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Political Economy: November 14, 2010 - November 20, 2010

Head of autos task force reflects on GM's comeback

ron bloom, senior treasury advisor for obama's task force, said in an interview that the gm ipo was a milestone.

By Brady Dennis  | November 19, 2010; 7:15 PM ET  |  Permalink  |  Comments (1)
Categories:  Auto industry  
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Aggressive lobbying defends mortgage-trading system

The financial services industry has launched an aggressive campaign on Capitol Hill to bolster the legality of the way companies have turned mortgages into securities and traded them across the globe in recent years. The companies have opened wide their wallets for lobbying and are flying top executives to Washington for one-on-one meetings with lawmakers. They are holding briefings for key staffers, including an event last week that drew more than 60 aides. And they are blanketing Congress with white papers, memos and other documents that lay out their arguments. The focal point of their efforts is Mortgage Electronic Registration Systems, or MERS, the controversial, privately run electronic database that is used by practically every lending institution and investment company to track the transfer of the ownership of mortgages as they are packaged into securities and traded at lightning speed around the globe.

By Ariana Eunjung Cha and Brady Dennis  | November 19, 2010; 10:20 AM ET  |  Permalink  |  Comments (4)
Categories:  Congress, Housing  
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GM shares close 3.6 percent up; Obama says bailout worked

After a quick jump this morning of six percent, General Motors' stock is now hovering at a four percent gain, at roughly $34 a share this afternoon. The stock, which was priced at $33 a share for the IPO, surged to nearly $36 a share minutes after chief executive Dan Akerson ran the opening bell at 9:30 a.m. using the horn blare of a 2011 Chevrolet Camaro SS. The price leveled off through the morning at around $35 a share with U.S. stocks up broadly. The Dow Jones Industrial Average was up 1.58 percent to 11181.40. The S&P has risen 1.63 percent to 1197.77. The lack of volatility indicates that GM priced the IPO well. "Seems like they were pretty much on the mark to me," said Bill Visnic, a senior editor at Edmunds.com.

By Jia Lynn Yang and William Branigin  | November 18, 2010; 5:16 PM ET  |  Permalink  |  Comments (103)
Categories:  Auto industry, Corporations  
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Rep. Frank: Homeowners should not have 'false hopes' in foreclosure mess

Rep. Barney Frank (D-Mass.) on Thursday called for bipartisan support for legislation that will make sure another foreclosure "mess" does not happen again, but said that homeowners who are delinquent should not have "false hopes" that a substantial number will get their homes back due to the paperwork problems. The outgoing chair of the House Financial Services Committee said at a subcommittee hearing that there is need for a single entity to make decisions about whether a borrower gets loan assistance.

By Ariana Eunjung Cha  | November 18, 2010; 12:24 PM ET  |  Permalink  |  Comments (17)
Categories:  Congress, Housing  
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Fed move may not work, but there's 'nothing left' says top European economist

The Federal Reserve's recent move to boost the money supply got a tepid endorsement today from a top economic agency, the Organization for Economic Cooperation and Development. It probably won't work as intended, OECD economists said in their latest review of the U.S. economy. But it's one of the only options left to try to keep a weak recovery on track. While saying it was doubtful the Fed's "quantititative easing" -- $600 billion of fresh treasury bond purchases -- will provide an appreciable boost to the economy, "there's not much left" to try, OECD chief economist Pier Carlo Padoan said in a briefing this week.

By Howard Schneider  | November 18, 2010; 12:00 PM ET  |  Permalink  |  Comments (0)
Categories:  Federal Reserve, International Economics  
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Congressional hearing on foreclosures: When did feds learn of problems?

Spencer Bachus (R-Al), who is likely to be tapped as the next chairman of the House Financial Services Committee, grilled federal regulators about when they learned of the "robo-signing" and other issues related to foreclosures. After regulators admitted they did not know about them until they read about the problems in news reports, Bachus said did not understand how that was possible. "Regulators were in some of those banks looking. I wonder why [the problems] were not visible," he said. Bachus added that, "I'm glad you read the newspapers."

By Ariana Eunjung Cha  | November 18, 2010; 11:43 AM ET  |  Permalink  |  Comments (7)
Categories:  Congress, Housing  
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NY attorney general Cuomo sues Rattner, chief architect of auto bailouts

The attorney general of New York, Andrew Cuomo, hit Steve Rattner with two lawsuits Thursday, alleging he paid kickbacks to win $150 million in business from the state's pension fund for his private equity firm. Meanwhile, Rattner has agreed to a $6.2 million settlement with the Securities and Exchange Commission over similar allegations of widespread fraud at Rattner's firm, Quadrangle.

By Jia Lynn Yang  | November 18, 2010; 11:01 AM ET  |  Permalink  |  Comments (16)
Categories:  SEC  
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Bank of America outlines radical foreclosure reform measures to Congress

Bank of America on Thursday said it was committed to making significant changes in its foreclosure process and that it had completed 25,000 mortgage modifications for financially distressed homeowners in October. That's more than a 50 percent increase from the previous month.

