Wednesday Night Commentary

Wednesday Round Up
- Obama passes roughly 275 billion housing plan.
- Plan calls for help to up to 9 million homeowners to refinance or modify their mortgages. Those who
have little equity or even own more than their homes are worth. This will be through both Fannie and Freddie
- 75 billion in direct spending will go to those who are at risk of foreclosures in order to modify loans
-Officials stating today that it will still not even come close to slowing foreclosures.
-Will individuals who misrepresented their income or assets on their original mortgage application be eligible to get taxpayer-funded assistance?
- Doesnt increase demand of houses, doenst solve over supply of houses
- Seems to only be aimed at owners who are in trouble of losing their homes.
- Those who have made all their payments have a right to be upset.
- Huge problem with modifying loans that are already part of another existing security
- Plan includes financial rewards to encourage mortgage companies to modify deliquent mortgages. Also incentives for servicers
and mortgage holders to modigy loans of borrowers at risk of foreclosure.
-Plan limits to only those mortgages owned by Fannie/Freddie- excludes some of the hardest hit markets
- Modifying mortgages is not easy though. Read this for more http://www.nytimes.com/2009/02/19/us/19loans.html?hp


-Euro rises from 3 month low on talks that Germany will signal/provide aid for the hurting Euro region.
- Also in Germany a draft of legislation allowing the state to take over lender Hypo Real Estate Holding AG, paving the way for the first German bank nationalization since the 1930s.

-United States long term inflation number out at 2%
- Officials also downgraded their forecasts for growth this year (set at 1.3%) due to recession and credit crunch.
- The Unemployment rate climed in January to 7.6%, the highest level since 1992. Unemployment is expected
to ride to somewhere around 8%.
- “There is no quick end in sight,” JPMorgan Chase & Co. CEO Jamie Dimon said in a statement for the group.

the Europe crisis plot thickens
-Robert Zoellick, World Bank president, has called for European Union-led co-ordinated global support for the economies of central and eastern Europe, even as divisions emerge in the EU over handling the crisis.

So looks like UBS in Switzerland helped clients to evade US taxes..
From FT "UBS on Wednesday agreed to pay $780m (£548m) in fines and turn over some customer names to the US government as part of a landmark settlement in which the Swiss bank admitted it helped thousands of clients evade taxes."

Dan