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“Too Big to Save?” with Robert Pozen

by Cord Blomquist on November 20, 2009

in Economic Commentary

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WP – “More than 14 percent of borrowers were in trouble on their mortgage during the third quarter, a new record, according to an industry survey released Thursday, which also suggests that the foreclosure rate is likely not to peak until next year as unemployment rates continue to rise.”

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WP – “The FDIC’s board voted Thursday to require banks to pay at the end of this year the amount they would owe the FDIC over the next three years. The agency collects insurance premiums from all banks, which it uses to reimburse depositors in failed banks.”

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OECD warns on impact of unemployment

by Ben Klutsey on November 19, 2009

in Economic Recovery

FT – “Growth in the world’s industrialised economies has resumed after the most virulent recession for decades, the Paris-based Organisation for Economic Co-operation and Development said on Thursday. But it warns that unemployment is set to continue to rise well into 2010 and to fall only modestly the following year from a peak of over 9 per cent.”

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Gary BeckerThe Becker-Posner Blog – “The best solution to reducing the real burden of the public debt is neither inflation nor higher taxes, but more rapid growth of the American economy. This involves lower, not higher, taxes on investments and incomes of small and large businesses. It also requires greater concern about the fact that the US is falling behind many other countries in the proportion of its young population, especially males, who receive a higher education.”

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WP – “Bernanke, offering his most detailed assessment of the economy in months, laid out a relatively gloomy prognosis for 2010. He said he believes that ‘continued growth next year is likely.’ But, he added, ’some important headwinds — in particular, constrained bank lending and a weak job market — likely will prevent the expansion from being as robust as we would hope.’”

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Size matters: Washington debates limits, divisions and breakups for banks

November 13, 2009

FinReg21 – “Is too-big-to-fail just plain too big? Should some of the big, integrated financial institutions like Citigroup be broken up? Should commercial and investment banking once again be separated? As lawmakers, administration officials, central bankers, academics and other policy makers debate regulatory reform in Washington, size itself has become an issue…”

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FHA’s cash reserves have dropped well below amount required by law, audit shows

November 12, 2009

WP – “For the first time since 1994, the Federal Housing Administration’s cash reserves have shrunk to a point far below what is required by law and could turn negative if worst-case scenarios are factored in, according to an independent audit designed to measure the agency’s financial soundness.”

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Dodd’s reform plan takes aim at the Fed

November 11, 2009

WP – “The legislation promoted by Sen. Christopher J. Dodd (D-Conn.) would impose the most fundamental change in the Fed’s mission since the Great Depression, leaving it responsible for little besides setting monetary policy. Senior administration officials and Fed leaders, by contrast, have urged that the central bank retain its power to oversee large and [...]

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Global confidence dips as policy makers begin exit strategies

November 11, 2009

Bloomberg News – “Confidence in the world economy dipped in November as central banks’ actions to withdraw some stimulus measures sparked concern about the strength of the recovery, a Bloomberg survey of users on six continents showed.

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