In a recent blog, we talked about how the mortgage industry’s reaction to the credit crunch mess is to impose policies that only make matters worse. The illustration given (from a recent Kenneth Harney column that appeared in the Boston Sunday Herald) noted how “…one major private mortgage insurance company has now designated over hundreds of geographic sections (by Zip Code) around the country as “declining market” areas, and stated that they will no longer sell private mortgage insurance coverage on condominium units in these areas. (This ‘ban’ is irrespective of the prospective condo buyer’s credit score or financial assets.)”
That blog further noted that “…this ban will almost certainly result in a further decrease in both the selling price of and, even more importantly, the number of condo units sold in these “banned” geographic areas (areas that are almost assuredly already experiencing great difficulty in their real estate markets).”
Well, not surprisingly, many others, especially consumer groups, have noticed the harmful effects of such ‘geographic bans’, and are trying to get such bans changed. As Harney points out in a follow up column (Boston Herald, 4-27-08):
“…a broad-scale reaction to declining real estate market policies [such as these ‘geographic bans’] is taking shape…Consumer and industry groups are demanding that lenders and investors abandon or modify [these] approaches.”
So far, in response, those in the mortgage industry are reacting by listening to the consumer complaints and considering making changes to their policies. But, as to any concrete changes – so far, none (and, we hasten to add, unfortunately, not surprisingly).
As Harney concludes, so long as the mortgage industry designate certain real estate markets as “declining market” areas:
“[If] you own a property or plan to buy in any of [these areas], expect [that buyers in such areas will have to] pay extra…for a loan…and [will likely encounter] a more limited menu of loan options. That’s the case even if the property is actually gaining in market value, not depreciating, and sales in [the] neighborhood are on the upswing.”
Which once again leads us to the same conclusion we’ve noted time and again on these pages and on “The Money Show”: As distasteful as government regulation is, one industry that absolutely cries out for government regulation is the mortgage industry.
Wednesday, April 30, 2008
Monday, April 28, 2008
BTMW ("By The Money Way") – “Die Hard”, “Wall Street” and today’s economy -- 4-28-06
Was watching “Die Hard” on one of the cable TV networks the other day (a movie which, BTW, is 1) a classic, and 2) has been out for 20 years…so, if you haven’t seen it yet, WHAT are you waiting for?!!!!). Anyhow during a commercial break, the network had a preview clip of the movie “Wall Street”. And suddenly, as they say, “Light dawned over marble head”. Mix the personalities and attitudes of the Ellis character in “Die Hard” with the Gordon Gecko character in “Wall Street”, and you get a very good idea of the personality/attitude of much too large a portion of those who ran and/or worked in the mortgage/investment banking industry and on Wall Street over the past decade or so. And, when looked at in that light, it’s not at all surprising that the economy in general, and the credit ‘industry’ in particular, are in the very difficult straits they’re in today.
Saturday, April 26, 2008
THE ONGOING MORTGAGE/CREDIT/REAL ESTATE MESS -- 4-26-08
We’ve given the example, relative to the current state of the mortgage industry, of a pendulum, having swung way too far to one side, now swinging back way too far to the other side, causing us all to suffer until it swings back to the middle, where it belongs.
Well, here’s a starker analogy. Think of the most of the players in the mortgage industry, over the past number of years, as a person who has gotten – really fat – 300-lbs-so-overweight-their-health-is-severely-threatened-fat– by eating everything in its sight, good food and bad food (i.e. an industry that has given loans to those who rightfully qualified for them AND to those who had no business getting a mortgage, and at the same time, giving good loans (such as 30-yr. Amortization, Fixed rate, full income verification loans) and, frankly, terrible loans (2-year adjustable rate, interest only, no income verification loans). Now, having looked (or, rather, been forced to look), in the mirror, and realizing it (the industry) is “300lbs overweight”, (i.e. stuck with all these terrible, and, in every growing number, “non-performing” loans, what does it, the mortgage industry, do? Go on a healthy, long term, diet (i.e. go back to the sensible
risk evaluation/risk formulas that served it well for (a least, for the most part) decades? NO!! Of course not. Rather, the mortgage industry has gone on a crash diet, eating less and less, getting closer and close to a fast, starving themselves (and, in the process, the real estate market) nearly to death (i.e. denying loans to those who rightfully don’t and shouldn’t qualify for loans, AS WELL AS, in FAR too many cases, denying loans to those who rightfully should qualify for a mortgage.
