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GM Bailout Payback Lie


Reason‘s Nick Gillespie, resplendent in his ubiquitous black jacket, explains, “How The Hell Did GM Pay Back Its Loans “in Full And Ahead of Schedule”? Well, It Didn’t.” The script: General Motors CEO Ed Whitacre has bragged in TV commercials and newspaper columns that GM has paid back its bailout “in full and ahead of […]

Goldman Sachs Fraud Case


As readers are likely aware by now, Goldman Sachs was yesterday charged with fraud by the Securities and Exchange Commission.  I’ve resisted comment thus far, as I’ve been tied up with a minor crisis at work and don’t have any especial expertise in the vagaries of securities law, anyway.   But here’s what we know thus […]

National Debt Hysteria?


In a front piece story in today’s NYT, Edmund Andrews warns that the bill is about to come due on the massive borrowing the federal government has engaged in. Treasury officials now face a trifecta of headaches: a mountain of new debt, a balloon of short-term borrowings that come due in the months ahead, and […]

Top Employees Flee Pay-Limited Firms


Remember that plan by Obama’s pay czar to radically limit executive pay at bailed out banks? And how some of us were predicting that they’d just go to companies whose pay was not limited?  Well, it didn’t take long. Even before the Obama administration formally tightened executive compensation at bailed-out companies, the prospect of pay […]

Obama Pay Czar Slashes Compensation for Bailed Out Firms


The top earners at the top firms bailed out by the U.S. government during the financial crisis will have their pay and bonuses drastically cut. Deborah Soloman and Dan Fitzpatrick for WSJ: The U.S. pay czar will cut in half the average compensation for 175 employees at firms receiving large sums of government aid, with […]

GM Bankruptcy Over, GM Lite Emerges

GM Bankruptcy

Surprisingly few bloggers of the bloggers I read are writing about GM’s emergence from bankruptcy in a mere 40 days through a rather unorthodox process.  The background: AP: General Motors completed an unusually quick exit from bankruptcy protection on Friday with ambitions of making money and building cars people are eager to buy. Once the […]

Some More Numbers on the Geithner Plan


Were you wondering if yesterday’s big rally was related to the Geithner plan? Well, it probably was. The Treasury helpfully provides an example, which I reproduce here: Step 1: If a bank has a pool of residential mortgages with $100 face value that it is seeking to divest, the bank would approach the FDIC. Step […]

Geithner Plan: TARP 2.0?


Tim Geithner takes to the pages of WSJ to flesh out his Plan for Bad Bank Assets. Our new Public-Private Investment Program will set up funds to provide a market for the legacy loans and securities that currently burden the financial system. The Public-Private Investment Program will purchase real-estate related loans from banks and securities […]

Renogiating Mortages


Eric Posner has a Slate piece offering a novel plan for “renegotiat[ing] all those bad loans at no cost to the taxpayer.” The solution to this problem is for the government to force renegotiations to occur. A simple plan could do this. The plan would give all homeowners who live in a ZIP code where […]

GM, Chrysler Seek Billions for Dumb Business Plan


Having already wasted billions of our tax dollars, GM and Chrysler are back. But don’t worry, they’ve got a plan: General Motors and Chrysler, two flagships of traditional American manufacturing, reported yesterday that the decline of the U.S. economy has outpaced their bleakest expectations of just two months ago, forcing them to significantly boost their […]

Bush to Bail Out Big 3


After hedging bets with talk about “controlled bankruptcy,” the Bush administration has decided to give the Big 3 loan guarantees that could not pass the Senate. The White House has decided to come to the rescue of General Motors and Chrysler by providing them with $17.4 billion in low-interest loans to keep them afloat, ABC […]

Money For Nothing, Loans for Free


The Fed cut their lending rate to zero. A surprised Wall Street bolted higher Tuesday after the Federal Reserve’s historic decision to further slash interest rates and provide broad support to revive the troubled economy. The Dow Jones industrials surged 360 points, or 4.2 percent, and broader indexes jumped more than 5 percent after the […]

