guesses at the bill’s impact on banks’ bottom lines. Many executives spent the weekend trying to assess the impact [...]

Obama to Propose New Measure to Reduce Spending

Mike Allen at Politico reports that President Barack Obama will unveil the Reduce Unnecessary Spending Act of 2010, a presidential check on Congressional bills. Under this new expedited procedure, the president would submit a package of rescissions shortly after a spending bill is passed. Congress would be required to consider these recommendations as a package, [...]

Consumer Groups Praise Financial Reform – But Cautiously

Sen. Chris Dodd (D-Conn.) (EPA/ZUMApress.com) Last week, the Senate passed a sweeping overhaul of the regulation of banks and financial institutions. The bill, authored by Sen. Chris Dodd (D-Conn.), does not just focus on Wall Street firms, changing leverage limits and capital requirements. It focuses on Main Street banks and lenders as well. The bill [...]

On FinReg, Five Lobbyists for Every Legislator

Today, the Center for Public Integrity has a good survey of how the financial regulatory reform bill got lobbied. More than 850 banks, financial firms, hedge funds and others deployed more than 3,000 lobbyists to the Hill to argue against strong consumer financial protections and other provisions blunting risk-taking and profit-making at financial firms. The [...]

Financial Regulatory Reform Bill Passes, 59-39

Sen. Chris Dodd’s (D-Conn.) bill overhauling the regulation of banks and financial firms has passed, 59 to 39. In short, the bill makes the financial system stronger by giving the Federal Reserve and new regulatory agencies — including the Consumer Financial Protection Agency and a systemic oversight council — the ability to impose leverage and [...]

Senate Invokes Cloture on FinReg, 60-40

The Senate just agreed to end debate on the financial regulatory reform bill, 60 to 40. Sens. Olympia Snowe (R-Maine), Scott Brown (R-Mass.) and Susan Collins (R-Maine) joined the Democrats in voting for the measure; Sens. Maria Cantwell (D-Wash.) and Russ Feingold (D-Mich.) chose to vote against the measure. (Sen. Arlen Specter (D-Pa.) returned from [...]

FDIC Reports Bank Earnings, Failures Up

This morning, the Federal Deposit Insurance Co. announced that the banks it insures earned $18 billion in the first quarter of 2010, up $12.5 billion from the first quarter of 2009, as money set aside for loan losses decreased 17 percent. The percentage of banks losing money fell to 19 percent, down from 22 percent [...]

Collins Amendment Becomes New Battleground

There are three amendments to watch today before Sen. Harry Reid (D-Nev.) calls another vote to end debate of Sen. Chris Dodd’s (D-Conn.) financial regulatory reform bill. The first is Sens. Jeff Merkley (D-Ore.) and Carl Levin’s (D-Mich.) bill strengthening the Volcker Rule, which would force banks to separate their commercial and investment banking functions [...]

If You Want Signs of Inflation, You Will Find Signs of Inflation

The core inflation rate is holding steady at 0.9 percent, the lowest rate in 44 years. The United States actually experienced a month of deflation in April. Still, yesterday, The New York Times felt it fitting to warn that the Federal Reserve — all too aware of the above statistics — might be overlooking other [...]

Jobless Claims Unexpectedly Rise

This morning, the Department of Labor announced that initial jobless claims rose 25,000 week-on-week to 471,000. Economists had expected claims to fall from 444,000 to 440,000, continuing their slow decline. The 25,000 person increase is the largest in three months. The four-week average — which smooths week to week variation — climbed by 3,000 to [...]

Senate Votes to Continue Debate on FinReg

During health care reform, senators strengthened and hammered out the bill in committee before it hit the floor. This go-around, Sen. Chris Dodd (D-Conn.) decided to pass the bill through the Banking Committee on a party-line vote (the vote took all of 20 minutes) and to allow a substantive amendment process. Senators were nearing the [...]

No FinReg Cloture Vote Today; Dodd Withdraws Punt on Derivatives

There’s a ton of last-minute changes currently happening to Sen. Chris Dodd’s (D-Conn.) financial regulatory reform bill.  Below are my updates on the most important ones. First: No cloture vote at 2 p.m. The Senate will vote on amendments instead, and the bill will still be up for debate. Notably, this means that Senators can [...]

Mortgage Delinquency Rate Hits 10 Percent, Mortgage Applications Plummet

Two reports from the Mortgage Bankers Association today — one mixed, one troubling. First, mortgage loan applications — measured by the MBA’s purchase index, which includes all mortgage applications for single-family homes — dropped 27 percent week-on-week, to 24 percent lower than a year ago. The news is not quite as terrible as it initially [...]

