Thursday, December 11, 2008

Friday December 12 Housing and Economic stories

TOP STORIES:



Second Consecutive Illinois Governor Arrested on Corruption Charges – Democrat Rod Blagojevich Arrested for trying to sell US Senate Seat - (www.cnbc.com) Illinois Gov. Rod Blagojevich was arrested Tuesday for trying to sell the US Senate seat being vacated by President-elect Obama. Illinois Gov. Rod Blagojevich was arrested on criminal charges on Tuesday, including trying to sell the U.S. Senate seat being vacated by fellow Democrat President-elect Barack Obama, federal prosecutors said. Blagojevich was also accused of threatening to withhold substantial state assistance to the Tribune Company in connection with the sale of the Chicago Cubs' baseball home Wrigley Field "to induce the firing of Chicago Tribune editorial board members sharply critical" of him. The 51-year-old Blagojevich and his chief of staff, John Harris, were charged in a 76-page federal indictment with conspiracy to commit mail and wire fraud and solicitation of bribery. Both were taken into custody at their homes in Chicago. In Illinois, the governor selects a successor when there is a mid-term Senate vacancy. Obama resigned from the Senate soon after winning the Nov. 4 presidential election. Blagojevich allegedly was caught on court-authorized wiretaps during the last month. He was seeking a "substantial" salary for himself at a nonprofit foundation or union affiliated organization, a spot on a corporate board for his wife, promises of campaign cash, as well as a cabinet post or ambassadorship in exchange for his Senate choice, the FBI affidavit added.

Illinois Threat to Bank of America Is Dangerous, Critics Say - (www.bloomberg.com) Illinois Governor Rod Blagojevich’s threat to halt the state’s dealings with Bank of America Corp. over a shut-down factory in Chicago extends a “dangerous” trend of politicians meddling with commerce, a former general counsel of the Federal Deposit Insurance Corp. said. Blagojevich, a Democrat, yesterday said the biggest U.S. retail bank won’t get any more state business unless it restores credit to Republic Windows & Doors, whose workers are staging a sit-in. “They’re absolutely right,” Obama, who gave up his U.S. Senate seat from Illinois last month, said over the weekend. “These workers, if they have earned these benefits and their pay, then these companies need to follow through on those commitments.” Cook County Commissioner Mike Quigley said he’ll introduce an ordinance to block the state’s biggest county from doing business with Bank of America. “I’m usually cautious, but this is an extraordinary example at an extraordinary time,” Quigley said in an interview. Robert Topel, a labor and economics professor at the University of Chicago, said it’s “just silly” that a governor or member of Congress would seek to “micro-manage” a business. “What does Chris Dodd know about running an auto company?” Topel asked. “Is Bank of America supposed to pick and choose which line of credit they want to keep open based on political pressure? It’s not Bank of America’s obligation to make sure the employer has funds to pay its employees.” This is clear cut. I side with Topel, against Obama. Bank of America should not be forced to lend money to a company that is going to go bankrupt. This is pure idiocy. But it get worse.

Regulators preparing rescue of credit unions: report - (www.reuters.com) Federal regulators are preparing a rescue plan to shore up the finances of some large credit unions, using billions of dollars in new government borrowings, the Wall Street Journal reported. The plan is not a taxpayer-funded bailout, but a short-term "mechanism to stabilize the credit-union system" while regulators work on other steps, to be announced early in 2009, Michael Fryzel, chairman of the National Credit Union Administration (NCUA) told the paper. A related program also to be announced by NCUA will provide as much as $2 billion in inexpensive loans to credit unions, which the institutions can use to reduce mortgage interest rates for homeowners, the paper said.

Advantage Rent-A-Car files for bankruptcy - (www.usatoday.com) Car rental chain Advantage Rent-A-Car filed for bankruptcy protection Monday and closed about 40% of its U.S. retail locations, citing a decline in the travel industry. The company said it laid off 440 workers, or almost half its workforce. Advantage said it will continue operating at its remaining locations during the bankruptcy, and is exploring strategic alternatives, including a possible sale or merger. Rental car companies, like Advantage, Hertz Global Holdings and Avis Budget Group, have been hurt by the slowing economy as customers cut their discretionary spending on travel, translating to lower rentals.

