Fannie, Freddie to Forgive Mortgage Debt?

By Richard Davies
@daviesabc
Apr 11, 2012 8:01am

Another big push to help troubled homeowners may be in the works. The acting director of the Federal Housing Finance Agency has softened his stand against allowing Fannie Mae and Freddie Mac to reduce mortgage debt for struggling borrowers. Edward DeMarco says his agency is considering whether this change would lower losses by Fannie and Freddie and help stabilize home prices. Taxpayers have already spent $170 billion to bail out the mortgage giants. Principal forgiveness could be offered to 700,000 borrowers at risk of foreclosure. In a CSPAN interview last week, President Obama’s Housing Secretary Shaun Donovan said he believes there is a “compelling” case for principal forgiveness.

Is it merely a correction or a true change of direction? Stocks have been in their biggest losing slide of the year. But the worst might be over.

European stock averages rose this morning. US stock futures were up after five straight days of losses. Both the Dow Jones Index and S&P 500 lost more than 4 percent in value over the past week. The real trigger was last Friday’s relatively weak US jobs report. Then came fresh concern about the weak state of Spain’s economy and debt problems.

Italy’s borrowing costs on short term debt more than doubled in today’s bond auctions. The interest rate demanded by investors for 1 year bonds rose to 2.84 percent from 1.4 percent last month.

Earnings season began with Alcoa reporting a sharp drop in profits. But its first-quarter report still came in stronger than analysts expected. Alcoa sales rose with a rise in demand from car makers, commercial transportation and aerospace companies.

Big oil benefits from high crude prices. Chevron says the price bump will help push first-quarter profits higher than the prior quarter. Chevron also benefited from higher refining profit margins, lower operating costs, and gains from selling assets.

When Brian Dunn quit abruptly as CEO of Best Buy it appeared to be related to the firm’s crumbling business model as a big-box retailer. Now a statement says Dunn resigned as the company looks into his personal conduct. It’s not clear what this involves.

Richard Davies Business Correspondent ABC NEWS Radio twitter.com/daviesabc

Fannie, Freddie to Forgive Mortgage Debt? – ABC News.

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Greek Suicide: Austerity Measures In Greece Lead To Elderly Man Killing Self In Syntagma Square

By NICHOLAS PAPHITIS 04/04/12 01:50 PM ET


A Greek Orthodox priest holds a memorial service, at the site where an elderly man fatally shot himself at Athens’ main Syntagma square, on Wednesday, April 4, 2012. (AP Photo/Thanassis Stavrakis)

ATHENS, Greece — A Greek retiree shot himself dead in the busiest public square in Athens during morning rush hour Wednesday, leaving a note police said linked his suicide with the country’s acute financial woes.

Hours later, more than 1,500 anti-austerity protesters gathered in the square, responding to social media calls for peaceful demonstrations accusing Greek politicians of driving people to despair with harsh cutbacks implemented to secure vital international bailouts.

Limited scuffles broke out between the protesters and riot police, who used a small amount of pepper spray to repel youths throwing bottles of water at them.

The 77-year-old retired pharmacist drew a handgun and shot himself in the head near a subway exit on central Syntagma Square which was crowded with commuters, police said. The square, opposite Greece’s Parliament, is a focal point for public protests.

The incident jolted public opinion and quickly entered political debate, with the prime minister and the heads of both parties backing Greece’s governing coalition expressing sorrow.

“A pharmacist ought to be able to live comfortably on his pension,” said Vassilis Papadopoulos, a spokesman for the “I won’t pay” group. “So for him to reach the point of suicide out of economic hardship means a lot. It shows how the social fabric is unraveling.”

Greece has relied on international rescue loans since May 2010. To secure them, Athens implemented harsh austerity measures, slashing pensions and salaries while repeatedly raising taxes. But the belt-tightening worsened the recession and led to thousands of job losses that left one in five Greeks unemployed.

