US debt ceiling deadline still August 2: Treasury

The deadline for raising the US debt ceiling or risk a
default remains August 2, the US Treasury said
© AFP/Getty Images/File Chip Somodevilla

AFP

WASHINGTON (AFP) - The deadline for raising the US debt ceiling or risk a default remains August 2, the US Treasury said Friday, after speculation that there might be more leeway for politicians to carve a deal.

"The Treasury Department continues to project that the United States will exhaust its borrowing authority under the debt limit on August 2, 2011," the Treasury said in a statement.

"Secretary (Timothy) Geithner urges Congress to avoid the catastrophic economic and market consequences of a default crisis by raising the statutory debt limit in a timely manner."

Geithner certain of debt limit deal

Editor's Note: The Treasury Department has been playing the "catastrophe" card since the beginning of the year, claiming we'd hit the ceiling in March, then in April, and now by May 16th.How the Treasury could be off by a quarter is an indictment in itself.

Geithner says the US admninistration wants to put in
place a comprehensive debt framework
© AFP/File Nicholas Kamm

AFP

WASHINGTON (AFP) - Treasury Secretary Timothy Geithner expressed confidence Sunday that feuding US political parties will reach an agreement to lift the country's debt limit before its is forced into default.

With Republicans demanding long-term spending cuts in return for voting to raise the debt ceiling, Geithner said the administration was willing to enter parallel talks, but in the end the limit would be raised either way.

"I want to make it perfectly clear that Congress will raise the debt ceiling," Geithner told the ABC channel "they told the president that on Wednesday in the White House."

US Treasury to sell $142 bn worth of toxic assets

© AFP/File Karen Bleier

AFP

WASHINGTON (AFP) - The US Treasury Department on Monday said it would begin to sell-off toxic assets worth an estimated $142 billion, in an effort to close another chapter of the financial crisis.

"We will exit this investment at a gradual and orderly pace to maximize the recovery of taxpayer dollars and help protect the process of repair of the housing finance market," said Treasury official Mary Miller.

The department said it would offload up to $10 billion in mortgage-backed securities (MBS) -- assets which bundle together large numbers of often distressed mortgages -- each month.

Homeowners Get The Boot For Bad Paperwork While Banks Get Millions For Same

Dees Illustration

Shahien Nasiripour
Huffington Post

Mortgage companies enrolled in the Obama administration's signature foreclosure-prevention initiative may be receiving taxpayer funds despite not having a legal right to the home or to the mortgage, a top Treasury Department official revealed Wednesday.

But despite faulty or missing paperwork, the Obama administration allows mortgage companies to boot homeowners from the program, sticking the borrowers with massive bills that often leave them worse off.

During an oversight hearing, Phyllis Caldwell, Treasury's housing rescue chief, acknowledged during questioning that Treasury doesn't know whether mortgage companies and the owners of mortgages are receiving public money under "false pretenses." Treasury is investigating, she said.

The contradiction highlights what many critics of the past two administrations' policies have claimed for some time: they exert overwhelming force when it comes to saving financial institutions, but merely modest assistance when it comes to distressed homeowners.

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TARP is Done, but Count on Sequels

Gretchen Morgenson
NY Times

THE government is pulling a sheet over TARP, the Troubled Asset Relief Program created during the panic of 2008 to bail out the nation’s financial institutions. With the program’s expiration on Sunday, we can expect to hear lots of claims from the folks at the Treasury that it was a great success.

Such assertions would be no surprise from a political class justifiably concerned about possible taxpayer unhappiness, the continuing economic turmoil and the midterm elections. But if we have learned anything during this crisis, it is that the proclamations emanating from the Washington spin machine must be taken with an extra-hefty grain of salt.

Consider the claims made last summer that the Dodd-Frank financial reform act reduces the threats that large, interconnected banks pose to taxpayers and the economy when the banks are deemed too big to fail. Indeed, as regulators hammer out the rules governing derivatives transactions, it’s evident that the law has created a new set of institutions that will almost certainly be deemed too important to fail if they ever get into trouble. And that means there won’t really be an effective way to keep those firms from taking big, profitable, short-term risks that are dumped on the taxpayers when the bets fail.

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