by Calculated Risk on 12/17/2009 12:00:00 AM

Note: This is just the House. The Senate votes early next year.

From Reuters: U.S. House approves $155 billion jobs bill

This includes:

More infrastructure spending

The bill would provide $48.3 billion for infrastructure projects that promise to get workers back on job sites by April. Highway construction projects would get $27.5 billion, while subway, bus and other transit systems would get $8.4 billion.

Extends COBRA subsidy to 15 months

Extends unemployment benefits for six months (that expire at the end of the year).

Aid to states:

States would get $23 billion to pay 250,000 teacher salaries and repair school buildings, and $1.2 billion to pay for 5,500 police officers ... $23.5 billion to help pay their share of federal healthcare programs for the poor.

The bill doesn't include:

Proposed hiring tax credit

Cash-for-caulkers.

by Calculated Risk on 12/16/2009 09:08:00 PM

Jon Stewart's take on the bank CEOs missing the meeting with President Obama ...

Click here if the embed doesn't work.

by Calculated Risk on 12/16/2009 05:46:00 PM

From Eric Dash at the NY Times: U.S. Said to Reconsider Quick Sale of Citigroup Stake

Two days after Citigroup moved to untangle itself from Washington, the Treasury reversed course Wednesday and backed away from plans to immediately sell a portion of its stake in the banking giant ... The decision came after Citigroup badly misread the financial markets on Wednesday and struggled to sell new shares to pay back its bailout funds.

Oops.

by Calculated Risk on 12/16/2009 05:29:00 PM

From TIME Magazine: Person of the Year 2009 Extended Interview

TIME: Do you have a mortgage?

Bernanke: Oh, yes, we refinanced.

TIME: Oh, perfect. When?

Bernanke: About 5%. A couple of months ago.

TIME: Good time.

Bernanke: Yes. We had to do it because we had an adjustable rate mortgage and it exploded, so we had to.

TIME: So, did you get a fixed rate at 5%? I think this might be the most valuable piece of information. (Laughter.)

Bernanke: Thirty years fixed rate at a little over 5%.

by Calculated Risk on 12/16/2009 04:11:00 PM

First, my thanks to everyone who visits this blog. Thanks - I appreciate the feedback in the comments and via email too.

I think the most important point in the FOMC statement was that they reiterated the ending dates for the Fed facilities and MBS purchases. The Fed is giving advance warning that these facilities will expire as previously announced. It would take a major credit or economic event to change these dates at this point.

There is some concern about what will happen when the Fed stops buying agency MBS. The important thing to remember is that there will be buyers; it is just a matter of price. My guess is that mortgage rates will rise about 35 bps (maybe 50 bps) relative to the Ten Year treasury when the Fed stops buying MBS. It could be more or less, but I'm surprised by how few analysts have tried to estimate the impact.

There are some sites that think there will no buyers for agency MBS once the Fed stops the purchase program. That isn't correct; as I noted it is just a matter of price.

But this gives me an excuse to post this photo: Canaille the Cat models the proper attire when visiting those sites!

Credit: Planet Wally

The other important point in the Fed statement was the recognition that the housing sector is not as strong as it appeared in November. The wording change was small:

Dec: "The housing sector has shown some signs of improvement over recent months."

Nov: "Activity in the housing sector has increased over recent months"

As I noted this morning, existing home sales will be very strong in November (as buyers rushed to beat the initial tax credit deadline), but the indicators for residential investment have been mostly flat to weak in Q4. This includes the NAHB housing market index, housing starts, new home sales and the MBA purchase index.

Residential investment (RI) is the best leading indicator for the economy, and I expect the recovery in RI to be sluggish. In the fourth quarter GDP will be strong because of inventory restocking and stimulus spending, but my guess is 2010 will mostly be weak (I'll try to quantify this soon).

Also: I try to post data that I think is informative and useful. In that sense the blog is like a filing cabinet of economic data for me and hopefully for all the readers.

I'm going to try to post more analysis (this is a common request - and I know I've posted less analysis recently).

And finally - draw your own conclusions from the two covers below. I think Larry Summers looks as uncomfortable as the Canaille the Cat above.

Paul Krugman beat me to this: Bernanke and the cover curse

Credits (ht JA):
Person of the Year 2009: Ben Bernanke

TIME Magazine Cover: Rubin, Greenspan & Summers - Feb. 15, 1999