President Obama's budget is understandably getting all the news attention. But, our mission is to focus on what's inside the paper, not on the front page. That's why we say, go read the lead story on the budget. THEN read these two pieces.
1) Your Mortgage Deduction May Get Dialed Back.
Here's why you care: The Wall Street Journal's Nick Timiraos has an important nugget from the President's proposed budget: Top earners could see their mortgage deduction dialed back should the budget pass. Ah, but who are top earners? As we like to say in the legal profession, that's a defined term. Which, of course, is another way of saying it can mean whatever the author wants it to mean. Read Timiraos' piece and decide for yourself.
2) The Fund that Insures Your Bank Account? It Needs Money.
Here's why you care: As most people know the FDIC insures your bank account, which is to say if the bank implodes, you still get your money. When the bottom fell out of the market the insurance amount was raised from $100,000 to $250,000. But, there's a problem: The fund that insures the accounts is based on payments from banks. And, because more banks have gone under, or are in trouble, the fund's size is dramatically smaller. What to do? The Washington Post's Binyamin Appelbaum explains the plan.
Friday, February 27, 2009
Is Your Mortgage Deduction Federal Budget Roadkill?
President Obama's budget is understandably getting all the news attention. But, our mission is to focus on what's inside the paper, not on the front page. That's why we say, go read the lead story on the budget. THEN read these two pieces.
1) Your Mortgage Deduction May Get Dialed Back.
Here's why you care: The Wall Street Journal's Nick Timiraos has an important nugget from the President's proposed budget: Top earners could see their mortgage deduction dialed back should the budget pass. Ah, but who are top earners? As we like to say in the legal profession, that's a defined term. Which, of course, is another way of saying it can mean whatever the author wants it to mean. Read Timiraos' piece and decide for yourself.
2) The Fund that Insures Your Bank Account? It Needs Money.
Here's why you care: As most people know the FDIC insures your bank account, which is to say if the bank implodes, you still get your money. When the bottom fell out of the market the insurance amount was raised from $100,000 to $250,000. But, there's a problem: The fund that insures the accounts is based on payments from banks. And, because more banks have gone under, or are in trouble, the fund's size is dramatically smaller. What to do? The Washington Post's Binyamin Appelbaum explains the plan.
1) Your Mortgage Deduction May Get Dialed Back.
Here's why you care: The Wall Street Journal's Nick Timiraos has an important nugget from the President's proposed budget: Top earners could see their mortgage deduction dialed back should the budget pass. Ah, but who are top earners? As we like to say in the legal profession, that's a defined term. Which, of course, is another way of saying it can mean whatever the author wants it to mean. Read Timiraos' piece and decide for yourself.
2) The Fund that Insures Your Bank Account? It Needs Money.
Here's why you care: As most people know the FDIC insures your bank account, which is to say if the bank implodes, you still get your money. When the bottom fell out of the market the insurance amount was raised from $100,000 to $250,000. But, there's a problem: The fund that insures the accounts is based on payments from banks. And, because more banks have gone under, or are in trouble, the fund's size is dramatically smaller. What to do? The Washington Post's Binyamin Appelbaum explains the plan.
Thursday, February 26, 2009
Congress Takes on Modifying Mortgages in Bankruptcy
We've been highlighting the issue for a while (most recently in our Tuesday posting) that Congress would like to have bankruptcy judges be able to modify mortgages in court.
Here's why you care: On the one hand it would give an avenue for those underwater to make their case and move on. On the the hand, it is going to cost those that lend and/or hold those mortgages a bundle of money - which will be passed on to you the next time you borrow. None the less, the House is taking it up, and the Senate is next. We figure you've seen all the front page headlines on the President Obama's budget so we thought we'd highlight the mortgage story instead since you may have missed it. The Los Angeles Times' Jim Puzzanghera has a well written story laying out all sides, and the costs (and potential costs). Give it a read and you'll be ahead of the curve.
