Barbara and I wrote a couple of pieces for TIME.com that ran last week when we weren’t paying attention. In case you weren’t paying attention either, here they are:
Is There Really a Credit Crunch? by Barbara, which begins:
Back in September, V.V. Chari, an economist at the University of Minnesota and an adviser to the Federal Reserve Bank of Minneapolis, got a call from a Congressman. Treasury Secretary Hank Paulson and Federal Reserve Chairman Ben Bernanke were arguing that they needed $700 billion to save the nation’s financial system, and the Congressman wanted to know what to make of it all. Chari said he didn’t know — he hadn’t looked at the data. Policymakers kept talking about how banks weren’t lending to businesses or to individuals or even to each other, so Chari pulled numbers to see just how badly the credit markets were frozen. He was surprised: he didn’t see much of anything wrong. Read More.
Congress Ready to Consider a Bolder Mortgage Fix, by me, which begins:
Last summer, Congress approved what was billed as a bold plan to stave off foreclosures by luring lenders and borrowers into renegotiating mortgages. So far, fewer than 400 homeowners have applied. Other government and private programs to modify loans have had somewhat more uptake, but still haven’t done much to slow the unprecedented wave of foreclosures sweeping the country.
And so next month, lawmakers will reconsider another, bolder plan: letting bankruptcy judges force lenders into modifying mortgages. It might actually work. Read more.