ProPublica and NPR’s Planet Money are up with a great investigation into how banks sustained demand for risky mortgage-backed securities, even as the housing market started to falter and the number of companies available to take the long side of the trades started to dwindle. They, in essence, made More…
In a new paper released today, entitled “How the Great Recession Was Brought to an End,” prominent economists Alan Blinder and Mark Zandi say that the stimulus, stress tests, emergency Federal Reserve maneuvers and Troubled Asset Relief Program saved the economy from collapse.
Sudeep Reddy of The Wall Street Journal interviews James Bullard, president of the Federal Reserve Bank of St. Louis — a voting member of the Federal Open Market Committee, which sets the nation’s short-term interest rate.
Bullard says that the Fed might start selling off mortgage-backed securities — it More…
Over at the excellent Atlantic Business Channel, Daniel Indiviglio runs through the three major overlooked issues in Sen. Chris Dodd’s (D-Conn.) financial regulatory reform bill that economists and market-watchers flagged for The New York Times. The folks quoted cite credit runs in the shadow-banking sector (in English: old-fashioned More…
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 More…
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
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.”
Today, the Securities and Exchange Commission charged Goldman Sachs and one of its vice presidents with selling clients a financial instrument that another client had purposefully designed to fail and had shorted, betting on its collapse:
The SEC alleges that Goldman Sachs structured and marketed a synthetic collateralized debt
For the Senate Permanent Subcommittee on Investigations, it is WaMu week.
Tomorrow, the subcommittee will release more than 500 documents on Washington Mutual, the $300 billion bank that helped fuel the subprime bubble and then collapsed in the biggest bank failure in U.S. history. It will also hold a More…
As a quick follow to Annie’s nice wrap of yesterday’s gathering of the commission investigating the recent financial crack-up, it’s worth noting that Alan Greenspan — once contrite about the “flaw” surrounding his blind trust in free markets — is now making the claim that he’d been More…
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