This near fast the mortgage industry has put itself on is manifesting itself in numerous ways. One of the most insidious was recently explained by Kenneth R.Harney in his syndicated real estate/consumer column “The Nation’s Housing”. (An aside – despite the fact that they make a big mistake by burying Kenneth Harney’s column in their real Sunday edition’s real estate classified section, nonetheless, Harney’s column alone is reason enough to purchase the Boston Sunday Herald.) As Harney explains in a recent column, many mortgage companies are making the acquisition of financing for the purchase of condominium units much more difficult. One example: one major private mortgage insurance company has now designated over hundreds of geographic sections (by Zip Code) around the country as “declining market” areas, and stated that they will no longer sell private mortgage insurance coverage on condominium units in these areas. (This ‘ban’ is irrespective of the prospective condo buyer’s credit score or financial assets.) Given that private mortgage insurance is a requirement on nearly all mortgages where the amount financed is above 80% of the property’s appraised value, the result of this ban will almost certainly result in a further decrease in both the selling price of and, even more importantly, the number of condo units sold in these “banned” geographic areas (areas that are almost assuredly already experiencing great difficulty in their real estate markets).
Contrast the above ban with, for example, the private mortgage insurance program offered by MassHousing, the quasi public mortgage institution that offers a mortgage insurance program which not only covers a property’s equity but also pays up to six months of mortgage payments for covered home owners who lose their job) and one can see how (not all, but) the bulk of the private mortgage industry – in its overreaction to the mortgage crises/fiasco is, rather than trying to correct the mistakes it made (which, to an extremely large extent, created the current mortgage/credit/real estate mess in the first place), is acting in ways that only make a bad situation MUCH worse.
What then, is the answer? At the risk of sounding like a broken record, while not a big fan at all of any kind of government regulation, in this instance, the bulk of the companies in the mortgage industry and their track record over the last five-plus years CRIES OUT for renewed and ongoing regulation. And, while such regulation WILL NOT cure this mess, it could, if done properly (admittedly, a big if whenever Congress is involved) prevent the current mess from getting worse, and prevent such a mess from happening again.
Well, here’s a starker analogy. Think of the most of the players in the mortgage industry, over the past number of years, as a person who has gotten – really fat – 300-lbs-so-overweight-their-health-is-severely-threatened-fat– by eating everything in its sight, good food and bad food (i.e. an industry that has given loans to those who rightfully qualified for them AND to those who had no business getting a mortgage, and at the same time, giving good loans (such as 30-yr. Amortization, Fixed rate, full income verification loans) and, frankly, terrible loans (2-year adjustable rate, interest only, no income verification loans). Now, having looked (or, rather, been forced to look), in the mirror, and realizing it (the industry) is “300lbs overweight”, (i.e. stuck with all these terrible, and, in every growing number, “non-performing” loans, what does it, the mortgage industry, do? Go on a healthy, long term, diet (i.e. go back to the sensible
risk evaluation/risk formulas that served it well for (a least, for the most part) decades? NO!! Of course not. Rather, the mortgage industry has gone on a crash diet, eating less and less, getting closer and close to a fast, starving themselves (and, in the process, the real estate market) nearly to death (i.e. denying loans to those who rightfully don’t and shouldn’t qualify for loans, AS WELL AS, in FAR too many cases, denying loans to those who rightfully should qualify for a mortgage.
This near fast the mortgage industry has put itself on is manifesting itself in numerous ways. One of the most insidious was recently explained by Kenneth R.Harney in his syndicated real estate/consumer column “The Nation’s Housing”. (An aside – despite the fact that they make a big mistake by burying Kenneth Harney’s column in their real Sunday edition’s real estate classified section, nonetheless, Harney’s column alone is reason enough to purchase the Boston Sunday Herald.) As Harney explains in a recent column, many mortgage companies are making the acquisition of financing for the purchase of condominium units much more difficult. One example: one major private mortgage insurance company has now designated over hundreds of geographic sections (by Zip Code) around the country as “declining market” areas, and stated that they will no longer sell private mortgage insurance coverage on condominium units in these areas. (This ‘ban’ is irrespective of the prospective condo buyer’s credit score or financial assets.) Given that private mortgage insurance is a requirement on nearly all mortgages where the amount financed is above 80% of the property’s appraised value, the result of this ban will almost certainly result in a further decrease in both the selling price of and, even more importantly, the number of condo units sold in these “banned” geographic areas (areas that are almost assuredly already experiencing great difficulty in their real estate markets).
