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Tuesday, June 16, 2009

Great Recession Roundup — June 16, 2009

Items of Interest:

Washington Post:
Calif. Aid Request Spurned By U.S. — The Obama administration has turned back pleas for emergency aid from one of the biggest remaining threats to the economy — the state of California. — Top state officials have gone hat in hand to the administration, armed with dire warnings of a fast-approaching "fiscal meltdown" caused by a budget shortfal…

discussion:
Brian Leubitz / Calitics: Don't Hold Your Breath on Obama Saving Us
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CNN Money:
Housing starts ratchet up in May -- Builders take out more permits to build than expected; still trail prior years badly.

The nation's builders boosted their production in May, starting new housing units at an annualized rate of 532,000, up 17.2% from the revised estimate of 454,000 in April.

The data release, a monthly report from the Census Bureau, also revealed that building permits jumped by 4% to a rate of 518,000 from 498,000 in April...
discussion:
Barry Ritholtz / The Big Picture:
Cramer Calls A Housing Bottom (Yet Again) -- No, we have not seen an explosion in new Housing Starts — rather, this is a noisy volatile series that frequently shows a monthly gain, but continue to show annual falls.

Each circled monthly number below shows a gain over the prior month:

Housing Starts through June 16, 2006Chart via Barron’s Econoday
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Diana Oleck / CNBC Realty Check:
High Housing Starts Don’t Reflect Reality -- builders are trying to jam all these homes into buyers’ pockets before the expiration of the $8000 first time home buyer tax credit. It turns into a pumpkin November 30th...
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Deadbeats Needed: Free Money!!

Credit Bailout: Issuers Slashing Card BalancesDavid Streitfeld / NY Times:
Credit Bailout: Issuers Slashing Card Balances -- Customer service employees are calling to offer deals, a practice that was practically unheard-of before the financial crisis...
discussions:
Trader Mark / Seeking Alpha:
Why Not Start Defaulting on Your Credit Cards? -- Bailout Nation mentality has hit critical mass. Just as we have walked away from homes with "no sweat", we are now at the point our debts on credit cards are no longer an issue either. Just start failing to make payments and wait eagerly for the credit card company to call you to strike a deal. How they can afford to do this? They are backstopped by your taxpayer money of course... no major financial institution is allowed to fail...

Calculated Risk: Credit Card Debt: "A line has been crossed"
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Bloomberg:
Obama to Create Consumer Financial Agency With Power to Punish -- President Barack Obama will propose creating an agency to protect consumers of financial products with the power to punish offending firms and stripping the Federal Reserve of some of its powers.

The Consumer Financial Protection Agency, to be announced tomorrow in the overhaul of financial regulations, will have the authority to ban “unfair terms and practices,” said a document obtained by Bloomberg News. Those powers now rest with Fed.

“We’ve got to make sure that we have somebody who is focused and responsible for protecting consumers, whether it’s on subprime loans, for their mortgages, for their credit cards,” Obama said today in an interview with Bloomberg Television.
discussion:
Mish's Global Economic Analysis:
Obama Asks Congress for the "Power to Punish" — Obama wants to extend the powers of the Fed. Then again he wants to take some powers away from the Fed. It's hard to know what he is thinking until you boil it down to its essence. Being president is not enough, Obama wants to become the Czar of Czars with the "Power to Punish". Shades of Roosevelt ...

Daily Kos:
Weekly Audit: Reining in the Subprime Scoundrels -- Without stronger regulations, the government's rescue programs for the financial sector will be a complete waste, and bailouts will only reward the destructive behavior that created the current recession...
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David Jolly / NY Times:
G.M. Sells Saab to Swedish Automaker-- General Motors said it had reached a tentative deal to sell the Saab unit to a consortium led by Koenigsegg Automotive, a maker of high-performance sports cars...
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Bernie Madoff gets SEC SEC gets their pound of air

USA Today:
Madoff settles civil fraud charges with SEC -- Bernard Madoff, who pleaded guilty to a $65 billion investment scam earlier this year, settled civil fraud charges with federal regulators without admitting or denying any wrongdoing, the Securities and Exchange Commission said Tuesday.

The SEC, which has been heavily criticized for failing to spot Madoff's fraud, said the former money manager is barred from association with any broker, dealer or investment advisers...
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Calculated Risk

MishTalk - Mike Shedlock

Paul Krugman - NY Times

The Big Picture - Barry Ritholtz

naked capitalism - Yves Smith

Pragmatic Capitalism

Washington's Blog

Safe Haven

Paper Economy

The Daily Reckoning - Australia