Weil on Finance: Killing Fannie and Freddie
Happy Friday, View fans. Here a look at my breakfast reading this morning.
What was Gene Sperling trying to say ?
Speaking at a housing-finance symposium this week, Gene Sperling, the director of the White House's National Economic Council, said President Barack Obama's administration wouldn't support recapitalizing Fannie Mae and Freddie Mac. And I get that. (Sorry, hedge-fund guys: This isn't your call.) The administration's position has long been that Fannie and Freddie should be wound down. What I don't understand is how the White House plans to go about this. I mean, the companies have been in conservatorship for more than five years. Here's what Sperling said about the White House's views on legislation proposed by Senators Bob Corker, a Tennessee Republican, and Mark Warner, a Virginia Democrat, under which the companies would be liquidated: "We were very engaged in helping when asked with the drafting of the Corker-Warner legislation. That doesn't mean that we agree with every aspect of it, but we saw it as a good and constructive effort and it was worthy of our cooperation. What Sens. Corker and Warner put together is an important start." So, he sees things wrong with the bill, but it isn't clear what they are. Here's a thought. Who wants to take bets on which lasts longer: Fannie/Freddie or the Fed's quantitative easing?
Main Street low finance
is a lot like Wall Street high finance
Here's a story by New York Times reporters Jessica Silver-Greenberg and Peter Eavis about payday lenders preying on members of the military by charging them outrageously high interest rates. Seven years ago Congress passed the Military Lending Act, which was supposed to curb abuses. But it turns out the law has a lot of gaps, and payday lenders are exploiting them. This is the same thing that always seems to happen whenever Congress passes new laws aimed at reining in Wall Street, too, such as the Dodd-Frank Act. There's always a workaround.
of the day JFK died
Bob Ivry of Bloomberg News looks back at that day 50 years ago, through the eyes of former New York Stock Exchange traders: "At 1:29 p.m. New York time, as the president's car, on its way to the luncheon, approached the Texas School Book Depository in Dallas, Donald Stone, a 39-year-old trader for E.H. Stern & Co., rode the elevator up to the Stock Exchange Luncheon Club and ordered his usual: chicken salad. Stone said he saw a guy running between the tables. He stopped him. The guy said Kennedy's been shot. Stone asked him if he meant Jack, the president, or Bobby, the attorney general. The guy said Jack. Stone said he raced downstairs. On the floor of the exchange, a clerk yelled, `The president's been shot!' The sound of selling grew into a roar."
Draghi: We must
destroy interest rates
in order to save them
I understand the logic here, but it's funny to see it in print anyway. European Central Bank President Mario Draghi gave a speech today in Frankfurt, Germany, where he expressed empathy for savers but said that rates must be kept low now so they can be higher later: "I understand the concerns about a prolonged period of low returns on savings. But it is important to understand that interest rates are low because the economy is weak. If we raised rates, we would further depress the economy, people would lose their jobs, and then their savings would be lower for longer. By keeping interest rates at a level that supports the recovery, we should see higher interest rates for savers going forward."
No, Samsung didn't try to pay Apple its $1 billion patent-infringement award
It's just a silly Internet rumor, according to the Guardian.
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Jonathan Weil at email@example.com