Items of Interest:
New York Times:
New G.M. Plan Gets Support From Key Bondholders — As General Motors moved closer to a bankruptcy filing, possibly early next week, attention on Thursday turned again to the bondholders, the most important group that the company has yet to win over for its efforts to start fresh...
Micki Maynard / DealBook: U.A.W. Defends Itself and Takes On G.M. BondholdersRyan Avent / The Washington Independent: Some Good News for ‘Government Motors’
GM Said to Plan June 1 Bankruptcy as Debt Plan Gains -- General Motors Corp., the world’s largest automaker until its 77-year reign ended in 2008, plans to file for bankruptcy protection on June 1 and sell most of its assets to a new company, people familiar with the matter said...
Joann Muller & Brian Wingfield / Forbes: GM Skids Toward Bankruptcy
Ted Reed / TheStreet.com: What Will Cure Automakers Is Selling Cars
1 in 8 Homeowners Late Paying or In Foreclosure -- One of eight U.S. households with a mortgage ended the first quarter late on loan payments or in the foreclosure process in a crisis that will persist for at least another year until unemployment peaks, the Mortgage Bankers Association said on Thursday...
Diana Oleck / CNBC Realty Check:
It's Prime Time In Foreclosures -- It’s not like we didn’t know it was coming, but apparently it’s coming with a vengeance.
Prime fixed-rate loans have finally leapfrogged those nasty subprimes to take the lead in the race to foreclosure. The foreclosure rate on primes has in fact doubled in the last year, and almost half of the overall increase in foreclosure starts in the first quarter of this year was due to the increase in primes.
I got a call yesterday from Scott Scredon at the Consumer Credit Counseling Services in Atlanta. He says they’ve seen a distinct change in callers. “We’re getting calls from engineers and attorneys and post graduate students,” he says. “Many of these people run through their 401Ks and their savings and start living off credit cards and then they call a counseling agency for help. So it’s a new kind of person we’re seeing today, but it’s a sign of the times.” ...
Calculated Risk: New Home Sales: The Distressing Gap
Mr. Mortgage Live:
Potential Consequences of 5.5% Mortgage Rates -- Yesterday, the mortgage market was so volatile that banks and mortgage bankers across the nation issued multiple midday price changes for the worse, leading many to ultimately shut down the ability to lock loans around 1pm PST. This is not uncommon over the past five months, but not that common either. Lenders that maintained the ability to lock loans had rates UP as much as 75bps in a single day. Jumbo GSE money — $417k - $729,750 — has been blown out completely with some lender’s at 8%. I have seen it all in the mortgage world — well, I thought I had.
A good friend in the center of all of the mortgage capital markets turmoil said to me yesterday “feels like they [the Fed] have lost the battle…pretty obvious from the start but kind of scary to live through it … today felt like LTCM with respect to liquidity.”
Mish's Global Economic Analysis: Mortgage Market Locks Up
The Graph That Will Solve the Financial Crisis -- Here's a pie chart that puts into perspective the size of the Fed's involvement in the financial crisis. The entire circle represents approximately 8 trillion dollars. Yes, $8,000,000,000,000. The blue quadrant represents federal lending including expansion of swap lines to the tune of about $2 trillion. The purple quadrant comprises housing related purchases ($1.45 trillion) and buying $1.8 trillion of commercial paper. You can see a more itemized breakdown here.
The Fed's Cash Machine -- As the housing collapse has turned into a financial crisis, and the financial crisis into an economic calamity, the government has tried furiously to keep the country free of breadlines and trash-can fires. Two of its interventions—the $700 billion bank bailout known as TARP and the $787 billion stimulus package—have inspired levels of partisan acrimony and journalistic scrutiny befitting a war vote. But neither of those initiatives, expensive as they are, approach the civic munificence displayed by the Federal Reserve...
FDIC's bad loan sale program stalling: sources -- A program to cleanse U.S. banks of bad loans has been stalled by recovering markets and fears among investors and banks of being hit by new government rules mid-game, sources familiar with the program said.
A pilot sale of $1 billion worth of whole loans by the Federal Deposit Insurance Corp, a U.S. bank regulator, may not take place next month as planned, the sources said.
However, the Treasury Department is pressing ahead with a parallel program to create public-private investment funds that would buy failed mortgage securities from banks.
A Treasury official said the launch of the Public Private Investment Program (PPIP) was on still track for a launch in late June or early July, but declined to comment on whether the whole loans portion of the effort would be delayed...
