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Warnings by state and city officials that were ignored by federal agencies and their officials. Efforts to protect homeowners from oppressive lending were thwarted by federal officials when state attorney generals took up the issue in Washington DC. Not a pretty picture and says a lot about what went on in that period when federal officials were too close to lenders way of seeing things or ideologically blind because lenders played the deregulation music to perfection.

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JP Morgan Chase will modify the terms of $70 billion in mortgages for borrowers who are behind in their payments or expected to be. This covers 400,000 borrowers. The focus is especially on a type of loan structured so that the monthly payment increases, and Chase inherited $54 billion of such loans with the takeover of Washington Mutual in September 2008. Some of these loans are called options adjustable rate mortgages where borrowers can make payments that don't even cover the interest costs, resulting in increasing the loan balance. Chase will replace the options ARM's with fixed rate loans.In taking over WaMU, Chase had a large exposure to the California housing market. WIth WaMu CHase ended up with $16 billion of subprime mortgages. The mortgages that Chase will modify for this plan with affordable payments make up 4.7% of the home loans it owns or are serviced by Chase's EMC Mortgage Corporation. So this is a good start but a lot remains to be done. Chase's Scharf who heads the retail division said that Chase had heard loud and clear what the thought leaders in the country are saying, and wanted to provide leadership on this issue to the whole industry as it does'nt make sense to wait. About 7.3 million American homeowners are expected to default on their mortgages from 2008 to 2010, and about 4.3 million homeowners lose their homes, according to Moody's Economy.com. While opinion leaders like FDIC's Sheila Bair and Reagan adviser Martin Feldstein have called for government help to prevent foreclosures from the early months of 2008,and FDIC has considered about 40% of current monthly payments the affordable amount for loan modification in IndyMac FDIC modifications, neither the Bush administration, banks or companies in the mortgage industry have taken any leadership on this issue. And now Scharf says it makes no sense to wait, in effect a signal to other banks to do the same. Scharf also said the stronger you are the more easier it makes to take these decisions suggesting that the $25 billion in government funds it received helped it reach this decision on this plan, which makes a lot of sense for the banks because foreclosures are the worst way to recover money with bad consequences for all parties and disastrous for the US and global economy....

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FDIC program for loan modification at IndyMac Bank. About 3500 loans were modified, and 15,000 borrowers contacted in recent weeks with offers for lower affordable monthly payments. FDIC's innovation is to create a comprehensive program with clear guidelines so that a lot of loans can be modified without doing it on a case by case basis which would take too long. Loans are modified by reducing interest rates and the principal amount so that the payments are affordable each month, and the FDIC has come up with 38 to 40% of the previous monthly payment as about the right amount. It also looks at tax information to verify earnings. There have been complaints about the responsiveness of FDIC Indymac call centers which may have inadvertently turned down some homeowners looking for help. A big problem is that the FDIC can do little for loans sold to other investors so that out of 653,000 loans serviced by Indymac Bank only about 47,000 are eligible for FDIC modification program. ...

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Sheila Bair tops the list of women in prominent positions who have exercized good judgement and vision in their positions.

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Why the loan modification programs get media attention but are not going to stem the rising tide of foreclosures. Even with all the programs announced by the banks it would affect only 2 million of the 8 million homeowners facing foreclosure. As the loan modifications are working with reducing payments to 40% of the prior monthly payment,this may not be enough as 28% is a better figure for homeowners struggling to makepayments. As a result homeowners with loan modifications may still end up in foreclosure as unemployment rises to 8% in 2009 and 2010.

