Obama Promises Butchers No New Financial Regulations

Hours after announcing his intent to accept the Nobel Peace Prize, President Obama again found himself at war with banks over his proposed Consumer Financial Protection Agency. The Washington Post reports that the president has zeroed in on the CFPA as a cornerstone of his broader overhaul of financial regulatory reform, even as lobbyists and industry groups continue to attack it. In a speech to lawmakers, he called out the U.S. Chamber of Commerce for running false ads claiming that butchers would be subject to stringent new financial relations—for letting customers buy meat on credit. The article explains that Obama is facing down moderate members of his own party in Congress on the issue, since their focus on creating a passable bill could strip away key reforms, such as the centralization of bank regulations, which would end the regulator shopping that helped cause the financial crisis.

A weaker dollar is OK, say most economists, because it can help narrow the trade deficit, something the government has long sought. Wish granted—the gap narrowed in August, the Post reports, in part thanks to a weaker dollar. Some traders gambled that Fed Reserve Chairman Bernanke intends to soon shore up the dollar, but despite the resulting “uptick, it is still down 14 percent against other major currencies since March.” The move is “helping rebalance an economy that has been skewed away from exports for years.”  Among reasons the Fed would intervene are to protect the dollar’s status as the reserve currency of choice for foreign governments and to prevent a run on the dollar should the decline look as if it’s getting out of hand. The Wall Street Journal, meanwhile, sees the trade recovery as a sign of economic recovery in general.

Phibro, home of $100 million man Andrew Hall, is off of Citigroup’s books, for a pittance. The Journal explains how Occidental Petroleum Corp. stole the company for between $250 and $450 million, the market value of Phibro’s holdings. The company was a small but reliably profitable unit of the big bank, which is why Hall was entitled to nearly $98 million in compensation this year. That figure led the Obama Administration, some believe, to suggest Citigroup divest the company. Hall and his team agreed to defer some of their pay as part of the sale and to remain with the firm. Hall was said to be relieved that the political battle over his paycheck seemed over. Occidental, knowing the position Citi found itself in, was able to play hardball on the price. Citi was described in the story as upset that the government is forcing it to look like a “plain-vanilla bank.”

Elizabeth Warren, head of the panel tasked with watching the bailout for Congress, believes the mortgage modification plan put forth by the Obama Administration isn’t working. The New York Times reports that Warren’s panel “sharply criticized the program and declared it would leave millions of Americans vulnerable to losing their homes.” One of the problems is that the programs targets “the housing crisis as it existed six months ago, rather than as it exists now,” in terms of helping homeowners who have exotic, large mortgages and who have also lost their jobs. While the administration said on Thursday that 500,000 homeowners have had trial reductions in monthly payments, the panel says the programs has produced only 1,711 permanent reductions, though the conversion period for the vast majority of modifications is just starting. The administration hoped to help as many as 4 million households under the program.

Google’s Voice telephony service is being investigated by a reinvigorated FCC for violations of the common carrier program, says the Journal. Google has refused to connect Voice users to some rural numbers, citing high connection fees. If the service were found to be a common carrier of telecommunications, such denials would be illegal.

Finally, the paper reports that GM’s sale of Hummer to Sichuan Tengzhong Heavy Industrial Machinery Co. has been finalized, for $150 million. The Chinese firm will take over manufacturing by 2012, and hopes to “create a stable of trucks that are more fuel-efficient and environmentally friendly than the current lineup, which had become synonymous with America's addiction to gas-guzzling sport-utility vehicles.”