“As a Greek, I am truly shocked,” Dimitris Giannopoulos, an Athens doctor, said before the protest. “I am shocked because I see that (the government is) destroying my dignity … and the only thing they care about are bank accounts.”

Police said a handwritten note was found on the retired pharmacist’s body in which he attributed his decision to the debt crisis.

According to a text of the note published by local media, the man said the government had made it impossible for him to survive on the pension he had paid into for 35 years. “I find no other solution than a dignified end before I start searching through the trash for food,” read the note. Police did not confirm whether it was genuine.

Greece has seen an increase in suicides over the past two years of economic hardship, during which the country repeatedly teetered on the brink of bankruptcy.

Police did not release the pharmacist’s name and offered few other details.

By Wednesday evening, dozens of written messages had been pinned to the tree under which the man shot himself, some reading: “It was a murder, not a suicide,” and “Austerity kills.”

Hundreds of protesters made their way across the street from the square to outside Parliament and the Tomb of the Unknown Soldier, chanting: “This was not a suicide, it was a state-perpetrated murder” and “Blood flows and seeks revenge.”

Dozens of riot police stood guard.

Papadopoulos, the protest organizer, said the suicide shows Greeks can take no more austerity.

“This suicide is political in nature and heavy in symbolism. It’s not like a suicide at home,” Papadopoulos said in a telephone interview. “There was a political suicide note, and it happened in front of a clearly political site, Parliament, where the austerity measures are approved.”

Prime Minister Loucas Papademos issued a statement as protesters gathered at the site of the suicide.

“It is tragic for one of our fellow citizens to end his life,” he said. “In these difficult hours for our society we must all – the state and the citizens – support the people among us who are desperate.”

Government spokesman Pantelis Kapsis described the incident as “a human tragedy,” but said it should not become part of the political debate.

“I don’t know the exact circumstances that led that man to his act,” Kapsis said. “I believe we must all remain calm and show respect for the true events, which we do not yet fully know.”

Evangelos Venizelos, leader of the Socialist party, said the suicide “is so overwhelming that it renders any political comment unbecoming and cheap.”

“Let us reflect on the condition of the country and of our society in terms of solidarity and cohesion,” said Venizelos, who served as finance minister for eight months before resigning to lead the Socialists.

Conservative party head Antonis Samaras said the tragedy highlighted the urgency of getting Greece out of the crisis.

“Unfortunately, this is not the first (suicide),” he said. “They have reached record levels.”

_____

Associated Press Television News’ Efty Katsareas contributed.

Need help? In the U.S., call 1-800-273-8255 for the National Suicide Prevention Lifeline.

Greek Suicide: Austerity Measures In Greece Lead To Elderly Man Killing Self In Syntagma Square.

15 Trillion Dollars In Debt, 45 Million Americans On Food Stamps And Zero Solutions On The Horizon

November 3, 2011

How does a country end up 15 trillion dollars in debt? 30 years ago, we were just a little over a trillion dollars in debt.

How in the world do supposedly rational people living in “the greatest nation on earth” allow themselves to commit national financial suicide by allowing government debt to explode like that?

It almost seems like there should be some sort of official ceremony in Washington D.C. to commemorate this achievement. It really takes something special to be able to roll up 15 trillion dollars of debt.

To get to this level, we really had to indulge in some wild spending. For example, did you know that the U.S.national debt grows by more than 2 million dollars every single minute? All of this debt has fueled an unprecedented boom of prosperity for the last 30 years, but now that prosperity is drying up.

Today, there are over 45 million Americans that are on food stamps. America is being deindustrialized at a blinding pace and there are not nearly enough jobs for everyone. Poverty is exploding all over the nation, and millions of families have lost their homes to foreclosure.

Unfortunately, there are zero solutions on the horizon. The leaders of both major political parties seem even more clueless right now than in past years. We really could use some hope, but hope is in very short supply.

When evaluating the health of America’s economy, it is important not to look at the short-term numbers. Rather, the key is to look at the long-term trends and the balance sheet numbers.

