The big news today is that President Barack Obama is proposing sweeping changes to the regulatory system that oversees our financial products and services industry. In addition to expanding the scope of some of the Federal Reserve’s powers to regulate large firms, Obama suggests that a consumer protection agency be created. One of the issues that such a consumer protection agency will oversee is that of home mortgage loans .

The main idea is to have mortgage lenders first offer traditional mortgages to borrowers, and help them find the mortgage that would best fit their situations . The Wall Street Journal offers this information on what could happen in terms of new mortgage regulations under a new system of oversight :

Mortgage brokers also could be charged with new duties, such as presenting homeowners with the best available mortgage loans and ensuring consumers can afford the mortgages . And the new agency could ban certain practices like prepayment fees or “yield spread premiums,” blamed for incentivizing brokers to steer borrowers to costly loans.

Any new requirements would be applied uniformly to all lenders in the industry , including banks, nonbanks and mortgage brokers. And the states would have the power to offer tougher rules than the federal agency.

This news comes on the heels of efforts by some in the Senate to pass a new $15,000 home buyer tax credit to be available to anyone buying a home. The housing market is a hot topic right now, and it is considered Very Important that matters in the housing and mortgage market stabilize, and that home buyers start buying homes again. A new tax credit would do that (in the short term, at least). And if new mortgage regulations actually pass, it may result in home buyers actually being able to keep their homes later on down the road.

Image source: Sean O’Flaherty via Wikimedia Commons

Lockheed Martin is expected to eliminate as many as 750 jobs, according to various reports. The job cuts are reportedly a result of the federal government’s decision to cancel a contract with the company.

The job losses will be centralized in a Lockheed Martin plant in the state of New York. The plant was responsible for manufacturing the helicopters used by the President of the United States. However, with that contract now canceled, the company will now have to cut the workers.

In total, about 25% of the workers in the New York plant, which is located in the city of Owego, have been lost. Almost the entire blame has been to budget cuts by the federal government.

Since Barack Obama and the rest of the federal government don’t look to fondly upon job losses in this economic climate, it will be interesting to see if there is any reaction to this announcement by Lockheed Martin. Some experts believe that Lockheed Martin might be using job cuts as a tool to ensure more government spending.

Lockheed Martin Helicopter (Image: Flickr)

Many investors and a large part of the general public have expressed their outrage and disgust at the excessive compensation practices of several corporate executives essentially draining their companies dry. In response to this situation, Obama has proposed new legislation that would give shareholders larger control over pay practices, allowing them to limit these golden parachutes and other forms of reckless compensation.

Wall Street (Image:Flickr)

 
“This financial crisis had many significant causes, but executive compensation practices were a contributing factor,” according to Treasury Secretary Timothy Geithner in a statement he released today.
 
The say on pay law, as the concept is referred to in the business world, sits alongside other proposed laws that aim to increase corporate transparency, such as a law that would force corporate compensation committees to distance themselves from the company. According to Geithner, the federal government has been considering several different tactics to curb executive irresponsibility, which means that the say on pay law may be the tip of the iceberg.

Chrysler is all set to sell most of its assets to Fiat and wanted to complete the deal prior to this weekend. However, that’s not happening after the deal between the two companies ran into a roadblock.

A threesome of Indiana construction and pension funds will fight the deal in a court of appeals on Friday. The three funds believe that the deal between Chrysler and Fiat is unfair in favor of unsecured stakeholders over secured debtholders.

The three Indiana funds in question are the Major Moves Construction Fund, the Indiana Teacher’s Retirement Fund and the Indiana State Pension Fund.

While the three funds will get their day in court, legal experts believe there’s virtually no chance that the deal between Chrysler and Fiat can be stopped at this point. Fiat, the automaker based in Italy, is virtually guaranteed to get a chance to turn around Chrysler.

President Barack Obama has said that he hopes that Chrysler can complete their bankruptcy proceedings in 60 days. Completing the sale to Fiat is one of the big obstacles that must be completed to meet that goal.

Fiat trying to purchase Chrysler (Image: Flickr)

On Monday, multiple reports indicate that President Barack Obama will announce that he will support General Motors restructuring effort as the United States automobile maker goes through its bankruptcy proceedings. He’s also reportedly going to announce that the nation’s taxpayers will own 60% of GM once it emerges from bankruptcy.

Will Barack Obama have his hands full with GM? (Image: Flickr)

To help GM emerge from bankruptcy in less than 90 days and be prepared to turn itself around, Obama is expected to announce that GM will be infused with $30 billion. That latest infusion will climb the amount invested in General Motors to around $50 billion.

To survive in the competitive automobile industry, the White House will want GM to be a smaller and more mobile company. Expect to see fewer workers, fewer factories and few dealerships. Also expect to see GM produce smaller cars that offer practicability in terms of price and gas mileage.

General Motors will join Chrysler as U.S. automakers who have been forced to file bankruptcy recently.

