Thursday, September 23, 2010

Today's Best Reads

1--Ireland leads the way back to recession, BBC

2--Obama Homeowner Program Hits 10-Month Low As Prices Drop And Foreclosures Surge, Huffington Post

Excerpt: Just over 33,000 homeowners had their monthly mortgage payments reduced in August for the next five years as part of the administration's Home Affordable Modification Program, Treasury Department data released Wednesday show. Obama promised in 2009 that some 3 to 4 million homeowners would be helped. About 449,000 borrowers have thus far received mortgage modifications.

The program, sold as a $50-billion effort, is unlikely to spend that much helping delinquent homeowners keep their homes. Nearly one and a half years into the program, only 1 percent of that money has been spent.

3--The GOP's Bad Idea, Ezra Klein, economist's view

Excerpt: Their policy agenda is detailed and specific -- a decision they will almost certainly come to regret. Because when you get past the adjectives and soaring language, the talk of inalienable rights and constitutional guarantees, you're left with a set of hard promises that will increase the deficit by trillions of dollars, take health-care insurance away from tens of millions of people, create a level of policy uncertainty businesses have never previously known, and suck demand out of an economy that's already got too little of it. (Are you surprised?)

4--Renewed Asset Purchases a Fraught Endeavor for Fed, Wall Street Journal

Excerpt: Despite all these challenges, it’s clear which way the Fed is leaning, and many top economists are moving into the camp that considers this action likely. The question now is figuring out what will make the Fed swing into action. (More QE on the way)

5--“The Giant Elephant in The Room”, Larry Doyle, Sense on Cents

Excerpt: We don’t have the money in the economy to successfully write down these loans,” Sanders said. “If we force the banks to write them down, the banks will become insolvent and come back to the federal government for additional bailout money, which means the taxpayers get stuck.” (Yes, the banks are still broke.)

6--Yep, Mutual Fund Investors Still Fleeing U.S. Stocks, Wall Street Journal

Excerpt: Small investors, as measured by mutual-fund flows, seem down for the count when it comes to U.S. stocks. For 17 consecutive weeks, U.S. stock funds have experienced combined withdrawals of nearly $50 billion, according to the Investment Company Institute. (Retail investors are still leaving in droves)

7--Lehman's "Black Hole", Yves Smith, Naked capitalism

Excerpt: The explanation used to deter further inquiry is that the damage ballooned because Lehman suffered a “disorderly collapse.” But the problem with this tidy account is that the maximum amount attributed to the impact of market upheaval was $75 billion. So not only were Lehman’s books cooked, but Repo 105 and the disorderly fail are insufficient explanation. There’s a great deal of other accounting fraud that has not come to light.

Where are the investigations and prosecutions? Lehman is an obvious example of massive chicanery, yet no action is being taken. If that isn’t a green light for future crooks, I don’t know what is.

8--KFC pays college women for ad space on buns, USA Today (No comment)

9--Why We Don't Need to Pay Down the National Debt, James Galbraith, The Atlantic

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