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Time to shore up financial regulations

21 Jun 2009 - Preaching the News for Sunday

This Sunday's psalm evokes images of distressed mariners crying out for rescue as they sink to the depths. President Barack Obama Wednesday unveiled a plan to bolster the U.S. financial regulatory system so that in the future the government will not be forced to choose between rescuing sinking institutions and financial collapse. Obama said his plan to refashion supervision of the U.S. financial system is needed to fix excessive risk-taking and lapses in oversight that helped push the economy into a prolonged recession. The president blamed the turmoil on a "culture of irresponsibility" that he said had taken root from Wall Street to Washington. The president will push Congress to grant new powers to the Federal Reserve to oversee the economy. The proposal sets out the biggest overhaul of market rules in more than seven decades, adding an additional layer of regulation for the biggest firms. A new Consumer Financial Protection Agency would oversee products from mortgages to credit cards. It would have authority to ban "unfair terms and practices," punish companies for violations with fines and penalties, and write rules to set higher standards for banks and non-bank companies. "We are called upon to recognize that the free market is the most powerful generative force for our prosperity--but it is not a free license to ignore the consequences of our actions," Obama said. But moving his plans through Congress as they are currently written is far from assured, given turf battles among lawmakers and what is sure to be heavy resistance from the financial sector. Obama acknowledged earlier this week that his revamp will be a "heavy lift." Source: Articles by Henry J. Pulizzi and Damian Paletta for the Wall Street Journal and Robert Schmidt and Hans Nichols for Bloomberg

barack obama financial system federal reserve regulation market
Happy house hunting

02 Aug 2009 - Preaching the News for Sunday

In this Sunday's gospel the people ask Jesus for a sign they can "see and believe in." Beleaguered homeowners and businesses waiting for a sign that recovery in the troubled housing market is near may have received it: The U.S. Commerce Department reported Monday that new home sales in the U.S. rose in June by the largest amount in more than eight years. The report is another encouraging indicator that the beleaguered housing sector is finally coming back to life. Last Thursday the National Association of Realtors said that home resales posted a monthly increase of 3.6 percent in June. Along with greater numbers of houses selling, the rate of home price deterioration has slowed and in some places leveled off, according to the widely watched Standard & Poor's/Case-Shiller home price index. The index, which tracks home prices in 20 metropolitan areas, rose 0.5 percent for the three-month period ending in May, compared with the three months ending in April. It marked the index's first increase after 34 straight months of decline. The home-sale numbers surprised Robert Shiller, the Yale University economist who helped create the Case-Shiller indexes. "The change in momentum here is very significant," he said. Shiller expects home prices to remain at current levels over the next five years, possibly declining a little further before bouncing back. Fallout from the housing crisis has played a central role in the U.S. recession, now the longest since World War II. Foreclosures have spiked, homebuilders have slashed construction, and financial companies have lost billions. Source: Articles by Nick Timiraos and Kelly Evans for the Wall Street Journal and Alan Zibel for Associated Press

recession housing housing market commerce department home sales national association of realtors standard poors case-shiller home price index robert shiller
China sentencing of geologist rocks international business

11 Jul 2010 - Preaching the News for Sunday

The law of the Lord is perfect, Psalm 69 says this Sunday. The laws of China came in for international criticism this week after a Chinese court sentenced an American geologist to eight years in prison for trying to buy public data about the Chinese oil industry. The heavy penalty is seen by legal experts as a warning to foreign businesses and a rebuke to the United States. Xue Feng's lawyer called the sentence "harsh" and said few details of the allegations against Xue were made public. The U.S. Embassy in Beijing said Washington is "dismayed" at Monday's sentence, announced during the U.S. Independence Day holiday weekend. The embassy called for Xue's humanitarian release and deportation. For foreign companies, Xue's case is the latest to highlight stark questions about the legality of conducting market research in China. Unlike more celebrated allegations involving Chinese secrets, Xue's case stems purely from his attempt to purchase commercially available data on the oil industry, according to people involved in his defense. Monday's sentence "sends a very bad signal to the foreign business community if they care to examine what happened," said John Kamm, executive director of the Dui Hua Foundation, a San Francisco group focused on helping those detained in China that was involved in Xue's case. Though a U.S. citizen, Xue was born in China, a reminder that ethnic Chinese may be more vulnerable to pitfalls of the country's legal system than other foreigners. Chinese security agents initially denied Xue the right to contact the U.S. Embassy, and his whereabouts were unknown for weeks, while his extended detention, quick trial, and alleged actions were likewise cloaked in secrecy. "One notable aspect of this case was the Chinese government's thumbing its nose at the [U.S. government's] efforts to support Xue," said Jerome A. Cohen, a New York University law professor and authority on China's legal system. Source: Articles by James T. Areddy for the Wall Street Journal and Bloomberg.com

