View Full Version : Ben at Ten, Bush at Eleven.

Milo Christensen
08-31-2007, 07:43 AM
Should be a real interesting day on Wall Street.

Bernanke should be smart enough to say the right things, but GW?

Looking like a good day to grab ahold of your shares and ride the rocket up.

Gary E
08-31-2007, 08:13 AM
Well, it is the say before a long weekend and if the boyz on wall street behave in there typical way, they will run it up so the public will say..."SubPrime Problems?...Inflation? the Dollar??... why worry, party on dude" and have no concerns over the weekend.... then wait till Tueday when the real traders get back to work.

Gary E
08-31-2007, 08:26 AM
So let the public bail out the subprime people that got in way over their heads and of course more important to bail out the BANKS and the Wallstreet Brokers that sell this low grade paper...


CBSMartketwatch reports: The private sector and Congress should create new, affordable mortgage products that would help some homeowners refinance their mortgages and keep their homes, Federal Reserve Chairman Ben Bernanke suggested in a letter released Wednesday.

In the letter to Sen. Charles Schumer, D-N.Y., Bernanke repeated that the Fed is closely monitoring markets and stands ready to act if needed. The Fed issued a statement with almost identical wording on Aug. 17 after it cut the discount lending rate to 5.75%. The letter from Bernanke was dated Aug. 27 and released by Schumer's office on Wednesday.

Calling it a "bullish" letter, bond market strategist Tony Crescenzi of Miller Tabak said Bernanke was "very sympathetic to concerns expressed quite strongly in the financial markets of late."

"If this tone is repeated on Friday, the conclusion will be that the Fed will lower the fed funds rate" by the Sept. 18 meeting of the Federal Open Market Committee, Crescenzi said. Bernanke is scheduled to give a speech on housing and housing finance on Friday.

Most economists and market participants expect a rate cut by the FOMC.
In his letter, Bernanke called for creative thinking to get the nation out of its subprime mess.

"It might be worth considering at this juncture whether the private and public sectors, separately or in collaboration, could help the situation by developing a broader range of mortgage products which are appropriate for low-and moderate-income borrowers, including those seeking to refinance," Bernanke wrote.

"Such products could be designed to avoid or mitigate the risk of payment shock and to be more transparent with respect to their terms," Bernanke wrote. "They might also contain features to improve affordability, such as variable maturities or shared-appreciation provisions for example."
Congress is considering legislation that would reform the Federal Housing Administration, which is a federal agency that provides mortgages to low-income buyers. FHA loans have been largely supplanted by subprime lending from the private-sector. But FHA loans, with tighter lending standards and less onerous terms, have not defaulted at the rates recently seen in subprime loans.

Under current law, the FHA cannot lend to those who are behind on their mortgage payments.

Congress is also considering legislation that would reform oversight of the so-called government-sponsored entities Fannie Mae and Freddie Mac
Some have suggested that Fannie and Freddie be allowed to buy more mortgages beyond their current maximum as a way of injecting more liquidity into very tight money markets. It has also been suggested that Fannie and Freddie be allowed to buy mortgages larger than the $417,000 conforming loan limit. The White House has opposed any loosening of Fannie and Freddie's buying.

Bernanke said Fannie and Freddie could expand their lending without changing their portfolio caps by selling some of their current holdings in the market.

Full Story: http://www.marketwatch.com/news/story/new-mortgage-products-could-help/story.aspx?guid=%7b69E9EB78-D... (http://www.marketwatch.com/news/story/new-mortgage-products-could-help/story.aspx?guid=%7b69E9EB78-D404-4305-82E2-7892DB5EA2B8%7d&print=true&dist=printTop)

Gary E
08-31-2007, 08:40 AM
WSJ Online reports: President Bush, looking for ways to respond to the subprime-mortgage crisis, will outline a series of policy changes and recommendations today to help borrowers avoid default, senior administration officials said.

Among the moves will be an administrative change to allow the Federal Housing Administration, which insures mortgages for low- and middle-income borrowers, to guarantee loans for delinquent borrowers. The change is intended to help borrowers who are at least 90 days behind in payments but still living in their homes avoid foreclosure; the guarantees help homeowners by allowing them to refinance at more favorable rates.

Mr. Bush also will ask Congress to suspend, for a limited period, an Internal Revenue Service provision that penalizes borrowers who refinance the terms of their mortgage to reduce the size of the loan or who lose their homes to foreclosure. And he will announce an initiative, to be led jointly by the Treasury and Housing and Urban Development departments, to identify people who are in danger of defaulting over the next two years and work with lenders, insurers and others to develop more favorable loan products for those borrowers.

The moves are the first visible steps the Bush administration has taken to help stem the fallout from the subprime crisis, which has roiled financial markets and threatened to contaminate the housing sector. Defaults and foreclosures are increasing as borrowers -- many of whom got interest-only or no-money-down loans -- begin having trouble making their mortgage payments as higher rates kick in. Many homeowners believed they could refinance their loans, but that has become much harder as lenders tighten their standards in the face of defaults and foreclosures.

With more than two million loans expected to adjust to higher rates over the next two years, possibly triggering many more defaults, the Bush administration is looking for ways to stem the damage.

"The president wants to see as many homeowners who can stay in their homes with a little help be able to stay in their homes," a senior administration official said. "We're not looking for an industry bailout or a Wall Street bailout. The focus here is on the homeowner."

Mr. Bush is instructing Treasury Secretary Henry Paulson to look into the subprime problem, figure out what happened and determine whether any regulatory or policy changes are needed to prevent a recurrence.