FinReg Update: Cloture Vote Today, Dodd Alters Derivatives Language

Today, at 2 p.m., the Senate will vote on Sen. Harry Reid’s (D-Nev.) motion to invoke cloture on Sen. Chris Dodd’s (D-Conn.) financial regulatory reform bill. The 60-vote-hurdle cloture motion, if it passes, would end debate on the bill and in 30 hours — after 8 p.m. on Thursday — the Senate could take a [...]

Consumer Price Data Shows Slight Deflation in April

Fed governors and market gurus have been warning about the threat of inflation to the United States economy — but there remains no sign of prices rising at worrying rates. Indeed, this morning, the Bureau of Labor Statistics reported a slight deflation in the price of consumer goods in April — a decline of 0.1 [...]

Financial Reform Advocates Lobby the Lobbyists

Showdown on K Street protesters in New York on Sunday (showdowninamerica.org) On Monday, with Sen. Harry Reid (D-Nev.) promising a final vote on financial regulatory reform in the next few days, rather than weeks, thousands descended on K Street in Washington, D.C., to lobby the lobbyists. Image by: Matt Mahurin Share The union giants SEIU [...]

Obama Reveals 2009 Financials, Bo the Dog Worth $1600

Today, President Barack Obama and Vice President Joe Biden released their financial disclosure forms from 2009. In them, you can learn that Obama made $1 million in royalties from each of his books, and donated his Nobel Peace Prize winnings. But the most interesting point? Bo the Portuguese Water Dog, a gift to the Obamas [...]

FinReg Endgame to Start Tonight

The amendment-athon on Sen. Chris Dodd’s (D-Conn.) financial regulatory reform bill is coming to a close, with staffers saying only five or so more amendments will receive votes. Senate Majority Leader Harry Reid (D-Nev.) has indicated that he plans to file cloture on the bill — ending debate and leading to an up-or-down vote on [...]

April HAMP Report Card Shows Modifications Rising

Today, the Treasury and Housing and Urban Development Departments released April data on the Home Affordable Modification Program, the Obama administration’s effort to modify mortgages in order to stem the tide of foreclosures and keep families in their homes. Modifications increased 13 percent month-to-month, to 300,000. “As the number of homeowners receiving permanent modifications continues [...]

365,000 Small Non-Profits Might Lose Tax-Exempt Status Today

Back in 2006, the Pension Protection Act instituted a new requirement: that all non-profits need to file a 990-N annual return with the Internal Revenue Service in order to retain their tax-exempt status. Before then, non-profits with annual revenues less than $25,000 did not need to file papers. Small, non-religious non-profits that have not filed [...]

States Report Lower-Than-Expected Tax Revenue

All that hand-wringing over California being the next Greece might not be for nothing. States are starting to report their April tax collections, and several have announced numbers far lower than expected even a few weeks ago, auguring bigger deficits and budget shortfalls for next year. The Wall Street Journal reports that collections are down [...]

FinReg Vote Could Come on Wednesday

Damian Paletta at The Wall Street Journal reports that Senate Majority Leader Harry Reid (D-Nev.) is “likely” to file cloture on Sen. Chris Dodd’s (D-Conn.) financial regulatory reform bill today. That means the Senate could vote on the bill as soon as Wednesday. I think this assessment is slightly rosy, though the final vote should [...]

New Mortgage-Backed Security Ratings Make Case for Reform

A few weeks ago, Citigroup and the real-estate investment firm Redwood Trust announced they had organized the sale of new mortgage-backed securities. They reported that they had picked 255 high-quality jumbo mortgages — mortgages too big to be backstopped by Fannie Mae and Freddie Mac — issued by Citigroup in California to back the financial [...]

GDP Grows at 3.2 Percent Per Year Pace in Q1

The big macroeconomic news today is that the United States’ GDP grew at a 3.2 percent per year pace in the first quarter — the third straight quarter of strong growth, weaker than the 5.6 percent pace in the fourth quarter of 2009 and right in line with  economists’ expectations. The Bureau of Economic Analysis [...]

Goodbye, Homebuyer Tax Credits

Today, April 30, is the last day for the Obama administration’s tax-credit programs for homebuyers. Purchasers need to have signed a binding agreement by the end of the day and have closed on the home by June 30 in order to receive the credits — $8,000 if it is their first home and $6,500 if [...]

