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Tag Archives: Federal Reserve

Commentary: Unintended Consequences

Legislators heard--or perhaps misheard--customers when they grumbled about ATM fees and clamped down even though there is a logical argument for them. Now, a new fee opportunity for major banks comes in the form of pay cards--debit cards loaded with your take-home pay each time you get paid. Workers must pay a fee to access their own wages and may be charged a fee for not using the card. The pay cards slither under, over, or around the definitions resulting from Dodd Frank for fees banks are permitted to charge for credit and debit cards or even for store cards.

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Payrolls Up 195k, Unemployment Rate Flat in June

Adding new pressures for the Federal Reserve, the nation's economy added 195,000 jobs in June, leaving the unemployment rate unchanged at 7.6.percent, the Bureau of Labor Statistics reported Friday. While the unemployment rate was unchanged, the broader employment-population ratio improved to 58.7 percent. The Fed has been looking to improvements in the labor market for a sign it should begin to reduce its program of stimulative monetary policy.

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Fed Approves of Final Rule for Basel III Implementation

The Basel III reforms were created to address ""shortcomings in capital requirements, particularly for larger, internationally active banking organizations, that became apparent during the recent financial crisis."" The Fed also announced a number of changes in the rule designed to address concerns about the regulatory burden on smaller community banks.

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Commentary: We’re Forever Seeing Bubbles

The recent jump in home prices has led to speculation that the rapid surge in home prices could be the sign of a new housing bubble similar to the one that led to the Great Recession. Is it? The not-so-short answer is, not yet. An increase in prices itself does not signal a bubble. An unsustainable increase, not supported by other data, however, would. In the run-up to the 2006 collapse, the higher prices--which had been trending up for four years--led to a sharp uptick in construction wholly unsupported by demographics.

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First-Time Jobless Claims in Surprise Jump

First-time claims for unemployment insurance jumped a surprising 18,000 to 354,000, for the week ending June 15, the Labor Department reported Thursday. Economists expected a more modest increase to 340,000 from the prior week. Claims filings for the week ending June 8 were revised up to 336,000 from the originally reported 334,000.

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Upbeat FOMC Votes No Change in Stimulus

With a somewhat upbeat assessment of the economy, the Federal Open Market Committee (FOMC) said Wednesday it would continue its policy of near-zero interest rates and its $85-billion-per-month bond-buying program. In the statement issued at the conclusion of its two-day meeting, the committee said it ""sees the downside risks to the outlook for the economy and the labor market as having diminished since the fall,"" a more optimistic assessment than May 1 when the Committee said it ""continues to see downside risks to the economic outlook.""

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Fed Report: Housing Market in Texas Poised for Growth

The steady influx of out-of-state transplants, along with stronger than average employment growth, should keep the housing and apartment sectors in Texas strong, a report from the Dallas Federal Reserve concluded. Using data from the Census Bureau, the report authors D'Ann Petersen and Christina Daly pointed out that Texas is the No. 1 state for domestic in-migration. From July 2011 to July 2012, the Long Star state saw a net 140,888 new arrivals when excluding births or international migration.

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Commentary: Eminent Digression

In a newly published paper posted on the New York Federal Reserve website, Robert Hockett, a Cornell University professor of financial and monetary law, proposes using government's eminent domain authority as a solution to underwater mortgage debt. In reviewing Hockett's suggestion, the Wall Street Journal concentrated not on the idea itself, but on the fact that Hockett ""turns out to have been on the payroll of none other than Mortgage Resolution Partners."" There may be a lot of good reasons to discard Hockett's suggestion, but his past relationships are not among them. His idea deserves a fair hearing, not a digression.

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Freddie Mac: Fixed Rates Climb, 30-Year Close to 4%

Mortgage rates continued to climb this week, but the near-term future is going to depend on how the Federal Reserve reacts. According to Freddie Mac's Primary Mortgage Market Survey, the 30-year fixed-rate mortgage (FRM) averaged 3.98 percent (0.7 point) for the week ending June 13, up from 3.91 percent last week. Last year at this time, the 30-year FRM averaged 3.71 percent. The 15-year FRM this week averaged 3.10 percent (0.7 point), up from 3.03 percent in the last survey.

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Fed Report Proposes Use of Eminent Domain for Underwater Mortgages

There's a mortgage debt ""overhang"" that threatens the health of the national economy, and one possible solution to the problem comes in the form of eminent domain, according to a new report authored by Robert Hockett. Of the roughly 11 million underwater mortgages, about 3 or 4 million are in default, foreclosure, or foreclosed and awaiting liquidation, the report, Paying Paul and Robbing No One: An Eminent Domain Solution for Underwater Mortgage Debt, found.

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