No Love on Valentine's Day [MERS]

So MERS cannot act as an agent of the banks in mortgage transfers on Bloomberg.

Merscorp Inc., operator of the electronic-registration system that contains about half of all U.S. home mortgages, has no right to transfer the mortgages under its membership rules, a judge said.

MERS holds about 50% of all residential mortgages in the US so the impact is non-trivial. This is bad timing because, according to Case-Shiller, housing is starting to turn negative again. The Case-Shiller Index is a very lagging indicator so price depreciation is probably further along than indicated in the index.

Business Unfriendly Government

Seahawk Drilling has filed for bankruptcy protection. Seahawk is an offshore oil and gas service and drilling company working in the Gulf of Mexico. They do not do deep water drilling. In fact, they specialize in contract drilling and exploration of depths up to 300ft. Seahawk employs 494 people and many jobs may be lost.

The reason for the filing:

Houston-based Seahawk said it's been hurt by a slowdown in Gulf of Mexico drilling following the BP oil spill last April. The government has imposed tough new rules and standards that have sharply slowed offshore drilling.

Read more: Seahawk Drilling

The impact is being felt thanks to the heavy hand of a government moratorium on all drilling in the Gulf. A ban that has landed the Obama Administration's Interior Department in contempt of court for failing to rescind the moratorium. The Interior Department continues a de facto ban by failing to approve any new projects. The insult in all of this is the Interior Department, read taxpayers, are required to pay the legal fees of the group that brought the suit. The outcome of the (implicit) moratorium will be even more dependence on foreign oil and the exit of valuable capital and expertise to other countries.

This is the problem when your funding is other people's money. Ignoring a judge's order by any private company risks that organizations' own capital - their choice, at their peril. Wasting taxpayer money is not acceptable but is beginning to be a pattern of behavior with the current administration. The administration continues to push forward with ObamaCare after being struck down in Federal Court (see references) as well.



References:
Bankruptcy
http://www.newsobserver.com/2011/02/12/985468/summary-box-seahawk-drilling-seeks.html
Contempt on Moratorium
http://www.bloomberg.com/news/2011-02-03/u-s-administration-in-contempt-over-gulf-drill-ban-judge-rules.html
Ignoring Ruling on ObamaCare
http://www.csmonitor.com/USA/Justice/2011/0131/White-House-vows-to-implement-health-care-reform-despite-judge-s-ruling.