Paulson: Economy in Danger

Countrywide, WaMu got $35M as they upped risky loans

(NEWSER) - Rick Perry handed mortgage lenders millions to draw them to Texas—right when their risky lending practices surged. The governor gave Countrywide $20 million and Washington Mutual $15 million in what he called an exemplary job-creation move; in effect, that $35 million subsidized dangerous subprime lending, an AP analysis of data and records finds. And when some began to fear the impending mortgage crisis, Perry's rep shrugged off their concerns as “slightly alarmist.” More»

But regulatory agency disagrees, and nothing has yet been filed

(NEWSER) - The SEC is making moves toward charging current and former Fannie Mae and Freddie Mac executives, sources tell the Washington Post , but the Federal Housing Finance Agency disagrees with the move. The SEC has sent notices to at least four senior executives over the past eight weeks warning them they may face civil charges, although nothing has been formally filed and the SEC could still change its mind. The executives would be charged with violations related to the housing market collapse, including a failure to provide investors with necessary information about the companies' mortgage holdings. More»

Housing market gloom is over-hyped

(NEWSER) - Has the housing crisis scared you out of the market? Too bad, because there are still many good reasons to buy, writes Brett Arends in the Wall Street Journal . A few points to consider before hopping on the first train to rents-ville:

• You could get a deal: Prices are down—way down. "This is a buyer's market," Arends writes, especially if you're willing to play hardball. Could prices drop more? Sure. But that "doesn't really matter so much in the long haul."
• You'll save on taxes: Usually, "the breaks are more valuable the more you earn, and the bigger your mortgage," Arends says. So run the numbers—you could save on income, real estate, and capital gains taxes.

Sales pace falls way short of 330K expected

(AP) - Sales of new US homes dropped sharply last month to the slowest pace on record, the latest sign that the economic recovery is fading. The Commerce Department says new home sales fell 12.4% in July from a month earlier to a seasonally adjusted annual sales pace of 276,600. That was the slowest pace on records dating back to 1963. More»

Debt on course to exceed GDP for first time

(NEWSER) - America's national debt is now at a dizzying $13.6 trillion and will reach $19.6 trillion in 5 years, according to a Treasury Department report. By 2015 the debt will, for the first time, exceed the value of all goods and services produced in America in a year, reaching 102% of GDP, Reuters notes . More»