Economy

Dodd Fallout: GOP Senators Pushing Housing Bill Delay

The timing for Sen. Christopher Dodd (D-Conn.) could not have been worse: Just as the Senate Banking Committee chairman was finalizing a bipartisan deal on legislation aiming to stem the nation's foreclosure crisis, Portfolio magazine breaks the news that he received special rates from Countrywide Financial when he refinanced homes in Washington and Connecticut in 2003.

Dodd Scandal No Hurdle To Housing Bill

The Senate on Tuesday voted overwhelmingly to end debate on legislation tackling the nation's housing crisis, setting the stage for final passage of the bill, which could come later today. Some conservative Republicans had pushed to delay the vote in the wake of the news that the bill's sponsor, Senate Banking Committee Chairman Christopher Dodd (D-Conn.), had received special rates on loans taken out from Countrywide Financial, which stands to benefit under the bill.

Going God Over Gas

Here's a valuable use of time: A group called the Pray at the Pump Movement will congregate at a Shell gas station in DC this afternoon to -- you guessed it -- pray in celebration of falling gas prices. Seems this group launched its plight in April, encouraging motorists to pray for lower fuel prices as they filled their vehicles. Now that oil prices have dropped to roughly $114 a barrel -- the lowest tally in months -- they want to give God a shout-out of thanks.

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.

'Toxic Titles' Haunt Cities in Mortgage Meltdown

Investors fueled the market for risky mortgages, and now cities and neighborhoods must handle the fallout.

A New Kind of Fair Housing Debate

As Allison noted earlier, Treasury Secretary Henry Paulson finally feels it's time for "more transparency" on Wall Street, especially if unregulated mortgage firms want access to the Fed's money. As my story today noted, there's a growing anger among housing advocates over what they see as special treatment from the Fed for subprime lenders, while homeowners facing foreclosures are told the government can't help them.

A New Name for the Pain

If you've been wondering how, exactly, to describe the current state of economic pain we're experiencing, John Kay at the Financial Times has the answer.

Kay launched a contest for readers to come up with the pithiest term for an anti-bubble. Going cute wasn't the answer, Kay said, so right away "elbubb" was tossed off the table. But anything too complicated wouldn't fit, either; Kay said specifically that "the word must be short enough to be part of the vocabulary of Jim Cramer of CNBC."

Kay liked "trubble," especially for the Shakespeare allusion, but felt it didn't go far enough. I might have suggested the Great Depression, except that it's already taken.
Readers who didn't win the contest still came up with ways to explain the current mess far more succinctly than experts have, Kay noted:

A Note On Message Consistency

Sen. John McCain has an op-ed in the St. Petersburg Times today about the potential government bailout of Freddie Mac and Fannie Mae. Here's the first paragraph:

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."

Addington and Yoo Put Under Oath

Making a special guest appearance, House Judiciary Committee Chairman Rep. John Conyers (D-Mich.) -- who says "I've come here to give you the benefit of the doubt" and fools no one -- puts on the monitor a clip of Sen. Lindsay Graham (R-SC) at last week's Senate Armed Services Committee hearing saying that Addington and Yoo's legal guidance was "some of the most irresponsible and shortsighted legal analysis ever provided to our military and intelligence communities." Addington looks even less pleased than he did five minutes ago.

Adoption Rules Tighten Abroad

Cultural changes, restrictions and shutdowns are changing the landscape of families produced by the "adoption revolution."

Advertising to Lose Your House

The biggest ally banks and lenders had in pushing lucrative home equity loans and lines of credit was advertising agencies, the New York Times says today. Ad executives found unusually creative ways to make piling on so much debt that you could lose your house seem desirable, and something to which you should be entitled. Working with banks, ad agencies changed the name "second mortgage," with its negative consequences due to the fact that such products had been used only by people in dire circumstances, to "home equity loans." The word equity made it seem like the loans were fair, something equal to what you, as the consumer, deserved. Citicorp went with the slogan "live richly" for its loans. This requires no explanation. The Money Store coined the polite phrase "less than perfect credit" to dress up the previous term for people who didn't pay their bills on time, which would have been "deadbeat."

All Politics Isn't Local, Apparently

So the Democratic presidential candidates came to Cleveland and talked about Farrakhan instead of foreclosures.

Not surprisingly, the locals are not happy. What was Tim Russert thinking, anyway?

And If You're Irish It's a Double Whammy

Some employers are beginning to specify in help wanted ads for new jobs that no mortgage brokers need apply, the O.C. Register's Mortgage Insider reports.

 

And Maybe Soup Lines Will Become the New Haute Cuisine

Recently we noted that a popular kid's movie, Kit Kittredge: An American Girl, was set during the Great Depression and had a very topical theme: Bank foreclosures and people struggling to keep their homes. Now clothing styles also are beginning to reflect hard times. Depression-era chic is in, reports the New York Post. Here's the look:

Another Food Crisis Cause?

Did the World Bank and the International Monetary Fund somehow contribute to the global food crisis? That's the intriguing question Salon's Andrew Leonard poses. He points out that policies by both agencies in the 1980s and 1990s required developing countries to pull back on government intervention in their economies in return for aid. Developing nations also were encouraged to open their borders up for free trade.

 

Another Free Bailout

Like the federal Bear Stearns bailout, the latest Washington rescue plan doesn't require anything of the group being saved.

Another State Moves on the Mortgage Crisis

Add West Virginia to the list of states suing Countrywide Financial Corp., alleging its loans were predatory and harmful to consumers, Housing Wire reports. California, Connecticut, Florida, Illinois, and the city of San Diego already have filed similar suits against the troubled firm, which once claimed the title of the nation's top subprime lender but has since been bought by Bank of America. Now West Virginia is stepping in, saying that foreclosures drag down home values for everyone, and blaming Countrywide loans for the problem.
From West Virginia State Attorney General Darrell McGraw:

Bailout Bernanke: Hero of Wall Street

Why did the the Fed think it had to pay to make a deal happen, instead of letting the market take its course?

Banks in Trouble on the Rise

Add another possible problem to the economic crisis: a surge in bank failures.