Items of interest:
Wall Street Journal:
Fed Races to Rescue Bear Stearns In Bid to Steady Financial System -- Credit turmoil spread to the heart of the U.S. financial system as Bear Stearns Cos., an 85-year-old institution that has survived the Depression and two world wars, sought and received emergency funding backed by the federal government. [...]
At about 5 a.m. Friday, regulators including New York Fed Chief Timothy Geithner, Federal Reserve Chairman Ben Bernanke, Treasury Secretary Henry Paulson and the Treasury under secretary domestic finance, Robert Steel, convened by conference call. At the end of the call at 7 a.m., the Fed had decided it would offer the loan. [...]
Bernanke outlines mortgage help plan - Fed chief says central bank 'strongly committed' to easing mortgage crisis.
Federal Reserve chairman Ben Bernanke outlined the central bank's proposal Friday to stem the subprime meltdown.
In a speech at the National Community Reinvestment Coalition's annual meeting, Bernanke said that the Fed is working to curb unfair lending practices to protect borrowers of adjustable rate mortgages.
"The Federal Reserve is strongly committed to fully employing our authority, expertise, and resources to help alleviate [borrowers'] distress," Bernanke said in written remarks.
Bernanke outlined four responses the Fed is proposing to alleviate the crisis:
- Prohibiting lenders from issuing loans that borrowers cannot repay.
- Make lenders verify the income and assets of the borrower.
- Require escrow accounts for higher-priced loans.
- Ban repayment penalties including "loan-flipping."
- Bear Stearns Is On the Bubble - Liz Moyer, Forbes
- The Bear Facts About the Fed's Priorities - Randall Forsyth, Barron's
- Q&A: Bear Stearns banking crisis - BBC
- Yes, Bear Stearns Is Having Liquidity Issues - Financial Times
- Home Prices to Fall in 2008 and 2009 - Calculated Risk
- Rubin Says Financial Markets Have Entered `Uncharted Waters' - Bloomberg
- Fear of further casualties whips up new storm - Financial Times
- Desperate Owners Burn Homes - CNN Money video
- We’re Off The Cliff In California - Housing Bubble blog
- Consumer Confidence in U.S. Falls to 16-Year Low on Gasoline Prices, Jobs - Bloomberg