Mind Over Market

An International Monetary Fund study finds a significant correlation between lobbying by mortgage lenders in the United States and the prevalence of riskier loans and higher delinquencies in markets where lobbying lenders increased their level of lending faster than non-lobbying lenders. By Robert Stowe England MindOverMarket.blogspot.com December 31, 2009 The International Monetary Fund (IMF) has released a working paper that examines the relationship between lobbying by mortgage lenders and the performance of loans in markets where lobbying lenders originated mortgages. The working paper is titled “A Fistful of Dollars: Lobbying and the Financial Crisis” and authored by economists Deniz Igan, Prachi Mishra, and Thierry Tressel. It is posted at this link: http://www.imf.org/external/pubs/ft/wp/2009/wp09287.pdf The study analyzes detailed information on lobbying and mortgage lending activities. For loan data, the study relies on data complied under the Home Mortgage Disclosure Act (HMD...

A Treasury announcement Christmas Eve raises a lot of questions about the future of Fannie Mae and Freddie Mac. Is the Administration planning a future where the two companies become permanent government agencies? Is the Administration laying the groundwork to expand the capacity of the two agencies to retain more mortgages and buy more mortgage-backed securities? Is the Administration planning to ramp up loan modifications involving principal reductions, which would mean more near-term losses for Fan and Fred? Those are some of the questions posed by mortgage industry consultant Ed Pinto. By Robert Stowe England MindOverMarket.blogspot.com December 26, 2009 Treasury released a statement on changes affecting the role of Fannie Mae and Freddie Mac on Christmas Eve, a time when they might be expected to escape more intense press scrutiny. "The timing of this executive order giving Fannie and Freddie a blank check is no coincidence," Rep. Spencer Bachus (R-Ala.), ranking minorit...

In the financial regulatory overhaul bill that passed the House December 11, insufficient regulation of over-the-counter (OTC) derivatives 'renders impotent' the enhanced resolution powers aimed at making sure large financial institutions are not too big to fail, according to economist Robert Johnson. By Robert Stowe England MindOverMarket.blogspot.com December 13, 2009 The Wall Street Reform and Consumer Financial Protection Act that passed the House of Representatives December 11 on a 232-202 party-line vote fails to attain its intended objective to rid the regulatory regime of the moral hazard of too-big-to-fail. Thus, the bill, known in Capitol Hill short-hand as H.R. 4173, does not protect the tax payer from future financial crises when regulators will once again be compelled to bail out major financial institutions that fail, economist Robert Johnson has told Mind Over Market . The complete text of the interview with Johnson, who is the Director of Financial Reform at the...

Four out of five employers have maintained or increased their matching and non-matching contributions to their 401(k) plans during the Great Recession of 2008 and 2009, according to the Profit Sharing /401(k) Council of America. And, nearly half of all employers who reduced or suspended their match have either already restored the match or plan to restore it by the end of the next quarter. By Robert Stowe England December 8, 2009 The Chicago-based Profit Sharing / 401(k) Council of America surveyed employers who sponsor 401(k) and profit sharing plans in October and found that 76.8 percent made no changes to their matching contributions in 2008 and 2009, compared to the end of 2007. An additional 4.7 percent of plan sponsors increased the employer match, bringing the share of surveyed companies that either maintained or increased their match to 81.5 percent. Further, of 264 companies that offered a non-matching company contribution -- where the employer makes a contribution to the plan...

Gerald Celente on Ben Bernanke By Robert Stowe England December 8, 2009 Moscow-based RT, a 24/7 English language news broadcasting service, interviewed Gerald Celente, Director the Trends Research Institute, Kingston, New York, on whether or not Ben Bernanke should be confirmed for a new term as Chairman of the Federal Reserve. RT's Washington bureau reporter Cedric Moon conducted the interview via Skype broadband. In the interview Celente charges that Bernanke should not be re-appointed to the Fed because he has been a failure as its Chairman and cited several instances where he got in wrong -- most importantly by igniting a bailout bubble that will be worse than the real estate and mortgage-finance bubble that occurred because of the mistakes made when Alan Greenspan was Chairman of the Fed. Celente declines to offer another name for Fed Chairman, noting the choice is made by Wall Street insiders to protect their own interests. Citing Timothy Geithner's position as Treasury S...

Richard Bove, a financial strategist at Rochdale Securities, was a keynote speaker at The Deal Economy 2010 conference, held November 18-19, 2009 at the Union League Club in New York City. In this video Bove speaks about the run on the banks in the fourth quarter of last year.