“In a world with some semblance of normality, one would look at surging energy prices as portending restraints on growth. Global bond markets would fret at breathtaking surges in commodities prices – along with the specter of hoarding and inflation psychology becoming firmly entrenched. But these are the most abnormal of times. It is not beyond the realm of possibility that a booming Asia might actually relax and further monetize higher food and energy prices. Global bond markets – that in the past could be counted on to help dampen incipient inflation through the imposition of higher yields – remain these days fixated on the likelihood that the Fed and global central bankers will for an extended period ignore inflation and stick with ultra-loose money.”
Archive for February, 2011
“Hats off to Matt Taibbi for staying on the Wall Street crime beat, asking in his most recent report in Rolling Stone: “Why Isn’t Wall Street in Jail?”"
“It’s encouraging that some Lenders have issued PRA [Principal Reduction Alternative] HAMP modifications with large principal reductions. That suggests those few Lenders understand the economic advantage of PRA HAMP, but it’s too early to tell how many will embrace the concept and actively participate.”
“Fianna Fail, the party that agreed to enormously unpopular austerity measures to bail out UK, German, French and US banks, was blasted to smithereens. The vote was both expected and well deserved. The real fun begins now, and it is not at all certain what that outcome is. My choice is for default, but I do not get to vote. However, if common sense prevails, the EU and ECB is in for a rude shock.”
“Because of the Dodd-Frank Act, servicers will now be required to provide borrowers every input that went into their NPV test when they deny HAMP loan modifications due to negative net-present values. And if the borrower finds that there are errors in those inputs, they’ll be able to call the Treasury’s new call center and… well, we’ll have to see how that whole thing pans out before commenting further… ven under Dodd-Frank’s new requirement, Treasury is not required to release the formula in its entirety, rather they are only required to release components of the formula they do not consider proprietary. So, although this is a step in the right direction, it’s a far cry from what one would think of as being transparent.”
Great discussion with Rickards, with the main new insights being on the mechanics of the new SDR international currency regime being (quietly) rolled out by the IMF.
“AIG dropped over 6% today following some very unpleasasnt disclosures about its muni outlook, and corporate liquidity implications arising therefrom: “American International Group Inc., the bailed-out insurer, said it faces increased risk of losses on its $46.6 billion municipal bond portfolio and that defaults could pressure the company’s liquidity.”
“Bank of America Corp. and Wells Fargo & Co., the largest U.S. mortgage firms, said they may face fines or enforcement actions from regulators amid investigations into foreclosure procedures”
“The new initiative, “Keep Your Home California,” includes four new programs to assist homeowners struggling to make their mortgage payments and remain in their homes”
“Single-family home prices in Deschutes County fell nearly 8 percent in the fourth quarter of 2010 compared with the fourth quarter of 2009, according to federal data released Thursday.”