Economy

GOP Gags Witnesses on Credit Card Woes

Republicans on a consumer credit subcommittee required witnesses to waive privacy rights to their financial history before testifying about run-ins with credit card companies.

The Continuous Housing Free Fall

When the mortgage crisis first hit, Freddie Mac and Fannie Mae were anointed to lead a major bank bailout.

The End of Cheap Food?

If cheap food is a thing of the past, the result could be disastrous for fighting poverty and could bring an end to the long-term rise in U.S. living standards.

Activist Approach to Ayn Rand

As former Federal Reserve Chairman Alan Greenspan continues to spin his defense of his legacy, we noted this week that his early mentor, Ayn Rand, would have approved of his unapologetic stance on laissez-faire capitalism and his aversion to government regulation of the financial markets. We also explained that the late author once had a cultish following that has waned in popularity. Some people pick up her books as youthful readers, then never look back. As one Huffington Post reader put it, in response to the story: "I read "The Fountainhead" and "Atlas Shrugged" and I was very impressed WHEN I WAS IN HIGH SCHOOL."

Big Oil Ties Could Hurt GOP

The GOP is striving to establish itself as the party with energy solutions, but connections with Big Oil companies could undermine their efforts.

Free Cash! (And Don't Forget Us in November)

If you're like most working Americans, your mailbox this week held a gift from the IRS in the form of an "Economic Stimulus Payment Notice." These gems of efficiency are designed to inform taxpayers that they'll be receiving a one-time payment of up to $600 for individuals -- or $1,200 for couples filing jointly -- courtesy of their benevolent Washington representatives.

But there's something curious here, which is this: In order to get these checks, taxpayers have to do -- drum-roll here -- precisely nothing. That's right. Just file this year's return, like you're required to do anyway, and the extra cash will follow.

"These special letters remind people that they won’t need to do anything more than file a 2007 tax return in order to put the stimulus payment process in motion,” Acting IRS Commissioner Linda Stiff said in a statement.

Which begs the question: Why did we need to be told to do nothing?

A quick glance at the notice gives the answer. "Dear Taxpayer," the text reads. "We are pleased to inform you that the United States Congress passed and President George W. Bush signed into law the Economic Stimulus Act of 2008, which provides for economic stimulus payments to be made to over 130 million American households."

The message is clear:

Race and the Housing Crisis

Now that blame for the mortgage fallout is extending to lenders, it's time to take a sober look at which borrowers were targeted for high-cost loans.

The FDIC Finally Figures Out that Banks Don't Play Fair

HousingWire reports that the FDIC sent letters to the banks it regulates, warning them over their handling of properties that they've foreclosed on and still own. The FDIC reminded banks of the importance of developing and putting into place policies to handle their bank-owned real estate, known as REOs. If I can translate for a second, the agency basically was telling banks they still have to pay taxes and other bills on the properties they have foreclosed on but cannot sell.
Here's are more interesting details, from HousingWire:

How Fraud Fueled the Mortgage Crisis

The question of who did most of the lying and cheating will be crucial in deciding who deserves help in any housing rescue plan.

McCain Policy Defies Math

McCain just finished his "forgotten" America tour, where he offered little to the working and poor who turned out to hear him.

The Plunge Protection Team

An elite group of financial sector protectors just celebrated its 20th birthday.

Imploding Credit Bubble to Hit $1 Trillion

From 2002 through 2005, Federal Reserve Chairman Alan Greenspan kept banks’ own borrowing rates lower than the rate of inflation – in effect, for bankers, money was free.

Mortgage Giants Need Dose of Reality

PART 2

In a country with low personal savings and wasteful consumption habits, McMansions seem like the national priority. A cold-eyed view suggests Fannie and Freddie have outlived their usefulness.

Mortgage Giants in Critical Care

PART 1

The housing market collapse is wreaking havoc at Fannie Mae and Freddie Mac. How did it happen and is a rescue on the way?

When Loan Workouts Don't Really Work

Can we just stop the madness now and come out and say it - voluntary loan workouts aren't doing much of anything to stem the mortgage crisis? Hope Now, a private sector group assembled by the Bush administration, released its latest numbers on Wednesday and, although they were, well, kind of awful, the Hope folks did their best to spin them. Sure, the number of workouts declined in May, the group said. But they're on track to complete a total of about 520,000 workouts in the second quarter, the highest since the program began.

Of course it all depends on how you define "workout." If you earn a modest income and you've got an interest only loan that recently reset so that your mortgage payment totals close to $4,000 or so - something not atypical these days - you need your loan modified entirely, the terms changed from top to bottom. You've got to convince the lender to reduce the interest rate on the loan or to convert it to a fixed-rate mortgage. That's a true loan workout.

Wall St. Still Hasn't Learned

The credit crisis was the result of banks using excessive leveraging. Lehman's decision shows Wall Street still doesn't get it.

The Saudi Arabia of Food

Don't panic when U.S. farmers switch crops.

Greenspan Defends His Legacy As Housing Crisis Widens

On his watch, the Fed failed to rein in abusive and predatory practices that caused millions of people to lose their homes. Now Greenspan can't stop a growing movement to put some brakes on the financial markets.

Edwards Moves on With MoveOn

$20-million activist effort targets 'obstructionist" members of Congress -- Democrats as well as Republicans -- that don't seek a rapid withdrawal from Iraq.

Credit Crisis Only Begins With Mortgages

The hard reality is that the economy is facing a one-two knockout blow from a collapse in consumer spending, plus a shock-and-awe wave of asset write-downs that is wreaking havoc in the financial sector.