Now raising intellectual capital
from Rolfe Winkler:
Substantial bank losses needed to fix housing (Bloomberg) To avoid foreclosures, principal has to be written down. That implies hefty losses, especially for banks that hold lots of home equity loans on their balance sheet. Such loans get wiped out before first mortgages lose a penny. Complicating matters, many big banks service both the first and the second mortgage, which means they are highly conflicted. They don't want to eat a loss on the second mortgage, even if writing it down would make the first perform much better...
Greece defies Europe as crisis grows deadly serious (Evans Pritchard, Telegraph) Provocative idea: To relieve its debt burden, Ambrose says Greece should devalue its currency. That's not easy since they use the Euro. He recommends Greece ditch the Euro, "restore its currency, devalue, pass a law switching internal euro debt into drachmas, and "restructure" foreign contracts. This is the 'kitchen-sink' option. Such action would allow Greece to break out of its death loop." Call it the nuclear option... (ht Implode-o-Meter)
Whole Foods Republicans (Petrilli, WSJ) The Republican party is missing an opportunity to reach independent college-educated voters...
Cuts come to New York: Two subway lines may get eliminated, along with subsidized fares for students. In the meantime, Gov. Paterson announced that he will withhold payments to schools and local governments.