I don’t know too much about Jack Lew, I know he has been a Washington insider for decades. At least from what has been reported, he is not as much of a Wall Street guy like other names that were floated by the media, example in Jamie Dimon.
He will still need to go through Senate confirmation so who knows, they could block his confirmation and we could still get another Wall Street pedigreed Secretary. He was part of the Clinton administration, and it being touting as playing a pivotal roles in the engineering of the balance budget during that presidency.
I am still not convinced, Obama brought in Paul Volcker in the initial aftermath of our current financial crisis and he was quickly marginalized so this may be another dog & pony show. We need to get serious about our tax code and spending or at some point people will lose confidence in our ability the repay our debts in kind and that will cause a serious dislocation in our market and large cracks in the American foundation.
Politico - President Barack Obama will nominate White House chief of staff Jack Lew for Treasury secretary as soon as Thursday, according to a person briefed on the matter. In doing so, Obama is throwing Lew straight into the middle of an increasingly nasty budget war, the likes of which Washington hasn’t seen since the mid-1990s.
We should be looking at all creative areas to help homeowners go through this restructuring process with the goal of making it as least painful as reasonable possible. At the same time we want to assist the banks in reducing their debt load. Setting more realistic real estate prices are another effect of clearing all the delinquent inventory.
Even allowing homeowners to temporary rent and repurchase the home at a normalized fair market plan would be an equitable option for people who still want to retain their home. Outside of prosecuting crimes that caused this overhang, getting prices and inventory down is a priority at this point. This is a principle that can be applied globally. This is what I would consider real financial innovation, you need a real problem before you can truly innovate in most cases.
USA Today - The number of homes that received an initial notice of default — first step in the foreclosure process — was 6% higher in July than last year, foreclosure listing firm RealtyTrac said Thursday. Filings of initial default notices have increased on an annual basis three months in a row.
Well you already should know what I would, I’ll say it anyways.
Not sure that EASING, lending standards is the best course of action when demand increases. That is close to what got us in our last crisis. When we lower lending standards on home loans, guess what, demand increase for the cheaper credit. Now I do have faith in the banks that this easing in the lending standard probably was not anywhere as drastic then the 2001-2007 time-frame but I am just saying, this logic they laid out in the article is at least different enough, that is got me to read it and write on here.
Please, bankers and risk officers everywhere, lets not repeat the same trap again. Our recovery will be long and slow and this is a good sign of a healthy, real and sustainable recovery. We don’t need cheap money right now. What we need is more good ideas and businesses to invest in so we can create the jobs that we need in America. Ok, all done.
Bloomberg: U.S. banks saw increased demand for lending in the first quarter and made loans easier to get, according to a Federal Reserve survey.
“Domestic banks generally reported having eased their lending standards and having experienced stronger demand over the past three months,” the Fed said today in Washington in its quarterly survey of senior loan officers. It said the number of banks reporting eased standards and improved demand, rather than the reverse, was “modest.”
This may be a turn-around story in the making. The faster they write-off the bad loans and give more disclosure on any contractual and legal liabilities, the better. It looks like they are getting serious about reforming the BofA bank and brand so lets hope so.
WSJ - Bank of America Corp. (BAC) closed out the turbulent 2011 year with better-than-expected revenue in the final three months, driving the bank to a fourth-quarter profit compared with the prior year’s loss.
$5 trillion is quite a bit of debt insurance to have exposure on. This could be of concern, both banks should clear up where a majority of this exposure originates before this rumor-mill gets out of control. I would assume that debt insurance is purchased in places where there was enough risk to bring that type of protection into the picture. I would think that the emerging portion of the Eurozone would be of higher risk. Banks need to set this straight soon, they already still haven’t fully disclosed and written down all they liabilities they still have from the U.S. real estate bubble of 2007.
Bloomberg (Christine Harper) – JPMorgan Chase & Co. (JPM) and Goldman Sachs Group Inc. (GS), among the world’s biggest traders of credit derivatives, disclosed to shareholders that they have sold protection on more than $5 trillion of debt globally. Just don’t ask them how much of that was issued by Greece, Italy, Ireland, Portugal and Spain, known as the GIIPS.