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Fed Will Support Mortgages; Second stimulus; Bad banks 😡

By December 16, 2020 No Comments

Record low-interest rates until 2024?

Everyone is losing it, just a little bit. Half of all remote workers admit that they drink alcohol during work hours. We suspect there is a margin of error to that study that’s around 50% (get it?). Tom Cruise recently lost it on the movie set of Mission Impossible 127 because many of his coworkers were not following COVID-19 safety protocols. (listen here, explicit language).

Speaking of freaking out. Watch this video of a millennial losing it because a potential employer asked her to work a full eight-hour shift, for free. “This is why millennials can’t buy [?%&$-] houses!” she yells. WARNING very colorful language.

OK. Remote workers, Tom Crusie, unemployed Millennial. Did you get that righteous anger out of your system? Great, let’s move on.

The Federal Reserve is helping to keep interest rates low by purchasing mortgage bonds. This behavior is expected to continue until 2024, according to coverage in USA Today. Why 2024?

Goldman Sachs believes the Fed will say it will keep buying bonds at the current pace until the labor market is “on track” to reach full employment and inflation is “on track” to reach 2%.

That’s similar to the Fed’s criteria for raising its key short-term rate but not as rigid. It likely would mean the Fed starts tapering down the bond purchases in 2023, about a year before raising its short-term rate.

🤣 MEME of the day by Kyle Nicholas McCray 🤣

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WaPo: More stimulus on the way, probably very soon

Congressional leaders are near an agreement to add a new round of stimulus checks to a roughly $900 billion relief package as they rush to complete a deal before the end of the week, according to three people familiar with the talks granted anonymity to share internal deliberations, according to a paywall article in the Washington Post.

Sen. John Thune (R-S.D.), the second-ranking Senate Republican, told reporters that lawmakers were considering providing stimulus checks worth between $600 and $700 per person. He added that the package was expected to have an additional federal unemployment benefit of $300 per week.

With the presidency in transition, there were concerns that a second round would not be considered a priority until late January.

There are numerous signs in recent weeks that the economy is flagging because of a surge in new coronavirus cases. Nearly eight million Americans fell into poverty since this summer, according to a new report, in part because emergency benefit programs expired.

🔥 Bourbon and BS 🔥 

With Josh Pitts & Alex Kutsishin

Fed is cool with letting bad bank behavior slide

JPMorgan Chase wrongly charged 170,000 customers overdraft fees. And Federal Regulators refused to penalize it for the bad behavior.

And they aren’t alone.

According to a ProPublica investigation, documents and records show that bank examiners have avoided penalizing at least six banks that incorrectly charged overdraft and related fees to hundreds of thousands of customers.

Since 2017, the OCC found several banks wrongly charged overdrafts and related fees, but in each case, the agency quietly rebuked the bank rather than pushing for fines and public penalties.

That’s not even a slap on the wrist, more like Fed handholding. The article in ProPublica describes a bank-friendly environment at the OCC and reminds us that leaders there helped run OneWest Bank, a lender that Treasury Secretary Steve Mnuchin founded in the aftermath of the 2009 financial crisis and once accused of redlining.

“Rather than openly penalizing Chase, the nation’s largest bank, OCC officials decided to issue a quiet reprimand — a supervisory letter — that would go into the bank’s file and stay out of public view, according to the people and regulatory paperwork,” the ProPublica article states.

“The agency’s deputy chief counsel, Bao Nguyen, [ed note: this is Bao’s first job out of college, what a way to start a career!] approved the supervisory letter in June and accepted Chase’s explanation of the incident and its promise to repay its customers, according to the people and regulatory paperwork,” the article concludes.

For the record, the Center for Responsible Lending has accused banks of price gouging with overdraft fees during the pandemic. The banks earned more than $11 billion each year charging these fees, so while we are happy to see them pay some back, they could easily afford any penalty to ensure righting this bad behavior.

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