china united states market research xue feng
Housing starts stall again

02 Oct 2011 - Preaching the News for Sunday

“Have no anxiety at all,” counsels Saint Paul in the Letter to the Philippians this Sunday, encouraging us to make our requests known to God “by prayer and petition.” The faith of home-builders and construction workers is being tested this week with news that sales of new U.S. homes fell to a six-month low in August. The fourth straight monthly decline during the peak buying season suggests the housing market is years away from a recovery. New-home sales are down nearly 80 percent from their peak in July 2005. They remain far below healthy levels, which would be more than double August's rate. "With job growth at a standstill, the stock market swinging wildly, Congress wrangling over the debt ceiling, and the euro zone's problems sending consumer confidence down, sales of new homes are slipping from an already weak pace," Celia Chen, director of housing economics at Moody's Analytics, wrote in a note to clients. Patrick Newport, U.S. economist with IHS Global Insight, said the trend for new home sales has been flat for the last 16 months. "This year is shaping up to be the worst year on record for new home sales," Newport wrote. The median sales price of a new home, which is the point at which half the new homes sold for more and half for less, fell nearly 9 percent to $209,100 in August. The steep drop in prices indicates that builders are struggling to attract buyers away from even cheaper so-called distressed properties, which are homes that are foreclosures or have borrowers in default. Sources: Articles by Alan Zibel and Jeff Bater for the Wall Street Journal and Alejandro Lazo for the Los Angeles Times

housing market home sales
Extreme makeover, housing market edition

23 Sep 2012 - Preaching the News for Sunday

This Sunday the psalmist sings the praises of the Lord who “sustains my life,” the God who “is my helper.” A jump in sales of previously owned homes to the highest level in more than two years, as well as an uptick in new home construction, are helping sustain a recovery in the long-beleaguered housing market, new data indicate.Sales of previously occupied homes rose 7.8 percent in August, the National Association of Realtors said Wednesday. That's the highest level since May, 2010, when a federal home-buying tax credit aided sales.“Today's data are another indication of improvement in the U.S. housing market which, for really the first time post-recession, is becoming a positive for economic growth,” said Andrew Grantham, an economist at CIBC World Markets in Toronto.At the same time builders broke ground on 2.3 percent more homes and apartments in August than July. The U.S. Commerce Department said the best rate of single-family home construction since April, 2010 drove the increase.The pair of reports comes amid other signs of steady progress in the housing market after years of stagnation. New-home sales are up, builder confidence is at its highest level in more than six years, and increases in home prices appear to be sustainable."The U.S. housing recovery is for real," said Sal Guatieri, an economist at BMO Capital Markets. "Great affordability, pent-up demand, and strong investor interest in rental units are driving the market." Sources: Articles by Christopher S. Rugaber and Martinn Crutsinger for theAssociated Press and Lucia Mutikani and Jason Lange for Reuters

housing market national association of realtors andrew grantham new home sales previously owned homes sal guatieri
Debt forgiveness talk is cheap but money even cheaper

17 Nov 2013 - Preaching the News for Sunday

The call for the Thessalonians to imitate the humble and hardworking ways of the followers of Jesus sounds similar to the strategy the Occupy Wall Street activists are putting into play by their recent purchase of $15 million in Americans' personal debt, which they then cancelled free and clear.Known as the Rolling Jubilee, the Occupy Wall Street group Strike Debt purchased for only $400,000 mostly personal medical debt which amounted to an overwhelming $14,734,569.87 and then informed the debtors that they were essentially off the hook.Professor and member of the group Andrew Ross explained that even the Strike Debt investors were surprised at how little they needed to purchase huge amounts of debt: “We thought that the ratio would be about 20 to 1. In fact, we’ve been able to buy debt a lot more cheaply than that.”The secondary debt market, which the Occupy Movement has called out for its predatory tactics, allows banks to sell off their debt for a fraction of what it’s worth to a third party, who then acts as a collection agency and makes a profit on whatever it can collect.Homily hint: Modeling behavior is the best way to show someone how to act. Saint Paul and his followers did just that for the Thessalonians, the Occupy Wall Street activists did it for bankers, and you can do it for your children or your employees or your neighbors. As you look around and see the need for change; model the behavior you hope to see in others. In other words, practice what you preach. Sources: Articles by Sarah Rasheed for AmericanLiveWire, Adam Gabbatt for The Guardian, and StrikeDebt.org

debt debt relief debt forgiveness model behavior strike debt rolling jubilee secondary debt market andrew ross occupy movement occupy wall street debt collection
Rising housing tide should lift all boats

26 Jul 2015 - Preaching the News for Sunday

Wherever Jesus went, we hear in this Sunday’s gospel, “a large crowd followed him.” Anyone with a home to sell these days is sure to attract a crowd as well. Americans bought homes in June at the fastest rate in more than eight years, pushing prices to record highs as buyer demand has eclipsed the availability of houses on the market. Sales have jumped 9.6 percent over the past 12 months, while the number of listings has risen just 0.4 percent, which means there are a lot of buyers out there for any property that is listed for sale. Homily help: A healthy housing market is central to a healthy economy. After many years of very slow recovery, it appears we are finally putting the crash of 2008 behind us. The question is, have we learned the lessons needed to avoid a repetition? Greed is one of the deadly sins in our tradition for a good reason. Let’s make sure that we keep our returning prosperity in perspective, and focus on making sure those left behind for so many years finally have a chance to recover. We’re all in this together! For more on the housing market, see: US home sales surge in June to fastest pace in 8-plus years