President Barack Obama plans to institute national fuel efficiency standards, along the lines of what California requires in its state standards. And the auto companies are happy about it, reports Popular Science:

The auto companies have been begging for a nation-wide standard (along with a clear timetable for improvement) for years. Now that they have one, they can unify their production and save money by not having to manufacture more efficient cars for certain states.

Many consumers will be happy to know that by 2016 they will have a variety of more fuel efficient cars to choose from. And it will be nice to know that cars continue to improve in fuel efficiency. I wonder how many cars will, in seven years, actually beat the 35.5 mpg national standard.

However, not all consumers will be pleased with this push for greener autos. After all, there are estimates that these standards will force prices to increase an average of $1,300 per car. In the case of my Prius, which offers me gas savings of about $360 a year, it would take 3.6 years to make up the cost. It is worth realizing, though, that with cars that already beat the national average (our Prius repeatedly gets about 40 mpg), costs shouldn’t rise substantially. Well, unless already-efficient automakers decide that they want a piece of the action as well.

One would think, though, that as technology improves and more fuel options become available, the overall costs of fuel efficient cars should go down. My recent Prius purchase cost the same as any other comparable car, a little more than $15,000. So I would hope that the trend toward lower-priced, fuel-efficient cars would continue after this initial bump in price.

What do you think? Are greener cars worth a price increase of $1,300 per car?

image source: IFCAR via Wikimedia Commons

RetireSafe.org, a grassroots organization that advocates for nearly 400,000 American citizens, recently called on President Barack Obama and the United States Congress to make steps towards improving Social Security.

“With unfunded liabilities of up to $100 trillion and the Social Security Trust Fund scheduled to pay out more than it takes in by 2016,” said Michelle Plasari, the President of RetireSafe. “America’s seniors deserve to know that the Social Security benefits they rely on to make ends meet will still be there for them.”

Among the improvements RetireSafe wants to see are guaranteed benefits, fair cost of living adjustments and the repeal of double taxation. Addition, the grassroots organization wants the government to prohibit totalization and to abolish the earnings limit for early retirees.

For more information on RetireSafe and what they are all about, visit their official website at RetireSafe.org.

RetireSafe.org Screen Shot

The recession has resulted in a number of job losses. One of the things that some are doing is to go back to school or go through some sort of skills training or certification in order become more marketable for the future. This can be a smart move, and a good use of time if you are unemployed. Unfortunately, getting training or education while you are unemployed can mean loss of benefits. And it can be expensive to go to school without grants. Consumerism Commentary points out that some of the economic recovery measures espoused by President Obama address some of the problems faced by those looking for an education while unemployed:

The President has proposed using current rather than the prior year’s income to determine whether an student qualifies for the Pell Grant, financial aid for low-income families. Another proposal would ensure that students would not lose their unemployment benefits while enrolled in classes and training.

This is actually very helpful, since many find it impossible to improve their education and skills while unemployed because in order to receive benefits they have to spend a certain amount of time looking for work. Also, it is disappointing to find that your high income last year precludes you from getting the financial aid help you need this year — now that you don’t have the same kind of earnings.

It’s an interesting opportunity, and one that has the potential to not only help regular folks get through the recession, but also help create a more skilled and educated workforce for the jobs that should come with recovery.

image source: Wikipedia

Approximately 539,000 Americans were laid off in the month of April. While that is still a lot of people out of work, that number represents and improvement. In fact, April had the lowest amount of layoffs in any month of 2009 so far.

Many experts were expecting more than 600,000 job losses in April, so this news is better than many were predicting.

“Although we have a long way to go before we can put this recession behind us,” said President Barack Obama, “the gears of our economic engine do seem to be slowly turning once again”.

Barack Obama has to happy about the improvement (Image: Flickr)

Among the hardest hit industries in April were those related to construction, manufacturing, retail and banking. The healthiest industry was arguably the government, which was aided to the more than 60,000 temporary employees hired by the feds to handle the 2010 national census.

Even with the slowing pace of job losses, the unemployment rate of nearly 9% is the highest the United States has seen in more than 25 years.

(Statistics from the United States Department of Labor were used in this article)

Chrysler, the third biggest car maker in the United States, filed for Chapter 11 bankruptcy on Thursday. Although the company has been fighting for ways to avoid bankruptcy in recent months, their creditors continued to fight for their money and Chrysler decided it had no other option.

Already living off of federal bailout money, Chrysler will now get more bailout money — as much as $8 billion more. After filing in New York, the company says that they will attempt to restructure within the next month.

In the restructuring process, Chrysler will reportedly look to change many aspects. They will try to build greener cars, with help from a partnership with Fiat, an Italian car manufacturer. Chrysler also said they will try to trim overhead and add more flexibility to their business model.

While going through the bankruptcy restructuring, Chrysler plants across the United States will shut down. With backing from the White House, many industry experts believe Chrysler will eventually be reborn.

“It’s a partnership that will give Chrysler a chance not only to survive,” said President Barack Obama, “but to thrive in a global auto industry.”

Chrysler Bankrupt (Image: Flickr)