Contrast the above ban with, for example, the private mortgage insurance program offered by MassHousing, the quasi public mortgage institution that offers a mortgage insurance program which not only covers a property’s equity but also pays up to six months of mortgage payments for covered home owners who lose their job) and one can see how (not all, but) the bulk of the private mortgage industry – in its overreaction to the mortgage crises/fiasco is, rather than trying to correct the mistakes it made (which, to an extremely large extent, created the current mortgage/credit/real estate mess in the first place), is acting in ways that only make a bad situation MUCH worse.
What then, is the answer? At the risk of sounding like a broken record, while not a big fan at all of any kind of government regulation, in this instance, the bulk of the companies in the mortgage industry and their track record over the last five-plus years CRIES OUT for renewed and ongoing regulation. And, while such regulation WILL NOT cure this mess, it could, if done properly (admittedly, a big if whenever Congress is involved) prevent the current mess from getting worse, and prevent such a mess from happening again.
Wednesday, April 23, 2008
EMERGENCY, EMERGENCY! (4-23-08)
Despite what much of the mainstream media would have you believe, the sky is not falling, the value of your home has not depreciated to zero, and the economy is not about to enter into the second coming of the Great Depression of the 1930’s. That said, it comes as news to no one that the economy is definitely in a down cycle. Whether we are “statistically” in a recession is unclear, and, frankly, really only important to economists. What is important is that times are tough for many, and, while there are signs that things may turn for the better soon, its always a good practice to ‘hope for the best, plan for the worst’. Towards that end, now’s a very good time to review a number of questions about emergency funds.
First – What is an emergency fund? An emergency fund is, as the name suggests, is an amount of money that you set aside for those times when your monthly cash flow is either stretched – due, for example, to an unexpected medical bill or home repair – or, temporarily stopped – due, for example, to a layoff.
How much should you keep in your emergency fund? Generally, you it should contain an amount equal to at least five to six months worth of your necessary living expenses (expenses you can’t decide not to pay – rent or mortgage, food, gas, insurance, heat, etc.) or eight to ten months of living expenses if you’re self-employed. So, for example, if your monthly living expenses equal $3,500, your emergency fund ideally should contain $17,500 – $21,000 ($28,000 – $35,000 if you’re self employed).
Where should your keep you emergency fund? Your emergency fund should be kept in a safe, liquid account that guarantees the full amount will be there and easily accessible if and when you need it.
What qualifies as a safe, liquid account? Savings or checking accounts covered by deposit insurance, or insured (either by the government, or by the large institution offering it) money market funds (for example a cash reserve account at one of the large brokerage houses.
A few final questions. Does a CD qualify as a “safe, liquid account”. Technically, no, since the money is not fully liquid. Should non-money market mutual funds and individual stocks be considered part of your emergency fund. NO! Why – because they are not fully liquid, and, much more importantly, they aren’t completely safe. Finally, can a home equity line of credit be considered an emergency fund? Again, NO! Why? To begin with, a home equity line is not savings at all, but a vehicle that gives you access to the equity in your home, equity which you only want to tap for “emergencies” as a last resort, and, as we’ve seen of late, access to equity that can quickly disappear (either because the value of – and thus the equity in – your home goes down, or, because, the home equity line is suspended (as more and more lenders are doing to home equity lines – even those of long time, very good borrowers – during the current ‘credit crunch’).
First – What is an emergency fund? An emergency fund is, as the name suggests, is an amount of money that you set aside for those times when your monthly cash flow is either stretched – due, for example, to an unexpected medical bill or home repair – or, temporarily stopped – due, for example, to a layoff.
How much should you keep in your emergency fund? Generally, you it should contain an amount equal to at least five to six months worth of your necessary living expenses (expenses you can’t decide not to pay – rent or mortgage, food, gas, insurance, heat, etc.) or eight to ten months of living expenses if you’re self-employed. So, for example, if your monthly living expenses equal $3,500, your emergency fund ideally should contain $17,500 – $21,000 ($28,000 – $35,000 if you’re self employed).
Where should your keep you emergency fund? Your emergency fund should be kept in a safe, liquid account that guarantees the full amount will be there and easily accessible if and when you need it.
What qualifies as a safe, liquid account? Savings or checking accounts covered by deposit insurance, or insured (either by the government, or by the large institution offering it) money market funds (for example a cash reserve account at one of the large brokerage houses.