housing market economic recovery economic justice
Homily stories

16 Nov 2008 - Thirty-third Sunday in Ordinary Time, Cycle A

A lot of people have been paying attention to the financial markets lately. It’s become clear that, in the world of finance, there’s always a risk in any investment. But Jesus’ story about the three servants and the talents they were entrusted with by their master makes the point that in the spiritual realm, it’s more risky not to invest. This is a strong message for parents who feel they are ill-equipped to nurture their children’s faith. They may say, “I’m not well-versed in my religion,” or “The people up at church are in a better position to handle that.” And so they hide the talent they do have (their own experience of faith), and don’t try to make more of it. They play it safe—or so they might think. In Jesus’ view, it is putting what we have to good use that reaps rewards. So share the faith you do have with your children and those around you. The good news is that we don’t have to start with a lot. Jesus says, “To all those who have, more will be given, and they will have an abundance.” It’s time to invest.

Authors Tom McGrath

financial markets invest Faith talent good use abundance

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Taking stock of the market

18 Dec 2016 - Preaching the News for the Fourth Sunday of Advent, Cycle A

Signs and wonders “as high as the sky” are spoken of in this Sunday’s reading from the prophet Isaiah. Major U.S. stock indexes are also in sky-high territory this week as the Dow Jones Industrial Average closed above 19,900 for the first time Tuesday. The 20,000 mark seems to be close at hand, although the Federal Bank’s interest rate hike Wednesday slowed things down a bit, at least for a moment. The bigger question is, what does all the stock market hoopla mean for the U.S. economy and ordinary Americans trying to get by? The rise in interest rates is generally seen as a positive sign that the economy is healthy and may even need to be cooled off a bit to avoid overheating, which would lead to a high level of inflation. J.J. Kinahan, TD Ameritrade's chief strategist, said stocks have surged since the presidential election because, after the long campaign, investors now have a better idea which policies the country will adopt. “The biggest questions hanging over us are gone,” he said. As the Dow nears 20,000, people who are not invested in stocks are asking if they have missed out on a record run and how much farther stocks will rise. Those already invested are wondering if they should sell while they are ahead. The simple answer that many experts give to these sorts of questions is that most investors, especially ordinary Americans who may have some money set aside for retirement, should do little to nothing in light of 20,000 or any market milestone. “Don’t try to time the market and don’t get caught up in the hype over a round number. Invest for the long term, be patient, and let the power of compounding returns do the work,” says Todd Morgan, chairman of Bel Air Investment Advisors LLC. Some investors may want to take steps to protect themselves from today’s relatively high stock valuations. For example, recent research indicates that people within a few years of retiring should temporarily reduce their stock allocations to protect against potential losses in the years right after retirement, when retirees are most vulnerable to stock-market declines. The Federal Reserve, as expected, nudged up short-term interest rates by a quarter of a percent, signaling its confidence that the economy is sufficiently robust to handle it. In its announcement, the Fed predicted a gross domestic product growth of 2.1 percent for the next year, and GDP growth at a similar pace in later years, plus it indicated it would lift rates three times next year. The prognosis bodes well for ordinary Americans hoping for continued slow but steady improvement in the job market and in earnings. “We’re on a good path to reaching our objectives,” Fed Chair Janet Yellen said in a news conference, in which she was careful not to pick a fight with the incoming administration. In perhaps an oblique reference to President-elect Donald Trump’s complaint that the Fed should have elevated rates earlier, she noted that she thought the Fed “is not behind the curve.” In broad terms, she also defended the Dodd-Frank law imposing tighter federal controls on banks, saying it was “important” to ensure that lenders keep solid amounts of capital to cushion them in bad times. Trump has talked about scaling back Dodd-Frank. In its statement, the Fed said that the "labor market has continued to strengthen and that economic activity has been expanding at a moderate pace since mid-year.” Lessons drawn from the readings Though economics often dominates the news, it’s good to remember, as the psalmist puts it this Sunday, that the "Lord’s are the earth and its fullness.” The beauty and grandeur of the natural world, and the miracle of life itself, does not depend upon the stock market or any “economic indicator.” They are, rather, “divine indicators” that serve to remind us where are ultimate loyalty—and security—can be found. Final thought in light of the news Before we break into a stanza of “Happy days are here again,” let’s pause to remember all those who have been left behind by the slow economic recovery of the past few years. Things may be better for more of us, but not for all of us. And when the “least among us” do not have the basic necessities—food, clothing, shelter, healthcare—then all of us are a little poorer.

stock market dow jones industrial average economy interest rates federal reserve dodd-frank
Fact of the week

18 Dec 2016 - Preaching the News for the Fourth Sunday of Advent, Cycle A

The Dow Jones Industrial Average first closed over 100 in 1906. It first closed over 1,000 in 1972. It first closed over 10,000 in 1999. 10 Most Interesting Facts About Stock Market

dow jones industrial average stock market