Economics USA: New aid to homeowners is "spitting in the wind"

"Fed Risks ‘Spitting in the Wind’ With New Aid Pledges" by Bloomberg's Craig Torres and Scott Lanman, Nov23,2k8 (3rd update)

The Federal Reserve’s new $800 billion effort to combat the financial crisis is designed to make credit more accessible to shaken consumers who aren’t sure they want more debt.

Households and lenders may not respond much because of the wealth destruction from plunging property and stock values, and the deepening economic slump, economists say. That means banks may end up returning the Fed’s new liquidity through deposits at the central bank.

“We are sort of spitting in the wind,” said Michael Darda, chief economist at MKM Partners LP in Greenwich, Connecticut. “Banks won’t be throwing a lot of loans out there when they fear -- rationally -- those loans may not be paid back.”

Policy makers aim to kick-start markets for loans to students, car buyers, credit-card borrowers and small businesses with a new $200 billion program. Backed in part by the Treasury, the Fed will become a new buyer in the market for consumer loans at a time when many traditional holders of the assets, such as off-balance sheet bank units, have collapsed or been dissolved.

More later....

Economix

Economics USA: New Fed move extends help to homeowners, both those already mortgage-foreclosed and those still-struggling to make payments

Headline:

Bailout Shocker:
Fed Government's Move Works!
H o m e o w n e r s . . . H e l p e d !

Nov26,2k8 10:34am EST by Henry Blodget


refWrite: Joe Weisenthanl, editor of ClusterStock, wrote a spoof, the background story of which is Ayn Rand's Objectivism. The title of Joe W.'s piece "Atlas Hedged" (Nov26,2k8) plays with the title of Rand's sect-revered work, the last and thickest of her ideological novels, famously entitled Atlas Shrugged. Joe is alluding to the role of Hedge-Fund funk in The Crisis that continues to rage on, in real life, differently from than phantasmagoria in the imaginal world of libertarian or objectivist fictioneering.

Braced by Weisenthal's sanguine satire, Blodget has his own go at it, but in a more analytic way:

The latest Trash Asset Removal Plan, the $800 billion one the government announced yesterday, is actually making a difference, at least so far.

One of the goals of the plan is to reduce mortgage rates through government buying of mortgage-backed securities, and Fannie and Freddie debt. And it worked immediately. Yesterday saw the biggest mortgage refinancing activity in a year.

If this trend continues, it will allow some homeowners to get out from under onerous adjustable rate mortgages and into cheaper fixed-rate ones--possibly even ones they can afford (at least until they get laid off). This, in turn, will free up some debt-service payments to be used on other things.

Economy USA:
Homeowners and Mortgages

I shoud add that the orthographic semiotics of the bold typefaces, underlines, and bold italics in the foregoing are my own interpretive retexting of the delitefully provocative Wiesenthal. Brief, sweet & sour enuff.

But Blodget pursues the chase (no pun avoidable!) passing Wiesenthal on the road. Then Blodget's done, it seems ... but then again, at length he quotes Wall Street Journal, (is the quoted text another piece of his own?, I wonder...or not). But certainly quoted at length, about the immediate impact of the Fed Government's apparently savvy political-economic action luring banks to adjust mortgage rates downward. WSJ:

Some brokers said it was the most activity they've seen in at least one year, although there was no way to determine to volume of refinancing...

Rates on 30-year fixed-rate mortgages dropped by roughly half a percentage point to about 5.5%, for borrowers with good credit scores and substantial equity in their homes, say mortgage brokers and lenders.

While the initial flurry of calls came from people seeking to refinance, economists predicted lower rates also will spur some home buying among bargain-seekers. The surge in refinancing will help the overall economy by putting more cash in consumers' pockets and reducing the pressure on some borrowers struggling to make payments...

The government's latest plans won't fix all the problems bedeviling the housing and credit markets. And it's not clear whether the most recent initiative will keep mortgage interest rates down over the long run.

Yet, at this particular time, a ray of sunshine, a note of hope for the future of the least-of-all-to-be-pitied, the American economic system.

Economix

Terror: Major assault on India's financial-hub city, Mumbai (Bombay)

Somini Sengupta reports Nov26,2k8 from Mumbai for New York Times:

NEW DELHI — Coordinated terror attacks struck the heart of Mumbai, India’s commercial capital, Wednesday night, killing dozens in machine-gun and grenade assaults on at least two five-star hotels, the city’s largest commuter train station, a historic movie theater and a hospital. There were unconfirmed reports of hostages having been taken at one of the hotels.

Mumbai police control room said at least 75 people had died and 240 injured, according to preliminary reports.

This assault was h+ly weaponized, and raises the level of continuing terrorist attacks in this part of India. Altho the chief suspect organization is thawt to be part of ongoing but heightened Islamicist extremists, recently police have been pointing to "a Hindu terror network as well," having made "several arrests."

Whoever the perpetrators prove to be, besides civilians and rank-and-file police,"several senior officers were killed...including the head of the Anti-Terrorism Squad.

A sad day for one of the world's thriving democracies.

Politicarp

Update:
MarketWatch, "Mumbai terror attacks kill 119; markets are closed," Nov27,2k89, by Anthony Lazarus, Lisa Twaronite, Nick Godt, Varahabhotla Phani Kumar, John Letzing. A day-after overview, detailing the financial targets hit and some anticipated outcomes for India's economy. The article also outlines the history of terror attacks in modernday India.

