=

1.  AIG press release – Federal Reserve Board, with full support of the Treasury Department, authorizes the Federal Reserve Bank of New York to lend up to $85 billion to the American International Group – Released by the Board of Governors of the Federal Reserve System

2.  A Closer Look at the Fed’s $85 Billion AIG Bailout – Kevin LaCroix – … The facility has a 24-month term. The interest rate is set at three month LIBOR plus 850 basis points. Three month LIBOR is a variable rate that resets weekly. The current weekly rate (here) is 2.81%, so the current interest rate on this loan facility is 11.31% — pretty hefty.  … – D&O Diary

————

Mortgage and Title Insurers Sucked into Housing Swamp – Continued housing market weakness and the uncertain long-term future of Fannie Mae and Freddie Mac is putting yet more pressure on the beleaguered mortgage and title insurance industries.  A new report from Standard & Poor’s graphically illustrates the declining fortunes of title insurers -  Research Recap

————

The Crisis of Confidence and the Banks – Christopher Whalen – Suggests 3 actions that need to be done to shore up confidence. – The Institutional Risk Analyst

————

Greenspan On Current Meltdown: The arsonist analyzes the fire – Tim Iacono – themessthatgreenspanmade

————

Reference: DINL News Stories Page – a great resource – check out the whole page  – Randolph Buss -   DINL.net 

————

Lehman Collapse Spurs Call for Credit Clearinghouse – Shannon D. Harrington – Bloomberg

————

Survey Shows Majority to Pay-Off Mortgages – PR Web 

————

Bit in the Fannie:  Midwest Banc moves to temper Fannie-Freddie exposure – Steve Daniels – Midwest Banc Holdings Inc. is eliminating its dividend and moving to raise $110 million in equity to buttress its capital position in the face of growing loan losses and a disastrous investment in preferred shares of mortgage giants Fannie Mae and Freddie Mac. – Crain’s Chicago Business 

————

from John Burns:  The National Bank of the United States -  The U.S. government now controls the U.S. mortgage industry, which means two very favorable things for home builders:
1.  The near-term future of mortgage liquidity will be set by policy rather than economics. In an election year, that can only be positive for housing.
2.  The mortgage-backed securities market will now officially have the full faith and credit of the U.S. government behind it, resulting in very low interest rates that may morph into very small spreads over Treasuries. 
————

AIG-LEH-Federal Reserve and asymmetric information. Special thanks to John Silvia, Dennis Gartman, George Akerlof and (we hope) Janet Yellen – David Kotok – … Noble Laureate Akerlof wrote about how the imbalance in information between the buyer and the seller (asymmetry) can result in lesser quality paper crowding out higher quality.  His theory explains some of the financial market dysfunction we see today.    … -  Cumberland Advisors
————

California Senator Issues Letter About New Reverse Mortgage Loan Limits -  I’ve received dozens of emails from RMD readers asking about the status of the HECM loan limits but I haven’t had any updates.  Yesterday I was forwarded a letter that was mailed out by California Senator Barbara Boxer regarding the HECM loan limits (thanks Heather).  According to Senator Boxer, the HECM loan limit has been increased to $625,000.  Below is the 1st paragraph from the letter.  (more…) – Reverse Mortgage Daily

————

Is the US going overboard on bailouts? -  Industry and government officials say the handouts are cheaper in the long run than doing nothing. But critics say they encourage bad behavior by removing the consequences. -  Michael A. Hiltzik -  Los Angeles Times 

————

Goldman Tarnished, But Not Broken – Goldman Sachs may not be doing well, but in the current financial crisis, bad is good enough. – Forbes

————

Fed Meeting Reveals the Heart of the Problem – The Fed’s announcement after yesterday’s FOMC meeting reveals that they are completely out of touch with reality. Their actions since March have significantly worsened the financial crisis. They still don’t get it.  As I have been screaming for a year, the U.S. crisis is a capital market event, not a GDP or CPI event. Investors lost confidence that they were able to understand the cash flows they would receive as security owners. – Dr. John Rutledge Blog 
————

1.  FASB Pushes Ahead With “Securitization Killer” – Paul Jackson – … In particular, the proposed changes seek to amend two key accounting standards critical to modern securitization: FAS 140, which establishes the concept of a qualifying special-purpose entity, commonly called the Q; and FIN 46(R), which currently provides an exception for QSPEs. Both proposed changes would effectively kill the mechanism for off-balance sheet securitization.  … – housingwire

2.  ASF voices concern over proposal for special-purpose entities  – The American Securitization Forum, an affiliate of SIFMA, is voicing its concern about a proposal from the Financial Accounting Standards Board that amends rules pertaining to special-purpose entities. The group says the changes will threaten the securitization market. – Financial Week

=====

IRA ARTMAN SECTION – thanks Ira:

Latest Issue of Timber Trends – see pp 7 & 10 – Timber Trends – a monthly publication developed by The Campbell Group.   This publication summarizes the applicable developments in the economy and forest products industry on a monthly basis.
————

(Lehman) Brothers’ Keepers - A Jewish family’s business survived the Civil War, but today’s economic crisis proved too much – Stuart Rockoff – NextBook
————

What will the new home mortgage financing system look like?- lists 5 mistakes made and says this … Long term, the covered bond solution is the most stable. But it would impose the most conservative, risk adverse review of mortgage applications in the short term and possibly delay the housing recovery. The  … – Notes from Jim Haughey blog – Reed Construction Data