Friday, March 26, 2010

Financial Headlines 3/26/2010

  • The headline reads "Europeans Agree on Bailout For Greece". Although leaders of the euro zone backed a deal where they and the IMF would jointly bail out Greece "should the country's debt troubles intensify," (yeah, because that hasn't already happened) details remain somewhat scant. "The agreement won't immediately trigger a Greek rescue, but it lays the groundwork." Sounds like if things get really bad, everybody's promised to have another meeting.
  • More than a dozen banks are accused of conspiring to rip off muni bond issuers in a criminal probe begun by the Justice Department's Antitrust Division. Financial are ripping on the fabulous news.
  • The White House has entered the mortgage principal forgiveness fray by extending its foreclosure prevention program. The new efforts will give unemployed borrowers forbearance for a few months as well as require banks to consider writing down loan balances as part of a formula for lowering monthly balances. The FHA is going to be used to put this initiative in place, which aims to help borrowers who are current on their mortgages, but are just unhappy about being upside down on their mortgage. For awhile there, I was leaning towards Fannie and Freddie ultimately costing the government the most in the long run, but now I'm rooting for FHA.
  • Meanwhile, at the Fed, Bernanke and Plosser have been running off at the mouth about what to do about all the crap they purchased in the quantitative easy frenzy of the past year. "I anticipate that at some point we will, in fact, have a gradual sales process." quoth Bernanke, in his typical calm and measured way. Because unloading a couple of trillion in securities when the world is watching your every move will be really easy, calm and measured. Right. I'm sure bond traders aren't going to be running around with their hair on fire trying to front run while screaming "Just find me a freakin bid and hit it!!"

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