Here's why you care: On the one hand it would give an avenue for those underwater to make their case and move on. On the the hand, it is going to cost those that lend and/or hold those mortgages a bundle of money - which will be passed on to you the next time you borrow. None the less, the House is taking it up, and the Senate is next. We figure you've seen all the front page headlines on the President Obama's budget so we thought we'd highlight the mortgage story instead since you may have missed it. The Los Angeles Times' Jim Puzzanghera has a well written story laying out all sides, and the costs (and potential costs). Give it a read and you'll be ahead of the curve.
Wednesday, February 25, 2009
Envelope Pushing Obama Web Coverage & Two Stories You Shouldn't Miss in the Business Pages
WhyYouCare is breaking from our norm of highlighting one article today because of the deluge of post presidential address coverage. If for some unforeseen reason you missed President Obama's address to Congress you are saved by the internet. Just about every news organization has posted a transcript (like CNN has here). However, we are particularly impressed with the web producing by both the Wall Street Journal and the New York Times for different reasons.
The New York Times has posted the entire video of President Obama's address (like many news outlets) online. However, the New York Times has one-upped the others by providing written analysis that corresponds to the President's address. In other words, as the video plays and you listen the President, written reporters' analysis automatically scrolls by for that particular moment in the speech. Nothing short of terrific producing. Which bring us to the Wall Street Journal which picked certain topics in the speech and compared those words to prior Presidents'. You just need to click on economy and compare President Obama to Presidents Kennedy and Reagan. Also, nothing short of terrific. So, if you missed it, or want more, you got it.
But our mission statement is finding the buried stories that put you ahead of the curve, and today there are two.
Here's why you care: The first is Wall Street Journal's Nick Timiraos who has written a piece on crunching the numbers on the age old dilemma of buying vs. renting. You care if you already own because as prices drop buying becomes more attractive, thus eventually driving prices back up again. Read this story, he's ahead of the curve.
Here's why you care: Another reporter ahead of the curve is the New York Times' David Leonhardt who today outlines in his Economic Scene column that the cost of a strong military and programs like Medicare mean one thing in the coming years: Higher taxes. His reporting is based on comments made by Republicans and Democrats at the White House's fiscal responsibility summit which we noted on our events calendar. His column is thoughtful and forward looking, and thus you should give him a couple minutes of your time. He'll put you ahead of the curve.
The New York Times has posted the entire video of President Obama's address (like many news outlets) online. However, the New York Times has one-upped the others by providing written analysis that corresponds to the President's address. In other words, as the video plays and you listen the President, written reporters' analysis automatically scrolls by for that particular moment in the speech. Nothing short of terrific producing. Which bring us to the Wall Street Journal which picked certain topics in the speech and compared those words to prior Presidents'. You just need to click on economy and compare President Obama to Presidents Kennedy and Reagan. Also, nothing short of terrific. So, if you missed it, or want more, you got it.
But our mission statement is finding the buried stories that put you ahead of the curve, and today there are two.
Here's why you care: The first is Wall Street Journal's Nick Timiraos who has written a piece on crunching the numbers on the age old dilemma of buying vs. renting. You care if you already own because as prices drop buying becomes more attractive, thus eventually driving prices back up again. Read this story, he's ahead of the curve.
Here's why you care: Another reporter ahead of the curve is the New York Times' David Leonhardt who today outlines in his Economic Scene column that the cost of a strong military and programs like Medicare mean one thing in the coming years: Higher taxes. His reporting is based on comments made by Republicans and Democrats at the White House's fiscal responsibility summit which we noted on our events calendar. His column is thoughtful and forward looking, and thus you should give him a couple minutes of your time. He'll put you ahead of the curve.
Tuesday, February 24, 2009
Modifying Mortgages in Bankruptcy and a Crib Sheet for Tonight's Congressional Address
As we pointed out in our events calendar for the week, Next Week's News Today - there are two key hearings on Capitol Hill today. One examining TARP, and the other loan modifications. Those hearings provide the context for President Obama's address to Congress tonight (9p ET).
