Tales from the Trail

Washington Extra – A moratorium on moratoriums

It’s official. Moratoriums are out (as are moratoria if you prefer the Latin plural). On the day the White House rejected calls for a nationwide moratorium on home foreclosures, it also lifted its own moratorium on deepwater drilling for oil and gas. Some Democrats, especially those like Harry Reid facing tough election races in November, had been calling for a foreclosure ban. But President Barack Obama, who doesn’t face voters directly for a couple more years, has accepted the longer-term argument that a broad halt to evictions would slow a recovery in the housing market and the economy.

Nevertheless, the scandal over how banks and other companies processed foreclosure documents and the uncertainty surrounding it is going to hang over the market, especially with 40 state attorneys general (many of whom are up for re-election) expected to announce their own investigation into the issue.

Obama, of course, rejected a similar economic argument when he imposed the deepwater drilling ban back in May, this time for the greater environmental good. Now, the White House says it can lift the ban on drilling because stricter rules are in place to prevent a repeat of BP’s massive spill in the Gulf of Mexico. Again, even without the ban, the drilling business will be slow to bounce back as companies adapt to the new safeguards.

As usual, some will blame Obama for hobbling business with excessive regulation. Others will say that unfettered business was exactly what led to the financial crisis and the oil spill.  The choice is yours on November 2.

Talking of choices, the voters of Wisconsin seem almost ready to make theirs. According to our latest Reuters/Ipsos poll, veteran Democratic Senator Russ Feingold is trailing his Republican challenger Ron Johnson by seven points. Interestingly, it is not so much Feingold’s vote for healthcare legislation that has hurt him (as some have suggested) but his failure to create enough jobs, the poll found.

from Summit Notebook:

Against high Hill drama, SEC chief mum on Goldman

First of all, Securities and Exchange Commission Chairman Mary Schapiro would not talk about Goldman Sachs.

There was no drawing her out. The head of the agency that filed a civil fraud lawsuit charging that Goldman misled investors would not say a word about the case. GOLDMAN/

Quite the opposite from the high-drama being played out at the same time on Capitol Hill where Goldman Sachs executives were facing the fusillade at a Senate hearing, where one senator kept repeating "shi--y deal." (There are two t's missing from that word).

from Summit Notebook:

ABA’s Yingling sees danger in rhetoric: it’s Wall Street, not banks

REGULATION-SUMMITEd Yingling, president and CEO of the American Bankers Association, is a little worried about the rhetoric that's been flying around as Congress tries to produce financial reform legislation.

And he wants people to be clear that the problems are with Wall Street, not banks.

Though, the differentiation gets a little tricky here because some of the largest banks in the country and biggest players on Wall Street are members of his organization and received taxpayer bailouts. The thousands of other banks that his trade association represents did not.