Amendment Process for FinReg Underway

Sen. Barbara Boxer (D-Calif.) will likely offer the first amendment to Sen. Chris Dodd’s financial regulatory reform bill which is now on the floor and in the process of being merged with Sen. Blanche Lincoln’s (D-Ark.) derivatives language. It will be a symbolic amendment, and a bipartisan favorite: No taxpayer funds for Wall Street bailouts. [...]

Yellen Responds to Fed Board Nomination

Economist and President of the Federal Reserve Bank of San Francisco Janet Yellen, whom President Obama nominated to become vice chairperson of the Federal Reserve board this morning, has responded to today’s events on her bank’s website: I’m honored that President Obama has asked me to serve in that capacity. If confirmed by the Senate, [...]

Yellen Responds to Fed Board Nomination

Economist and President of the Federal Reserve Bank of San Francisco Janet Yellen, whom President Obama nominated to become vice chairperson of the Federal Reserve board this morning, has responded to today’s events on her bank’s website: I’m honored that President Obama has asked me to serve in that capacity. If confirmed by the Senate, [...]

Fact Checking the ‘Too-Big-to-Fail’ FinReg Attack Ad

I don’t watch much television, and therefore have missed most of the attack ads on financial regulatory reform. But, with Sen. Chris Dodd’s (D-Conn.) bill finally on the Senate floor for formal debate — and the open amendment process starting today — the back-and-forth will only heat up. When Sen. Jim DeMint (R-S.C.) tweeted “Let’s [...]

Fact Checking the ‘Too-Big-to-Fail’ FinReg Attack Ad

I don’t watch much television, and therefore have missed most of the attack ads on financial regulatory reform. But, with Sen. Chris Dodd’s (D-Conn.) bill finally on the Senate floor for formal debate — and the open amendment process starting today — the back-and-forth will only heat up. When Sen. Jim DeMint (R-S.C.) tweeted “Let’s [...]

Obama Names Three to the Federal Reserve Board

This morning, President Obama named three people to the board of the Federal Reserve: Janet Yellen to be vice chairman, and Peter Diamond and Sarah Bloom Raskin to be general members of the seven-person board. Yellen is the president of the Federal Reserve Bank of San Francisco, Diamond is an economist at the Massachusetts Institute [...]

Senate Agrees to Move FinReg to the Floor by Unanimous Consent

Rather than taking a fourth cloture vote, the Senate just agreed to start formal debate on Sen. Chris Dodd’s (D-Conn.) financial regulatory reform bill by unanimous consent. Earlier this afternoon, Senate Minority Leader Mitch McConnell (R-Ky.) said Republicans would no longer stand in opposition to the bill reaching the floor. Republicans Olympia Snowe (Maine), Susan [...]

Republicans Agree to Vote for Cloture, Start FinReg Debate

Senate Minority Leader Mitch McConnell (Ky.) has distributed a press release stating, if circuitously, that Republicans will agree to start formal debate on Sen. Chris Dodd’s (D-Conn.) financial regulatory reform proposal: I appreciate the efforts of Sen. Shelby to work toward a bipartisan solution on an issue that will have an impact on nearly every [...]

Corker on GOP FinReg Alternative: ‘I’m Not Sure What the Purpose of It Is’

Matt Corley at ThinkProgress picks up on a bizarre statement from Sen. Bob Corker (R-Tenn.) on financial regulatory reform. On CNBC this morning, Corker admitted that he is “not sure what the purpose of” the Republican alternative plan for financial regulatory reform is. If written well and carefully considered, the Republican bill might have helped [...]

Federal Reserve Holds Interest Rate Near Zero

This afternoon, the Federal Open Markets Committee, the board of the Federal Reserve that determines monetary policy and interest rates, announced it has decided to keep the target federal funds rate between 0.0 and 0.25 percent, as expected. The language in the statement was virtually identical to that in last month’s, indicating no change in [...]

Democrats Might Force Republicans to Filibuster FinReg

After the failure of the third cloture vote to start formal debate on Sen. Chris Dodd’s (D-Conn.) financial regulatory reform proposal, Senate Democrats say that they might force Republicans to filibuster — the old-fashioned, all-night, stand-up-and-read-the-phone-book kind of filibuster — this evening. Senate Majority Leader Harry Reid (D-Nev.) released a statement immediately after the blocked [...]