Public Opposes Auto Bailout

Big 3 Bailout Poll

The public opposes bailing out the Big 3 automakers by a wide margin because they believe the companies are responsible for their own failure and doubt that their going bankrupt will hurt the economy, a new WaPo-ABC poll finds. Overall, 55 percent of those polled oppose the latest plan that Chrysler, Ford and General Motors […]

Auto Bailout Dead, Politics Alive and Well

Auto Deal Runs Out of Gas

Senate Republicans killed the bailout deal worked out between President Bush and congressional leaders that had previously passed the House.  NYT: The failure to reach agreement on Capitol Hill raised a specter of financial collapse for General Motors and Chrysler, which say they may not be able to survive through this month. After Senate Republicans […]

Defaulting Homeowners Default Again After Relief


Roughly three in five people who got bailed after failing to pay back home loans are back in trouble in short order according to a shocking government report.  (Well, shocking to government officials.  Otherwise, entirely predictable.) Recent data suggests that many borrowers who received help with mortgage modifications earlier this year tended to re-default on […]

Not Buying Troubled Assets After All


Remember that emergency bailout, wherein the world would come to a complete halt if the government didn’t buy up all the bad loans? Hank Paulson says “Never mind.” Treasury Secretary Henry Paulson says that the $700 billion government rescue program will not be used to purchase troubled assets as originally planned. Paulson says the administration […]

Fannie Mae and Freddie Mac Bailout Debacle

Freddie Mac and Fannie Mae Logo

The widespread rumors of a government bailout of Fannie Mae and Freddie Mac have already had dramatic consequences, perhaps creating a self-fulfilling prophecy. Iain Dey and Dominic Rushe, writing for The Times of London, note that, “The two companies lost almost half their market value last week as rumours of a government bail-out swept the […]

Obama’s ‘Sweetheart’ Home Loan


The Manufactured Outrage of the Day comes to us from Joe Stephens and his page A3 piece for today’s Washington Post, “Obama Got Discount on Home Loan.” Shortly after joining the U.S. Senate and while enjoying a surge in income, Barack Obama bought a $1.65 million restored Georgian mansion in an upscale Chicago neighborhood. To […]

North Korea Nukes Breakthrough: A Roadmap for Iran?


The news over the past 48 hours or so about movement in solving the nuclear arms standoff with North Korean has been stunning. Not only is President Bush taking the DPRK off the “state sponsors of terrorism” list but the Kim government has taken major steps to dismantle their program and provide with stringent verification […]

Ralph Nader: Obama Not Black Enough

Ralph Nader:  Obama Not Black Enough

Ralph Nader says that Barack Obama “talks white” and ignores “black issues.” “There’s only one thing different about Barack Obama when it comes to being a Democratic presidential candidate. He’s half African-American,” Nader said. “Whether that will make any difference, I don’t know. I haven’t heard him have a strong crackdown on economic exploitation in […]

Obama Loves America — No, Really!


Barack Obama’s latest ad spot has him explaining that, no, really, he’s an American. And, despite what you might have heard, he likes it here. And he’s not a Muslim, either. Here’s the video: The transcript: I’m Barack Obama. America is a country of strong families and strong values. My life’s been blessed by both. […]

McCain the Interventionist


I’ve long thought that American politics and the fact that we have an activist/interventionist government when it comes to economic policy leads to a race to see who can pander the most to voters, or at least a sub-class of voters. John McCain’s new “plan” to bail out the greedy and stupid when it comes […]

Obese Feel More Discrimination

Obese Feel More Discrimination

Even though Americans are fatter than ever, we’re actually less tolerant of fat people. So say fat people. Led by Tatiana Andreyeva, a postdoctoral research associate at Yale’s Rudd Center for Food Policy and Obesity, a team of researchers questioned 1,100 subjects, aged 35 to 74, twice over a 10-year span (once between 1995 and […]

Iraq, Five Years On


In recognition of the fifth anniversary of the U. S.-led and mostly U. S.-conducted invasion of Iraq and removal of the regime of Saddam Hussein, there have been a number of articles in the New York Times and elsewhere that have an odd sort of synergy to them. For example, there’s this interview from the […]

George McGovern Now Conservative?

