EconomicCrisis.US

The Obama administration is launching a new effort to prop up the housing market by restoring financing to state and local housing agencies.

Such agencies, known as HSAs, help low- and moderate-income families purchase homes or attain affordable rental housing. They have come under strain amid the financial crisis as investors have shunned their debt, forcing the agencies to curtail their activities.

The administration on Monday announced that Treasury would begin purchasing securities from Fannie Mae and Freddie Mac backed by new housing bonds issued by the HSAs to fund their activities. In addition, Fannie and Freddie will launch temporary credit and liquidity facilities for the HSAs. The state agencies will pay a fee for access to both programs.
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The first major criminal trial against top Wall Street execs involved in the financial crisis kicked off in New York yesterday. Bear Stearns hedge fund managers Ralph Cioffi and Matthew Tannin are accused of misleading investors in a desperate attempt to stop them from abandoning the funds, even as they themselves yanked their money out and admitted the subprime market is “toast” in personal emails. The collapse of the fund cost investors $1.6 billion.

“These two defendants lied to their investors to save their multimillion-dollar bonuses,” an assistant US attorney told jurors. “In the United States of America that’s a crime and it’s called securities fraud.” The pair—who face up to 20 years in jail if convicted—are accused of chicanery during the financial crisis but not of actually causing it, the Independent notes, although that distinction may matter little to jurors likely to be hungry for payback after the economic misery of the last two years. “This is not a revenge opportunity,” the judge cautioned them.
By Rob Quinn – newser.com

The deep and ongoing crises of leading capitalist countries, especially the United States, has provoked a debate over the causes, consequences and appropriate policies to remedy it.

The debate has revealed a deep division over the causes and remedies, with Anglo-Franco American (AFA) politicians, columnists and economists on one side and their Asian-German (AG) counterparts on the other. In general terms the AFA spokespeople put the blame for the crises on external factors, or more specifically they point their finger at the positive trade surpluses, dynamic export sectors and high investment rates in productive sectors and low levels of consumption in the AG countries as the cause of ”unbalances” or “disequilibrium” in the world economy .
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The Wall Street Journal is reporting today that the Obama administration is on the verge of committing as much as $35 billion in financing and subsidies to provide mortgages to low- to moderate-income families. Hmm… this sounds vaguely familiar. The government subsidizing the mortgage market making credit artificially easy — oh yeah! That was one of the reasons why the mortgage market overheated, and we fell into a deep financial crisis. Have we learned nothing?
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