Articles About Economics

Bank of America (BofA) is taking steps to write down mortgage principal owed by thousands of underwater homeowners in what has been termed “the mortgage industry’s boldest move yet” to resolve the nation’s foreclosure problem.  Bank of America can well afford the initiative. According to Betsy Graseck, a Morgan Stanley analyst, the ultimate cost of […]

Simon Johnson, a professor at M.I.T.’s Sloan School of Management and former chief economist at the International Monetary Fund, raises the question of “As we move closer to a Senate – and presumably national – debate on financial reform, the central technical and political question is:  What would prevent any bank or similar institute from […]

The United States economy is entering an era of sustainable growth as companies begin hiring again.  That’s the opinion of Treasury Secretary Timothy Geithner, who said “I think the economy is definitely getting stronger. We’ve made a lot of progress, we’ve got some work to do still and it’s going to take some time to […]

Senator Christopher Dodd (D-CT), chairman of the Senate Banking Committee, introduced revised legislation to regulate the nation’s financial system.  The plan would create a nine-member council, led by the Treasury secretary, to be on the alert for systemic risks, and direct the Federal Reserve to oversee the nation’s largest and most interconnected financial institutions. The […]

The Federal Reserve is ending its purchase of mortgage-backed securities, a sign of confidence that the nation’s economic recovery is well underway.  At the same time, the Fed voted to retain its benchmark interest rate at approximately zero percent, because of remaining economic weakness and the lack of inflation.  According to the Fed, it will […]

The Obama administration has announced a new initiative to assist troubled homeowners by helping them refinance with government-backed mortgages that cut monthly payments.  The program would also temporarily reduce payments for unemployed borrowers who are actively job hunting.  The government is encouraging lenders to write down the value of loans for borrowers participating in modification […]

A draft of President Barack Obama’s financial reform legislation has been sent to Congress.  Dubbed the Volcker Rule in honor of the former Federal Reserve chairman’s  aggressive pursuit of these regulations, the five-page proposal will ban proprietary trading and mergers that give banks more than a 10 percent market share as measured by liabilities that […]

The Congressional Budget Office has determined that the Troubled Asset Relief Program (TARP) will cost the government $109 billion – just 16 percent of the $700 billion set aside to rescue the nation from the great recession.  Insurance giant AIG and the auto industry are TARP’s largest beneficiaries. The federal government bought $40 billion in […]

A decade before the financial meltdown, one woman was sounding the alarm that a catastrophe was coming.  That woman is Brooksley Born, who correctly predicted that investments known as over-the-counter derivatives could cause a financial crisis.  As Chairman of the Commodity Futures Trading Commission (CFTC) during the second Clinton administration, Born would wake up “in […]

Despite the Snowmageddon that crippled Washington, D.C. and much of the East Coast during February, the economy continued to grow at a modest rate.  This is the opinion of the Federal Reserve’s newly issued Beige Book report – officially known as the “Summary of Commentary on Current Economics Conditions by Federal Reserve District” — which […]