George McGovern Now Conservative?

It’s been occasionally remarked in recent years that George McGovern, who lost the 1972 election to Richard Nixon in a landslide because he was so ultra-liberal, became more conservative after leaving public life and starting his own business. A column in today’s WSJ, “Freedom Means Responsibility,” will certainly add another log to that fire. His […]

Usury Laws, the Christian Right, and Bad Statistics

Usury Law, the Christian Right, and Bad Statistics Maps

A study (or, rather, a report on said study) by two law professors on the relationship between the availability of high-interest payday loans and representation by Christian conservative legislators is generating some blogospheric commentary. The study’s abstract: The culture war has become a national moniker describing a variety of policy debates between social conservatives and […]

Where Did Hillary Get $5 Million?

Where Did Hillary Get $5 Million?

Mark Hosenball and Michael Isikoff ask and answer an interesting question: “Where did Hillary Clinton get the money for her $5 million loan to her campaign?” Clinton, unlike rival Barack Obama, has not released her tax returns. But disclosure forms that Clinton filed with the Senate provide some clues to her family finances. They show […]

A Question of Stimulus


Now that the stimulus package has passed, as James noted below, the conventional wisdom, as we discussed yesterday on OTB Radio, seems to be that this stimulus package won’t actually stimulate the economy at all. The thinking here goes to the effect that the economic stimulus comes when people say, “Cool, an extra 600 bucks! […]

Caption Contest Winners


The Three Hour Tour Edition OTB Caption ContestTM is now over.

Mortgage Companies to Freeze ‘Teaser’ Rates

Mortgage Companies to Freeze 'Teaser' Rates

The Bush administration has strong-armed mortgage companies into freezing teaser rates on old loans. The Bush administration has come up with a plan to help strapped homeowners facing a daunting jump in their monthly mortgage payments. The proposal, reached in negotiations led by Treasury Secretary Henry Paulson with the mortgage industry, would freeze introductory “teaser” […]

Affirmative Action for Rich, White Kids?


Peter Schmidt, deputy editor of The Chronicle of Higher Education and author of Color and Money: How Rich White Kids Are Winning the War Over College Affirmative Action, argues in a recent Boston Globe op-ed that more whites than minorities who don’t make the grade are admitted to elite schools. Researchers with access to closely […]

Economist Loves to Party


Slate’s Daniel Gross says that Jim Cramer and other fat cats who want the Fed to cut interest rates constitute a Punch Bowl Caucus who want to be bailed out against the long term interests of the economy. College students don’t alleviate the after-effects of an evening spent at the punch bowl by returning to […]

John Edwards Accidentally Made Millions from Katrina Victim Abusing Subprime Lenders


WSJ’s Christopher Cooper reports on what appears to be serious hypocrisy on John Edwards’ part: As a presidential candidate, Democrat John Edwards has regularly attacked subprime lenders, particularly those that have filed foreclosure suits against victims of Hurricane Katrina. But as an investor, Mr. Edwards has ties to lenders foreclosing on Katrina victims. The Wall […]

Stock Market Roller Coaster


The stock market provided quite a roller coaster ride today. The Dow Jones Industrial Average dropped 300 points, recouped a large portion of that loss, then lost what was recouped, only to rally at the end of the day and close down about 55 points. I’m sure that part of the reason for todays wild […]

Dow Plunges 387 Points on Subprime Fears


The Dow fell 387 points today amid mounting fears in regards to subprime loans in the housing market. Wall Street plunged again Thursday after a French bank said it was freezing three funds that invested in U.S. subprime mortgages because it was unable to properly value their assets. The Dow Jones industrials extended its series […]

Bill Richardson’s New Realism


Bill Richardson sets forth his foreign policy vision in a piece called “New Realism: Crafting a US Foreign Policy for a New Century” published in the Harvard International Review. The beginning is standard boilerplate, with plenty of sops to the base thrown in: US foreign policymakers face novel challenges in the 21st century. Jihadists and […]

Should You Worry About Sub-Prime Mortgages?