A few final questions. Does a CD qualify as a “safe, liquid account”. Technically, no, since the money is not fully liquid. Should non-money market mutual funds and individual stocks be considered part of your emergency fund. NO! Why – because they are not fully liquid, and, much more importantly, they aren’t completely safe. Finally, can a home equity line of credit be considered an emergency fund? Again, NO! Why? To begin with, a home equity line is not savings at all, but a vehicle that gives you access to the equity in your home, equity which you only want to tap for “emergencies” as a last resort, and, as we’ve seen of late, access to equity that can quickly disappear (either because the value of – and thus the equity in – your home goes down, or, because, the home equity line is suspended (as more and more lenders are doing to home equity lines – even those of long time, very good borrowers – during the current ‘credit crunch’).
Monday, April 14, 2008
TAX FILING EXTENSIONS – 4-14-08
It’s April 14th, which means, its tax time. Hopefully, you’ve already filed your tax return. However, if you haven’t, and won’t have it done in time, you’re not fully out of luck. Both the IRS (federal) and (in Massachusetts) the Department of Revenue do allow taxpayers to file for an automatic, six-month extension to file their tax return. But, if you choose this route, there are a few things you should keep in mind.
Most importantly, both the federal and state extensions give you an automatic additional six months to file your tax return. They do not, however, give you any additional time to pay any taxes you still owe. Accordingly, if you owe (or think you owe) additional taxes for last tax year, the exact amount, if you know it, or, if you don’t, your best, good faith estimate of how much additional tax you owe should be sent along with your request for an extension to file your return. If you don’t, the IRS, DOR (or, depending on who and what you owe, both) will levy interest and, in some cases, penalties on the amount owed until that amount is paid.
Some additional points to keep in mind. In many cases, you can contribute monies to certain retirement plans – for example, a Roth IRA – for last tax year up until the time you file your final tax return. So, for example, if you qualified for a Roth IRA in 2007, but won’t have the monies to fund a Roth IRA (for tax year 2007) for another month or two, it would likely be in your best interest to file for an extension to file you return (paying, of course, any additional taxes owed) wait the month or two until you have the money, set up and fund a Roth IRA for 2007, and then file your final 2007 federal and state tax returns.
As for the extension forms themselves (and instructions for using and filing them) the federal extension with instructions (Form 4868) is available at the IRS website www.irs.gov/ , while the Massachusetts state extension form (Form M-4868, and instructions) is available at the DOR website www.taxsites.com/state.html#links .
Finally, remember that all tax related issues can be both complicated and confusing. Accordingly, if you have any questions or concerns regarding filing an extension to file your tax return (or, questions or concerns about any other tax related matter), it’s always best to seek and take the advice of an experienced CPA or tax attorney.
Most importantly, both the federal and state extensions give you an automatic additional six months to file your tax return. They do not, however, give you any additional time to pay any taxes you still owe. Accordingly, if you owe (or think you owe) additional taxes for last tax year, the exact amount, if you know it, or, if you don’t, your best, good faith estimate of how much additional tax you owe should be sent along with your request for an extension to file your return. If you don’t, the IRS, DOR (or, depending on who and what you owe, both) will levy interest and, in some cases, penalties on the amount owed until that amount is paid.
Some additional points to keep in mind. In many cases, you can contribute monies to certain retirement plans – for example, a Roth IRA – for last tax year up until the time you file your final tax return. So, for example, if you qualified for a Roth IRA in 2007, but won’t have the monies to fund a Roth IRA (for tax year 2007) for another month or two, it would likely be in your best interest to file for an extension to file you return (paying, of course, any additional taxes owed) wait the month or two until you have the money, set up and fund a Roth IRA for 2007, and then file your final 2007 federal and state tax returns.
As for the extension forms themselves (and instructions for using and filing them) the federal extension with instructions (Form 4868) is available at the IRS website www.irs.gov/ , while the Massachusetts state extension form (Form M-4868, and instructions) is available at the DOR website www.taxsites.com/state.html#links .
Finally, remember that all tax related issues can be both complicated and confusing. Accordingly, if you have any questions or concerns regarding filing an extension to file your tax return (or, questions or concerns about any other tax related matter), it’s always best to seek and take the advice of an experienced CPA or tax attorney.
Monday, April 7, 2008
BTMW – THE JOURNALISTIC VALUE OF $.25 – 4-7-08
It’s certainly not front page news that less and less people read daily newspapers, and that, of those that do, more and more read their paper(s) of choice online. Nonetheless, it is, at the least, somewhat surprising that there has been virtually no reaction from the media at large to the Boston Globe’s recent 150% increase in the cost of its daily paper to $.75.