Clinton Cites Immigration Reform as Crucial to Solving Long-Term Deficit

Speaking this morning at the Peter G. Peterson Foundation’s fiscal summit, former President Bill Clinton forcefully argued that immigration reform is crucial to solving the country’s long-term deficit problem. Clinton, who said he had recently visited Arizona — whose governor last week signed a highly controversial and highly stringent immigration bill that, for instance, requires [...]

Third Cloture Attempt to Start FinReg Debate Fails

With Democrat Sen. Ben Nelson (D-Neb.) siding again with the Republicans — none of whom crossed over to vote for cloture to start debate on Sen. Chris Dodd’s (D-Conn.) financial regulatory reform bill — the effort has failed for the third day in a row on a vote of 56 to 42. Reid immediately moved [...]

Is Housing Really Recovering?

In The New York Times, University of Chicago economist Casey Mulligan offers some housing-market optimism: Recent reports on housing starts, new home sales and housing prices show that the housing recovery continues…. Although the housing inventory exceeded the demand in 2007 and 2008, we have known for a while that the fundamental supply and demand [...]

The Republican Counter-Proposal vs. the Dodd Bill

Tonight, the Republicans released a counter-proposal to Sen. Chris Dodd’s (D-Conn.) financial regulatory reform package. Here is a comparative analysis of the two proposals. First, the similarities. There are many. Both bills create systemic regulators to keep watch over risky firms. Both ensure that taxpayers will never be on the hook for Wall Street bailouts [...]

The Republican FinReg Counter-Proposal

Read it in full after the jump:

Republicans Circulate a Draft of Their Own Financial Plan

Damien Paletta at The Wall Street Journal has gotten a look at a 20-page Republican counter to Sen. Chris Dodd’s (D-Conn.) financial regulatory reform bill. The proposal is impossible to parse, as the reforms are complex and the details scarce, so take this with a grain of salt. But Paletta says the Republican proposal includes [...]

Democrats’ Second Attempt to Start Debate on FinReg Fails

With Sen. Ben Nelson (D-Neb.) siding again with the Republicans, the Senate for the second time just failed to agree to start debate on Sen. Chris Dodd’s (D-Conn.) financial regulatory reform proposal. The vote, which is going through final processing right now, was 57 to 41, with 60 needed to break a Republican filibuster and [...]

Reid Slams Republicans, Sets Another Cloture Vote

This morning, Senate Majority Leader Harry Reid (D-Nev.) came out swinging against Senate Republicans’ obstruction of debate on Sen. Chris Dodd’s (D-Conn.) financial regulatory reform bill. In a press release, he argues: The American people also demand that their leaders discuss these details and improve on these ideas.  They have two simple requests: One, that [...]

Goldman, Bernanke Testimonies Released

Washington is buzzing with the various testimonies and commissions ongoing today. Watch Fed Chairman Ben Bernanke and other speakers at the National Commission on Fiscal Responsibility and Reform, the president’s deficit commission, live here. And watch Sen. Carl Levin’s (D-Mich.) Senate Permanent Subcommittee on Investigations interrogate Goldman Sachs executives live here. Both the debt commission [...]

Home Prices Declined in February

This morning, Standard & Poor’s released its S&P/Case Shiller housing index data for February. It is not pretty. The composite index declined for the fifth straight month. Of the 20 cities Case Shiller follows, only Los Angeles, San Diego, San Francisco, Washington, Las Vegas and New York registered gains in home prices between January and [...]

A Guide to Today’s Economic Agenda

Today is a busy day for economic wonks and other economist-types in Washington. Below is a brief guide to all the action: At 9 a.m., the Federal Open Markets Committee — the board on the Federal Reserve that sets interest rates — starts a two-day meeting in Washington. The FOMC is expected to announce tomorrow [...]

A Guide to the Tangled Financial Reform Bill

Senate Banking Committee Chairman Chris Dodd (D-Conn.) and Ranking Member Richard Shelby (R-Ala.) discuss financial regulations on Monday. (EPA/ZUMApress.com) Yesterday evening, Senate Democrats began the procedural endgame to their push to reform the regulation of the financial sector. In a 57-41 vote, with Democrat Sen. Ben Nelson (Neb.) joining Republicans in opposition, the Senate failed [...]

4.4 Million Squatters?

Charles Smith at Seeking Alpha has an interesting post estimating that the number of people living in their homes but not paying their mortgages — people delinquent on their mortgages, people in foreclosure, strategic defaulters and others — might be as high as 4.4 million. He uses FDIC and Foresight Analytics data to extrapolate: 14 [...]

