Wednesday, 16 Mar 2011 | 9:12 AM ET

Obama's Top Housing Policy Adviser Becomes Mortgage Banker Lobbyist

Posted By: John Carney

A key adviser to President Barack Obama on housing and mortgage policy is set to become the head of the Mortgage Bankers Association.

Barack Obama
Barack Obama

Now I'm pretty cynical about politics. But this news made me stop and gasp.

David H. Stevens announced last week that he was leaving the Federal Housing Authority last week. At the time, he said he had no plans for his future employment. But, as it turns out, he's becoming a lobbyist.

The Washington Posts's Dina Elboghdady reports:
After joining FHA in July 2009, Stevens quickly emerged as a major player in crafting the Obama administration’s housing policy. He’s been deeply involved in several high-profile initiatives that involve the mortgage banking industry, including current negotiations that will determine what kinds of fines and penalties might be imposed on mortgage servicers who took part in shoddy mortgage foreclosure practices.

A key adviser to President Barack Obama on housing and mortgage policy is set to become the head of the Mortgage Bankers Association.

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  Wednesday, 16 Mar 2011 | 9:09 AM ET

US Banks Face 'Small' Exposures to Japan

Posted By: Ash Bennington
  Wednesday, 16 Mar 2011 | 9:05 AM ET

Waking up With Nicole Lapin

Posted By: Nicole Lapin

Wednesday = #winning. Here's what you missed in the wee morning hours:

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  Tuesday, 15 Mar 2011 | 4:52 PM ET

Bahrain, Japan, And The NYC Subway

Posted By: Ash Bennington
  Tuesday, 15 Mar 2011 | 4:23 PM ET

Fed Says Recovery Is Firm, Jobs and Inflation On The Rise

Posted By: John Carney
Fed Chief Ben Bernanke Testifies to House Budget Committee
Fed Chief Ben Bernanke Testifies to House Budget Committee

TheFederal Reserve’s statement reveals that the Fed believes the economic recovery is growing stronger, the labor market is improving, and inflation is creeping back.

Gone was the most negative language about labor market conditions. But gone also was the conclusion that measures of underlying inflation were headed downward.

Back in January, the Federal Open Market Committee said that although the economic recovery was continuing, the improvement was “at a rate that has been insufficient to bring about a significant improvement in labor market conditions.”

Today, the FOMC changed its tune. The economic recovery is no longer just "continuing"—it is "on a firmer footing. What’s more “overall conditions in the labor market appear to be improving gradually."

At the same time, inflation has crept back into the FOMC’s analysis. Back in January, the FOMC described measures of inflation as "trending downward." They’re no longer doing that. These days they are trending up, although at a "subdued level."

The Fed didn’t take any notice at all of recent events in Japan. It did note increasing commodities and energy prices.

"The recent increases in the prices of energy and other commodities are currently putting upward pressure on inflation. The Committee expects these effects to be transitory, but it will pay close attention to the evolution of inflation and inflation expectations," the statement said.

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  Tuesday, 15 Mar 2011 | 3:14 PM ET

The End Of Nuclear Power Will Drive Up Japanese Demand For Oil

Posted By: Ash Bennington
Ferrybridge power station
Getty Images
Ferrybridge power station

While oil – and just about everything else but Treasuries -- sold off today in the wake of the Japanese nuclear crisis, oil prices may be poised to surge as demand for 'alternative' energy sources to replace lost nuclear power in Japan ramp up.

I spoke with Brad Schaeffer, CEO of INFA Energy Brokers, after the closing bell Monday to get his perspective on the global oil markets.

The situation in Japan remains grave , as workers struggle to regain control of the nuclear reactors at Fukushima Daiichi nuclear power plant.

But when the crisis passes, the third largest economy in the world will need to begin planning how it will replace the energy production capacity it lost to the tsunami.

"Japan has some of its industry curtailed," Schaeffer says, "like auto and steel – but that's not going to last too long. People are starting to realize that there economy is not going to be shut down for long -- and they're going to have to start to look for alternative fuel sources."

In this context, Schaeffer means 'alternative fuel' in the exact opposite sense of what it usually denotes – as Japan turns from nuclear energy to burning fossil fuels.

As Schaeffer points out: "About 27 percent of their power needs come from nuclear plants. So if they take them all offline, they are going to have to compensate for the shutdown by running their generators on other fuels."

And oil will likely be the natural choice to replace.

The other option, on the fossil fuel front, is liquefied natural gas.

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  Tuesday, 15 Mar 2011 | 2:42 PM ET

Will Japan Crisis Spark Global Markets Correction?

