My afternoon train reading:

Romney Rally: Banks, Health Care, Coal Stocks Big Winners (WSJ)
• Investors: 2nd Class Status Brings 2nd Rate Returns (Fiscal Times)
• Apartment Demand Ebbs as ‘Avalanche’ of New Units Open (CNBC)
• Jobs Report May Show a Big Surprise (WSJ)
WTF? Broker Sent Oil Prices to Eight Month High in a Drunken Stupor (Oil Price) see also California Gas Stations Begin to Shut on Record-High Prices (Bloomberg)
• Voting with the wallet (Economist)
Candidates Ignored Some Big Economic Issues in Debate (WSJ) see also Taking Stock of Some of the Claims and Counterclaims (NYT)
• Bank-Friendly U.S. Regulator Shifts to Revamp Reputation (Bloomberg)
• China, Robots/Automation and Unemployment (Econ Future) see also Oil Tumbles on Fears About China (WSJ)
• Map Apps to Bypass the Rivalry of Google and Apple (NYT)

What are you reading?

Burdened by Old Mortgages, Banks Are Slow to Lend Now

Source: WSJ

Category: Financial Press

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

13 Responses to “10 Thursday PM Reads”

  1. VennData says:

    The Romney test, “Is it worth it to keep your top rate temporary tax cuts, your carried interest special rate, your accelerated depreciation, your second home’s mortgage deduction? Is it worth it to borrow from China to do it?”

    If you say, “Well, now that’s different” you’re a Republican and think Romney is going to win even if he lied his ass off all night long…,0,5248662.story

  2. Gary says:

    I’m reading a blog post in which the author argues that fiscal stimulus (as advocated by Stiglitz most recently) will not fix the economies. Instead, the author argues that losses on excess debt must be taken by the banks to protect the real economy, examples being Iceland and Sweden.

    Obviously, the financial powerhouse that is the Blob (don’t you just love Connaughton for telling us its name inside the Beltway?) won’t appreciate the elegance of this solution, so I doubt it will be implemented barring the appropriate alignment of certain tail-ends of probability curves.

    Be that as it may, the article is thought provoking.


    BR: You know my view is most of our woes is the refusal to allow losses to occur naturally — to banks, bond holders, etc.

  3. gkm says:

    “Oil rises on hopes about China” link to follow when wording has been inverted.

  4. northendmatt says:

    The article on gas in CA mentioned the refinery problem in Torrance, but I think it missed the fact that there was one in Richmond too. The spike in CA gas prices seems to be short-term due to these issues.

  5. lalaland says:

    If the markets hate uncertainty so much, why is it so keen to see Romney elected? He has promised to roll back Dodd Frank (if it takes this long to write the rules, how long would it take to unwrite them, and re-write new ones), roll back Obamacare (but with lots of parts intact, so it will have to be completely rewritten), change the tax code, etc. If banks, coal companies, and health care companies jumped today it means the market thinks Romney will pick winners and losers, not decrease uncertainty. That sounds like crony capitalism, and imho that’s what Wall Street really loves -

  6. Bob A says:

    Fact-Checking Governor Romney’s Debate Numbers on Renewables and Loans

    DOE loan success rate: 98 percent; Bain Capital success rate: 80 percent

  7. [...] impact will be more political than investing, but watch the “Romney rally” stocks I linked to last night today for weakness . . [...]

  8. Jim67545 says:

    I have a problem with the graphic from the WSJ. It seems to imply that when a bank is forced to buy back a loan from Freddie/Fannie, it absorbes funds that would otherwise be used to make new mortgage loans, thereby reducing the supply of mortgage loans.
    Most mortgage loans are originated and, shortly thereafter, sold off to the secondary market (now mostly the GSEs.) Aside from the 2 or 3 weeks worth of flow on the books at any given time, the banks devote relatively little capital to this. So, however many mortgages they have to buy back and put on their books, it is unrelated to new mortgage funds availability.
    However, with the GSEs trying to find reasons to put back mortgages it would raise the bar considerably in terms of the quality of the borrower and the quality of the documentation required by lenders to get a home mortgage. So, some people who are borderline or below averagely qualified may be denied a loan just because the lender is fearful that the GSE will unilaterally decide, 12 months later, that it was not of sufficient quality (despite it perhaps qualifying in terms of the automated underwriting) and make them buy back the loan.
    Lenders do not want a bunch of low rate, 30 year fixed rate loans on their books. It is eventual suicide to have a lot of 30 year fixed rate mortgages on the books funded with very short duration, variable rate deposits. When deposit rates rise, as they eventually will, these mortgages become a losing proposition