OBAMA:

Obama Becomes Banker-in-Chief in Credit Market Freeze – Ari Levy and Caroline Salas – The U.S. economy has little chance of recovering from what may prove to be its worst recession since World War II unless President Barack Obama shows he can get banks to lend money again. – Bloomberg 
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Obama’s First Job Is Buying Brain-Dead Banks: Michael R. Sesit – Commentary by Michael R. Sesit – Bloomberg 

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Obama’s Bailout Challenge - ANDREW ROSS SORKIN – … This has been a popular — and populist — view that has emerged over recent months: those greedy bankers are hoarding our tax dollars instead of lending the money the way they were supposed to do. And it needs to stop.  This view, however, may be misplaced. … – New York Times
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Obama versus Jim Rogers, place your bets – ForexFactory 

OTHER NEWS:

Banks: The Final Countdown – Patrick Watson  – Something strange is happening – or about to happen.  Bank of America (BAC), Citigroup (C), and JPMorgan Chase (JPM) all moved up their quarterly reports to this week.  None have offered any coherent explanation for doing so.  What are they trying to get ahead of? – Invest With An Edge
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1.  Obama team weighs government bank to ease crisis – Tim Ahmann -  The U.S. Federal Reserve, Treasury and Federal Deposit Insurance Corp, a bank regulator, have been in talks about ways to ease a banking crisis that is again deepening — and a government-run “aggregator bank” is among the options.  Outgoing Treasury Secretary Henry Paulson and FDIC Chairman Sheila Bair said on Friday a government bank to round up bad assets was one of a number of ideas U.S. regulators had been discussing to restore confidence in U.S. banks.  – Reuters 

2.  Chase to tackle modifying investor-owned mortgages – Al Yoon – Reuters 

3.  PIMCO’s Total Return Fund cuts MBS, adds Treasuries – The $132 billion PIMCO Total Return Fund, the world’s largest bond mutual fund, reported sharply reduced holdings of mortgage-backed securities in December based on market value, while cash and Treasury investments rose, according to the fund’s Web site.  Investments in MBS issued by companies such as Fannie Mae fell to 62 percent of its portfolio last month from 81 percent in November, a chart showed. – Reuters

4.  Wall Street layoff storm also soaks office landlords – Wall Street’s employment tsunami, most recently swamping Citibank Inc , is also undermining the island of Manhattan ’s 443 million square foot office market, threatening to drag rents down 35 percent from a second quarter 2008 high. – Reuters

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Closing A HECM For Purchase? 10 Million Net Worth Required – John Yedinak – Looking to close a HECM for purchase deal?  Well, if you have a minimum net worth of $10 million, Sun West Mortgage Company might let you close it with them.  See the email they sent to brokers/correspondents below … – Reverse Mortgage Daily

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US Unprepared for Double-Digit Unemployment Rate – … according to Oxford Analytica. … Romer estimates that the stimulus plan will create at least 3 million new jobs. However, given that employers are likely to slash payrolls by at least 5.0 million over the course of recession … and that 5.4 million US residents are already drawing unemployment insurance, ‘mass unemployment’ is likely to create serious economic and policy challenges through 2010, OxAn says in UNITED STATES: Unemployment will surge through 2010. – Research Recap
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FDIC to Require Greater TARP Disclosures. – On January 13, Federal Deposit Insurance Corporation (FDIC) official John F. Bovenzi testified …  Bovenzi further noted that the federal banking regulatory agencies will measure and assess participating institutions’ success in deploying TARP capital … to ensure that funds are used in a consistent manner. Bovenzi called on Congress to establish standards for loan modifications and to provide for a defined sharing of losses on any default by modified mortgages meeting those standards. He also demanded greater accountability for financial institutions that use TARP funds. For a copy of the testimony, please see FDIC  

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THE DEFLATION BATTLE RAGES ON -  For the first time since 1955, the consumer price index fell on a year-over-year basis. Last month’s seasonally adjusted CPI slipped 0.1% for the 12 months through December, the Labor Department reports. Deflation, in short, is here. It’s been expected for some time, as we’ve been discussing in recent months, including here and here. The great question, of course: How long will it last? – good commentary at Capital Spectator
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1.  Let’s Fast Forward To A New RTC – BUT THEN WHAT – By Tom Lindmark 
2.  Are The Regulators Moving To A RTC Solution? – BUT THEN WHAT – By Tom Lindmark 

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How to fix finance – An influential group makes some provocative proposals for re-regulating global finance – … The Group of Thirty’s “Financial Reform: A Framework for Financial Stability” is important both because of the concreteness of its 18 recommendations and because of who was involved. The authors were led by Paul Volcker … – Economist.com 
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Federal Mortgage Banks Show Stress – Some Branches of System May Have to Borrow From Taxpayers – By Binyamin Appelbaum – … which provide U.S. banks with hundreds of billions of dollars in low-cost funding to support lending to home buyers.  The little-known network has grown in importance as banks lose access to other sources of funding because of the credit crunch. The volume of outstanding loans provided by the home-loan banks has increased by 58 percent since the beginning of 2007, to more than $1 trillion at the end of September.  – Washington Post