Financial Innovation Amplifies Systemic Liquidity Shocks - A new Working Paper from the International Monetary Fund finds that increasing financial integration and innovation can make market and funding liquidity pressures readily turn into issues of insolvency. - Research Recap 

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Long but fascinating - Section 8 Vouchers? - American Murder Mystery - Hanna Rosin - Why is crime rising in so many American cities? The answer implicates one of the most celebrated antipoverty programs of recent decades. - thanks Ira Artman - The Atlantic 

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PIMCO’s August 2008 Global Central Bank Focus, “The Narrowing Ecologies of Global Growth” by Paul McCulley and Saumil Parikh, is now available at PIMCO 

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Speech by Chairman Bernanke on reducing systemic risk - At the Federal Reserve Bank of Kansas City’s Annual Economic Symposium, Jackson Hole, Wyoming - Released by the Board of Governors of the Federal Reserve System
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FDIC’s IndyMac Borrower Aid `Dangerous’ for Bonds - Jody Shenn - The Federal Deposit Insurance Corp.’s plan to have IndyMac Federal Bank FSB rework mortgages for troubled homeowners is “dangerous” for bondholders, according to Barclays Capital - Bloomberg 

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About GSEs, commercial banks, and preferred stock - It’s more than Fannie and Freddie -   “Below I offer up a few guesses of what other issuers would have to pay to issue preferred stock.
Lehman Brothers-11-13%.
Merrill Lynch-11-12%.
Morgan Stanley-9-10%.
Citigroup-9 1/2-10 1/2%.
CIT Group-12-15%.
Fannie Mae/Freddie Mac—15%
Keycorp-11-13%.
National City-13-15%.
Wachovia-10-12%.
Zions Bancorp-13-15%.
GM/GMAC-not possible.
Washington Mutual-not possible.
Ford-not possible.”
John Mauldin’s Weekly E-Letter 

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Prime Jumbos Showing Strain: S&P - PAUL JACKSON - .. delinquencies increase during July, relative to June’s totals; 2006 vintage prime jumbos saw delinquencies increase 13.2 percent, while the 2007 vintage saw delinquencies rise 7.3 percent. Both jumps came in just one month. … - housingwire 

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Fannie Doesn’t Want New York Subprime, Either - PAUL JACKSON -  … “Fannie Mae will not purchase or securitize any mortgage loan that meets the definition of a subprime home loan under New York law, regardless of whether any provision of the law is preemptedparticular mortgage or for a particular originator,” senior vice president Michael Quinn wrote in a seller bulletin dated Aug. 19. … -    housingwire 

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Paul Muolo:  “Chain of Blame, How Wall Street Caused the Mortgage and Credit Crisis,”     which I co-authored with Matt Padilla of The Orange County Register. … The excerpt below deals with Angelo Mozilo, Countrywide, James Johnson and Fannie Mae. Mozilo is a central character in the book and Countrywide and Fannie were linked at the hip …   this is worth reading - National Mortgage News 

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Skyscrapers and Business Cycles - Mark Thornton - The skyscraper index, created by economist Andrew Lawrence shows a correlation between the construction of the world’s tallest building and the business cycle. Is this just a coincidence, or perhaps do skyscrapers cause business cycles?  - mises.org 

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Coming Bull Market In Financials: Some Straws In The Wind  - It’s the little things that tell you a turn is at hand. . .  - Thomas Brown  -  bankstocks.com 

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Poll Results: Grading Bernanke & Paulson - Prieur du Plessis - Investment Postcards from Cape Town

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The Ebay Fannie/Freddie Insider Selling Sign - Paul Kedrosky - Not sure if I’ve mentioned it here before, but I’m fond of my handy-dandy Ebay-based bankruptcy indicator. It works like this: When high-profile companies are in dire financial straits, or at least employees perceive that to be the case, insiders start selling … golf shirts and baseball caps. - Infectuous Greed 

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Restructuring of mortgage loans gets tougher - J. Craig Anderson - The Arizona Republic

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Treasury wants GSEs shareholder-owned: source - Patrick Rucker - Reuters 

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Charge-off Rate for US Banks to Peak in Mid 2009 - The charge-off rate for major US banks is likely to continue to rise for the rest of this year before leveling off and peaking in 2009, according to a new report from financial services consulting firm Aite Group. Charge-offs represent the value of loans removed from the books and charged against loss reserves.  The residential real estate loan charge-off rate is expected to peak at over 2%, while commercial real estate loans should top out at around 1.5%. - Research Recap 

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More houses return to lender, address unsold -  Chicago Tribune 

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WILLIAM PESEK - Here’s to Hoping Nouriel Roubini Is Proven Wrong - It’s hard to forget your first Nouriel Roubini experience. - Bloomberg