Tim Iacono has 10 Predictions for 2009 – themessthatgreenspanmade

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2008: Annus Horribilis, RIP – John Mauldin’s Weekly E-Letter – The Aftermath of Financial Crises - What happens to an economy after a financial crisis? Since there are few who would deny that we have been in and are experiencing a financial crisis, it might be instructive to look at what has happened in previous crises in other countries.

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Fed has abandoned monetary policy, critic says – … John Taylor, who was under secretary of treasury for international affairs from 2001 to 2005, said the explosive growth of the Fed’s balance sheet since September was “unbelievable.” … – Reuters 
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Next head of American Bankers Association backs bailout efforts – by Bryce Hoekenga – mLive.com 

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‘Cramdowns’ on tap in 2009? -  Report: Dems to renew push for loan mods in bankruptcy – … Rep. Brad Miller, D-N.C., said he plans to introduce a bill today allowing bankruptcy “cramdowns” of mortgage loan principal, the Wall Street Journal reported. Sen. Richard Durbin, D-Ill., plans to sponsor similar legislation in the Senate, the paper said. … – Inman News 
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Jumbo mortgage loan rates put damper on refinancing -  While plunging mortgage rates have spawned a frenzy of refinancing, borrowers with larger, so-called jumbo loans are still seeing interest rates in the 7 percent range, prompting them to abandon refinancing plans altogether or resort to creative transactions. … Kerry Scarlott, 46, and his wife, Rebecca, 44, are refinancing the jumbo mortgage on their Hingham home with two smaller loans: a jumbo conforming loan at about 5 percent, with the balance covered by an adjustable-rate home equity loan, currently at 4 percent, which they intend to pay off as soon as possible. … – Boston Globe 

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Reactions to an EDHEC Study on the Fair Value Controversy December 2008  – summary – it’s up to regulators, don’t blame the accountants (BC) -  The full version of “Reactions to an EDHEC Study on the Fair Value Controversy” can be accessed by clicking here. The full version of the position paper “The Fair Value Controversy: Ignoring the Real Issue” can be accessed by clicking here.

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Reverse Review – January 2009 Edition – - John Yedinak -  Check out the December ‘08/January ‘09 issue of The Reverse Review, available online now! Included in this month’s issue is our featured article about the challenges and changes we faced during 2008 and how we can learn and continue to grow in 2009. – Reverse Mortgage Daily

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1.  Fed’s Yellen says US economy risks “grim outcome” – Reuters 

2.  Fed’s Yellen Says ‘Worth Pulling Out All Stops’ on Stimulus - Bloomberg

3.  Deflation – it’s starting to get silly now – Tim Iacono – So, let me get this straight…  After presiding over the inflation and bursting of the biggest financial bubble in the history of Mankind, in the process blessing soaring home prices that far outstripped any reasonable expectation of borrowers to repay and praising the “financial innovation” of Wall Street for facilitating such, the smartest economists at the world’s most important central banks are now concerned (actually, “scared witless” as you’ll see below) that prices may fall. … – themessthatgtreenspanmade

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Little House on PIMCO’s Prairie – Michael Steinberg – The Wall Street Journal “Would You Pay $103,000 for This Arizona Fixer-Upper?” reports on how a 576 square foot house not fit for human occupancy wound up as a foreclosure on a triple-A rated PIMCO MBS.  – click broker  

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Viewpoint: A Push For Homeownership that Backfired – PAUL JACKSON -  One of the central themes that I’ve written about extensively over the course of the past few years here at HousingWire is that the current mess isn’t the result of any one single group — there are, of course, now no less than 25 books out there that you can buy that provide some detail on these sort of claims. But the one group that has clearly been given a free hall pass, at least thus far, are consumer advocacy organizations. – housingwire

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Non-Agency Mortgage Bonds Rallied as Rates Declined – Jody Shenn -  … Securities initially rated AAA and backed by prime-jumbo mortgages with five years of fixed rates climbed 5 cents on the dollar in December to 75 cents, according to JPMorgan Chase & Co. data. Bonds of 30-year Alt-A loans with “conforming” balances rose to 45 cents less than similar Fannie Mae bonds, from 52 cents, … – Bloomberg

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has a video surprise – Top Ten D&O Stories of 2008 – Kevin LaCroix – D&O Diary 

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Obama must let the economy shrink – John R. Talbott – … I don’t blame President-elect Obama for his stimulus plan in this economic environment. I don’t even blame his economic advisers. It is the entire field of economics that is wanting.  For too long, economists have fallen in love with their mathematical models of certainty and have ignored how poorly these models reflect the real world. … – Open Forum at SFGate.com 

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Is This The Year Of The Credit Union? – Phil Hall – … “One advantage that credit unions have historically had in their mortgage lending operations, regardless of who they sell their loans that they retain their servicing,” she observes. “That relationship with their members is always treated as priceless.” … -   MortgageOrb
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has summary and report – talks about MBS – Setting the bull trap – “The Fed has declared a war on savers, a war on prudence and provided the ultimate Moral Hazard Card – and with our money no less. They are also setting up the ULTIMATE BULL TRAP – a trap so large that when it is sprung, perhaps as early as the end of the first quarter/beginning of second quarter, there will only be sellers left,” said guest contributor Bennet Sedacca. -  Investment Postcards from Capetown 

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Reverse Mortgage Investments: When will one-note song become a symphony? – John Yedinak -   Any serious expansion of reverse mortgage production in 2009 and beyond will require increased investor support, and not just from buyers with a direct line to the U.S. Treasury … – Reverse Mortgage Daily

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   IRA ARTMAN SECTION – thanks Ira: 

very long mostly praiseworthy article on Barney Frank – lots about finance and housing – Barney’s Great Adventure – The most outspoken man in the House gets some real power. – by Jeffrey Toobin -  New Yorker

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SEC: Something about Mary (Shapirio) worries many – Broker ties concern shareholder activists, plaintiff’s attorneys – By Jed Horowitz – Investment News

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1.  Liberal: The End of the Financial World as We Know It - By Michael Lewis and David Einhorn, The New York Times.  – AlterNet
2.  Conservative: Rating the Rating Agencies and Securitization – by Michael S. Rozeff – Lew Rockwell.com

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The Institutional Risk Analyst: IndyMac, FDICIA and the Mirrors of Wall Street – The late Bob Weintraub, who served on the staff of the House Banking Committee and wrote extensively about economics and the Fed, told a colleague once that “the Fed can bail out anything in return for any collateral.”  The importance of this obvious statement is overshadowed by a larger truth.  When federal agencies want to do something, such as bail out a client, they will do it regardless of their legal authority. When they don’t want to do something, such as regulate banks, they will refuse to do it – even in the face of a legal mandate from Congress.