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IDS World Markets Wed 19th November 08


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October housing starts were at a seasonally adjusted annual rate of 791,000, which is 4.5% below the revised September estimate and 38.0% below the year-ago level

 

Liesman. "Their is no way housing starts can continue this precipitous decline..."

 

Haines. "Why would u start a house? I don't get it."

 

Classic, Liesman had no idea how to answer that......

 

Of course nobody failed to mention that building permits were down 12% as well which signals housing starts will not see a recovery anytime soon.

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"Record injections of liquidity have driven the overnight lending rate between banks to less than half the 1 percent target set by officials last month. The gap is shifting investors' focus toward the amount of money in the banking system as a better gauge of Fed intentions, something San Francisco Fed President Janet Yellen last month called ``a kind of quantitative easing.''

 

``There has been a policy shift, but the Fed is not transparently announcing what it is doing and why,'' said former St. Louis Fed President William Poole, now a senior fellow at the Cato Institute in Washington. ``Monetary policy works best when the markets understand what the central bank is doing.'' "

 

http://www.bloomberg.com/apps/news?pid=206...&refer=home

 

Gloomberg is catching on, some factual incorrections but close.

Here's a better post on the quantitative easing theme and the links in the article to a Fed white paper Divorcing Money from Monetary Policy and Bernanke's speech

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NY Times reports the Treasury Department's inspector general will review a quiet change in tax policy that stands to give banks a windfall of billions of dollars, a top official said on Tuesday. The formal review is intended to address mounting concerns from Congressional leaders and independent tax lawyers about the process that led the department to announce the obscure tax break, which allows banks much greater leeway to use tax losses from banks they acquire. The initiation of the review was described by a spokesman for the Treasury's inspector general. On Sept. 30, a day before Congress passed the Treasury Department's $700 billion bailout package to aid struggling financial cos, the department unexpectedly tweaked the rules and said that a bank was entitled to use all the losses related to troubled loans in a bank that it was purchasing, thus reducing its tax bill. The break, which can be applied to deals made years ago, before the financial crisis began, will hand banks at least $110 billion, according to Robert Willens, an independent tax and accounting anal cyst.

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