The Attorneys General of California and Nevada, Kamala Harris and Catherine Masto, have joined forces to pursue the banks that were involved in the foreclosure crisis to the ends of the earth. This is crusading stuff. But will it actually help? The LA Times sums it up:
The new alliance between Harris and Masto comes as the largest banks are working to strike a deal with a coalition of attorneys general and federal agencies that is led by Iowa Atty. Gen. Thomas Miller, who has forced the mortgage industry to accept large settlements in the past.
Masto has said the state would evaluate any proposed deal but would push ahead with her own work. New York, Delaware, Kentucky and Minnesota have signaled they are unhappy with the direction of the talks with the banks. New York and Delaware have struck their own agreement to pursue a wider probe of Wall Street's role in the mortgage meltdown.
The negotiations were expected to have produced a settlement of as much as $25 billion for the states, including a provision that would write down principal for troubled borrowers, a move long pushed for by housing advocates. But despite pressure from the Obama administration for a quick settlement that might give the beleaguered housing market a boost, those talks have dragged on for more than a year.
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U.S. Treasury Secretary Timothy Geithner.
As the sovereign debt crisis continues to roil Europe, the eurozone is currently in the process of trying to save the euro single currency by deposing elected political leaders — Papandreou in Greece, Berlusconi in Italy, the socialists in Spain — and replacing them with "technocrats," or economic experts who, in theory, will be able to make the dispassionate, non-political, utterly essential decisions that need to be made.
Can't happen here, right? Well, maybe it's happened already. Take as Exhibit A one Tim Geithner, U.S. Treasury secretary and according to the Atlantic's Dan Indiviglio, a man disliked by all but his boss, one Barack Obama.
Geithner is probably the closest creature to a technocrat we have in American government. And he runs practically the entire economy (the Federal Reserve runs the rest, and its part is extremely not insignificant). So who needs to hire technocrats when we already have one in the top job?
Hundreds of Occupy protesters gathered in downtown L.A. for a march through the financial district.
Here's a real barn-burner of an opinion essay from David Coates, a professor at Wake Forest who harbors no love for the global banking class — the financial elites who brought us the financial crisis, as well as the eurozone crisis, and who are currently getting rid of elected leaders in Europe at a brisk clip while doing whatever it takes to stall reform in the U.S. Not surprisingly, Coates sees Occupy Wall Street — which in recent weeks has come under siege from authorities — as being a populist movement that's trying to push back against the bankers.
This a taste of his lash, from the Huffington Post:
We live in troubled and ironic times. The times are certainly troubled. The IMF's Managing Director has recently spoken with some justification of a looming "lost decade" for the global economy — warning of "dark clouds" blocking the capacity of the world's leading economies to deliver a renewed bout of economic growth and generalized prosperity. The times are also deeply ironic: since the governing solution to those dark clouds — in countries as substantial as Italy and Greece, and in institutions as powerful as the IMF — would currently appear to be the replacement of elected leaders by appointed technocrats. The solution favored by the powerful is the transfer of state authority from democratically chosen leaders to governors drawn predominantly from the ranks of the very bankers whose inadequate supervision of their own industry darkened the skies in the first place. In this manner, a global financial crisis that initially discredited bankers has incrementally morphed into one to be settled on terms directly specified by bankers themselves. A crisis of economics has been turned into a crisis of democracy. It is an outrage.
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A foreclosure sign sits in front of a home for sale.
Another month, another Case-Shiller index on housing prices — and more bad news for the housing economy. This is from the Wall Street Journal:
The Case-Shiller data come on the heels of the White House's revamp of a mortgage-refinance program for "underwater" borrowers—those who owe more than their homes are worth. But economists say there are few quick fixes for the housing crisis, and easier refinancing rules will do little to address weak demand for homes.
"It was a very bad spring-to-summer-market season," said Nancy Wallace, a finance professor at the University of California at Berkeley. She said a turnaround in the housing market remains largely dependent on loosening credit and a surge in hiring. "People are almost afraid to apply for mortgages and lots of people have little scratches and dents on their credit right now."
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Elizabeth Warren, chairman of the TARP Congressional Oversight Panel, testifies at a hearing on Capitol Hill, on July 22, 2009 in Washington, DC.
Were you wondering why some big banks are reporting big profits, even as markets are driving down their share prices? Blame it on...accounting: "'This is the most vilified accounting rule I've ever seen. It's amazing how universally despised it is,'" said Robert Willens, author of the Willens Report, which analyzes corporate accounting and tax matters." (Reuters)
Somebody loves Massachusetts Senate candidate Elizabeth Warren: "She is provocative and assertive in her critique of corporate power and the well-paid lobbyists who protect it in Washington, and eloquent in her defense of an eroding middle class." (NYT)
What it was like in SoCal when aerospace was booming: "...dozens of airfields dotted the landscape; test-rocket firings flashed and echoed in the foothills; and the local economy became yoked to the boom-and-bust cycles of defense spending. In the process, aerospace helped drive the extraordinary metamorphosis of California from a rural, agrarian state to the sixth-largest economy in the world." (Zócalo)