making reality look worse – Fannie, Freddie Losses May Hit U.S. – By NICK TIMIRAOS – The U.S. government’s move to deepen its ties to mortgage-finance giants Fannie Mae and Freddie Mac by agreeing to absorb unlimited losses for the next three years is igniting a debate over whether it should bring the business operations of the companies onto its books. A decision on how the government treats Fannie and Freddie could have broader political implications. So far, the White House has resisted calls by Republicans to bring Fannie’s and Freddie’s obligations onto the government’s books, a move that could boost the federal deficit by tens of billions of dollars. At a time when the deficit is already at a postwar high, that could create added urgency for Congress and the administration to address the companies’ future. – Wall Street Journal
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has 6 points – Aftershocks from the Massachusetts Earthquake – John Lounsbury – Seeking Alpha
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great explanation – Joseph Stiglitz, the Nobel-prize winning economist, described the PPIP program in a New York Times op-ed this way: “Consider an asset that has a 50-50 chance of being worth either zero or $200 in a year’s time. The average ‘value’ of the asset is $100. Ignoring interest, this is what the asset would sell for in a competitive market. It is what the asset is ‘worth.’ Under the plan by Treasury Secretary Timothy Geithner, the government would provide about 92 percent of the money to buy the asset but would stand to receive only 50 percent of any gains, and would absorb almost all of the losses. Some partnership! – keep reading – more logic … – Investment Watch Blog
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8 point plan – A Blueprint for Financial Reform – John P. Hussman, Ph.D. – Note – The reprieve of recent quarters may create a misleading impression that there is no urgency to the issues faced by the U.S. economy, but as noted below, the likelihood of fresh mortgage losses and credit difficulties is high. Few reforms have been enacted that would make a second wave of difficulties any different from the first. The following would provide the U.S. with broader policy options. – Hussman Funds
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Stakes are high as government plans exit from mortgage markets – By David Cho, Neil Irwin and Dina ElBoghdady – … The wind-down of federal support for mortgage rates, set to end in two months, is a momentous test of whether the Obama administration and the Federal Reserve have succeeded in jump-starting the housing market and ensuring it can hold its own. The stakes for the economy are massive: If the market again falls into a tailspin, homeowners could face another wave of trouble, and it would deal a body blow to President Obama’s efforts to get the economy on track. … – Washington Post
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Fixing Our Broken Democracy – Kimball Corson – … As I see it, only five things together can resurrect our democracy to its former glory and enable our economy to ultimately do better and grow in the long run as it used to … has list of 5 – Wandering the Oceans