Economy Watch: Brown Taking Moody’s to Court
- Apr 20, 2010
April 20, 2010
By Dees Stribling, Contributing Editor
In a particularly Jerry Brown turn of phase, the California Attorney General said on Monday that Moody’s Investors Service is “blowing off” the state of California. He is going to court to force the ratings agency to cooperate with his office, which is investigating whether Moody’s and other rating agencies pasted a lot of happy-face triple-A ratings on a lot of toxic MBS, back when such a thing was possible.
Moody’s has variously said that it is indeed cooperating with the attorney general’s probe, but also that it doesn’t have to cooperate because the information and documents that Brown have asked for are “subject to the exclusive jurisdiction” of the feds. Brown counters that the agency does have to cooperate with him, or else.
“In California alone, half a million people are losing their homes,” Brown, who will also probably run this year to reclaim the governor’s office, said at a news conference on Monday. “And all this came out of mortgage manipulation, fraud, behavior that is completely unethical and in many cases illegal.”
Mortgage Delinquencies Dip in March
The Wall Street Journal reported on Monday that residential mortgage delinquencies dropped for the second month in a row. Citing spanking-new data from LPS Applied Analytics, which does mortgage processing for banks, the newspaper said that the number of loans more than 30 days past due declined by 8.6 percent during the month.
The most improvement came in the segment of loans that are only 30 days past due, which fell by more than 647,000 since the beginning of the year, according to LPS. About 1.45 million mortgage-holders currently find themselves in that situation, which sounds like a hefty number, but in fact the total hasn’t been that low since fairly early in the mortgage crisis, back in the spring of 2008.
Still, no one in the mortgage business is fishing around for those party hats they stored away around 2007, since there are still plenty of troubling mortgage factoids out there. According to LPS, for example, in excess of 320,000 loans nationwide that were current at the beginning of 2010 are now at least 60 days past due.
Leading Indicators Look Better
The Conference Board Leading Economic Index increased again in March, this time by a sizable 1.4 percent, on the heels of smaller gains in February and January, which saw 0.4 percent and 0.6 percent gains, respectively. The LEI has been going up for a year now, and even the board’s Coincident Economic Index has started to go up lately too (though only 0.1 percent in March).
“The U.S. LEI has risen steadily for a year, and its six-month growth rate has remained fairly stable in recent months–led by improvements in financial and labor market indicators,” noted Ataman Ozyildirim, an economist at the Conference Board, in a statement. “Payroll employment made its first substantial contribution to the coincident economic index, suggesting a recovery that is beginning to gain traction.”
Wall Street was down most of Monday, but ended up mixed. The Dow Jones Industrial Average spiked upward in the afternoon to end 73.39 points–or 0.67 percent–higher, making up much of Friday’s decline. The S&P 500 gained 0.45 percent, but the Nasdaq lost 0.05 percent.