For example, if a mother and a father gave their teenage kids a bunch of credit cards and told them to go out and buy whatever they wanted, that would create a lot of “economic activity”, but it would also send that family to the poorhouse really quickly.

Well, we have basically done the same thing as a nation. We are drowning in debt, and all of this debt is going to destroy us financially.

Unfortunately, the federal government continues to spend money as if there was no tomorrow. Right now, spending by the federal government accounts for about 24 percent of GDP. Back in 2001, it accounted for just 18 percent.

When you are running up a credit card, it can be a lot of fun and it can seem like there aren’t any consequences.

But when it comes to debt, there are always consequences. The following is what former Republican Senator Alan Simpson (of the Simpson-Bowles Commission) recently had to say about the horrific debt crisis we are currently facing….

“It’s very simple. If you spend more than you earn, you lose your butt”

In the United States, we love to have the government spend money on all sorts of things, but we never want to pay for it.

So the debt just keeps piling up higher and higher.

A lot of Republicans say that spending on social programs has gotten out of control. A lot of Democrats say that spending on the military has gotten out of control.

They are both right. As I have written about previously, the U.S. military accounts for close to half of all the military spending in the world. In fact, U.S. military spending is greater than the military spending of the next 15 countries combined.

Yes, we will always need a very powerful military, but we can have one without going broke in the process.

But an even larger problem is our rampant spending on social programs.

The following comes from a recent article by Janet Tavakoli….

In 1950 spending for social programs was only one percent of the total Federal Budget. As the economy grew, social programs expanded to include Social Security, Medicare, Medicaid, Food Stamps, Unemployment Compensation, Supplemental Security for the Disabled, and educational programs. In 1983 as the United States pulled out of an ugly recession and brought inflation under control, social programs consumed 26% of the budget. In fiscal year 2012, they’ll eat up an estimated 57% of the budget.

Tens of millions of Americans have become absolutely addicted to government money. Nobody ever wants “their government benefits” to be cut, but nobody ever seems to want to have their taxes raised to pay for them.

To get a really good idea of how government transfer payments have absolutely skyrocketed over the years, just check out this chart.

Obviously, the course that we are on is not anywhere close to sustainable.

To say that the “war on poverty” was a failure would be a huge understatement.

The more money we seem to spend on social programs, the more that poverty seems to grow.

Right now, there are over 45 million Americans on food stamps. The economy is supposed to be “recovering”, but the number of Americans on food stamps has grown by over 8 percent in just the past year.

Food stamps are the modern equivalent of the old-fashioned bread lines. The federal government is now feeding an almost unbelievable number of Americans.

According to the Wall Street Journal, nearly 15 percent of all Americans are now on food stamps. That means that approximately one out of every seven Americans is dependent on the federal government for food.

That is not just a crisis – that is a total nightmare.

So what can be done?

Well, we certainly shouldn’t let our people starve in the streets.

But handouts should only be a temporary solution.

What these people really need are good jobs. Unfortunately, our “leaders” have created a business environment in this country that is incredibly toxic, and they have stood by as millions upon millions of good jobs have been shipped out of the country. That is one of the reasons why I write about the insane trade policies of the globalists over and over and over. The American people need to understand that globalization is going to mean a continuing loss of jobs for this country and it is going to result in the destruction of the middle class.

If we are not going to provide good jobs for American workers, then we are going to have to pay higher taxes in order to feed them and take care of them.

But what happens when the “safety net” breaks?

Even now, a lot of state and local governments all over the country are flat broke and they are cutting back on assistance for the poor.

The following is a brief excerpt from a recent article about this issue that was posted on the Fiscal Times….

For years, hundreds of thousands of people in dire straits – mentally or physically disabled, homeless and unemployed, ineligible for federal welfare, disability, or food subsidies – could generally count on state or local government largesse for modest handouts of cash to help scrape by. Under the rubric of “General Assistance,” these down-and-out Americans received modest payments – often no more than a few hundred dollars a month – to help defray the cost of necessities including rent, food, clothing, toilet paper, aspirin, phone cards, and bus tickets.