Here's why you care: The first hearing examines TARP and will undoubtedly address the issue of banks needing more cash, and how the administration plans to measure both the need and effectiveness of further cash injections into financial institutions (remember as we noted yesterday the "stress tests" for banks start tomorrow). But the second hearing caught our eye because we think it might get over looked. What may or may not come up in the hearing regarding loan modifications is a bill in the House that would allow bankruptcy judges to modify loans. CNN is running a good Reuter's wire story explaining what's in the bill which may get voted on by Thursday. The story does a good job of outlining the stakes and why you care. Meanwhile, given that all of this is happening as the President prepares to address Congress, we thought it worth a mention that the Washington Post staff put together something of a crib sheet or racing form breaking down all the areas of the economy that President Obama is likely to hit tonight. It is a great graphic to use alongside tonight's speech.
Here's why you care: The first hearing examines TARP and will undoubtedly address the issue of banks needing more cash, and how the administration plans to measure both the need and effectiveness of further cash injections into financial institutions (remember as we noted yesterday the "stress tests" for banks start tomorrow). But the second hearing caught our eye because we think it might get over looked. What may or may not come up in the hearing regarding loan modifications is a bill in the House that would allow bankruptcy judges to modify loans. CNN is running a good Reuter's wire story explaining what's in the bill which may get voted on by Thursday. The story does a good job of outlining the stakes and why you care. Meanwhile, given that all of this is happening as the President prepares to address Congress, we thought it worth a mention that the Washington Post staff put together something of a crib sheet or racing form breaking down all the areas of the economy that President Obama is likely to hit tonight. It is a great graphic to use alongside tonight's speech.
Monday, February 23, 2009
Bank "Stress Tests" Start Wednesday
As we noted in yesterday's posting of our events calendar for the week - Next Week's News Today - there's been a lot of talk about the nationalization of banks (see our explanation yesterday). And part of that has been in anticipation of the government checking on the health of banks receiving tax payer dollars ("stress tests"). Thus, we were not surprised to see on the front page of the New York Times this morning Edmund Andrews' story "As Doubts Grow, U.S. Will Judge Banks' Stability." We figure you saw it because it is on the front page. What you didn't see is the just released joint statement by the Treasury, FDIC, Federal Reserve, the Comptroller of the Currency, and the Office of Thrift Supervision saying the stress tests start this Wednesday, February 25.
Here's why you care: You care because the tests will indicate who is healthy, who is not and who simply needs more access to cash. That's the reason why banks are getting all the attention today both in the press, and at the White House's Fiscal Responsibility Summit. When the Treasury announced the new economic rescue plan on February 10, the stress test were part of it. The reason for the attention is whether more funds, and thus a larger stake in the banks for tax payers, is needed.
Here's why you care: You care because the tests will indicate who is healthy, who is not and who simply needs more access to cash. That's the reason why banks are getting all the attention today both in the press, and at the White House's Fiscal Responsibility Summit. When the Treasury announced the new economic rescue plan on February 10, the stress test were part of it. The reason for the attention is whether more funds, and thus a larger stake in the banks for tax payers, is needed.
Sunday, February 22, 2009
Next Week's News Today (Obama, Bernanke and Volcker Go To Congress Edition)
It's time for Next Week's News Today where we publish our own futures calendar of earnings, reports, hearings and political events which will either drive the news, or deserve more attention. Last week we were correct to say that the foreclosure plan would indeed make last Wednesday nothing short of Big Wednesday. We were also right to point out that the details of the stimulus package would continue to be examined heavily.
