If the folks from Tech Ticker are right, Bank of America may be too big to fail, but not too big to be a cry baby: In mid-December, the WSJ tells us, Bank of America (BAC) went to Hank Paulson and threatened that if he didn’t give the firm another TARP bailout, they’d abandon the Merrill Lynch deal and cripple the financial system.  Paulson then apparently spent more money he didn’t have, promising that he would rescue BAC yet again. (This a month or so after an annoyed Ken Lewis said he didn’t want or need the original TARP infusion)….
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The Securities Investor Protection Corp. is seeking data on clients’ withdrawals from as far back as they can remember, that could lay groundwork for clawbacks. [1] Holy revictimization, Batman!  Did SIPC just go through an exercise in mailing out 8,000-odd sheets of fly-paper?  Looks like the big-time, long term Madoff investors who retained a large balance at the end but took significant withdrawals over the years have some heavy cost-benefit analysis ahead of them: Of course, investors who prefer to disappear into the weeds need not file the form. But those wishing to make a claim for lost funds, and…
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Just when I think that the bailout plans couldn’t get any wackier, along comes this gem proposed by the National Community Reinvestment Coalition to the House Financial Services yesterday- they propose using eminent domain to buy loans to modify them.  Here’s a summary from Diana Olick of CNBC: We all know that the biggest roadblock to mortgage modification is and has been the loan servicer and that servicer’s responsibility to its investors. So many loans during the housing boom were pooled and sold off to investors that it became close to impossible for the servicers of those pools to get…
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Under the plan, dealers can re-package collateralized mortgage obligations, or CMOs, with attributes similar to plain-vanilla "agency" mortgage debt. Reconstituted issues can trade in the so-called "to-be-announced" (TBA) market — one of the most active markets in the world where investors trade MBS before actually taking delivery of the bonds. [1] This may not exactly be perpetual motion, but it sure looks like the ruminant digestive system. A few days ago, SIFMA’s bizarre recycling scheme was approved.[1] Doom asks the obvious question: If  canned fish is selling for less than fresh fish, how is it going to help to open…
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How is Phoenix going to get rid of that oversupply of empty houses if people are picking up and moving out of the Valley? [Hat tip MR!] For the first time in modern history, Phoenix’s population could be shrinking. It’s an idea that would have been unimaginable just a few years ago, when Phoenix was surging up the list of the nation’s most populous cities. Now, a variety of indicators suggest that fewer people are living here than a year ago. No one knows for sure exactly how many people have moved in or out. But with the 2010 census…
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David Lereah, former chief economist of the National Association of Realtors, was the economist we all loved to hate.  During the boom, he was all over the news talking about how real estate "would not bust".  During the bust, we all looked forward to seeing how great a disconnect there was between reality and his forecasts.  Now he says that it wasn’t his fault:  [Thanks L!] Mr. Lereah, who says he left NAR voluntarily, says he was pressured by executives to issue optimistic forecasts — then was left to shoulder the blame when things went sour. "I was there for…
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"The evolving thinking is that electronics extends our central nervous system, and that economic news in particular has hit the point of speed and saturation that our microeconomic daily freak-outs are be­coming the new macroeconomics" [1] The cover story in the Sunday Supplement to yesterday’s local print newspaper carried a veritable FNORD-fest of great reasons to turn off the catastrophic economic news which is finally seeping into even mainstream sources. My favorite was the above, by respected Canadian postmodern novelist Douglas Coupland, who continues: "As we know, bad news travels in­stantly, good news ends up on a slag heap. Remember,…
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Peter Schiff on why the bond bubble is going to burst: [Hat tip Freedom's Phoenix!]

A woman in Pinal County, AZ talks about falling values and foreclosures in her neighborhood: [Thanks L!]

We need our industry experts to weigh in on this one.  Fannie Mae and Freddie Mac were issued a "home valuation code of conduct" in December, but not everyone thinks that this is a good thing.  [Thanks L!] When you apply for a mortgage to buy or refinance a house, should you be concerned that your appraiser is being paid much less — maybe just half –– of the $300 to $600 you’re charged on your settlement sheet? Should you know who pockets the rest, or that cut-rate fees are too low to attract the most experienced, highly trained appraisers?…
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I’ve already vented my spleen at enough of the powers-that-be today, so this re-post can go up pretty well without comment.  I can’t even remember which blogger first recommended it, but at least a couple of places have already pointed this out as a good read, and Doom is happy to expose the first couple of charts above the fold here. The author does do a good job on the old Birth Death Model   The December Non-Farm Payrolls Report: Portrait of a Ponzi Economy by Jessie The ‘headline number’ is the seasonally adjusted net change in jobs. The drop…
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In my humble opinion — this image is no accident (click the pic for context [1] ): The mainstream media routinely uses modified or carefully selected images for ad hominem attacks, but this example deserves to become a Communications course classic.  Note the stark primary color-scheme and a cropping that places Neel’s right ear squarely at the center of the frame.  The ear is also emphasized by the white arrow formed by his shirt collar, and as an added bonus, his left index finger is precisely in line with top edge of cartilage, fortuitously lit to suggest a point.  What…
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Among the options: Get in line with other victims looking for restitution. Keep quiet and hope nobody notices. Return the money. Or hire a lawyer and fight to keep profits that were probably fraudulent. [1] Doom saw this one coming a few days ago, but Caruso’s headline pretty well nails it: "Madoff ‘victims’ do math, realize they profited" … as in, oops!

Still, while such a transformation is, to put it mildly, undesirable, the policies are necessary. As outlined in these pages, the U.S. and many of its G-7 counterparts over the past 25 years have become more and more dependent on asset appreciation. Under the policy-endorsed cover of technology and somewhat faux increases in financial productivity, we became a nation that specialized in the making of paper instead of things, and it fell to Wall Street to invent ever more clever ways to securitize assets, and the job of Main Street to “equitize” or, in reality, to borrow more and more…
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  Feeling depressed by all the tough economic news out there?  Here’s your morning chuckle- real estate will come "roaring back" in 2009:  [Thanks L!] FAIR OAKS, CA – The nation’s foreclosure hemorrhage has finally slowed and 2009 should see a significant decline in foreclosures as buyers return, pushing home prices up and fueling a real estate recovery, according to the 2009 Outlook from ForeclosureS.com. “Recovery is underway. Affordable is back in the housing market,” says Alexis McGee, real estate expert, educator, and president of ForeclosureS.com. “In 2009, housing will not only recover, but we’ll see buyers leap into this…
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