Democrat Ben Nelson Votes Against Moving Forward With Financial Regulation

Sen. Ben Nelson (D-Neb.) has voted no on the cloture motion to start debate on Sen. Chris Dodd’s (D-Conn.) financial regulatory reform bill — meaning the motion will likely fail, 58 to 42, short of the 60 votes needed. Republicans will tout this as an extraordinary victory demonstrating bipartisan opposition to moving forward on financial [...]

FinReg Cloture Vote Likely to Fail

In 15 minutes or so, Senate Majority Leader Harry Reid (D-Nev.) will call a vote to start debate on Sen. Chris Dodd’s (D-Conn.) financial regulatory reform bill. Senate staffers say that the vote will not gain a Republican crossover, and formal debate will not yet begin on the bill. To watch the ongoing debate, see [...]

Homeownership Declines to 10-Year Low

Calculated Risk has a smart analysis — with graphs! — on the first-quarter housing and rental vacancy rates released by the Census Bureau this morning. The rate of homeownership fell to 67.1 percent, its lowest level in more than a decade. The homeowner vacancy rate (the percentage of total housing units that are for sale [...]

Poll Shows Americans Overwhelmingly Support Regulatory Reform

A new Washington Post/ABC News poll shows that Americans overwhelmingly approve of financial regulatory reform, with two-thirds of respondents supporting the measures. Half approved of how President Barack Obama has handled the issue, with an equal number disapproving. Additionally, and not surprisingly, respondents approved of easier-to-understand measures, regardless of the partisan politicking surrounding them. For [...]

Poll Shows Americans Overwhelmingly Support Regulatory Reform

A new Washington Post/ABC News poll shows that Americans overwhelmingly approve of financial regulatory reform, with two-thirds of respondents supporting the measures. Half approved of how President Barack Obama has handled the issue, with an equal number disapproving. Additionally, and not surprisingly, respondents approved of easier-to-understand measures, regardless of the partisan politicking surrounding them. For [...]

Fed Considers How to Sell $1.1 Trillion of Mortgage-Backed Securities

The Wall Street Journal’s Jon Hilsenrath has a good piece on the problems facing the Federal Reserve as it tries to slim down its balance sheet, now swollen with $1.1 trillion in mortgage-backed securities and totaling more than $2.3 trillion. The story notes: Fed staff in the coming week will present models to forecast how [...]

Dodd, McConnell, Shelby Say FinReg Is ‘Not There Yet’

With a cloture vote to open formal debate on Sen. Chris Dodd’s (D-Conn.) financial regulatory reform bill scheduled for 5 p.m. this evening, Senate Democrats spent the weekend negotiating with Republicans likely to support the bill, including Maine Sen. Olympia Snowe. It seems that Democrats do not yet have the crossover support. Sen. Mitch McConnell [...]

What to Demand from FinReg

Mike Konczal of the Roosevelt Institute and the blog Rortybomb has a useful chart and paper outlining what to demand from Sen. Chris Dodd’s (D-Conn.) financial regulatory reform bill — the provisions that will ensure financial security — along with the chances of each provision making it into the final legislation. The effort that seems [...]

Strategic Defaulters Are Not Mortgage ‘Deadbeats’

Bloomberg News’ Caroline Baum has a tart piece on strategic defaults and consumer spending — invoking the theory, first put forward by HousingWire’s Paul Jackson, that underwater homeowners are purposefully defaulting on their mortgages and using the funds to buy regular goods. That would explain why consumer spending is increasing despite high unemployment, declining real [...]

Levin Committee Slams Ratings Agencies

The Senate Permanent Subcommittee on Investigations, headed by Sen. Carl Levin (D-Mich.), held its third hearing on the financial crisis today, and up to bat were the credit ratings agencies. These companies — just three players, Moody’s, Fitch and Standard & Poor’s, dominate the market — take financial products issued by banks and other financial [...]

The Banks’ Unfair Fight Against Derivatives Reform

Sen. Blanche Lincoln (D-Ark.) has written an aggressive proposal to regulate the derivatives market. (WDCpix) This week, Sen. Chris Dodd’s (D-Conn.) financial regulatory reform bill moved to the floor of the Senate. And with that bill close to passage, Wall Street and lobbyists turned their attention to Sen. Blanche Lincoln (D-Ark.) and the Senate Agriculture [...]