What you are seeing in the press is a great deal of coverage devoted to the concept of nationalizing certain banks. What some may find confusing is how banks that have already received direct cash injections from the Treasury in return for stocks are sometimes referred to as "effectively nationalized." The difference is this: Banks receiving Treasury dollars in return for giving the government stocks are not nationalized. BUT, the government can find itself a dominate or controlling shareholder and thus have a great deal of say - thus the reference to effective nationalization. Alternatively, real nationalization is where the government steps in and takes over everything and stock holders are wiped out. It is this later concept that is being discussed. The reason is because when the Treasury announced the new rescue plan for banks it included a "stress test" where banks would have to show they were in trouble, but yet healthy enough to survive if they could just get their hands on some more cash. There are multiple press reports that banks may receive further details on the stress test this coming week. Thus, the discussion as to who is healthy and who is not.
This coming week you'll hear more about those stress tests and the word nationalization. It is an obvious slam dunk to say that President Obama's address to Congress (2/24) will garner headlines. What you should also note is that Fed Chmn. Ben Bernanke is testifying on Capitol Hill regarding the economy on (2/24-5) followed by Paul Volcker, the President's Economic Advisory Board Chmn. (2/26). Both will get grilled on President Obama's remarks because there will have been time to dissect them. Both will get asked about stress tests and nationalization. Their comments could end up impacting the markets as much or more as President Obama's.
We'll definitely be watching, you should too. We do caution that you check back to WhyYouCare.com for updates on scheduling.
Here's why you care about next week's trends in earnings and reports:
Earnings: Some trends this week that will highlight their sectors: 1) a couple auto companies reporting, 2) dollar stores, 3) pizza companies, 4) a bevy of real estate related firms, and 5) a couple media companies.
Reports: Consumer confidence (2/24), mortgage applications and existing home sales (2/25) and unemployment numbers.
Such a big week that you could almost miss it?: T. Boon Pickens in Washington, DC talking up alternative energy (2/24).
As always notable earnings, events, and reports are below:
MONDAY 2/23
Earnings: Campbell Soup, Developers Diversified Realty, General Growth Properties, Healthsouth, Hertz Global, Nordstrom.
Summit: White House Fiscal Responsibility Summit with President Obama, Vice President Biden, Treasury Secy. Geithner, and others.
Meeting: Natl. Governor's Assoc. Meeting (Governors only meeting with President Obama).
TUESDAY 2/24
Earnings: Avis Budget, CB&I, Consumer Portfolio Services, Crown Castle, Daimler AG, Domino's Pizza, DreamWorks Animation, Dycom, Education Realty Trust, Home Depot, Macy's, Northstar Realty, Office Depot, Orbitz, PG&E, Papa John's, Quanta Services, Radian Group, RadioShack, Sempra Energy, Steven Madden, Target, TASER, Thomson Reuters, Vornado Realty Trust, World Wrestling, Wynn Resorts.
Economic Report: Consumer confidence.
President Obama addresses Congress, 9p ET.
Hearing #1: Oversight and Investigations Subcmte. holds a hearing on "A Review of TARP [Troubled Assets Relief Program] Oversight, Accountability and Transparency for U.S. Taxpayers."
Hearing #2: Housing and Community Opportunity Subcmte. holds a hearing on "Loan Modifications: Are Mortgage Servicers Assisting Borrowers with Unaffordable Mortgages?"
Hearing #3: Senate Banking, Housing and Urban Affairs Cmte. hearing on the semiannual report on monetary policy with Fed Chmn. Ben Bernanke.
Discussion: Council on Foreign Relations holds a discussion with BP Capital Management founder T. Boone Pickens on "U.S. energy policy and the future of his $58 million national energy campaign, which calls for increased use of domestic energy products such as wind and natural gas and decreased dependence on foreign oil."
WEDNESDAY 2/25
Earnings: AMBAC, American Equity Investment Life, Caribou Coffee, Del Monte, Discovery, Dollar Tree, Donnelley & Sons, Equity One, Frontier Communications, Hearst-Argyle TV, ICT Group, J.M. Smucker, KBR Inc., Lexington, Martha Stewart, Mortons Restaurant Group, Pennsylvania R.E.I.T., Saks, Zale.
