Today’s MUST READ:  Forced to lend? – How the Fed is Making Banks Lend – Mark Sunshine – The Federal Reserve is forcing banks to lend or face financial disaster. … As a result, banks have the choice of buying bonds that yield less than their cost of funds or lending. Any bank that decides not to lend will suffer losses. … – First Capital Blog

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MUST READ PART 2: No one knows what will happen – A different way to look at what is going on – Wall Street Truthiness: A New Series – READ “Starting Agenda”  – Jeff Miller – A dash of Insight

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slowdown in reverse mortgages too? – Changes At Senior Lending Network, Revamps Wholesale Strategy – John Yedinak – …  announced it was changing its direction of its wholesale channel to concentrate on a specific market niche and is no longer interested in high volume and low touch business in this economy.  As part of the new direction, the company was forced to lay off some of its employees.  … – Reverse Mortgage Daily

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    OTS Annual Report for Fiscal Year 2008

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Lump of coal in your stocking? – Credit Suisse bankers are livid over getting bonus payments in toxic debt – original from WSJ – Wall $treet Folly  – thanks Susan Kulakowski

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Another cause?  – Tax Break May Have Helped Cause Housing Bubble – VIKAS BAJAJ and DAVID LEONHARDT – “Tonight, I propose a new tax cut for homeownership that says to every middle-income working family in this country, if you sell your home, you will not have to pay a capital gains tax on it ever — not ever.” — President Bill Clinton, … Together with the other housing subsidies that had already been in the tax code — the mortgage-interest deduction chief among them — the law gave people a motive to buy more and more real estate. … – NY Times – thanks Margo 

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I Meant to Do That – John Mauldin’s Weekly E-Letter – has interesting rates commentary
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nifty chart – Government bailout hits $8.5 trillion – Net Worth – Kathleen Pender – SF Gate.com  

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The Final Episode of Serial Bubbles: T Bonds – … Wishing to lower the long term interest rates so that housing markets will not deflate or collapse, Federal Reserve does not learn from financial history that ALL financial bubbles cannot be reflated. Not a single bubble in human history that I know of was reflated over its peak in the duration of less than 20 or even 100 years.  … – Frugal Millionaire

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Obama Takes First Shot at Reshaping Fed by Naming Board Member -  By Neil Irwin – …Thus within 18 months of taking office, Obama will likely have appointed five of the seven Fed governors.  … – Washington Post

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Helicopter Ben Goes ZIRP! – Nouriel Roubini – Forbes 

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Mortgage: Pay or walk away? – More likely to consider defaulting as economy sinks – By DAVE CARPENTER – The Associated Press – The State

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Remarks by FDIC Chairman Sheila Bair to The New America Foundation conference: “Did Low-income Homeownership Go Too Far?”  

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The American Dream—Only This Time in Reverse   – Daniel McGinn – … mortgage than their home is worth—every month. Touring a foreclosed home is like watching an episode of “Extreme Makeover: Home Edition” in reverse. … -   Newsweek