“It’s proven by the fact that you have millions of people who are in foreclosure who never should have been in foreclosure. This just didn’t happen because there were a lot of irresponsible people. Think about it. This is unprecedented, that this many people, all of a sudden, would be in foreclosure. What went wrong?” she asked Mark Haines. “I’ll tell you what went wrong. These exotic products that were put on the market tricked people into mortgages they could not afford. They had mortgages that reset that they never anticipated would reset, where the interest rates were double, where their mortgage payments were double. They never anticipated that. They didn’t know what they were getting into. This is not just some irresponsible homeowner. This is massive fraud…On a macro level, policy for the whole country, I still don’t understand how you get around the moral hazard without just simply saying all of the contracts that are out there are not worth the paper they’re printed on.” Read more »
Congress
“…insider-trading laws don’t apply to Congress.” [WSJ]
As previously mentioned, Maxine Waters has been accused of some questionably ethical dealings. The Congresswoman from California has denied that she’s violated any house rules and as a result, will take part in a public hearing rather than admitting to any wrongdoing. Naturally you can expect any hearing involving Waters to be an extremely entertaining event but today the Boston Herald takes one for the team, raising a few points that ensure there will be a minimum of, ballparking it, 5 delightful awkward exchanges, vis-a-vis a pal of hers named Kevin who allegedly has a coke, sodomy and Porsche problem. Read more »
“I have not violated any House rules,” Waters said in a statement today. “Therefore, I simply will not be forced to admit to something I did not do.” Instead, the Representative from California will be taking part in a public hearing “rather than admitting to any wrongdoing.” The House Ethics Committee has said it formed an “adjudicatory subcommittee” to deal with the matter/hold the showdown, and while at this time they probably do not have plans to consider allow Waters to question herself, I think it’s most certainly something that should be considered. Honestly. Just take a moment to imagine the fireworks of Waters on Waters. They could sell tickets and make it a pay-per-view event. Don’t say no, just say maybe, and get a taste of what could be. Read more »
At least one guy says yes, though perhaps this is just an all to convenient way of blaming the government for something he’s been planning on doing all along. Funny how that happened.
Advisers say the estate-tax dilemma is especially awkward for heirs. “At least in December 2009, people wanted to keep their relatives alive,” says Ronald Aucutt, an estate-tax attorney with McGuire Woods in the Washington area. Now he and others are worried that heirs may be tempted to pull plugs on Dec. 31. Economists might call the taking of a life to reap a tax advantage a “perverse incentive.” District attorneys might call it homicide.
Congress is also apparently encouraging keeping appliances plugged in and close to the tub while going for a dip. Read more »
Guess what? Congress is starting to worry about commercial real estate being the next shoe to drop. Again. Still. And no one is doing anything about it. Enters a group of valiant House members, who took the matter into their own hands. They wrote a letter to Timmy G. and Ben B. begging them to take some action. Because, yeah, they will.
As a part of our “All Beard Wednesday” programme, we would like to call your attention to a Reuters piece so bold as to compare the Fed Chairman to Clark Kent and Superman.
True, the piece badly mixes metaphors, implying Superman was some kind of “swashbuckler,” and lamenting that Bernanke might lose some of “his swashbuckling spirit.”
The Fed has every reason to be politically intimidated. Relations between lawmakers and the Fed are close to an all-time low.
Much congressional ire has been focused on the Fed’s role in bank bailouts. There has been nervousness over its expanded balance sheet, which more than doubled during the crisis to around 14 percent of GDP.
For some Republican Senators such as Jim DeMint, the Fed’s purchase of U.S. Treasuries has been aiding and abetting “reckless” spending by Obama. DeMint is not alone in believing that credit easing is a covert means of devaluing the dollar. In the House an increasing number seem willing to listen to obsessively anti-Fed Congressman Ron Paul.
It is not surprising that correspondents for foreign outlets might be desirous of a more activist and powerful Fed. They, after all, seem less blinded by the trappings of power and can therefore, see what a pack of knee-biting wild dogs Congress is, and how completely they will destroy the United States if permitted to tinker with the structure of the Fed- much less continue to meddle with the economy.