By Ariana Eunjung Cha  | November 18, 2010; 10:06 AM ET  |  Permalink  |  Comments (19)
Categories:  Congress, Housing  
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CitiMortgage admits to foreclosure paperwork problems

Citigroup, which for almost two months has claimed its process for preparing foreclosure affidavits was sound, is reviewing about 14,000 documents for issues, including 4,000 that may have been notarized improperly, a company official said in written testimony to Congress to be delivered Thursday. Unlike other large mortgage servicers it competes with, Citi had not frozen foreclosures and had repeatedly declined to publicly discuss any internal reviews it was conducting. Harold Lewis, managing director of CitiMortgage, said in the written remarks that 10,000 of the 14,000 documents being reviewed are for judicial foreclosures. The purpose of the review is "to assure that these affidavits are substantively correct and properly executed. Citi expects that affidavits executed prior to the fall of 2009 will need to be refiled," Lewis said. The other 4,000 documents that are being reviewed were prepared at its Dallas processing center and "may not have been signed in the presence of a notary, to assure that these affidavits are substantively correct and properly executed." Lewis said these affidavits were also be refiled. Lewis and other representatives from large mortgage servicers--Bank of America, J.P. Morgan Chase, Ally Financial--will take questions from members of Congress Thursday starting at 10 a.m. at a House Financial Services Committee hearing.

By Ariana Eunjung Cha  | November 18, 2010; 9:07 AM ET  |  Permalink  |  Comments (8)
Categories:  Housing  
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Economic agenda: Thursday, Nov. 18, 2010

At 8:30 a.m. --The Labor Department releases data on weekly claims for unemployment benefits. At 9 a.m. -- The Securities and Exchange Commission holds a forum examining the impact on small businesses of the Dodd-Frank financial overhaul enacted over the...

By Mike Shepard  | November 18, 2010; 6:30 AM ET  |  Permalink  |  Comments (0)
Categories:  *Economic agenda  
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Altman in the running to succeed Summers

Investment banker Roger Altman, a former deputy treasury secretary during the Clinton administration, is among several candidates to replace Lawrence Summers as President Obama's top economic adviser, White House officials said Wednesday.

By Lori Montgomery  | November 17, 2010; 8:45 PM ET  |  Permalink  |  Comments (2)
Categories:  White House  
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GM says its IPO will be priced at $33 a share

General Motors said that it will price its stock at $33 a share for its initial public offering on Thursday, setting it up to be one of the biggest IPOs in history in a remarkable turnaround for the beleaguered auto giant. The total offering size could be as large as $23.1 billion, according to GM in an announcement late Wednesday. At that amount, counting sales of preferred shares, the GM IPO would be the largest ever in the world.

By Jia Lynn Yang  | November 17, 2010; 7:10 PM ET  |  Permalink  |  Comments (37)
Categories:  Auto industry, Budget and fiscal policy, Corporations  
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Federal regulators' report on foreclosures expected in early 2011; MERS, LPS under scrutiny

The four major federal regulatory agencies overseeing banks are conducting a joint investigation into residential foreclosure practices and policies that involves visiting mortgage servicers and reviewing sample loan files, according to a Federal Reserve official. In prepared remarks by a Federal board member to be delivered tomorrow before the House subcommittee on housing, Elizabeth A. Duke says that that investigators are expect to conclude the on-site portion of the examination process by the end of this year and plan to publicly release a summary report highlighting the industry-wide findings in early 2011.

By Ariana Eunjung Cha  | November 17, 2010; 4:18 PM ET  |  Permalink  |  Comments (11)
Categories:  Federal Deposit Insurance Corp., Federal Reserve, Housing  
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Austan Goolsbee to business: We're on your side

White House economic adviser Austan Goolsbee delivered a message straight to some of the country's most powerful chief executives Tuesday: the White House is not anti-business. "We are actively interested in the ideas of business," he said at an event for executives hosted by The Wall Street Journal. "It's not at all the case it's a false dialogue and we're only listening."

By Jia Lynn Yang  | November 17, 2010; 10:40 AM ET  |  Permalink  |  Comments (0)
 
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Stores opening on Thanksgiving Day

You better scarf down that turkey: Toys 'R' Us on Wednesday became the latest retailer to announce that it will open its doors on Thanksgiving Day. Stores have competed for years to offer the biggest deals at the most ungodly...

By Ylan Mui  | November 17, 2010; 7:00 AM ET  |  Permalink  |  Comments (70)
Categories:  Retail  
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Economic agenda: Wednesday, Nov. 17, 2010

At 8:30 a.m. - The Labor Department releases data on inflation at the consumer level. At 8:30 a.m. - The Commerce Department releases data on new home construction for October. At 9:30 a.m. - The Senate Commerce Committee holds a...