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"It may be that this iron curtain is small, unimportant and justified, but it is a bad sign." Howard Buffett took a stand in the House of Representatives against the VOA broadcasts being used inside the US in 1947.  Warren Buffett is the son of Congressman Howard Buffett of Omaha, Nebraska, who was on the Board of Education of Omaha, started a small stock brokerage firm, and ran for US Congress in 1942, reelected twice and in 1950. He also ran Howard Taft's Republican presidential campaign in 1952. Looking at Buffett in the FDR-Truman years- one sees a young Buffett in contrast to Warren Buffet's silence on the 2008 financial crisis, raising serious issues- about the Truman doctrine in 1947 on the floor of Congress, was Acheson falling dominoes analogy a dangerous one?  It worked in Turkey-Greece with $400 million in aid in 1947 but was Acheson/Truman using a dangerous analogy of dominoes that would later hurt the US in French colonial Indochina wars, and in the reference to protecting oil resources in Middle east in Iran, Iraq and Saudi to lead to wars that exist to this day in 2024? Wars DJT and Biden have both opposed in contrast to Reagan, Bush, and Obama. There is a huge contrast between the father Howard Buffett, descendent of Huguenot ancestors from 1600 New York, and the finance professional Warren Buffett who went to Columbia University in 1951-52 as student of Prof. Graham with 70 years in finance during which financial crises destabilized the US with Buffett not taking a stand. One hedge fund manager say it is pure nepotism to pass on the company Berkshire to Warren's son Howie. But he is not surprised- who else would be sure to keep the company headquarters in Omaha, keep things simple invested in index funds and much of it in a few companies leaving the investing to managers chosen by Warren, with Howie's job to make sure his father's principles remain. Howie is Warren Buffett's 70 year old son, who Buffett 90 years is setting up as his successor as chairman who will not do investing leaving it to managers, yet be able to change CEO's. Howie worked for a few years at See Candy, a Berkshire owned company before becoming corporate VP at ADM food producer, followed by working on his own farm in Decatur, Illinois which he enjoyed doing. At ADM Howie left after an anti trust investigation began, in which the company was charged with $100 antitrust fines for price fixing says the WSJ. What is Berkshire Hathaway? It is a trillion dollars of investment funds invested in a few companies under name Berkshire Hathaway, using some of the basic ideas of Benjamin Graham, a pioneer in careful investing, adopted by Warren. Where has Buffett put his money? Berkshire top ten investments are- about $90 billion in Apple, $70 billion split between Bank of America and American Express, $30 billion in Coca Cola, and $30 billion split between 2 oil companies Chevron and Occidental. He has not invested in pharmaceuticals or in renewable energy- in just a piece of America.This has generated a compound interest of about 14% over 3-5 years and about 12% over 10 years. He holds 30% of his investments in cash or fixed, mostly cash at this time. And holds the remaining 70% in stocks. ...

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France's Foreign Minister Ayrault says of Boris Johnson: "He lied a lot to the British. Now, he is the one with his back against the wall." He sees missing in Johnson the "clear, credible and reliable" person with whom he can negotiate. Ray Stegner, deputy chairman of Germay's Social Democrat Party says "May looks weaker after such a choice of personnel. Now he is negotiating Brexit. Enjoy the trip." In China he is seen as a celebrity not a serious person. Bildt, ZDF, see in this a part of British humor. Jurgen Hardt, foreign policy spokesman for Christian Democrats Party in Germany had a different take on Johnson- seeing this as an astute move because if the government one day comes to conclude that Brexit should not be completed then having Johnson on board to explain it to the people would guarantee support in her party and with the people of England. In her first speech May emphasized that she was a "Unionist." Her first important meeting was with Nicola Sturgeon of Scotland and made Scotland's agreement necessary before invoking Article 50. Her talk of "burning injustices" for the poor and the underprivileged also goes to address the root of the problems behind the Leave vote. By having Johnson on board she can focus on the issues that really matter and which were on the minds of people in England, Wales, Scotland and Northern Ireland- to ensure that the economic system works for all.   ...

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The antiquated nature of the electoral college system that decides elections for president in the U.S. Under this system there can be a close election in the popular vote by a margin of 1-2 % and still have the winner take a huge majority in the electoral college. It also makes states where elections are not close irrelevant for campaigning purposes and framing the message candidates make- in the last three elections this means the South and Plains states which are Republican and the West and East coasts which are Democrat largely irrelevant for campaigning, creating a situation where large parts of the country are simply ignored.

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The European bank stress tests could trigger the restructuring of the troubled landesbank sector in Germany say German experts. The landesbanks do about 25% of the lending in Germany and are in severe financial stress. The landesbanks suffered hundreds of billions of losses in the US subprime mortgage securities. There has been no serious reform of the landesbanks. Even though the management of one of the landesbanks Bayerische Landesbank in Munich was under criminal investigation- the management made bad decisions that led to the losses in bad investments totalling 25% of the Bavarian state's yearly budget. A similiar problem is unfolding in Spain where the Spanish government has initiated action for the troubled cajas bank sector, the regional savings banks in Spain. In Spain the government and opposition came together to reach an agreemet to consolidate the cajas from 45 to about 20 and set aside a fund of 99 billion euros for this task. In Germany the landesbanks are controlled by German states and regional savings banks, so the German government has no direct control over this failing banking sector....

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Only 23% of teachers in the U.S. come from the top third of college graduates, the figure drops to 14% for inner city schools. Only the best students get into teaching programs in Finland.

