The Government's Case Against The Banks

Sep 3, 2011

During the housing boom, banks sold investors bundles of mortgages that were shoddier than promised, according to lawsuits the federal government filed yesterday.

This allegation won't come as a surprise to anyone who has followed the financial crisis; similar accusations have been flying around for years.

It's the scope of the lawsuits that makes them such a big deal: 17 separate suits naming many of the world's biggest banks and covering nearly $200 billion in mortgage-backed securities.

Not having a summer or after-school job affects more than just a kid's wallet. It also has real consequences for his or her personal and economic development.

While the overall unemployment rate is stuck at 9.1 percent, the unemployment rate for 16- to 19-year-olds has been going up since February. Currently 25.4 percent of teenagers who want jobs can't find them.

President Obama is set to deliver a major speech on jobs next Thursday, and his task will be even more challenging after Friday's monthly government jobs report. The U.S. Labor Department says there was no job growth for the first time in a year, and unemployment was unimproved, staying at 9.1 percent.

NPR's Scott Horsley tells Weekend Edition host Scott Simon some jobs were added, but not enough to make up for other losses.

The founder of WikiLeaks, Julian Assange, once said his mission was not simply to divulge secrets, but to make sure the release of that information actually made a difference.

He shared his trove of diplomatic cables with The New York Times, the Guardian in London, and other news organizations so they could draw the world's attention to the most important parts.

In 1969, astronaut Alan Bean went to the moon as the lunar module pilot on Apollo 12. Although the trip going to the moon covered the same distance as the trip back, "returning from the moon seemed much shorter," Bean says.

People will often feel a return trip took less time than the same outbound journey, even though it didn't. In the case of Apollo 12, the trip back from the moon really did take somewhat less time. But the point remains that this so-called "return trip effect" is a very real psychological phenomenon, and now a new scientific study provides an explanation.

The Federal Government filed suit against more than a dozen big banks over mortgage backed securities the banks sold during the housing boom. Essentially the government claims the banks were selling securities that were riskier than advertised.

As we reported earlier, The New York Times reported this news, last night. But, now, the Federal Housing Finance Agency, which was appointed to oversee mortgage buyers Fannie Mae and Freddie Mac, filed the lawsuits today.

One-time baseball pitching star Roger Clemens is not off the hook.

A federal judge ruled Friday that Clemens must stand trial a second time for allegedly lying to a Congressional committee about steroid use. In July, Judge Reggie Walton declared a mistrial due to prosecutorial misconduct.

Rupert Murdoch, the chairman and chief executive of the embattled News Corporation, received a $12.5 million cash bonus for the fiscal year that ended in June.

That may come as a surprise, considering that Murdoch has been at the helm of News Corp. as it tries to weather a phone hacking scandal that has led to the arrest of 13 people and the resignation of two of Murdoch's top executives.

Murdoch's son, James, who is his deputy, turned down a $6 million bonus, which would have been a 74 percent increase from his 2010 take-home pay.

It became clearer today why John Boehner this week became the first U.S. House Speaker in the nation's history to turn down a president's request to address a joint session of Congress.

The House has pressing business Wednesday evening, when President Obama asked to speak to members of Congress about his plans to goose the stagnant jobs market.

Pressing, as in:

Considering the extension of the "Generalized System of Preferences."

Contemplating the Civilian Service Recognition Act of 2011.

Old people who don't have signs of cardiovascular disease still may have suffered microscopic strokes that don't show up on conventional tests. The small strokes may impair their ability to walk, balance and function just the same.

Scientists examined the brains of 418 priests and nuns after they died. The researchers found that one-third of the brains that had seemed normal using conventional tests while the people were alive actually had damage to tiny blood vessels. The damage was so slight it was impossible to see without a microscope.

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