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Fannie & Freddie Legal Bills Cost Taxpayers $130+ Million

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TIPS Top 17 Percent Return Over Two Years [Bloomberg] Treasury Inflation-Protected Securities returned 17 percent the last two years, compared with gains of 1.9 percent in Treasuries, Bank of America Merrill Lynch indexes show. Yields on 10-year TIPS show bondholders expect the consumer price index to increase 2.18 percentage points a year on average over the life of the debt. The rate rose 1.5 percent in 2010 and is forecast to climb 1.7 percent this year, based on a Bloomberg survey of more than 60 economists.

Fannie & Freddie Legal Bills Cost Taxpayers $130+ Million [NY Times] "Since the government took over Fannie Mae and Freddie Mac, taxpayers have spent more than $160 million defending the mortgage finance companies and their former top executives in civil lawsuits accusing them of fraud. The cost was a closely guarded secret until last week, when the companies and their regulator produced an accounting at the request of Congress. The bulk of those expenditures — $132 million — went to defend Fannie Mae and its officials in various securities suits and government investigations into accounting irregularities that occurred years before the subprime lending crisis erupted. The legal payments show no sign of abating."

Food & Fuel Inflation Creeping In? [Wall Street Journal] "Inflation fears—fueled by spiraling food, oil and raw material prices—are mounting around the globe, prompting the head of the European Central Bank to signal that it could raise interest rates in the future even though some countries have been weakened by the Continent's debt crisis."

"Davos Pre-Game: Something Old, Something Very New" [CNBC] CNBC's Kim Khan provides background color—and the inside scoop—ahead of the World Economic Forum in Davos: "Travelling to Davos from Zurich is always an enjoyable challenge, provided you take the adventurous option of the train. The age of austerity is limiting the rapid helicopter option for many delegates, according to some people on the ground I spoke to. The other option, for the thrifty journalist, is sharing a minivan up the mountains."

President Obama's Centrist Push [Financial Times] "President Barack Obama will seek to cast himself as a transformed leader in his State of the Union address on Tuesday – a president who has been tempered by last year’s mid-term election loss and is willing to lock arms with Big Business to hasten job creation."

"Treasury's toxic asset funds gain 27 percent" [Reuters] " The U.S. Treasury's toxic asset funds have gained 27 percent since they were created to help revive the mortgage-backed securities market, according to data expected to be released later on Monday. As part of the government's deeply unpopular $700 billion bailout program, the funds were set up to remove illiquid securities from banks by matching private capital with taxpayer money and Treasury loans via funds run by private investment managers."

Paul Krugman: Competitiveness Contrarian [NY Times] "It’s true that we’d have more jobs if we exported more and imported less. But the same is true of Europe and Japan, which also have depressed economies. And we can’t all export more while importing less, unless we can find another planet to sell to. Yes, we could demand that China shrink its trade surplus — but if confronting China is what Mr. Obama is proposing, he should say that plainly."