By Mike Shepard  | November 17, 2010; 6:30 AM ET  |  Permalink  |  Comments (0)
Categories:  *Economic agenda  
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House sustains Obama veto on mortgage bill

In a largely token vote, the House on Wednesday declined to override President Barack Obama's veto of legislation that could have facilitated the processing of home foreclosure documents. Obama, in rejecting the bill, said it could worsen problems related to recent revelations that some mortgage lenders have been evicting homeowners using fraudulent or flawed methods to expedite foreclosures.

By Associated Press  | November 17, 2010; 6:19 AM ET  |  Permalink  |  Comments (0)
Categories:  Congress, Housing, White House  
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50 state attorneys general probing foreclosures mess in negotiations over compensation fund

The 50 state attorneys general are close to an agreement on the broad outlines of a settlement over foreclosures that would include a victims' compensation that would provide money to borrowers whose homes have been taken away improperly. While there's no universal agreement that would apply industry wide and the AGs are negotiating separately with each bank, many of the stipulations are the same for the agreements being discussed with the three largest mortgage servicers: Bank of America, JP Morgan Chase and Wells Fargo.

By Ariana Eunjung Cha  | November 16, 2010; 5:05 PM ET  |  Permalink  |  Comments (62)
Categories:  Housing  
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Report: Wall Street profits way down from last year's record

Wall Street is facing a sharp drop-off from last year's record profits, according to a report Tuesday by New York State Comptroller Thomas DiNapoli. After seeing a blockbuster 2009, which was fueled by government help and low interest rates, banks...

By Jia Lynn Yang  | November 16, 2010; 4:28 PM ET  |  Permalink  |  Comments (4)
 
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Mortgage securitization industry defends itself

The industry responsible for bundling mortgages and selling them to investors has stepped forward to defend itself from charges that it's been improperly transferring loan documents. The American Securitization Forum, a trade group, issued a paper Tuesday touting the legality...

By Jia Lynn Yang  | November 16, 2010; 2:06 PM ET  |  Permalink  |  Comments (1)
Categories:  Housing  
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Geithner says Congress must resolve tax issue by end of year

Treasury Secretary Timothy Geithner on Tuesday urged lawmakers to resolve the issue of expiring tax breaks by the end of the year, adding that the White House and Congress should be able to reach a deal soon. "It is very...

By Jia Lynn Yang  | November 16, 2010; 11:22 AM ET  |  Permalink  |  Comments (3)
 
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Republicans: Fed should focus on fighting inflation, not on job creation

A second top Republican is arguing that the Federal Reserve's mandate from Congress should be changed so that the central bank is no longer charged with maintaining low unemployment. Sen. Bob Corker (R-Tenn.), a member of the Senate Banking Committee, has called for the Fed's current "dual mandate" -- to pursue maximum employment and price stability -- be amended to order the central bank to focus only on maintaining stable prices.

By Neil Irwin  | November 16, 2010; 10:40 AM ET  |  Permalink  |  Comments (6)
Categories:  Federal Reserve  
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Economic agenda: Tuesday, Nov. 16, 2010

At 8:30 a.m. - The Labor Department releases the October Producer Price Index, a measure of inflation at the wholesale level. At 8:45 a.m. -- The Federal Deposit Insurance Corp. meets to review the issue of underserved communities. At 9:15...

By Mike Shepard  | November 16, 2010; 6:30 AM ET  |  Permalink  |  Comments (1)
Categories:  *Economic agenda  
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Obama economy officials, bank execs and mortgage electronic registry head to hot seat on Capitol Hill

*Phyllis Caldwell, Chief, Homeownership Preservation Office, U.S. Department of the Treasury *Elizabeth A. Duke, Governor, Board of Governors of the Federal Reserve System *David Stevens, Assistant Secretary for Housing and Federal Housing Administration Commissioner, U.S. Department of Housing and Urban Development *John Walsh, Acting Comptroller of the Currency, Office of the Comptroller of the Currency *Edward DeMarco, Acting Director, Federal Housing Finance Agency *Rebecca Mairone, Default Servicing Executive, Bank of America *Thomas Marano, CEO of Mortgage Operations, Ally Financial Inc. *Stephanie Mudick, Executive Vice President, Office of Consumer Practices, JP Morgan Chase *Alan Jones, Head of Servicing Operations, Wells Fargo Home Mortgage *Harold Lewis, Managing Director, Citi Mortgage *RK Arnold, President and CEO, Mortgage Electronic Registration Systems, Inc. (MERS)

By Ariana Eunjung Cha  | November 15, 2010; 2:35 PM ET  |  Permalink  |  Comments (4)
Categories:  Housing  
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Economic agenda: Monday, Nov. 15, 2010

At 8:30 a.m. -- The Commerce Department releases October retail sales results....

By Washington Post editors  | November 15, 2010; 6:30 AM ET  |  Permalink  |  Comments (0)
Categories:  *Economic agenda  
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