Mind Over Market

Speaking on CNBC, Las Vegas hotel owner Steve Wynn excoriates the lack of common sense in Washington and blast politicans for insane spending, regulatory policies and legislative initiatives. He says Washington has created a terrible environment of uncertainty for business in America -- worse than in China, which is more stable. "The shocking unexpected government is in Washington," he says. "Everything is cuckoo and God knows what's coming next." In particular, he attacks FHA for backing $20 billion a month in subprime lending. He blasts Obamacare and says it will drive up costs and faults Washington for failing to do anything about frivolous lawsuits that drive up the cost of liability insurance for doctors.

By Robert Stowe England June 14, 2010 Subprime loan performance of mortgages held in private label residential mortgage-backed securities (RMBS) has finally improved for the first time after rising steadily for nearly four years. Delinquencies in RMBS vintages from 2005 to 2008, which peaked at 54.4 percent in January 2010, began to decline over the last three months and fell to 51.5 percent as of April 2010, according to Moody's Investors Service. "Subprime mortgage loan performance appears to have turned a corner over the past several months," writes Peter McNally, vice president and senior analyst at Moody's in the credit rating agency's Weekly Credit Outlook for June 14. McNally notes that other classes of RMBS, jumbo prime and Alt-A and home equity, have also shown improvement, "though somewhat less pronounced." McNally is crediting the Home Affordable Modification Program (HAMP) as "one contributor" to the improved loan performance for s...

At the request of Senator Judd Gregg, New Hampshire Republican and ranking member of the Senate Budget Committee, the Congressional Budget Office has completed a report titled The Budgetary Impact and Subsidy Costs of the Federal Reserve's Actions During the Financial Crisis. See the report at this link: http://www.cbo.gov/ftpdocs/115xx/doc11524/05-24-FederalReserve.pdf The report, written by Kim Kowalewski and Wendy Kiska of CBO's Macroeconomic Anlaysis Division, comes up with what most willl surely think is a low ball estimate of the subsidy cost of the extraordinary actions during the financial crisis of 2007 and 2008. From July 2007 to the end of 2008, the Fed's balance sheet grew from $790 billion to $2.275 trillion. Of that total, loans and other types of support extended to financial institution made up $1.686 trillion. By the end of 2009, direct loans and other support had fallen to $280 billion, but the Fed held just over $1 trillion in mortgage-related securities...