Economic Reports: Mortgage Banker's Assoc. releases mortgage application data, Natl. Assoc. of Realtors releases existing home sales data.
Stress Tests Start: Stress tests conducted by the federal government to measure the health of banks receiving government funds begin under the Capital Assistance Program.
Hearing: House Financial Services Committee (Day 1) on the Semiannual Monetary Policy Report - economic outlook. Witness: Fed Chmn. Ben Bernanke.
Confirmation Hearing: Senate Agriculture, Nutrition and Forestry Committee holds Gary Gensler's confirmation hearing to be chairman and commissioner of the Commodity Futures Trading Commission.
THURSDAY 2/26
Earnings: American International, AthenaHealth, Big 5 Sports, Cablevision, Capital Lease Funding, CapitalSource Inc., Checkpoint Systems, Dell, Digital Realy Trust, Duff & Phelps, EMCOR Group, First American, Frontier Oil, Frontline, Gap Inc., General Motors, Gramercy Capital, Grubb & Ellis, Hansen Natural, Hospitality Properties, HRPT Properties, JMP Group, KKR Financial, Kohl's, MGM Mirage, Midas, NASDAQ, Novatel Wireless, Pinnacle, RAIT Investment Trust, Safeway, Sotheby's, US Cellular.
Economic Reports: Initial Unemployment Claims, New Home Sales.
Hearing #1: House Financial Services Committee (Day 2) on the Semiannual Monetary Policy Report - economic outlook.
Hearing #2: Joint Economic Committee on restoring the economy and preventing another crisis. Witness: Paul Volcker - Chmn., President's Economic Advisory Board
FRIDAY 2/27
Earnings: Integra, Magellan Health.
Economic Report: Gross domestic product (GDP) data released.
What you are seeing in the press is a great deal of coverage devoted to the concept of nationalizing certain banks. What some may find confusing is how banks that have already received direct cash injections from the Treasury in return for stocks are sometimes referred to as "effectively nationalized." The difference is this: Banks receiving Treasury dollars in return for giving the government stocks are not nationalized. BUT, the government can find itself a dominate or controlling shareholder and thus have a great deal of say - thus the reference to effective nationalization. Alternatively, real nationalization is where the government steps in and takes over everything and stock holders are wiped out. It is this later concept that is being discussed. The reason is because when the Treasury announced the new rescue plan for banks it included a "stress test" where banks would have to show they were in trouble, but yet healthy enough to survive if they could just get their hands on some more cash. There are multiple press reports that banks may receive further details on the stress test this coming week. Thus, the discussion as to who is healthy and who is not.
This coming week you'll hear more about those stress tests and the word nationalization. It is an obvious slam dunk to say that President Obama's address to Congress (2/24) will garner headlines. What you should also note is that Fed Chmn. Ben Bernanke is testifying on Capitol Hill regarding the economy on (2/24-5) followed by Paul Volcker, the President's Economic Advisory Board Chmn. (2/26). Both will get grilled on President Obama's remarks because there will have been time to dissect them. Both will get asked about stress tests and nationalization. Their comments could end up impacting the markets as much or more as President Obama's.
We'll definitely be watching, you should too. We do caution that you check back to WhyYouCare.com for updates on scheduling.
Here's why you care about next week's trends in earnings and reports:
Earnings: Some trends this week that will highlight their sectors: 1) a couple auto companies reporting, 2) dollar stores, 3) pizza companies, 4) a bevy of real estate related firms, and 5) a couple media companies.
Reports: Consumer confidence (2/24), mortgage applications and existing home sales (2/25) and unemployment numbers.
Such a big week that you could almost miss it?: T. Boon Pickens in Washington, DC talking up alternative energy (2/24).
As always notable earnings, events, and reports are below:
MONDAY 2/23
Earnings: Campbell Soup, Developers Diversified Realty, General Growth Properties, Healthsouth, Hertz Global, Nordstrom.
