** Housing Bubble Splatter/Slime still oozing: Bad news, foreclosure numbers are inching back up in Las Vegas, NV; good news home prices have started to climb up a bit. [Las Vegas Sun] Realytrac has more numbers. What is even more interesting is that now Elko and Churchill Counties have been included in the high range of home foreclosures. There may be some hope on the horizon, the Washington Post notices some positive signs in the housing market. Meanwhile, the government settled with Wells Fargo over discriminatory practices in the mortgage market to the tune of $175 million. [DoJ]
** Why should voters praise Romney’s business experience if he doesn’t know where his money is? Or does he? The Romney campaign says the former Massachusetts governor cannot be accountable for actions taken by Bain Capital after Mr. Romney’s departure from the company — even though he founded the company and directed its course as a pioneer in business consulting in mergers and acquisitions. This Boston Globe article opens with “Government documents filed by Mitt Romney and Bain Capital say Romney remained chief executive and chairman of the firm three years beyond the date he said he ceded control, even creating five new investment partnerships during that time.” The Romney camp responded that the former Governor was not “active” in Bain management after Feb. 1999, or might we say: “I did not have management with that firm?“
For a closer examination of Mr. Romney’s financial reports, limited as they are, see Crooks & Liars on the Romney off shore accounts. There’s more information at The Nation’s “Romney’s Donors Share His Love Of Offshore Tax Havens.” The question really is obvious: Why go to all the bother of moving money off-shore if the purpose ISN’T to avoid paying taxes?
Governor Romney’s been “tough on China” of late, however once there was a manager of Bain Capital who ” invested heavily in a Chinese manufacturing company that depended on US outsourcing for its profits—and that explicitly stated that such outsourcing was crucial to its success.” [MotherJones]
** LIBOR rigging and the financial sector that spawned it continue to make news. If you were wondering why this should be of any interest to you, there is an excellent infographic from Deal Book. Still wondering? Note 45% of prime mortgages and 80% of subprime mortgages are based on the LIBOR (London Interbank Offer Rate) and about 50% of student loans are tied to LIBOR. Business Insider has a more colorful version, also a good place to start, and it illustrates how the LIBOR affects some $800 Trillion in securities and investments.
Now that you have the basics, you might want to see where the scandal is headed. JPMorgan has already been implicated. Now there are questions about the role of the Federal Reserve Bank of New York. [Telegraph] Massachusetts is beginning an investigation to see if any of its public agencies were affected by the LIBOR manipulations. [BostonGlobe] The situation could get uglier as some cities file lawsuits stating that manipulated borrowing costs damaged their loans and investments. [HuffPo] The article explains why the “just shrug it off there’s nothing to see here” protestations from Wall Street may not be accurate:
If the banks were responsible for moving the three-month Libor rate by just 1/100th of a percentage point on that entire universe of $800 trillion in notional derivatives contracts, then that would be worth $20 billion, according to Tchir’s calculations.
“Banks are probably not going to be on the hook for derivatives worth anything close to that $800 trillion. But if banks manipulated rates by more than that 1/100th of a point, or for more than 90 days — the term of three-month Libor — on even smaller notional derivative amounts, then the numbers can still get big in a hurry. And that doesn’t even include punitive damages. And it doesn’t include the estimated $10 trillion in mortgages and other loans tied to Libor, including $275 billion worth of U.S. mortgages, according to an estimate from the Office of the Comptroller of the Currency referenced in the FT.”
There are Big Bucks involved in this game, and entities from school districts to homeowners have skin in it. The Economist warns the scandal is about to go global in a must read piece, “The Rotten Heart of Finance.”
** Once upon a time a U.S. president called for higher taxes on the wealthiest Americans and the Republicans cried out, “Class Warfare, and Job Killer.” It was 1993 and Bill Clinton’s administration launched the longest economic expansion in recent history and created 23 million jobs. More at Perrspectives. Sound familiar?
** Oh those tax and spend Democrats! Oh,…wait. There’s this:
“Yesterday, a new Congressional Budget Office report said that in 2009, taxes were at their lowest rate in 30 years and that does not include the other tax cuts this President enacted since 2009. In fact, President Obama’s historically low taxes were less than Bush I, Clinton, Bush II, and Reagan administrations, but Republicans will never admit that inconvenient truth, but there’s more.” at [Politicususa]
So, now do the Congressional Republicans want to hold tax cuts for 98% of the American public hostage in order to secure extended tax cuts for 2%?
Taxed Enough Already? In the REAL world federal taxation rates are the lowest they’ve been since 1979:
Sometimes it’s hard to get Republicans to move from closely held Ancient Truths, but in the case of taxation there’s really no argument anymore about the average rate of federal taxes. However, e-mailing the little graphic to fuzzy math Uncle Fester could produce some interesting sounds? He probably won’t want to read the full article at the Washington Post, because it’s “from one of ‘em librul media buyass places.”
** Body parts. NV Progressive neatly eviscerates Senator By Appointment Only™ Dean Heller’s attempt to attack Rep. Shelley Berkley on vague “ethics” allegations. ™Gleaner. Could it be that Senator Heller forgot he worked with Representative Berkley to save the UMC’s kidney transplant center?
While we’re on the subject of news — there’s this piece from Media Matters about local political reporting and who’s paying for it. Must Read!