- Pennsylvania Among 'Terrible 10' Most Regressive Tax States
- February 4 Non-Partisan Training: HOW TO RUN FOR ELECTION BOARD IN 2013: HOW TO RUN FOR COMMITTEEPERSON IN 2014
- Republican Governors Opt-In to Medicaid Expansion
- The Reports of Unions' Death Are Greatly Exaggerated
- Ask Allyson Schwartz to run for Governor
- Mind the gap: Opting Out of Medicaid Expansion Leaves Low-income Families Behind
- Jan. 14 Workshop:HOW TO RUN FOR ELECTION BOARD IN 2013; HOW TO RUN FOR COMMITTEEPERSON IN 2014
- Seth Williams on Guns, Jasmine Rivera on School Closures @PFC Meetup Wednesday
- PA Revenue Strong Midway Through Year; Tax Cut Could Have Big Impact
- What to Make of the Fiscal Cliff Deal?
Here's a combination of resources from the world of Public Radio that I recommend if you want to really dig into some of this huge financial mess that we are in.
First, listen to This American Life's episode #355, The Giant Pool of Money. This episode explains why there was such an appetite for a safe-yet-profitable investment, and how the American housing market came to be seen as that market when the U.S. Treasuries refused to be. Then it follows that appetite from the super-huge institutional investors to the merely huge institutional investor all the way down to the guy brokering the loans in Scranton and Tuscaloosa.
Okay, second, switch your loyalties to Marketplace, where Senior Editor Paddy Hirsch has made the video below about how Collateralized Debt Obligations work. What I like about this video is that he explains how investors made CDOs of CDOs, and therein lay the problem.
You may remember that I took a crack at explaining these things back in December. This video is better.
There's two more things you need to see: click Read More!
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Remember when I said I was for the bailout? I'm still for the bailout that I said I was for. Not so sure that I'm for this bailout, though:
Treasury may capitalize banks by end of October. Buying into the banks makes no sense to me. I know that it's what lots of economists say would make more sense, but the logic of it just doesn't work for me. I think it was Nancy Pelosi who said that people shouldn't think of this is as a "bailout" but a "buy-in." When I heard it, in the early days of the bailout discussion, I thought: "Yeah, that's right!"
But buy in to the banks (and etc)?
I see three problems with buying in to the financial industry:
1) You can't directly improve the terms of mortgages. Whether the government directly bought mortgages or the securities that held them (the former is better), it could change the terms of those mortgages, giving consumers much more stability, insuring a more even flow of money back into those securities and greater stability across the board. It would be great for homeowners and the rest of the economy. If we just give banks some money, well, who knows what they will do?
2) We won't ever get our cash back, even if the securities make money.
I don't care if The New York Times is calling This American Life preciously hipster, maybe they are just jealous because Chicago Public Radio often accomplishes what The Grey Lady has failed to do most days: turn complex problems into a compelling narrative.
Today at the gym, I listened to this episode on how a global tidal wave of capital led to an excess of demand for mortgage backed securities which led to nonsense like No-Income-No-Asset loans and our present troubles. I love This American Life. A lot. To a point that I get a little crazy about it, but this may well be one of the best episodes I have ever listened to. I follow the sub-prime issue very closely, and I learned a lot from this episode. I also laughed several times.
In case you aren't quite convinced to follow Dan's suggestion, above, to call Specter, here's a little back-up for him. This whole industry friendly foo-fah going on with the Hope Now Alliance is not cause for much hope. We need something stronger. Yesterday, PUP did an informational picket outside a HOPE NOW event.
In our press release, John Dodds, Director of the Philadelphia Unemployment Project, explained: “With sub prime loans increasing dramatically in Philadelphia in the past three years from 20% in 2004 to 37% in 2006 we need more than a public relations road show to protect families and neighborhoods from this crisis."
Hope Now Alliance Hotline has gained a reputation for causing frustration and minimal help to large numbers of homeowners trying to use their services. The Alliance is heavily dominated by the mortgage industry.
“They didn’t even reach out for local housing counselors until this Tuesday for a large scale event a week away”, said Pam Kennebrew a housing counselor for the Unemployment Information Center. “The phone number for the flyer they sent to local homeowners had a bad phone number to call to get information on the Homeownership Forum. A woman in Las Vegas was getting the calls.”
Action News reporter Nydia Han covered the Foreclosure Crisis Committees informational picket. As she reports, no homeowners left the meeting with modified loans.
Umm, we've got (had) a stock exchange? From The Greenlee Partners' Harrisburg On-Line:
The Philadelphia Stock Exchange reportedly is about to be acquired by NASDAQ Stock Market Inc. in a deal estimated between $600 or $700-million...
Apparently it's the oldest exchange in the country and primarily sells "options," which is a concept I vaguely understood even when I was studying it. No details. The Inqy's got more coverage here.
Not clear if it would leave Philadelphia, but it sounds like it's a growing concern that the general public is paying no attention to.