But in the midst of the worst recession of modern times and changing attitudes about the poor, many states have been gradually chipping away at general assistance programs or eliminating them altogether. Only 30 of 50 states currently offer any form of general assistance – down from 38 in 1989. And just this week, Washington State formally ended its “Disability Lifeline” program for an estimated 18,000 to 22,000 economically desperate residents.

Sadly, even more of us may be joining the ranks of the poor soon. The layoffs just keep on coming.

Normally, most major store closings do not happen until after the holiday season. You see, the reality is that most troubled retailers tend to want to bring in one more year of holiday sales before they finally shut the doors. If you announce store closings before the holidays, that is going to make holiday shoppers less likely to shop at those stores.

So that is why some of the recent store closing announcements have been so troubling.

For example, it just came out that all 46 Syms and Filene’s Basement stores are closing.

Also, Gap recently announced plans to close 189 stores in the United States.

So if this is what we are already seeing now, what is going to happen after the holidays?

That is a very good question.

So many jobs are being lost all around the nation. These days, there is massive competition for just about any job that is available.

People are getting desperate. They just want to be able to pay the bills and take care of their families.

The other day, thousands upon thousands of people lined up to apply for casino jobs in south Florida. Scenes like this are going to become even more frequent in the years ahead.

So do our politicians have any solutions?

Of course not.

The worst of the Republican candidates are actually at the top of the polls. The cold, hard truth is thatRomney, Cain and Perry are all clueless when it comes to the economy.

Of course you might as well call Barack Obama “Captain Clueless” when it comes to the economy. Obama keeps giving great speeches about jobs while at the same time signing more “free trade” agreements that will send thousands more businesses and millions more jobs out of the country. Even the CEOs onObama’s jobs creation panel are shipping huge numbers of jobs out of the United States.

Obama gave a speech in Washington D.C. today that exemplified his clueless approach to the economy. During the speech, Obama made the following statement….

“If Congress tells you they don’t have time, they got time to do it. We’ve been in the House of Representatives, what have you guys been debating? John, you’ve been debating a commemorative coin for baseball? You have legislation reaffirming that In God We Trust is our motto. That’s not putting people back to work. I trust in God, but God wants to see us help ourselves by putting people back to work”

First of all, Obama is not putting people back to work. He has been helping big corporations ship jobs out of the country at a record pace.

Secondly, how does he know what God wants?

A lot of people actually think that the phrase “God helps those who help themselves” is in the Bible.

But it isn’t.

A while after the Obama speech, White House Press Secretary Jay Carney made matters worse when he told reporters the following….

“I believe the phrase from the Bible is ‘The Lord helps those who help themselves”

But once again, there is no such verse in the Bible.

Okay, so quoting a “mystery verse” from the Bible is not that big of a thing at the end of the day, but this is yet another example of how the Obama administration just can’t seem to get anything right.

Look, everyone makes mistakes once in a while. I know that I certainly do.

But when you are wrong about almost everything almost all of the time, that is a major problem.

Especially when you are the president of the United States.

But both political parties are to blame for the mess that we are in. Budget deficits exploded during Republican administrations just like they have under the Democrats.

Both political parties are responsible for us being 15 trillion dollars in debt.

Both political parties are responsible for 45 million Americans being on food stamps.

Both political parties are responsible for the fact that there are not nearly enough good jobs.

If Barack Obama, Mitt Romney or Rick Perry is elected in 2012, we are just going to have more of the same.

America is running out of time. If we are going to change course, we need to do it immediately.

The borrower is the servant of the lender. We are enslaving ourselves and we are enslaving future American generations by going into so much debt.

Shame on the politicians that have rolled up so much debt in our name and shame on us for continuing to send those same politicians back to Washington D.C. time after time after time.

It is so sad to watch what is happening to America.

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