For now, the administration's primary vehicle to help homeowners will be the FHA, which doesn't originate loans but helps riskier borrowers qualify by guaranteeing their loans against default. By allowing the agency to back loans for delinquent borrowers, the FHA estimates it can help an additional 80,000 homeowners qualify for refinancing in 2008, bringing its total of refinancing guarantees to about 240,000, senior administration officials said. Mr. Bush also plans to announce that the FHA will begin charging "risk-based" premiums, a move that will enable the agency to help riskier borrowers since they can charge those individuals higher insurance rates. Right now, FHA premiums are a flat 1.5% of the loan, and the change would give the FHA flexibility to charge some borrowers as much as 2.2%.

Still, the move will help only a small portion of homeowners -- and few in high-cost states such as California or New York -- because the FHA faces constraints on the size of the loans it can back and strict rules that borrowers must meet. The Bush administration has been pushing Congress to enact overhauls that would eliminate the required 3% down payment and raise the size of the loans the FHA can insure to as much as $417,000 from $362,790. Senate Banking Committee Chairman Christopher Dodd (D., Conn.) said recently that FHA reform will be among his priorities when Congress returns from its August recess, and a bill is expected to head to the full House this fall.

In another move, Mr. Paulson and HUD Secretary Alphonso Jackson have instructed their staffs to begin working with mortgage lenders and others to identify borrowers who are in danger of defaulting. They also are trying to work with private lenders and mortgage giants Fannie Mae and Freddie Mac to develop loans for borrowers who will likely face default if they can't get more flexible terms.

Full Story: http://online.wsj.com/article/SB118851742988914064.html (http://online.wsj.com/article/SB118851742988914064.html)

08-31-2007, 08:52 AM
Senator Calls on Big Four to Fix Subprime Crisis Sen. Charles Schumer sends a letter to the large accounting firms, asking them to educate lenders about the newly understood flexibility of FAS 140. Sarah Johnson (http://www.cfo.com/index.cfm/l_emailauthor/9709799/c_9710458/7291643), CFO.com August 28, 2007

One month after Securities and Exchange Commission chairman Christopher Cox made it more economically feasible for lenders to modify securitized loans when a default seems likely, Sen. Charles Schumer is encouraging the Big Four accounting firms to ensure their clients are aware of the option.
Schumer sent the largest firms a letter last week asking them to "assist this country's mortgage crisis by ensuring that your clients are aware of the recent SEC and FASB guidance on FAS 140, and by otherwise encouraging them to modify subprime loans at risk of default." Currently, according to Schumer, investors of securitized mortgages are still saying they are unable to refinance or modify loans because it would interfere with their off-balance sheet treatment of the loans. That has given mortgage borrowers on the brink of foreclosure little or no wiggle room to refinance their loans.
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At issue is the Financial Accounting Standards Board's rule for securitizations, in which loans are packaged together and sold, at varying risk levels, as bonds backed by future loan payments. When a securitized loan's future proceeds are owned by a trust, the lenders — which continue to service the loans — are generally not able to modify them unless the loans are in default. If the lenders do make any modifications, they could be at risk of tampering with the "true sale" agreement they have with the trust and therefore would have to account for the loan as an asset on their balance sheet.
However, prompted by queries from congressmen (http://www.cfo.com/article.cfm/9388430?f=related) concerned about the burgeoning subprime mortgage meltdown earlier this year, Cox implied (http://www.cfo.com/article.cfm/9564784?f=related) that the lenders could indeed make modifications without a change to their balance sheet — as long as the likelihood of default is "reasonably foreseeable." Cox's letter said that "modifications undertaken when loan default is reasonably foreseeable should be consistent with the nature of modification activities that would have been permitted if a default had occurred."
Schumer considers this clarification from the SEC a "promising solution" to the repercussions he believes will arise when more subprime borrowers foreclose on their mortgages in the coming months. To stave off a further crisis in the mortgage industry, Schumer says, lenders could apply the new interpretation of FAS 140 and refinance the loans of subprime borrowers — those with a weak or nonexistent credit history.
But it may be up to the accounting firms to let, or remind, those lenders that they have this possibility. In his letter, Schumer urges the accounting firms to tell him what they are doing to make sure their clients know about the newly realized flexibility of FAS 140 and to "make it a priority" to do so.
For their part, the accounting firms aren't yet saying if they will address Schumer's letter. CFO.com's calls for comment were not immediately returned by spokespeople at Deloitte & Touche, Ernst & Young, KPMG, and PricewaterhouseCoopers. The Center for Audit Quality, which represents the accounting firms and was copied on Schumer's letter, referred CFO.com to the firms' press offices.

John of Phoenix
08-31-2007, 10:08 AM
Bernanke should be smart enough to say the right things, but GW?

The market started dropping at "Good mornin' ". Let's see what else he has to say.
One sentence, man. Just get out one friking coherent sentence.

Milo Christensen
08-31-2007, 10:35 AM
Damn Bernanke. It's all true, but why not add a little sugar coating?

Bush, too little, too late, 9/11 and Iraq and Katrina all over again.

Read my signature. Today I've been optimistically stupid and it is painful.

John of Phoenix
08-31-2007, 11:00 AM
He has no credibility on anything.
All that Precious Political Capital... squandered. Oh well.

Given up on Michigan have you?

Milo Christensen
08-31-2007, 11:06 AM
. . . Given up on Michigan have you?

Oh no. Never! But the advertising contract expired and wasn't renewed. :(

John of Phoenix
08-31-2007, 11:26 AM

Well, I thought you did a yeoman's job of it.