This virtual silence is made even more surprising given what we, the reader, have gotten in return. Just a few examples:
· A paper that is, physically, barely 2/3rds its previous size (don’t believe it – next time you
pass a green Globe vendor box, check out how little of the display area the paper takes up;
· The (with whatever little due respect can be found) insidious “Sidekick” section, which,
frankly, appears to serve no use beyond lining of litter boxes (assuming you have a cat);
· Increasingly smaller newsprint, which will certainly force many 50 year olds, and possibly
some 15 year olds, to don reading glasses.
Even all this might be acceptable were it not for the Globe’s virtual abandonment of journalistic principals. Always liberal, the paper, at least until recently, made some attempt at journalistic objectivity. No more.
And yet, perhaps we might be able to accept even that, were it not for the Globe’s downward spiral into the inane. A case in point – the Monday, 4-7-08 story concerning the increasing number of parents who (we’re not making his up) “…turn to etiquette pros to counter…” their children’s lack of manners. A story to which any thinking human being’s reaction should first be ‘Are you kidding?!’, followed quickly by ‘WHO CARES?!’ The Globe, however, deemed the story of such importance, that they placed it on the paper’s front page. One can only wonder what the powers that be at the Globe will present us when they decide it time to raise the price of their daily paper to $1.00.
This virtual silence is made even more surprising given what we, the reader, have gotten in return. Just a few examples:
· A paper that is, physically, barely 2/3rds its previous size (don’t believe it – next time you
pass a green Globe vendor box, check out how little of the display area the paper takes up;
· The (with whatever little due respect can be found) insidious “Sidekick” section, which,
frankly, appears to serve no use beyond lining of litter boxes (assuming you have a cat);
· Increasingly smaller newsprint, which will certainly force many 50 year olds, and possibly
some 15 year olds, to don reading glasses.
Even all this might be acceptable were it not for the Globe’s virtual abandonment of journalistic principals. Always liberal, the paper, at least until recently, made some attempt at journalistic objectivity. No more.
And yet, perhaps we might be able to accept even that, were it not for the Globe’s downward spiral into the inane. A case in point – the Monday, 4-7-08 story concerning the increasing number of parents who (we’re not making his up) “…turn to etiquette pros to counter…” their children’s lack of manners. A story to which any thinking human being’s reaction should first be ‘Are you kidding?!’, followed quickly by ‘WHO CARES?!’ The Globe, however, deemed the story of such importance, that they placed it on the paper’s front page. One can only wonder what the powers that be at the Globe will present us when they decide it time to raise the price of their daily paper to $1.00.
Sunday, April 6, 2008
ECONOMIC DOWNTURN’S SILVER LINING – 4-6-08
The economists can argue all they want as to whether we’re experiencing a “statistical recession’. The bottom line is this economic slowdown means tough times and at least some belt tightening for most (at best), job loss, very difficult financial times, and possible bankruptcy for some (at worse). Moreover, the “silver linings” to be found in this downturn are few and far between. However, as with virtually all bad times, at least a few silver linings do exist. One is that interest rates are down, including those on mortgages. This, of course, is of small consolation to those who, due to lower income, lower (or no) equity in their property, and/or stringent (and, in far too many cases, very overly stringent) underwriting standards on the part of suddenly “CYA” leaning mortgage underwriting departments. However, with 30-year fixed rates again back below 6% (a least as of this writing), for those with satisfactory income, equity and credit scores, now can be a very good time to refinance.
Unfortunately, many home owners are unaware of this opportunity, both because much of the media has made it look like finding mortgage money is impossible today (not true!), and because so many people still labor under the long prescribed refinancing rule of thumb that one should never refinance unless you can lower your rate at least 2%. Such a rule of thumb was suspect, at best, when it was first “introduced” some 50-plus years ago. Today, such a rule of thumb is, to be blunt, stupid. So then, what is the prudent rule of thumb for refinancing?
· Refinance if you can save money by getting a lower interest rate, and/or,
· Refinance if you can gain security by switching from an adjustable to a fixed rate
mortgage. (Never refinance to an adjustable rate mortgage!)
However, unless you’re refinancing solely to get out of an adjustable mortgage, before you go forward, be certain that the monthly savings you'll realize by refinancing will be recoup the cost of refinancing within the remaining time period you plan to own the property – and, preferably, much sooner.
The formula for determining how long recouping the cost of refinancing will take, is as follows: Divide the cost of refinancing – closing costs, points (if you pay any), and, if required, private mortgage insurance (PMI) – by the amount you'll save each month. However, since its not always possible to know exactly how long you’ll retain ownership of the property, plan on keeping the property for a minimum of five years before you refinance. There is, however, one major exception: if you can lower your interest rate with a no point, no closing cost refinance mortgage, that’s a no brainer – definitely to ahead and refinance.