Dept. of Bad News

Citigroup is selling new mortgage-backed securities for the first time in two years. The company expects the mortgages to be rated AAA. But, BusinessWeek notes, “$67.3 million of the loans were to self-employed borrowers and $66.3 million didn’t require borrowers to document two years of their incomes and assets.”

Banks Down, Fannie and Freddie to Go

With Sen. Chris Dodd (D-Conn.) on the cusp of pushing his financial regulatory reform bill through Congress, the head of the Senate Banking Committee is looking forward to the next legislative fight, over housing and mortgage finance. This morning, Dodd said that the government-sponsored enterprises — Fannie Mae, Freddie Mac and the federal home-loan banks, [...]

Reid Moves FinReg Bill, McConnell Says No

Just minutes ago, Sen. Harry Reid (D-Nev.) moved for the Senate to start debate on the financial regulatory reform bill on Monday, saying, “We’re going to move forward on this legislation because the American people demand it.” Sen. Mitch McConnell (R-Ky.) said no, as bipartisan negotiations were ongoing. Reid has now filed for cloture to [...]

Financial Regulatory Reform Bill Reduces Deficit

The Congressional Budget Office has released its review of Sen. Chris Dodd’s (D-Conn.) financial regulatory reform bill. It says the bill reduces the deficit by $21 billion over 10 years, with the money raised coming mostly from charging banks to pay into a fund available to the government to liquidate failing firms. Additional items of [...]

Obama’s Speech at Cooper Union

Watch live here. And here is the full text: It’s good to be back in the Great Hall at Cooper Union, where generations of leaders and citizens have come to defend their ideas and contest their differences. It’s also good being back in Lower Manhattan, a few blocks from Wall Street, the heart of our [...]

The Regions the Housing Market Recovery Might Leave Behind

Housing sales should rise a strong 5 percent in March, housing economists say, with the rush fueled by the end-of-the-month expiry of the first time homebuyer’s tax credit. All in all, 5.3 million Americans will purchase a new home. But The Associated Press story injects a note of caution: Still, some housing market experts predict [...]

Goldman’s Blankfein: SEC Case Will ‘Hurt America’

Lloyd Blankfein — head of Wall Street giant Goldman Sachs, against which the SEC filed civil charges last week for defrauding clients in some mortgage-backed securities trades — famously stopped speaking to the press after he mentioned he thought Goldman was doing “God’s work” in the midst of the biggest financial crisis since the Great [...]

Obama’s Cooper Union Speech

President Barack Obama will give a speech on financial regulatory reform this morning at New York’s Cooper Union college, located one mile from Wall Street. He plans to demand that five elements make it into the final bill: Protect taxpayers from too-big-to-fail firms Impose the Volcker rule, named for former Fed Chair Paul Volcker, which [...]

The Fed’s Annual Earnings Increase

It’s earnings week — and the Federal Reserve system is offering up details on its 2009 balance sheet. The bank notes that though the total value of its assets “did not change significantly,” the composition of those assets changed dramatically. The bank shed $1.3 trillion in central bank liquidity swaps, loans and commercial paper. But [...]

How to Break Up the Banks?

Senators agree that the banks are too big. But multiple bills and possible amendments circulating on the Hill offer different solutions to that problem. Here is a primer on the main proposals. The American Financial Stability Act: Sen. Chris Dodd’s (D-Conn.) financial regulatory reform proposal is due to be taken up next week. It imposes [...]

Republicans Near a FinReg Deal; Derivatives Proposal Moves Out of Committee

Talking Points Memo reports that Sen. Richard Shelby (R-Ala.), the ranking member of the Senate Banking Committee, says Republicans are close to supporting Sen. Chris Dodd’s (D-Conn.) financial regulatory reform bill. “We’re very close to a deal and there will be a substantial number of Republicans that go along with it,” Shelby says. Senate Minority [...]

Is It Really a Good Time to Buy a House?

Today, New York Times economics writer David Leonhardt has a good column on why it might be a good time to buy a home in some unlikely parts of the United States. Leonhardt shows that the rent ratio — the price of the home divided by the estimated annual cost to rent one like it [...]

How It Works: Dodd and Lincoln Finance Bills

Senate Minority Leader Mitch McConnell (Ky.) is softening his criticism of Sen. Chris Dodd’s (D-Conn.) financial regulatory reform proposal, which Democrats plan to move to the floor on Monday. At the same time, Sen. Blanche Lincoln’s (D-Ark.) derivatives reform proposal goes into markup this morning at the Senate Agriculture Committee. (Lincoln says she expects it [...]