Items of interest - updated:
Tim Iacono / Seeking Alpha:
Greenspan: Throw Cash At Mortgage Crisis -- Wow! Talk about moral hazards. Is it possible there could be a bigger moral hazard than Alan Greenspan's proposed solution to the housing crisis?
"Cash from the government", presumably deposited directly into the bank accounts of homeowners who are about to lose their homes, is the former Fed Chairman's solution to the current foreclosure crisis. He added, "Cash is available and we should use that in as large amounts as is necessary to solve the problems".
[You might think I'm starting to just make this stuff up but I'm not.]
The Maestro was on ABC's This Week with George Stephanopolus yesterday and weighed in a variety of subjects, none of which involved any culpability on his part for the mess that is the current U.S. economy and global financial system. [...]
Bernanke Blows Smoke -- Ben Bernanke's Federal Reserve blew smoke at the markets last week, and markets blew smoke right back. Nothing was solved in terms of the growing global credit crisis, the result of a sub-prime virus that continues to infect money and capital markets everywhere.
Instead of taking aggressive action with a half-point shock-and-awe rate cut, the Fed opted for a timid quarter-point cut. The result was a sharp drop in stocks around the world. It then announced a more generous discount-window lending facility in coordination with global central banks. But that didn't work either. [...]
Subprime: A Predictable Surprise -- Michael Watkins on how the subprime crisis provides another textbook example of the theory of predictable surprises and how to prevent the disasters they bring [...]
In a July 7, 2007, interview with the Financial Times, former Citigroup CEO Charles Prince III unknowingly uttered his epitaph: "When the music stops, in terms of liquidity, things will get complicated. But as long as the music is playing, you've got to get up and dance. We're still dancing." [...]
Mark Pittman / Bloomberg:
Subprime Securities Market Began as `Group of 5' Over Chinese -- Representatives of five of Wall Street's dominant investment banks gathered around a blonde wood conference table on a February night almost three years ago. Their talks over take-out Chinese food led to the perfect formula for a U.S. housing collapse. [...]
Mortgage-Relief Plan Divides Neighbors -- A mortgage-relief plan being pushed by the government is supposed to help debt-laden homeowners across America. But it's creating dashed hopes and fresh tensions in this city that mushroomed during the subprime-lending boom. [...]
The state's highest number of foreclosures is in the Inland Empire, a region of 4.1 million people. The area might seem ripe for the mortgage-rescue plan, which would freeze interest rates for certain borrowers who have kept current on their loan payments but can't afford scheduled interest-rate increases over the next two years. The Inland Empire was a builder's delight in recent years as middle-class families increasingly were priced out of Los Angeles and Orange County. Giants such as Lennar Corp., KB Home and Beazer Homes USA Inc. uprooted citrus groves and paved over dairy farms to blanket the area with tract housing and upscale developments. [...]