Mind Over Market

In a story titled "Paperwork Woes Plague Mortgage Plan," in the weekend (January 16-17, 2010) edition of the Wall Street Journal, the accompanying chart appears. It is based on data provided by the Treasury Department. The chart is intended to capture the extent to which banks have move to modify loans that are eligible for loan modifications under the Obama Administration's loan modification program, which subsidizes lower interest rates on existing loans eligible for the program. From a quick look at the chart, it would appear that the lenders with the fewest number of loans eligible for the program have made the most permanent modifications. Permanent modifications occur after a trial period when homeowners who qualify for the program make regular payments on time for their new modified loans. For example, GMAC Mortgage has the highest rate of permanent modifications on the fewest number of eligible loans. Bank of America has one of the lower rates of permanent modific...

To maintain the Fed’s independence in monetary policy and its ability to successfully fight inflation (and deflation) the Fed and the Treasury need to sign a Federal Reserve Credit Policy Accord, says economist Marvin Goodfriend. He offers six principles to guide such an accord. By Robert Stowe England April 25, 2009 A call for a Federal Reserve Credit Policy Accord between the Fed and the U.S. Treasury was issued yesterday (April 24) by Marvin Goodfriend, professor of economics and chairman of the Gailliot Center for Public Policy at the Tepper School of Business at Carnegie-Mellon University in Pittsburgh. He was speaking at a symposium conducted by the Shadow Open Market Committee ( http://www.somc.rochester.edu/ ) at Cato Institute in Washington, D.C. Goodfriend’s concern was aimed at the Fed’s decision to provide more than $1 trillion of credit through the Term Asset Lending Facility (TALF) and other arrangements. The effort includes loans to banks and other financial institutions...