This week in economic outrage has some real winners. Everyday there are so many injustices it is hard to keep up. Here are some cut to the chase boil downs of news and events you might have missed. As usual, corporations are running the government while the American people and labor be damned.
The Bank for International Settlements has demanded Central Banks stop their quantitative easing in hopes of a global economic recovery. All that has happened is a stock market love affair while the real economy languishes. BIS has issued their annual report demanding nations deleverage, which is codespeak for austerity.
The truth comes out on the mortgage fraud settlement. The OCC announced the payout terms and for most people, they get less than $1,000 out of the deal. Only in America can one be fraudulently foreclosed on, lose their home, have their credit ruined, only to be compensated less than $1,000 for the ordeal.
The Dow hit a record high yet for most of America this means little. While some fawn and fan over the high rise stock market, here are some stories that actually matter to real people with real lives.
It is 2013, five years after the start of a recession and two and a half years after so called financial reform legislation was passed. Yet, Too Big To Fail Banks have just gotten bigger, the financial system is still at risk and most of the disaster was buried in a mountain of bail out money.
There is nothing more frightening than when those in charge of the economy miss something that was as plain as the nose on your face. Such was the situation with the Federal Reserve and the subprime mortgage crisis in 2007. The FOMC met on August 7th and claimed there was not enough evidence of a subprime problem.
The Federal Reserve and the Office of the Comptroller of the Currency are cutting an $8.5 billion deal against ten of the largest banks for their systematic foreclosure and loan modifications abuse which resulted in millions losing their homes. From the settlement press release.
The FOMC just did a great thing. The Federal Reserve tied interest rates and quantitative easing to U.S. labor. The messaging alone is powerful. The Federal Reserve is saying, very clearly, U.S. workers matter. Businesses need to start hiring and increasing wages if they want to actually improve the overall economy.
About 5 million people—more than 40 percent of the unemployed—have been without a job for six months or more, and millions more who say they would like full-time work have been able to find only part-time employment or have stopped looking entirely. The conditions now prevailing in the job market represent an enormous waste of human and economic potential.
The QE3 has been officially launched today by the Federal Reserve, which has promised to buy $40 billion of asset-backed securities from the market each month, on top of $35 billion per month of Treasury securities it is already buying as part of its program to reinvest proceeds from securities which are maturing in its existing portfolio. If this isn’t enough to excite the animal spirits of the economy, the Fed has put no limit or end-date on QE3, and it has pushed out its promise to keep short term interest rates near zero for at least the next 2-1/2 years.
Why is the Fed buying mortgage-backed securities and not Treasuries, which it bought under QE1 and QE2? In the past fiscal year for the US government, the Fed purchased 77% of all the new debt issued by the Treasury, and because the Fed focused its purchases in the 10 year and beyond maturities, the Fed is bumping up against its self-imposed limit of not owning more than 70% of the outstanding paper in any maturity. The Fed is already close to this limit for maturities clustered around the 10 year mark, and the Fed owns on average 50% of all the outstanding paper in the 10 year to 30 year maturities. As Republicans have made clear in this election year, every Treasury purchased by the Fed is viewed as an attempt to influence the election of Obama, so this is a potent political reason to stay out of this market for the time being.
There is nothing more frightening than when those in charge of the economy miss something that was as plain as the nose on your face. Such was the situation with the Federal Reserve and the subprime mortgage crisis in 2007. The FOMC met on August 7th and claimed there was not enough evidence of a subprime problem.
The Federal Reserve and the Office of the Comptroller of the Currency are cutting an $8.5 billion deal against ten of the largest banks for their systematic foreclosure and loan modifications abuse which resulted in millions losing their homes. From the settlement
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