Some Data and More Musings From FDIC and SEC

• In happy economic headlines, S&P's Case Shiller index on housing prices posted a small uptick from the prior month. Only Las Vegas and Seattle showed declines. Year-over-year, prices are still down across the board, with the worst performer, Las Vegas, posting a drop of 31.4%, and the best performer, Cleveland, posting a 1.3% decline.
• Meanwhile, the index of consumer confidence dipped to 53.1 from 54.5 putting an end to the stock market's rally this morning. I suppose economists who predicted a continued rise in consumer confidence were shocked that consumers somehow care about silly things like a 10% unemployment rate, rising credit card fees, and negative home equity.
• Desperate to raise money without having to tap the Treasury, the FDIC is now expected to propose that the bulk of the banking industry prepay three years' worth of fees to replenish the dwindling deposit insurance fund. The FDIC anticipates collecting between $36 billion and $54 billion through this new money-making scheme. I suspect this fee will be met with more than a wee bit of resistance from the banking industry. Certainly all banks have been underpaying for the past several years since it only took us a year or so to blow through the insurance fund, but still, it's never fun paying for the clean-up.
• The SEC is weighing new regulations for that mysterious and "opaque market" called securities lending. I know we need to regulate everything to look like we're actually doing something after last year's clustersuck, but still, this is getting ridiculous. There is nothing opaque or complex about securities lending that needs regulating. The securities lenders lost buckets of money last year out of sheer stupidity not because the industry needs more regulation. They took a very simple business model of lending out securities to shorts and reinvesting into liquid assets earnings higher rates and screwed it up by investing in highly illiquid toxic securities that lost money. Besides, if the SEC finally does succeed in making short-selling so difficult that nobody wants to do it anymore, securities lending won't be necessary.