Mid-Day Must Reads: Market Dives, Rebound in Home Sales, Greenspan Cover-Up

By Stephen Gandel | @stephengandel | May 4, 2010 | +

Was he hiding the housing bubble?

–When will the market’s moussaka indigestion end? Not today. The Dow is down nearly 250 points on worries that the European bailout for Greece won’t be big enough.

–Finally, some good news on the housing front. Pending home sales hit a 5-month high in March. For a while it looked like the latest extension to the home buyer tax credit had been a bust. Here’s some proof it has been working. Extension, anyone?

–More on the Greenspan Housing Bubble Cover-up Controversy. The Federal Reserve released notes recently from a bunch of 2004 Fed meetings, and there seems to be evidence that suggests Greenspan and others were not interested in allowing, even privately, a debate on whether the housing market was or wasn’t in a bubble. So was it a cover up? Vincent Reinhart, who was a the Federal Reserve’s top staff accountant at the time, says no.

–The lack of criminal prosecutions stemming from the financial crisis is causing some to coin a new term for the big banks: Too Big To Jail?

–Geithner told the Senate Finance Committee this morning that a $50 billion proposed tax on the big banks will not hurt lending. He says 99% of all banks will not have to pay the tax. But opponents says the cost of the tax will ripple through the banking system.

–The White House is putting more fire power behind its fight against a push to have more through audits of the Federal Reserve. Over at Naked Capitalism they argue that how the Fed has handled the AIG bailout argues that more transparency and oversight is needed for the Fed.

–Will airline mergers lead to higher prices for consumers? The answer: 10%, possibly more. Deidre Van Dyke of TIME.com digs in and finds good reason to believe the years of super cheap airline travel may be coming to an end. Yeah, but will they bring back the nuts?

Anything I missed?

Related Topics: Economy & Policy

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deconstructiva

Stephen, please keep this feature going daily. If you’re out, have Barbara, John, or other teammates handle it. No need for turf wars. With five colleagues + daily events somewhere there should be lots of posts every day + our comments and your team’s replies. These should keep site traffic moving. But fewer posts / replies won’t help. “Less is more” doesn’t apply here.
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As for the airline merger, I’d bet Southwest and Air Tran don’t plan to sit around and let United take over. How are the unions reacting? But kudos to Deidre for pointing out that United is to blame for inventing airline food. I’d oppose the takeover on that alone. I bring my own food – peanut butter sandwich + fruit from home, or buy something good at the airport (Chili’s, etc.). How do you and colleagues handle eating in flight?
pneogy

“Fed meetings, and there seems to be evidence that suggests Greenspan and others were not interested in allowing, even privately, a debate on whether the housing market was or wasn’t in a bubble. So was it a cover up? Vincent Reinhart, who was a the Federal Reserve’s top staff accountant at the time, says no.”

There are three related transgressions here – a lack of transparency, a cover up and a conspiracy. Reinhart concedes lack of transparency. I don’t know if anyone has alleged a conspiracy, which Reinhart denies. A cover up is a tad stronger than lack of transparency, but not all that much stronger.