Countrywide Financial, the nation’s largest mortgage lender, suffers a 13% drop in the value of its common stock (having voting rights, but paying no guaranteed dividends) after announcing that mortgage delinquencies and foreclosures have risen to their highest levels in five years.

       NOTE: Countrywide became notorious for advertising low interest rate mortgages, and then subutituting documents with higher interest rates at the final signing.

       [restored 5/4/2024]

       In a speech to the Federal Reserve (central) Bank of Atlanta, President Timothy F. Geithner, of the privately owned Federal Reserve (central) Bank of New York, pays tribute to the resilience of the nation’s top financial institutions, saying that novelties such as “derivatives” (a type of temporary insurance that protects an investment against loss that can be bought and sold as a commodity) have “improved the capacity to measure and manage risk. Risk is spread more broadly across countries and institutions.

· · · · · · ·

       The dramatic changes we’ve seen in the structure of financial markets over the past decade and more seem likely to have reduced this vulnerability. The larger global financial institutions are generally stronger in terms of capital relative to risk.

      Postscript: Two days later, it was revealed that Geithner lobbied behind the scenes for a Federal study that would make it possible for commercial banks to lower them of cash reserves (fractional reserve banking).

       [restored 5/4/2024] Thanks to Freedom’s Phoenix for this entry.