The housing market really isn’t my thing, but James Hamilton does have a pretty good post that looks at a potential problem with sub-prime loans. Still, you are interested in such things, head on over and check out that post. Here is the main conclusion, The ultimate discipline, then, must come from these final holders […]

Caption Contest Winners


The Silver Bullet Edition OTB Caption ContestTM is now over.

Housing Bubble Bursting for Alt-A’s?

Fester warns that, just when you thought that the bursting of the housing bubble was confined to those who took on risky “sub-prime” loans, news comes out that there may be a problem with with the “Alternative A” or “Alt-A” loans, which “account for about 21 percent of loans outstanding and 39 percent of mortgages […]

Houses Cheaper than Cars in Detroit


You can buy a house in Detroit for $4000! It’ll be a fixer-upper, though. As Detroit reels from job losses in the U.S. auto industry, the depressed city has emerged as a boomtown in one area: foreclosed property. It also stands as a case study in the economic pain from a housing bust as analysts […]

Mortgage Late Payments, Defaults at All Time Highs


Not good news for the economy. A drop in consumer spending could be quite bad news for the economy and future growth. WASHINGTON – Late mortgage payments shot up to a 3 1/2-year high in the final quarter of last year and new foreclosures surged to record levels as borrowers with tarnished credit histories had […]

The Return of EconoPundit


Steve Antler, EconoPundit, has returned to blogging after a several month hiatus necessitated by his breaking both of his wrists. Welcome back, Steve. In his post for today Steve links to a St. Louis Federal Reserve study that goes a long way towards answering the questions I asked about subprime loans yesterday. Thanks, Steve. While […]

Subprime Borrowers

A little earlier today James posted on the problems that subprime lenders are experiencing and there was a comment on that post to the effect that people who bought older homes were more likely to be “subprime borrowers” than those who bought “McMansions” and that got me to thinking. That’s not my intuition. My intuition […]

Crisis in Home Mortgage Market?


It appears that the long-forecast burst of the housing bubble may be upon us, as several companies who made risky home mortgage loans are in trouble. Hanging in the balance is the nation’s housing market, which has been a big driver of the economy. Fewer lenders means many potential homebuyers will find it more difficult […]

No Sympathy for Privilege


Phil Carter has a thoughtful post on the fact that many top law firms are having difficulty retaining top associates despite paying them as much as $200,000 right out of school. Perhaps not surprisingly, this is met with ressentiment from non-big law firm commenters. There are certain occupations for which outsiders have zero sympathy for […]

James Hamilton on the Housing Market


Prof. Hamilton has an excellent post on the housing market. The short version is that the slight decline in the 30 year mortgage rate should help with the decline in the housing market. However, the large supply of existing of unsold homes will be a source of hardship for homebuilders. This hardship will translate into […]

Payday Lending


There are some signs that there is some interest in capping/curbing payday lending practices. The article paints a rather sad picture, The Center for Responsible Lending, an anti-payday lender group, said Thursday that its nationwide study found that the typical payday borrower pays back $793 for a $325 loan. It says such data come from […]

Blue Ribbon Politics

Cal Thomas has an interesting idea about what Republicans should do if, as seems increasingly likely, they find themselves in the minority after the November midterm elections. Republicans should assemble a bipartisan group of former members of Congress, such as Georgia Democrat Sam Nunn and Missouri Republican John Danforth. They would be commissioned to draft […]

Bangladeshi Financial Pioneer Wins Nobel Peace Prize


Muhammad Yunus won the Nobel Peace Prize for his creation of Grameen Bank, a bank that specializes in micro-credit loans to the very poor to help them establish their own businesses and get them started on a path out of poverty. According to the news story the first loan Grameen Bank made was only $27. […]

The Uncertain Future of the IMF


Kenneth Rogoff has an interesting article on the problems facing the International Monetary Fund. Sept. 25, 2006 issue – As the international Monetary Fund holds its big fall meetings in Singapore this week, it faces a financial world that has been turned on its head. Traditionally, the Fund has helped out bankrupt emerging-market governments using […]

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