E. Klein / Washington Post:
Is the Geithner Plan DOA? -- The Wall Street Journal reports that the Public-Private Investment Program -- better known as Geithner's Plan -- might never live at all...Ryan Avent / The Washington Independent: It Seemed Like a Good Idea at the Time — It's not easy to recall …Kevin Drum / MoJo Blog Posts: The Fed's Legacy — Ezra Klein writes about the federal response to the banking crisis:
WSJ: Plan to Buy Banks' Bad Loans Founders
Jonah Goldberg / The Corner: Targeting GOP Car Dealers?Kevin Drum / MoJo Blog Posts: Economic Fascism — The latest firestorm in the conservosphere …MichaelW / QandO: “Dealergate”: Things To Keep In MindReliapundit / THE ASTUTE BLOGGER: DEALERGATE SMOKING GUN: STATISTICAL PROOF THAT WHOEVER SELECTED …Mac Ranger / Macsmind: Is the Obama Administration shutting down Republican owned Chrysler dealerships?Dan Collins / protein wisdom: The Stats, AgainDigby / Hullabaloo: Target Practice
Ryan Powers / Think Progress:
discussion:Allahpundit / Hot Air: Michelle: Thanks for smearing our site, O'Reilly
Furor grows over partisan car dealer closings
Tom Maguire / JustOneMinute: Dealergate — It's going to take a lot of digging to see if there is gold in Dealergate.Rabble Rouser Reverend Amy / NO QUARTER: Payback's A BitchArnold Kling / EconLog: The Anti-Stimulus — Greg Mankiw reports that the yield curve …Steve M. / No More Mister Nice Blog: REPUBLICAN CRACK-UP WATCHJoe Weisenthal / Clusterstock: Mounting Speculation That Republican Chrysler Dealers Were TargetedTom / It's a Kwazy Life: Motor city Madness: Is Obama Putting Mo Money back into MotownKenneth R. Timmerman / NewsMax.com: Republican Donors Hit by Chrysler ClosingsJoey Smith / Chrysler Dealership Campaign …: Robert Gibbs Press Conference (Chrysler Closings)Pamela Geller / Atlas Shrugs: CAR THEFT: White House car czar married to Democratic fund raiserSteven L. Taylor / PoliBlog: Numbers Need Context (the Chrysler Dealership Closing Brouhaha)Susan Duclos / Wake up America: Car Dealership Closings, Political Or CoincidenceJames Joyner / Outside The Beltway: Chrysler Conspiracy: Dealership Closings Politically MotivatedRon Chusid / Liberal Values: Conservative Conspiracy Theory On Auto Dealership ClosingsMegan McArdle: Closing Chrysler's Dealers: Cui Bono?William Teach / Stop The ACLU: Washington Post Notices Potential Car Dealership Closures-Minority OnesRick Moran / Right Wing Nut House: DEALERGATE: STATISTICAL COINCIDENCE OR POLITICAL BIASAJStrata / The Strata-Sphere: Obama's “Dealergate” Scandal Needs InvestigationEric Dondero / Libertarian Republican: STUNNING REVELATION!! …
Dealergate and the MSM — I talked about Dealergate on Fox and Friends this morning.
Steven Pearlstein / Washington Post: Big Bank RegulationSteven L. Taylor / PoliBlog: Another Thought on “Dealergate”Mike Sargent / NewsBusters.org: Chrysler Conservatives Axed - Only Blogs InvestigateAce / Ace of Spades HQ: Obligatory Obama-Closes-Chrysler-Dealerships- Over-Politics Post
Initial Unemployment Claims Dip Slightly; Continuing Claims Approach 6.8 Million, 17th Consecutive New Record -- The peak in initial claims might be in but the peak in unemployment is nowhere close. Continuing claims hit 6.788 million, setting a record for the 17th straight week.
The peak in initial claims might be in but the peak in unemployment is nowhere close. Continuing claims hit 6.788 million, setting a record for the 17th straight week...
- Ten Risks to Resumed Global Economic Growth - Nouriel Roubini, Forbes
- Getting Worse More Slowly No Reason for Joy - Randall Forsyth, Barron's
- Has the U.S. Recovery Begun? - Martin Feldstein, Project Syndicate
- What's Driving the Great Bond Freak Out - Paul La Monica, CNN Money
- U.S. Treasuries--Maybe the Final Bubble Is Upon Us - Across the Curve
- How To Find Gold In a Recession Economy - Rick Newman, Flow Chart
- Good Luck With That 401(k), Retiree! - Daniel Gross, Newsweek
- Vanguard's Bogle Says Time Is on Your Side - Chuck Jaffe, MarketWatch
- Crazy Compensation, CEOs & The Crisis - Alan Blinder, Wall Street Journal
- How Executives Can Thrive in this Economy - Geoff Colvin, Fortune
- Will Bernanke Get Four More at the Fed? - David Ignatius, Washington Post
- Don't Go Wobbly On Free Trade - Gordon Brown, Wall Street Journal
- The Global Economic Balance Is Shifting - Anatole Kaletsky, London Times
- Is a Commercial Real Estate Bust Inevitable? - Colin Barr, Fortune
- If Citigroup's Too Big to Fail, Isn't California? - Robert Scheer, The Nation
- California's Problem Is Spending? It's a Myth - Michael Hiltzik, LA Times
- China Won't Dump Our Debt - Zachary Karabell, Wall Street Journal
- Obama Should Ditch Deadly CAFE Standard - Diana Furchtgott-Roth, RCM
- America's Hidden Trillion Dollar Tax - Wayne Crews & Ryan Young, IBD
- We Must Mend Ways, Not Make More Rules - Edmund Conway, Telegraph
- Another Scandal Rocks Already Weak SEC - Jonathan Weil, Bloomberg
- Is Oil Spent or About To Geyser? - Jack Hough, SmartMoney