Bernanke: Back to Clark Kent [Reuters]
If Ben Bernanke thought he could keep the Fed (semi)-independent of the rest of Washington, he may get a rude awakening soon. Congress is looking to provide the GAO with the authority to audit all of the Fed’s activities. The thought of greater Congressional scrutiny has to make Bernanke reach for the Pepto and hope that he doesn’t wake up in a cold sweat haunted by the vision of Maxine Waters marching down the corridors of the Fed trying to fire every ex-Goldman employee herself. Best of luck Ben.
Congress seeks to open Fed actions to more scrutiny [FT]
Passing by almost unnoticed today is the news that the Greenbrier, the famous White Sulphur Springs resort retreat for Congress and whose Presidential Suite has been the host of every President since Dwight Eisenhower, has slipped quietly under the dark waves of insolvency.
The Greenbrier Hotel Corporation (GHC), owner of The Greenbrier resort in White Sulphur Springs, announced today that it has sought Chapter 11 protection to help ensure the viability of the resort.
The ordinary is made interesting when one realizes that the Greenbrier was for years the location of the secret Congressional emergency relocation facility. Complete with medical facility, meeting rooms, generators, cafeteria, long-term living quarters and the like, the underground bunker was designed to keep Congress alive and able to continue running the country into the ground long after a devastating nuclear attack (the ultimate sign of a failure in leadership).
No word on whether the bunker will now accept Marriott Rewards points.
The Greenbrier Files Chapter 11, Signs Agreement With Marriott Hotel Services, Inc. [PRNewswire] via Alea
That’s you, not the CEOs, by the way.
Since CSPAN has gotten back on the ball, and therefore we don’t have to watch CNBC to follow it, we continue our snide coverage:
Ok guys, who believes nicotine is not addictiveyou will pay back the TARP money and need no more funds?
[Everyone]: Yes, but we have no clue what the Geithner plan is so…
Rep. Ellison: Hey, Bank of America- The Huffington Post claims that your employee at the Financial Services Roundtable was advocating opposition to the Employee Free Choice Act? Is that true?
Lewis: I don’t go the roundtable.
Rep. Ellison: You don’t think you should be opposing union organization with TARP funds do you?
KL: Huh?
Rep. Ellison: So, are you guys solvent?
VP: Oh yes.
Rep. Ellison: What about you Bank of America?
KL: Since we made money last year, I am simply amazed you would even ask that.
Rep. Ellison: So, are you going to collapse?
K “De Niro” L: Are you talking to me?
Rep. Ellison: Yeah, you.
KL: Absolutely not. I don’t even know what the hell you are talking about or why you’d ask me that question. And why don’t you just go out back and pound salt you bank run creating public menace. (Ok, maybe we made that last part up).
Rep. Wilson: Why don’t banks want TARP funds, Mr. Lewis?
KL: Simple, we don’t want your dirty paws on your business. Duh.
Rep. Perlmutter: You guys are just big bloated bombs waiting to go off and blow up the system, right?
JM: No. G’z. We sold the credit card morass, what more do you want?
JD: No.
Rep. Biggert: If you guys are so healthy, why are were here? How can you help restore consumer and investor confidence?
JD: Doing the best we can, lady.
JS: How about you guys whack Mark-to-Market so we can report our assets at the marks we prefer?
Rep. Biggert: Who wants to nuke Mark-to-Market?
[Only JS raises his hand]
JS: Ok, let me clarify. I only really want to do away with Mark-to-Market when it results in marks that I don’t likewhen the market is irrational.
Rep. Donnelly: Will it play in Peoria?
[Deer. Headlights.]
Rep. Foster: Given 11% unemployment a 25% decline in residential real estate and similar problems in commercial real estate who of you is going to survive? Don’t point or anything.
[Everyone]
Rep. Foster: Have you ever seen a compensation restriction you couldn’t circumvent?
[Deer. Headlights.]
Chairman Franks: I really don’t want to see the eight of you singing “I Will Survive.”
Rep. Speier: What was your exposure to AIG? And were you present at the Fed meetings during the AIG collapse discussions?
LB: We had very little actual exposure to AIG because (we were hedged/we offset our risk).
Rep. Himes: When are you going to start eating your own cooking? Who here is going to set up strong long-term compensation structures?
[Everyone]
Rep. Himes: Let me start with Mr. Pond-it. Why aren’t you taking top-loss tranches on these complex issues?
VP: That’s not very traditional.
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