Update from this morning: Neel Kashkari joins PIMCO (Ishmael, Alphaville)
TARP cost estimate falls $200 billion (Somerville, Reuters) Even after this latest reduction, the administration still estimates TARP will cost $141 billion. We may be getting more back than we though, but we’re not making money. Remember, the Fed still has north of $1.0 trillion or mortgage-backed securities on its balance sheet, the value of which is not clear.
Moody’s links option ARM performance with subprime (Golobay, HousingWire) Option ARMs were generally considered “prime” loans based on the credit scores of borrowers. We learned last year, however, that credit scores are less indicative of default rates than negative equity. Negatively amortizing option ARMs, which allow borrowers to make a minimum payment that doesn’t even cover interest, have seen their loan balances explode. With prices down, they’re so far underwater it makes little sense to pay their mortgage…
Euros become currency of choice for drug cartels (Syal/Townsend, Guardian) Not an indication of the euro’s strength versus the dollar, however. €500 notes are smaller than $100 bills and therefore easier to smuggle.
Does Dubai really owe $150 billion? (Arabianbusiness.com) The consensus estimate is that Dubai owes closer to $85 billion…
Global banking economist warned of coming crisis (Spiegel) Keep your eye on the Bank for International Settlements. They’ve been predicting that low interest rates encourage investors to chase risk imprudently…
Colton Harris-Moore, the barefoot bandit, outfoxes sheriffs (Times UK) “Police say 18-year-old Colton Harris-Moore, whose escapades are turning him into a folk legend, is a one-man crime wave, responsible for 50 burglaries as well as stealing light aircraft, which he taught himself to fly from video games, and several speedboats. He lives in the woods, shuns shoes and catches his own food. His only technological aid is a pair of thermal-imaging goggles to hunt at night and his weakness is pizzas, which he asks to be delivered at the edge of the woods.”
Audited for not making enough money (Westneat, Seattle Times) Doesn’t the IRS have bigger fish to fry?
How China won and Russia lost (Gregory/Zhou, Hoover) Bottom-up reforms worked in China; top-down reforms failed in Russia.
Atheist cat (imgur)
Speed of light from earth to moon (Wikipedia) Clever animation.
Driving a Humvee in Iraq…(considering the threat of roadside IEDs, I understand why these guys want to keep moving)