SF Fed’s Janet Yellen contender for Federal Reserve’s vice chair
This is most likely the best choice available to the Fed. Janet Yellen is a known quantity and should do a good job at the Vice Chairmanship. Ms. Yellen will have a huge job ahead of her, we have a massive amount of liquidity in the U.S. banking sector that will need to be withdrawn or we will see inflation on the rise when all that cash goes into some asset class.
Reuters, Washington D.C. - San Francisco Federal Reserve Bank President Janet Yellen is a leading contender to be nominated by President Barack Obama as vice chair of the central bank, a senior administration official said on Friday.
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Bank of America to End Overdraft Fees on Debit Cards
This is great news and I applaud BofA for taking to the essence of the credit card reform bill and ended this predatory type of fee. Even myself, was under the impression that the reason we enter our pin number for debit purchases was to authorize a purchase and at that moment the terminal checked to make sure sufficient funds were in the account before running the transaction. I learned this was not the case and realized that a debt card holder could be charged thousands of percents of interest for the smallest transaction based on the fee that was charged on an annual basis. I hope to see more banks step up and do away with these fees and focus more on core banking tasks and true financial innovation to produce profits and value.
New York Times - In a move that could bring an end to the $40 cup of coffee, said on Tuesday that it was doing away with overdraft fees on purchases made with debit cards, a decision that could cost the bank tens of millions a year in revenue and put pressure on other to do the same.
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New York Fed to expand list of banks for reverse repurchases
This is a good sign to see this liquidity drained from the system but the big question is what will happen to the banks taking back the “toxic assets” that were purchased during the crisis. First off, some real accounting will need to be made on the actual values of those securities.
The real estate market is no where near the peak so most of those will require write-downs to reflect the fair-market value (FMV). We will need to follow this closely to see how this arrangement is handled and see what the banks are putting on their balance-sheets.
Reuters, New York - The U.S. Federal Reserve is taking an additional measure to lay the groundwork to drain excess bank reserves, as it seeks to remove some of the $1 trillion in cash it injected during the global credit crisis.
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First American Offers Flat Fee on REO Management Service
This looks to be a good program for the REO market at the moment. With the large shadow inventory in the U.S. Fees for doing real estate transaction can really become a nuisance if a property does not sell quickly.
First American Outsourcing and Technology Solutions is offering a flat-fee package for managing, maintaining and selling REO property, in what they say is a first for the industry.
The business-outsourcing provider is a member of the First American Corp.. Depending on the mixture and prices of the assets in the portfolio, the fixed price on the referral fee could push down expenses even further, according to First American.
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U.S. Home Prices Up 5% Year-Over-Year
With jobless claims going down, consumer spending up and home prices rising, this may be a sign of an actual recovery. To be sure, we still have need to see large gains in the job market to really believe we will have a sustained and durable recovery.
Let us not forget if we look at the U6 unemployment number, we have over 15% unemployment and that represents discouraged workers that have given up looking for work. Once jobs start being created rapidly, those workers are going to re-enter the labor market and that will but a strain on the recovery. We are walking a fine line right now and hopefully we can get through this without creating another bubble.
DS News - New data released by Clear Capital Thursday shows that home prices nationally are up 5.0 percent compared to February 2009. The quarter-over-quarter price change for the numbers through last month was flat at 0.0 percent, indicating a softening during the winter months.
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Goldman Sachs Board Rejects Shareholder Demands on Pay Restrictions
No surprise this request from Goldman shareholders fell on deaf ears. This issue will only be settled in the courts. Goldman has a reputation of lavish compensation and that creates an environment that makes smart people who want to work hard and make oddles of cash. That could be the reason why the board didn’t want to do anything that could possible tarnish that image regardless of the the public opinion is off their compensation.
Wall Street Journal - Goldman Sachs Group Inc. said its board of directors rejected demands from shareholders that the investment bank investigate excessive compensation and take steps to recoup some awards given to executives.
The company reported in a filing with the Securities and Exchange Commission that it received several letters from shareholders asking for the firm to revamp the way it pays out salaries, benefits and compensation. Goldman’s board “rejected the demands,” according to the filing.
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Donald Kohn to Leave Fed at End of Term as Vice Chairman
Who Obama chooses as his replacement will be very important and is to be watched. Vice Chairman Kohn has been an establishment at the Federal Reserve for over four decades. Even though I personally have issue with many of the policies responses in crisis, Donald does have a wealth of knowledge after being near the helm for over 40 years and they will lose some of that wisdom when he steps down at the end of his term. Mr. President choose wisely, the markets will be watching very closely.
Vice Chairman of the Fed
Business Week - Donald Kohn will leave the Federal Reserve at the end of his four-year term as vice chairman after helping Ben S. Bernanke and Alan Greenspan steer the U.S. through recessions and crises.
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