MORNING YAPS

*what stalled the rally was MEXICO releasing a statement saying their GDP expected to drop 10%. WHOPPER!
Reality of slow economic recovery affects U.S. stocks
Capital markets' spring rally went soft as mentions of a second stimulus in the U.S. reminded investors that the economy is still in turmoil. "What stalled the rally was the realization that unemployment is still going up," said Denis Amato, chief investment officer of Ancora Advisors. USA TODAY (08 Jul.)

*REALLYYYYYYYYY? and foreclosures are profitable?????
Loan modification unprofitable for lenders, study finds
According to a study by the Federal Reserve Bank of Boston, most lenders do not try to rework home loans for borrowers facing foreclosure. Doing so would mean losing money for the lenders, according to the study. "Loan modification is not profitable for lenders," said Paul S. Willen, senior economist at the Boston Fed. "If it were profitable, they would go out and hire staff." InvestmentNews (07 Jul.)

*how bout getting rid of the PRESENT bankers who have pilloried the financial system? That would be a healthy start. Talk about a black plague.
U.S. Treasury team examines issues plaguing financial system
The U.S. Treasury developed a team to identify and look into issues that could threaten the financial system, specifically the fragile lending sector. The team is focusing on distress in commercial real estate markets, trouble at community and regional banks, homeowner delinquencies, and other areas vexing the system. The internal project is informally known as Plan C, implying that it is the last line of defense. The Washington Post (08 Jul.)

*of course Private Equity groups (who now want to become BANKS) complain if they have to have more reserves to protect DEPOSITERS! How about banks protecting US TAXPAYERS who have to bail them out when they do really STUPID things. Buck up Sheila, give em hell.
Investors object to FDIC's proposed capital changes
At a meeting between Federal Deposit Insurance Corp. Chairwoman Sheila Bair and potential investors in struggling banks, participants voiced objection over a proposal that would require investors to post 15% of Tier 1 capital for three years or more. "Most of the questions [from investors] were around the 15%," one investor at the meeting said. "At that level, you won't see private equity as bidders, or if you do, you will see private equity bid half of what we otherwise would have." Financial Times (tiered subscription model) (08 Jul.)

*see? IJIOTS think the real estate market will turn around and POOF! everything okie dokie. Those ijiots getting involved in the PPIP program will be sorry...well not really when you have Uncle Sam scratching your back.
Economists fret over shadow inventory's effect on housing
Economists are worried that the shadow inventory may slow the housing recovery. The shadow inventory is homes that will be listed in the coming months and join the 3.5 million houses already listed. As the shadow inventory "bleeds into the market over time, it continues to put downward pressure on prices," said Stan Humphries, chief economist for Zillow. National Public Radio (7/7)

*HELLOOOOOOOO. We're done that here and you see how well that worked out for us eh? Banks worldwide have much too much power and need to be castrated. IJIOTS!
Source: Darling to tell banks to plan for their own unwindingU.K. Chancellor Alistair Darling will propose that banks keep instructions on how to unwind their positions to help regulators should a rescue be necessary, a source said. The measures are part of an effort to prevent a repeat of the crisis that required the rescues of Lloyds Banking Group and Royal Bank of Scotland. The U.K. and the U.S. are coordinating their regulatory overhauls while the crisis continues. "It's very important for governments to move forward because impetus will wane as the crisis lessens and the lobbying efforts of the banks get even stronger," said Richard Portes, a professor at London Business School. Bloomberg (07 Jul.)