(For more information on financial rules of thumb in general, and refinancing in particular, check out the BestMoneyinfo.com website, and/or, via the website, the BestMoneyinfo.com e-book, “Your Bottom Line: Fifty Steps to Firm Financial Footing.”)
Two last pieces of advice: if you find you qualify for a refinance, it’s probably best to lock in your rate immediately. Rates, of course, can always go down further, but they also may go back, up, and since they’re currently back down near a 40-year low, you don’t want to miss out on the opportunity to get a great rate. Second, be certain to tune into “The Money Show” every Saturday and Sunday, where we will continue to give you up to information on the current mortgage/credit “crisis/fiasco” in general, and mortgage interest rates, terms and qualifying standards in particular.
Unfortunately, many home owners are unaware of this opportunity, both because much of the media has made it look like finding mortgage money is impossible today (not true!), and because so many people still labor under the long prescribed refinancing rule of thumb that one should never refinance unless you can lower your rate at least 2%. Such a rule of thumb was suspect, at best, when it was first “introduced” some 50-plus years ago. Today, such a rule of thumb is, to be blunt, stupid. So then, what is the prudent rule of thumb for refinancing?
· Refinance if you can save money by getting a lower interest rate, and/or,
· Refinance if you can gain security by switching from an adjustable to a fixed rate
mortgage. (Never refinance to an adjustable rate mortgage!)
However, unless you’re refinancing solely to get out of an adjustable mortgage, before you go forward, be certain that the monthly savings you'll realize by refinancing will be recoup the cost of refinancing within the remaining time period you plan to own the property – and, preferably, much sooner.
The formula for determining how long recouping the cost of refinancing will take, is as follows: Divide the cost of refinancing – closing costs, points (if you pay any), and, if required, private mortgage insurance (PMI) – by the amount you'll save each month. However, since its not always possible to know exactly how long you’ll retain ownership of the property, plan on keeping the property for a minimum of five years before you refinance. There is, however, one major exception: if you can lower your interest rate with a no point, no closing cost refinance mortgage, that’s a no brainer – definitely to ahead and refinance.
(For more information on financial rules of thumb in general, and refinancing in particular, check out the BestMoneyinfo.com website, and/or, via the website, the BestMoneyinfo.com e-book, “Your Bottom Line: Fifty Steps to Firm Financial Footing.”)
Two last pieces of advice: if you find you qualify for a refinance, it’s probably best to lock in your rate immediately. Rates, of course, can always go down further, but they also may go back, up, and since they’re currently back down near a 40-year low, you don’t want to miss out on the opportunity to get a great rate. Second, be certain to tune into “The Money Show” every Saturday and Sunday, where we will continue to give you up to information on the current mortgage/credit “crisis/fiasco” in general, and mortgage interest rates, terms and qualifying standards in particular.
Tuesday, April 1, 2008
REGULATION PROPOSALS -- FINALLY!! (4-1-08)
The Bush Administration on Monday finally revealed its proposals for regulating the mortgage/investment banking industry. Some of the proposals are good, some not so good, but all are long overdue, and while a possible definite plus going forward, none will do much, if anything, to cure the current major market downturn caused – as we’ve pointed out time and again – in very large part by the credit meltdown which itself is mainly a result of lax (or no) regulation of the mortgage/investment banking industries.
First, however, all the proposals for revamping regulation of the credit/financial industries must be poured over and, eventually, passed, in some form, by Congress (a long and laborious process in itself). As to what these regulations end up looking like after Congress ultimately gets done with them is anyone’s guess.
We’ll talk about all of this much more on Saturday’s (4-5-08) edition of “The Money Show”. In the meantime, for a good overview/preview, check out Robert Galvin’s story – “Regulation pendulum swinging the other way” – in Tuesday’s (4-1-08) Boston Globe business section.
First, however, all the proposals for revamping regulation of the credit/financial industries must be poured over and, eventually, passed, in some form, by Congress (a long and laborious process in itself). As to what these regulations end up looking like after Congress ultimately gets done with them is anyone’s guess.
We’ll talk about all of this much more on Saturday’s (4-5-08) edition of “The Money Show”. In the meantime, for a good overview/preview, check out Robert Galvin’s story – “Regulation pendulum swinging the other way” – in Tuesday’s (4-1-08) Boston Globe business section.
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