Politics: USA: Gates to stay on as Defense Secretary in Obama's initial Cabinet

Yahoo! News carries a report by Associated Press's Beth Fouhy and David Espo, "Officials: Obama to ask Gates to stay at Pentagon," Nov25,2k8. The re-appointment, however temporary, underscores the remarkably astute moves President-Elect Barack Obama is making generally in shaping his Cabinet and Adminstration for its unprecedented tasks. Robert Gates is a registered Independent, appointed first by Pres. George W. Bush to replace the erstwhile Donald Rumsfeld, whose strategy is largely claimed to have failed in Iraq. Gates now has been appointed to the same post, by Bush's successor.

Meanwhile, former Republican candidate for President, John McCain, will continue to serve in the US Senate. He will be traveling to Iraq and Afghanistan soon, according to a Yahoo! News video report.

Update:
Gates to stay on for a year.
AP Analysis: Obama opts for establishment advisers. Excellent pix of Gen James Jones (retired Marine) as the new Administration's National Security Advisor in the Whitehouse.

Politicarp

War: Iraq a stopgap for Afganstn-Pakstn's enhanced Taliban, Paul Rogers' defeatist swipe at Gen. Petraeus

Paul Rogers constructs the "two wars" into one, the Afghan war, regarding which the non-NATO coalition's efforts in Iraq was only a diversion and rearguard action. No matter that the war in Iraq was older and was against genocide, against the ending of which genocide the Weapons of Mass Destruction argument only served as a supplemental (recall Obama's coy rhetoric claiming the USA had no reason to be engaged in hostilities in Iraq, whereas the genocide in Darfur must be stopped by the USA and its allies). Rogers is hanging a lot of rthetoric, as did Obama, on a capricious hypothesis. So what if there were no WMD's awaiting our invading troops in Iraq; Saddam's genocidal regime had to go.

Now, there are two democracies of sorts functioning in the Muslim Mideast (counting Afghanstn in that designation, at least for the moment).

Of course, two new flawed Mideast democracies later, Rogers is correct that now there is one war. But, having come to share at least implicitly this element of the Petraeus Doctrine of one war, Rogers neglects to give a good accounting of changes in the scope of this now vastly militarized regional conflict in the Mideast. Changes: not only is the Taliban augmented in Pakistan (where, we add that a third democracy has been renewed after the sloughing-off of military dictator Musharraf), but that augmented and enhanced Taliban coalition with tribal/clan entities in Pakstn regularly crosses the border into Afghnstn with considerable impunity. Petraeus is presentlly taking action against the Taliban's power in both countries (while still he is coordinatively active in the third country, Iraq where apparrently Al Qaida has lost its grip).

Paul Rogers (Open Democracy, Nov20,2k8, click the title link) is an old hand at obfuscating in the service of defeatism. President-Elect Barack Obama would do well to dialogue closely, first of all, with Gen. David Petraeus.

Politics: Opposed campaigns compare notes on bipartisan roster of Fed appointee possibles

Steve Clemons, blogging on Huffington Post, Nov22,2k8, tells us:

A senior Obama campaign official shared with The Washington Note and Huffington Post that in July 2008, the McCain and Obama camps began to work secretly behind the scenes to assemble large rosters of potential personnel for the administration that only one of the candidates would lead.

Lists comprised of Democrats and Republicans were assembled, sorted into areas of policy expertise, so that the roster could be called on after the election by either the Obama or McCain transition teams.

This kind of out-of-sight coordination is rare between battling presidential camps and provides some indication that both Obama and McCain intended to draw expertise into their governments from both sides of the aisle -- or at least they wanted to appear interested in doing so if the information leaked out about the list development process.

Fascinating tidbit on cooperation behind battle lines.

-- Steve Clemons publishes the popular political blog, The Washington Note

Of course, some of the nasties among Huffington's commenters rushed to this one in order to expose each his/her own conspiracy theory.

Politicarp

Politics: wild satire of last election campaign

Politicarp

Politics: USA Presidency 2009 and new Congress begin to shape up

As President-Elect Obama makes a few appointments to staff for his term, the Congressional situation regarding a number of seats begins to shape up as well
("Democrats Gain as Stevens Loses His Senate Race," Nov19,2k8). Of primary note is the Senate's refusal to seat Sen. Ted Stevens of Alaska to yet another term, altho just re-elected (his trial for financial misdeeds, being his stumbling block).

That leaves an empty seat, the filling of which is subject to the appointment by Alaska's governor, Sarah Palin, recent national Repubican candidate for the vice-prez job -- which raises the question whether she might choose to self-designate herself into the Senate.

Politicarp

New computer, arms better, etc.

I've got a new computer, and I'll try some occasional blogging. My arms have not fully recovered, so I'll not be promising much of anything.

President-elect Barack Obama will soon officially take office (Jan 2k9).




Update Nov12,2k8: In updating and correcting my initial spelling of the President-Elect's first name, correctly "Barack," I also want to add a URL for an important twist in the Congressional Dem's planned economic legislation, " Democrats Craft Economic Plan for the country and the globe, at least ostensibly.

Politicarp