2012 March 09 | timiacono.com

Trying to Change How the Game Is Played

We haven’t heard too much about the Consumer Financial Protection Bureau lately but, one thing seems certain, if control of the Senate or White House changes hands in the fall, they’ll likely have a much tougher time doing their job in the years ahead.

Consumer Protection

From the RJ Matson archive at the St. Louis Post Dispatch.

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In today’s Wall Street Journal report about the side deal that Bank of America made with Obama Aministration officials (related to the robo-signing settlement announced a few weeks ago) comes word of a surprisingly generous approach toward principal reductions for nearly a quarter of a million underwater homeowners.

Big Banks and their MortgagesUnder the arrangement, part of the recent $25 billion settlement of alleged foreclosure abuses between government officials and five large lenders, Bank of America will make deeper and broader cuts in balances than other banks

The plan will offer qualifying borrowers a chance to cut their mortgage balances to their home’s current market value. Other banks are required under the national settlement to cut principal to no more than 120% of the home’s value.

Borrowers who qualify are expected to receive principal reductions averaging more than $100,000, a Bank of America spokesman said. The pact’s total value will depend on how many borrowers take up the offer.

Based on the 200,000+ homeowners the article cites as being eligible for this action, a little simple math puts the total principal writedowns by BofA at over $20 billion! Now that seems like an even more unbelievable number than the $100,000 per household.

Of course, per the report, this will allow BofA to avoid $850 million in fines and they’ll save a bundle in taxes by adjusting these mortgage balances down, many of which they’d end up taking back as foreclosures anyway.

I guess homeowners are finally getting their bailout too!

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The Labor Department reported that nonfarm payrolls in the U.S. rose by 227,000 in February, paced by big gains in the professional and businesses services sector as well as in health care, and the unemployment rate was unchanged at 8.3 percent.

Labor Report

There were also some big upward revisions to previously reported payrolls data as the December job gain total of 203,000 was raised to 223,000 and January’s total of 243,000 now stands at 284,000.

The number of Americans the Labor Department counts as unemployed held steady at 12.8 million, though a broader measure of underemployment that includes discouraged workers and those settling for part-time work now stands at 23.5 million as the U-6 measure of underutilization fell from 15.1 percent to 14.9 percent.


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Friday Morning Links

Debt crisis and Greek bond swap: live – Telegraph
Greek debt swap ’success’ welcomed by European leaders – BBC
Greece averts immediate default, markets skeptical – Reuters
Greek Debt Swap at 95% After Bondholders Forced to Join – Bloomberg
Hedge funds find loophole to trigger Greek default – Reuters
Legal skull-duggery in Greece may doom Portugal – Telegraph
U.S. Government sets record deficit in February – Washington Times
Happy Birthday, Alan Greenspan: The Housing Bubble Wasn’t Your Fault – The Atlantic
Goldman Bankers Shower Romney With Cash, Snub Obama – The Street
The US Deleveraging Is Now Over – Zero Hedge
Buffett’s Bursting Bubble – LewRockwell.com
BofA Makes a Deal on Side – WSJ

Oil rises to near $107 ahead of key US jobs report – AP
Gold edges up on easing hopes after China data – Reuters
Don’t count on stocks as an inflation hedge – MarketWatch
Nikkei Touches 10,000 First Time Since August – Bloomberg
Greek Deal Leaves Market in ‘Uncharted Territory’: Experts – CNBC
OPEC sees flat oil market for 2012 – Globe & Mail
Fed reaction key to precious metals case – BullionStreet
Gold, silver fighting back on improved Asian demand, Greek deal – Mineweb
Switzerland Wants Its Gold at Home and Out of Fed Hands – GoldSilver
Silver’s fresh swings heighten need for strategy – MarketWatch
Time To Sell Gold? – The Big Picture

A Philosophical Look at Unemployment – Azizonomics
Wall St. workforce rises despite layoff fears – Reuters
U.S. household wealth up 2.1 percent in Q4 2011 – xinhuanet
China’s Slowing Inflation, Factory Output Aid Stimulus Case – Bloomberg
One in two young Greeks are unemployed as jobs crisis spirals – Telegraph
Draghi Lays Groundwork for ECB Stimulus Exit, Focus on Inflation – Bloomberg
EU Debt Issue to Rile Markets for ‘Many More Years’ – CNBC
There’s Never Been a Worse Time to Buy a House – counterpunch
Obama unveils new foreclosure measures to aid housing market – Washington Post
CoreLogic: Clogged foreclosure pipeline in Northeast slowing recovery – Housing Wire
Morgan Stanley: QE As We Know It Is Over – Business Insider
The Fed’s latest plan to boost the economy – Moneywatch
An interesting model of asset bubbles – Noahpinion

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