Assembly Plants Seed for Legal Pot in California – NBC Bay Area
Lawmakers on Tuesday approved Assembly Bill 390 — legislation to tax and regulate marijuana. The Assembly’s Public Safety Committee voted 4-3 on bill at a hearing in Sacramento. The bill will now be passed to the full Assembly on Friday for consideration.
What the Financial Crisis Commission Should Ask – The New York Times, Andrew Ross Sorkin
On Wednesday, the first hearing of the Financial Crisis Inquiry Commission — what many are calling this century’s equivalent of a Pecora-style investigation that scrutinized the market crash of 1929 — will take place in Washington.
MBA Forecasts 40% Drop in Mortgage Business this Year – DS News
MBA projects mortgage originations to drop 40 percent to $1.28 trillion dollars in 2010. With those numbers, it would be the industry’s worst year since 2000, when originations totaled $1.14 trillion.
While the volume of loans made for home purchases is expected to climb by 5 percent, to $776 billion this year, refinances are expected to fall more than 60 percent, to $502 billion. That’s because interest rates are forecasts to rise when the Federal Reserve stops buying mortgage securities in March.
By the end of 2010, MBA projects rates for 30-year loans to hit 5.8 percent, jumping to 6.5 percent by the end of 2012.
Option ARM Recast Update – Calculated Risk
How to Punish A Bank – The Atlantic, Megan McArdle
I continue to be unconvinced by the arguments for walking away from a mortgage. The arguments run in one of several directions:
Federal Reserve earned $45 billion in 2009 – The Washington Post
Much of the higher earnings came about because of the Fed’s aggressive program of buying bonds, aiming to push interest rates down across the economy and thus stimulate growth. By the end of 2009, the Fed owned $1.8 trillion in U.S. government debt and mortgage-related securities, up from $497 billion a year earlier. The interest income on those investments was a major source of Fed profits — though that income comes with risks, as the central bank could lose money if it later sells those securities to reduce the money supply.
Too Big Too Fail Tax – The Big Picture, Barry Ritholtz
If we as taxpayers are on the hook for past and future excesses of bankers, we have the right to a) protect ourselves and 2) exact a payment, both after the fact and in anticipation of the next crisis.
Despite the theatrics we are likely to see today from the Financial Crisis Inquiry Commission hearing, there is a possible solution. If our broken Congress cannot regulate the Too-Big-To-Fail banks, at the very least, we can tax the hell out of them.
Measuring the effect of stimulus: If you don’t like the results, change the yardstick – Mish
No one is going to believe the reported numbers now. Indeed, the new methodology is so ridiculous that even his most ardent supporters will have trouble defending it.
Housing Bubbles, Global Household Leverage, Why Fed’s Reflation Efforts Will Fail - Mish
Not only did the Fed enable the credit bubble, it blew the policy response. All it takes to prove that is another stock market plunge and credit crunch. Both are coming, we just don’t know when.
Moody’s Says Greece, Portugal May Face ‘Slow Death’ – Bloomberg
While the two countries can still avoid such a scenario, their window of opportunity ’’will not be open indefinitely,’’ Moody’s said in a report today from London. Portugal, with a negative outlook on its Aa2 rating, has more time “to reverse this trend” while Greece “has significantly less time.” Moody’s cut Greece’s rating to A2 from A1 on Dec. 22.
Bring Back Glass-Steagall – The Wall Street Journal
The business-culture delusions of the ’90s may seem obvious today. But at the time, our great thinkers assured us that we had turned a historical corner and the “old rules” no longer applied. Prosperity was eternal. And government was a dinosaur, serving only to impede our pursuit of info-age excellence. Again and again, the narrow agenda of particular interests were cast as freedom for all of humanity.