Summit: White House Fiscal Responsibility Summit with President Obama, Vice President Biden, Treasury Secy. Geithner, and others.
Meeting: Natl. Governor's Assoc. Meeting (Governors only meeting with President Obama).
TUESDAY 2/24
Earnings: Avis Budget, CB&I, Consumer Portfolio Services, Crown Castle, Daimler AG, Domino's Pizza, DreamWorks Animation, Dycom, Education Realty Trust, Home Depot, Macy's, Northstar Realty, Office Depot, Orbitz, PG&E, Papa John's, Quanta Services, Radian Group, RadioShack, Sempra Energy, Steven Madden, Target, TASER, Thomson Reuters, Vornado Realty Trust, World Wrestling, Wynn Resorts.
Economic Report: Consumer confidence.
President Obama addresses Congress, 9p ET.
Hearing #1: Oversight and Investigations Subcmte. holds a hearing on "A Review of TARP [Troubled Assets Relief Program] Oversight, Accountability and Transparency for U.S. Taxpayers."
Hearing #2: Housing and Community Opportunity Subcmte. holds a hearing on "Loan Modifications: Are Mortgage Servicers Assisting Borrowers with Unaffordable Mortgages?"
Hearing #3: Senate Banking, Housing and Urban Affairs Cmte. hearing on the semiannual report on monetary policy with Fed Chmn. Ben Bernanke.
Discussion: Council on Foreign Relations holds a discussion with BP Capital Management founder T. Boone Pickens on "U.S. energy policy and the future of his $58 million national energy campaign, which calls for increased use of domestic energy products such as wind and natural gas and decreased dependence on foreign oil."
WEDNESDAY 2/25
Earnings: AMBAC, American Equity Investment Life, Caribou Coffee, Del Monte, Discovery, Dollar Tree, Donnelley & Sons, Equity One, Frontier Communications, Hearst-Argyle TV, ICT Group, J.M. Smucker, KBR Inc., Lexington, Martha Stewart, Mortons Restaurant Group, Pennsylvania R.E.I.T., Saks, Zale.
Economic Reports: Mortgage Banker's Assoc. releases mortgage application data, Natl. Assoc. of Realtors releases existing home sales data.
Stress Tests Start: Stress tests conducted by the federal government to measure the health of banks receiving government funds begin under the Capital Assistance Program.
Hearing: House Financial Services Committee (Day 1) on the Semiannual Monetary Policy Report - economic outlook. Witness: Fed Chmn. Ben Bernanke.
Confirmation Hearing: Senate Agriculture, Nutrition and Forestry Committee holds Gary Gensler's confirmation hearing to be chairman and commissioner of the Commodity Futures Trading Commission.
THURSDAY 2/26
Earnings: American International, AthenaHealth, Big 5 Sports, Cablevision, Capital Lease Funding, CapitalSource Inc., Checkpoint Systems, Dell, Digital Realy Trust, Duff & Phelps, EMCOR Group, First American, Frontier Oil, Frontline, Gap Inc., General Motors, Gramercy Capital, Grubb & Ellis, Hansen Natural, Hospitality Properties, HRPT Properties, JMP Group, KKR Financial, Kohl's, MGM Mirage, Midas, NASDAQ, Novatel Wireless, Pinnacle, RAIT Investment Trust, Safeway, Sotheby's, US Cellular.
Economic Reports: Initial Unemployment Claims, New Home Sales.
Hearing #1: House Financial Services Committee (Day 2) on the Semiannual Monetary Policy Report - economic outlook.
Hearing #2: Joint Economic Committee on restoring the economy and preventing another crisis. Witness: Paul Volcker - Chmn., President's Economic Advisory Board
FRIDAY 2/27
Earnings: Integra, Magellan Health.
Economic Report: Gross domestic product (GDP) data released.
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