Straws in the Wind 11-8-07
Straws in the Wind
Foreboding Headlines this morning:
Markets and Dollar Sink As U.S. Slowdown Grows; Homeowners Feel the Pinch of Lost Equity; Dow Falls 360--Oil is Pushing Gas Prices; House of Representatives Backs Broad Protections for Gay Workers; Ohio Goes After Failing Charter Schools; New York Attorney General Investigating Mortgages; Southwest Airlines Ends Open Boarding Policy--Business class fliers to get preference; Flying greatly increases risk of blood clots.
MARKET MELTDOWN CONTINUES
The Dow is down 187 points at 1:pm and NASDAQ has dropped even more as the decline has spread to the tech sector of the market. The talking heads on CNBC are debating whether we are headed for a recession. Maria Bartiromo commented that someone said "We can live with $100/barrel oil but what about $200/barrel oil--December 2008 oil futures are going for $200/barrel." Pessimism appears to be rife on Wall Street today.
APPRAISERS AND MORTGAGE LENDERS COLLUDED TO INFLATE HOME VALUES
NY attorney general, Andrew Cuomo, has subpoenaed Fannie Mae and Freddie Mac over what he calls "widespread collusion between real estate appraisers and lenders, including Washington Mutual, to inflate home values. "We believe it is widespread. It is prevalent," Cuomo said. First American, the country's largest title insurer is under investigation for artificially increasing appraisals in order to get Washington Mutual's business. And so the rot spreads increasingly throughout the mortgage industry from top to bottom. Somebody should do a story on honest mortgage lenders and appraisers if they can find one!
FED CHAIRMAN BERNANKE SENATE TESTIMONY TODAY
Bernanke calls on Congress to loosen FHA lending requirements; says subprime crisis is impacting wider economy; points out that creditworthy borrowers with subprime adjustable rate mortgages are finding it difficult to refinance their mortgages; advises people behind in their mortgage payments to contact their lenders ASAP and try to work out their situation short of foreclosure. He said banks are saying that borrowers frequently don't respond to their notices or attempts to reach people in trouble with their mortgages.
CRACKS IN GOP BASE?
Cracks in the GOP base appeared this week as wingnut Pat Robertson announced his support for plain nut Rudy Giuliani despite Giuliani's past support for abortion and gay rights and his three marriages, while arch GOP movement conservative Paul Weyrich endorsed Mitt Romney and conservative right candidate, as he withdrew from the race for the GOP nomination, announced his support for John McCain. And many evangelicas are supporting Mike Huckabee as well as Chuck Norris for whatever that's worth. (Not much!) Is the GOP policy of sharp divisiveness based on race and cultural issues devised by Newt Gingrich and honed to a razor's edge by Tom DeLay coming unglued? Too early to tell for sure but it sure appears so.
GIULIANI PARTNER FACES CRIMINAL INDICTMENT
Bernie Kerik, Mafia-connected NYC police commissioner under Giuliani and his business partner, was criminally indicted today for tax fraud, conspiracy and corrpution. On Giuliani's recommendation, Bush nominated Kerik for head of Homeland Security but he was withdrawn after the roaches started crawling out of the woodwork.