Items of Interest:
Barry Ritholtz / The Big Picture:
New Bailout Price Tag: $2.25 Trillion Dollars -- We learned yesterday that the size of the bailout just tripled, from $750b to $3T. Here is the cost structure:
• $250 billion of capital into banks;
• Guarantee $1.5 trillion in new senior debt issued by banks;
• Insure $500 billion in deposits in noninterest-bearing accounts (primarily businesses accts) ...
NY Times: Drama Behind a $250 Billion Banking Deal
Bloomberg: Americans Embrace Big Government to Help Solve Market Crisis
WSJ: Devil Is in Bailout's Details
ABC News: Bailout Critic: Plan Could Cost $3 Trillion
Discussion:Margaret Heffernan / The Huffington Post: The Mines are Full of CanariesRotwang / TPMCafe: Gents Without Cents; or, How Moe, Larry, Curly, and Shemp Upheld The MarketArnold Kling / EconLog: Misleading Story — Today's Washington Post gives us
Smaller Banks Resist Federal Cash Infusions
Discussion:Jim Oliphant / The Swamp: Bush: Actions ‘preserve free enterprise’
Shooting puts face on foreclosure crisis -- AKRON, Ohio — By the time deputies came to escort Addie Polk out of her home of 38 years, the 90-year-old had taken out her life insurance policy and placed it next to her pocketbook and keys in the neatly kept house.
She shot herself in the chest Oct. 1 before she could be taken away from the foreclosed house, which was worth less than its mortgage from the day she took out the loan.
A congressman called her the face of a national tragedy, the housing crisis that has affected millions of Americans. Neighbors were stunned and said they had no idea the widow had been about to lose her two-story, white vinyl home...
USA Today: Ohio woman, 90, shoots self during eviction; Fannie Mae forgives loan
San Diego Union Tribune: Want your mortgage forgiven? Shoot yourself
Blogger News Network: Addie Polk the Face of The Crises
Discussion:Mark Silva / The Swamp: Obama's 10-point lead: The economyKrooney / TIME.com: McCain Still Looking for Polls That Shows Obama (Only) +6
US mortgage applications rise on refinancing -MBA -- U.S. mortgage applications rose for a second consecutive week, reflecting a jump in demand for home loan refinancing even as interest rates surged the most in more than five years, an industry group said on Wednesday.
The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, for the week ended Oct. 10 increased 5.1 percent to 489.3.
Borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 6.47 percent, up 0.48 percentage point from the previous week...
MBA: Refinancing Activity Soars -- As has been the case throughout the downturn, however, contrasting the MBA’s findings was a separate application index maintained by Mortgage Maxx LLC, known as the MAX; the MAX index fell 4.6 percent in the same week.
Given that the MAX index corrects for multiple applications, the jump in application activity may signal that borrower interest in refi activity may have been higher, but fewer borrowers found programs they could actually qualify for amid a tightening credit cycle — spurring multiple applications...
Iceland Feels the Chill -- How would you like to have your retirement invested in an index fund tracking Iceland's benchmark stock index (OMX ICEX 15)? After a three-day halt to trading, the index re-opened back up today down 77% from its most recent closing price. The reason? The keepers of the exchange took the prices of all the banks in the index down to zero after they were nationalized by the government. You can complain all you want about the US government's anti-capitalistic actions over the last two days, but if you want to see what a real nationalization looks like, check out Iceland.
- Banks Need Capital, Not Government Management - J. Berry, Bloomberg
- Washington Simply Didn't Catch Up To Wall Street - A. Faiola et al, WaPo
- How To Prevent Foreclosures - Charles Calomiris, Forbes
- Stop The Bleeding, Hank - Luigi Zingales, Foreign Policy Magazine
- Credit Derivatives: The $58 Trillion in the Room - Jesse Eisinger, Portfolio
- Central Banks Reconsider Doctrine of Preemption - C. Baum, Bloomberg
- What’s the Future for Much-Maligned Derivatives? - Dan Weil, Big Money
- Blanket Deposit Insurance Is a Bad Idea - A. Blinder & G. Hubbard, WSJ
- How to Manage the Banks - Boone, Johnson & Kwak, Washington Post
- What Paulson Is Trying to Do - Andy Kessler, Wall Street Journal
- The Feds Take Control of Lending - William Dunn, RealClearMarkets
- Regulating Bankers' Pay Is a Bad Idea - Jamie Whyte, Financial Times
- How Long Will Governments Stay Invested? - Adrian Michaels, Telegraph
- The Gilded Age of Deregulation - Dave Jamieson, The New Republic
- Deregulation Was Not the Problem - John Stossel, RealClearPolitics
- Fed Should Reduce Margin Requirements - Bob McTeer, Washington Times
- Next Victim of Turmoil: Your Salary - David Leonhardt, New York Times
- No Government Jobs Recession Yet - Steven Malanga, RealClearMarkets
- Are We Facing a Recession or a Depression? - David Merkel, Aleph Blog
- Obama's Welfare Plan & the Producer - Rafael Resendes, Capitalist Nexus
- Right to McCain: Your Econ. Plan Is Weak - James Pethokoukis, U.S. News
- Government to Rescue Banks -- Yikes! - Scott Grannis, Calafia Beach Pundit
- The Orgy of Government Spending - Brian Sullivan, Fox Business
- Republicans, Democrats, and the Stock Market - Greg Mankiw
- How To Rebuild America and Get Back on Track - Jeffrey Sachs, Fortune
- Governments Have At Last Thrown the World a Lifeline - Martin Wolf, FT
- Helping Wall Street Kick The Gambling Habit - Robert Lenzner, Forbes
- Keynes Would Have Seen It Coming - Robert Skidelsky, Washington Post
- A Shake-Up in the Private-Banking Industry - Suzanne McGee, Barron's
- Bringing Money Markets Back To Life - Javier Suarez, VoxEU