Posted By: John Carney
Koriyama fire department staff check radiation levels of rescue personnel in Koriyama city in Fukushima prefecture on March 13, 2011.
JIJI Press | AFP | Getty Images
Koriyama fire department staff check radiation levels of rescue personnel in Koriyama city in Fukushima prefecture on March 13, 2011.

Fears of a serious nuclear catastrophe pushed Japanese stocks far lower in Tuesday trading.

But there is another problem building, and some fear it could lead to a much more widespread crisis in financial assets.

The problem is that banks, Wall Street firms and hedge funds have built up exposures to riskier assets over the past two years. Much of the 'smart money' has been chasing bargains—bottom fishing in sovereign debt, muni debt and financial sector securities.

If sentiment turns suddenly away from risky assets, some of these investors could find that there was no market for the risk they hold. Although there is no direct connection between, say, the situation in Japan and Illinois revenue bonds, a sharp pullback in risk tolerance could see these very different asset classes decline together.

In a crisis, assets that seem uncorrelated on a fundamental or technical basis can suddenly trade together. As the saying goes, in a crisis, all correlations go to one.

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  Tuesday, 15 Mar 2011 | 2:02 PM ET

Voice of Aflac Duck Gets His Goose Cooked

Posted By: Ash Bennington
Gilbert Gottfried
Getty Images
Gilbert Gottfried

Gilbert Gottfried, now the former voice of the Aflac duck, was fired on Monday by his employer for jokes he made about the Japanese tsunami on Twitter.

Gottfried's Twitter feed -- where the jokes originally appeared, along with lots of other humor that can't be republished by CNBC – is located here .

This isn't the first incident where a high-profile employee was fired over the content of a tweet. In July of 2010, Octavia Nasr, a former CNN Senior Editor covering Mideast affairs, was fired when she praised a controversial Muslim cleric who had just died . But the Aflac case is the first one, that I know of at least, where a celebrity was fired for tweeting jokes.

But Gottfried may be more than just a victim of his own bad taste and bad timing: He may also be a victim of Aflac's bad earnings exposure as well.

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  Tuesday, 15 Mar 2011 | 1:08 PM ET

Goldman Sachs Considered Buying AIG In 2008

Posted By: John Carney
Rajat Gupta
Umesh Goswami | The India Today Group | Getty Images
Rajat Gupta

Goldman Sachsconsidered buying troubled insurer AIG in 2008, according to wire-tapped phone conversations played on Tuesday at the insider trading trial of Raj Rajaratnam.

The government played tapes today of Rajat Gupta discussing a Goldman Sachs board meeting with Rajaratnam. Rajaratnam wanted to know about a rumor that Goldman could buy a commercial bank.

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  Tuesday, 15 Mar 2011 | 12:27 PM ET

Japan Fears And The Retail Sell-Off

Posted By: Lori Ann LaRocco

Retail stockscontinue on their slide as investors worry about the world's second largest consumer market.

I decided to ask Brian Sozzi, a StarMine top-ranked Equity Research Retail analyst, about his outlook on the sector.

LL:Japan is a supplier to the world. Now we are hearing that some products might have to be tested for radiation. What are your retail sources telling you?

Brian Sozzi: Thus far, the supply chain situation for retailers is not as dire as one would expect amidst all the heart-wrenching headlines and photographs. While the movement of goods and services throughout Japan has taken a hit, sparking sharply lower production from chip suppliers to car producers, the not so detrimental impact to retail reflects where the sector is structural speaking. By that I mean diversification. As the costs of production have climbed appreciably since the economic fallout concluded, retailers have made it a top priority to shift production from a high cost region in Japan, and a creeping inflationary country in China, to the likes of Egypt, Philippines, Vietnam, Nicaragua, and in some instances back to the United States.

Two great examples of the supply chain diversification I speak of are Gap and Abercrombie & Fitch. Gap has a vendor base of some 600 spread throughout 60 countries worldwide, with no vendor accounting for more than 3% of purchases. Abercrombie & Fitch has broadened its supply chain to Central and South America, and no vendor comprises greater than 5% of its purchases. Moreover, many retailers have taken advanced receipt of products that are set to arrive in stores in the next few months, so an immediate disruption in most product classifications is unlikely.

Make no mistake, Japan is a player in the global supply chain, and products produced there could very well be a cog in the supply chain of a plant in China, which in turn supplies a retailer with a finished product for sale. If we learned anything from the leverage bust, it’s that the world is interconnected.

Regarding my discussions with contacts, many have characterized things as being at a temporary standstill. Products are not flowing smoothly, and product out of stocks in food is being noted. Empty shelves are normally music to the ears of retailers as it signals strong demand, but the demand we are seeing in Japan is for basic necessities that may not be replenished quickly. Rolling blackouts, damaged roads and lines of communication are impediments to the supply chain currently.

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