"If you're going to panic, do it fast and beat the crowd." ~ Jesse Livermore

Tuesday, February 5, 2013

Feds bungled foreclosure crisis

9 ways feds bungled foreclosure crisis- MSN Money: "1. No one's getting much. Only $3.3 billion is actually going to people who have been in foreclosure. The government tried unsuccessfully to review a small portion of 3.8 million foreclosed homes, The New York Times reports. But no one knows how many of those borrowers were harmed, so all 3.8 million will get the money regardless if they were wronged. That comes to $868 per home, writes columnist Joe Nocera. 2. Skewered by fees. The government got banks to hire expensive consultants to review every foreclosure from 2009 and 2010, Nocera reports. It was so slow and tedious that the consultant fees, sometimes coming in at $250 an hour, eventually topped $1 billion. "The feds and the banks finally threw up their hands," Nocera writes. "The settlement made the whole thing go away.". . . . Some banks spent much more on consultants than they did on actually helping those homeowners they abused. A now-bankrupt mortgage servicer called ResCap spent $250 million to review its loans. It will probably only pay $35 million to $60 million to homeowners who were harmed, reports American Banker. "This is Kafkaesque," an industry source told American Banker. "The reviews don't provide any closure [to borrowers], and their cost is going to be orders of magnitude beyond what banks pay out.""

RealClearMarkets - Uncle Sam's 'F' Rated Bonds: "That interest rate risk makes long-term U.S. Treasury securities lousy investments -- they have no place in most retirement portfolios. For rating agencies, Washington's monopoly on printing dollars makes it difficult assigning a conventional rating between AAA and D on its bonds. Those can't default but investors' capital is still at risk. Perhaps a special grade: "F" -- flee now before you get stuck."

Techno-pessimism: When will the good times return? | The Economist: " . . . As of 2005, however, something seemed to go wrong. Productivity in manufacturing slipped a bit and dropped substantially for the economy as a whole. The 2000s were also a trying period in terms of employment and wage growth. This has led some thinkers, including Mr Gordon, to conclude that the boost from IT has run its course. . . . The unknown is the unknown. So while I'm optimistic about the prospects for innovation and economic growth, it's worth acknowledging that there's no telling how it all will end up until well after the fact.

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