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Tata will start making the Nano small car in the 4th quarter of 2008 at a plant it is constructing in the eastern state of West Bengal. Tata faces the same difficulties other car makers are facing around the world as fuel prices adversely affect car sales, and the unprecedented and enormous increases in the prices of raw material costs like steel, tires, and so on with the impact of tighter money supply with higher interest rates creates a different environment for Indian automakers. Tata's margins will be under pressure from these changes in the operating environment. Tata will look for ways to reduce costs and introduce several new models in 2008 in the commercial and passenger car markets. Tata completed acquisition of Land Rover and Jaguar for $2.3 billion in June. To fund the acquisition Tat Motors is raising 72 billion rupees ($1.7 billion) through three separate rights issues, and an additional $500 million to $600 million through an international offering of securities. This acquisition says Ratan Tata CEO of Tata Motors , will add global scale, profits and visibility to Tata Motors, enabling Tata Motors to take its place in the global auto industry as a credible international automobile company....

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PM Modi's win in Maharashtra, India's second largest state, and commercial center Mumbai with Ahmedabad, puts Vikshit Bharat plan to modernize India like China and Japan, on a firm footing. Some observers such as this one were of the view that the Chief Minister during Covid had done a good job, and that splitting his party with defections was not the right thing to do. Yet this view does not look at the infrastructure needs of the state and the nation which require effective government and government that can concentrate on delivery. It overlooks India's need to do what China and Japan have done to modernize their country in the last century. Vikshit Bharat is real, it is within reach, and Maharashtra senses this like the rest of the Indian nation. It is similar to Bumrah like Modi telling the Indian team that it had prepared well, now one should trust the process- which leads to Vikshit Bharat modernizing the nation - and give one's best. This led to Jasprit Bumrah taking the Indian team to a 297 run win over Australia at Perth after losing 3 Tests in New Zealand. A 14% vote margin for the NDA alliance called Mahayuti that is PM Modi's effort in Maharashtra, one of India's largest states which includes the city of Mumbai. This report says waves such as 2019 or ones in which Rajiv Gandhi won in 1985 were felt on the ground. This one was not anticipated. Yadav says in just 5 months after PM Modi's party lost in the Maharashtra Lok Sabha elections by 1-2% the shift is 15-16%. He says there is an additional 5 % deficit when a party contests a state election after a national election, widening the vote margin to 20 percent.  Of this he says the welfare schemes for women account for only 2-3%. The rest he can't understand.     ...

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India agrees to an immediate ceasefire after a call from Pakistan's head of military operations for a ceasefire. The conflict started with attack on tourism that was reviving the Kashmir economy after three decades through a terrorist attack killing 26 tourists in Phalgam, Kashmir on  April 22, 2025 in the mountains near the Pir Panjal range. 24 million tourists visited Kashmir in 2024. Indian response was swift on May 7 early morning hours attacking 18 terrorist camps inside Pakistan occupied Kashmir and inside Pakistan. India called it a act of self-defense to Pakistan sponsored state terrorism going back to 1947. What is different in this brief 4 day war is that India made it economic with efforts at IMF to make terrorism an issue for loans to Pakistan, and ending the Indus Waters Treaty on water sharing. Pakistan economy is struggling with no debt relief from China, making it turn to the IMF, a politically split population with Opposition leader Imran Khan in jail, and continued domination by the military over civilian govenrment. On May 9 drone attacks were launched from Pakistan using Turkish made drones in large numbers on cities and towns in Gujarat, Rajasthan, Punjab. Blackouts were placed in India by May 8 in all cities in the north and in Pakistan. India responded with its own drones and missile attacks on three military airbases as the war broadened to military targets on May 10. US mediated a ceasefire through Saudis and Turkey. Earlier Saudis and Iran were in New Delhi with whom India has good relations to get a ceasefire. Mr. Trump's efforts behind the scenes secured an agreement. VP Vance had cut short an Indian trip in Jaipur on April 22. India and the US are allies in the Indo-Pacific, and India and Russia have decades of friendly relations. China now uses Pakistan as a proxy state, but does not provide the economic aid it needs, for which it has turned to the IMF.    ...

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A report from Roubini Global Economics says state and local government financial problems are not of a systemic nature and should not affect the U.S. financial system. The report sees defaults as isolated events. Still it says reforms will be needed only some of which have been made, and preventing a crisis will require real austerity. The report predicts $100 billion in muni-bond defaults over 5 years.

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Foreign direct investment in Indonesia surged 30% to 51.5 trillion rupiah ($5.6 billion) for the first quarter of 2012. Indonesia's Investment Board says the mining sector gained $1.1 billion of FDI, telecom $800 million and plantations $500 millon. Singapore invested $1.2 billion, Japan $600 million, and S. Korea $500 million. Meanwhile S&P retained the BB+ credit rating for Indonesia because of concern about the government's decision not to raise subsidized fuel prices by 33% to cut a fuel subsidy bill of $15 billion, and other "policy slippages."