Yesterday the Financial Times reported that Edward DeMarco, acting director of the Federal Housing Finance Agency which oversees Fannie Mae and Freddie Mac, is resisting banking lobbyists' efforts on Capital Hill and in the Obama administration to have nearly a trillion dollars in banking losses paid by taxpayers. Elements in the Obama administration who have crafted a scheme to have banks reduce loan balances on homes in foreclosure or about to go into foreclosure, want these GSAs to take responsibility for mortgage reductions in order to preserve the major banks' investments in second mortgages and lines of credit that the homeowners had taken on. In normal foreclosures and bankruptcy proceedings the banks seconds would be defaulted causing them to lose money. The present plan requires the GSAs (thus the taxpayer) to take the loses.
Edward DeMarco, acting director of the Federal Housing Finance Agency
re: Edward DeMarco, acting director of the Federal Housing Finance Agency
Ukraine or Greece real threat is oligarchs and warlords Wolfgang Munchau (Financial Times, 27 April, 2015, "The real threat lies in Ukraine rather than Greece") is correct that the EU faces a debacle from its involvement in Ukraine. However, the problem is amplified by the fact that the EU is struggling on 3 fronts: Ukraine, Greece and the immigrant crisis in the Mediterranean. The combination is lethal, especially since none have obvious solutions. Of the 3 Greece seems the simplest, extend the loans and have expectations that things with improve. The debt situation in Greece was known to the EU as it grew over the past decade and Greece should not have been admitted in the first place given the economic problems it had from the beginning. However, the EU has made many poor decisions simply on political grounds, as when Cyprus was admitted. In 2004 it was clearly a mistake had been made on Greece as the Independent reported at the time: " The Finance Minister, George Alogoskoufis, said the true scale of Greece's budget deficit was massively understated enabling Athens to dip below the qualification bar and into the EU's single currency." (16 November 2004). As for Ukraine, Roman Olearchyk reports (FT 27 April 2015, "President tackles oligarchs' stranglehold on economy") a new crisis. The battle of the Ukrainian oligarchs is more of a contest of "the pot calling the kettle 'black'." Before the EU encouraged the Ukraine there should have been substantial movement to transparency of the looting of the country and a correction. The IMF and EU loans are bad money after worse and the accounting of the nation is a ruin as is the economy. Things will not improve soon. As in the European meddling in the former Yugoslavia, encouragement for independence led to a horrific civil war and the EU has pushed Ukraine to the brink of a similar conflict. The oligarchs will act as Tudjman and Milosevic did carving out defensible territories and consolidating by exterminating opponents. The best strategy for the EU here is to back off. Then the EU can concentrate on the immigration disaster which has few possible solutions, least of which is an orderly Libya. Yet free of these other millstones, the EU will at least have the resources and less distraction. Niccolo Caldararo, Ph.D.Dept. of AnthropologySan Francisco State University