The Man Who Predicted The Economic Meltdown : Peter Schiff - (www.npr.org) As one in a small group of analysts who publicly predicted the collapse of the American financial system, Peter Schiff was a lonely — and much maligned — voice on cable's financial news shows. In August 2006, Schiff, the self-confident president of the Connecticut-based brokerage firm Euro Pacific Capital, warned viewers on CNBC that the U.S. economy would be hampered by "too much consumption and borrowing and not enough production and savings." "What's going to happen is that the American consumer is basically going to stop consuming and start rebuilding his savings, especially when he sees his home equity evaporate," he said. "And when you have the economy 70 percent consumption, you can't address those imbalances without a recession." Schiff was even more blunt when speaking on Fox News Channel in December 2006: "You're going to start to see both the government and the lenders re-imposing lending standards and tightening up on credit — and these sky-high real estate prices are going to come crashing back down to earth." Since then, the economy has played out pretty much exactly the way Schiff said it would. "Peter Schiff said a year ago on our air the Dow will fall below 10,000," says Liz Claman, an anchor for the year-old Fox Business Network. "Several people on the set scoffed, [but] he was right, as you see today."

Peter Schiff silenced on CNN - (www.youtube.com) I doubt its censorship, Schiff's been allowed to say these things for a while now... however, the REAL censorship is the fact that FOX is refusing to have him back on so that he can bask his rightfully deserved glory and tell everyone at Fox news to go fuck themselves, even if its only that one time! It would be a glorious moment!Was this a technical glitch or did CNN cut him off. Notice that Fox is no longer having him on anymore as he has embarrassed their supposed economic clowns like Ben Stein, etc.

From hybrids to SUVs, unsold cars pile up - (www.reuters.com) From pricey luxury sedans to popular hybrid cars, automobiles made overseas are stacking up at ports and parking lots around the United States as supplies far outstrip demand amid the nation's worst auto market in more than 25 years. At the Long Beach port near Los Angeles, Toyota Motor Corp vehicles including Prius hybrids, FJ Cruiser sport utility vehicles and Lexus IS 250 luxury sedans are being stored on a vast construction site that will one day be a new container terminal. The site became a gigantic parking lot when Toyota and Daimler AG's Mercedes-Benz asked the port for space to store thousands of vehicles that dealerships have not been able to take on due to sluggish sales. "It's unusual that they would be here longer than a few days, but that's the situation now," said Art Wong, a spokesman for the Port of Long Beach. "They can't move it through their pipeline fast enough so they are asking for additional space while they keep their vehicles here more than a few days, and in some cases more than a few weeks."

Profiles in Panic - (www.vanityfair.com) With Wall Street hemorrhaging jobs and assets, even many of the wealthiest players are retrenching. Others, like the Lehman Brothers bankers who borrowed against their millions in stock, have lost everything. Hedge-fund managers try to sell their luxury homes, while trophy wives are hocking their jewelry. The pain is being felt on St. Barth’s and at Sotheby’s, on benefit-gala committees and at the East Hampton Airport, as the world of the Big Rich collapses, its culture in shock and its values in question. A snapshot: East Hampton, late summer, a lawn party at a house on the ocean overlooking the dunes. The host is a prince of private equity known for dressing well. One of his guests is Steven Cohen, the publicity-shy billionaire whose SAC Capital, with $16 billion under management, is perhaps the most revered of the 10,000 or so hedge funds spawned by this giddily rich time. Nearby is Daniel Loeb, of Third Point, one of the better-known “activist” hedge funds, who hopes to move soon into a 10,700-square-foot, $45 million penthouse at l5 Central Park West, a Manhattan monument to the new gilded age. Gliding easily between them is art dealer Larry Gagosian, so successful at selling Bacons and Serras to Wall Street’s new titans—including to Cohen—that he now travels in his own private jet and has his own helicopter to take him to it. How did we land in a recession? Visit our archive, “Charting the Road to Ruin.” Illustration by Edward Sorel. But here’s the odd thing: despite the beauty of the ocean view, nearly all the guests have their backs to it. Cohen is deep in conversation with a colleague who seems to be pitching him a deal. Loeb hovers close to his wife, a former yoga teacher. Gagosian is near his stunning young girlfriend. No one notices the clouds that are, quite literally, on the horizon. Snap. Six weeks later, the photograph is cracked and sepia-toned, curling at the edges, a historic print. In just that short time, the storm has hit and nothing looks the same.

GM's Bust Turns Detroit Into Urban Prairie of Vacant-Lot Farms - (www.bloomberg.com) With enough abandoned lots to fill the city of San Francisco, Motown is 138 square miles divided between expanses of decay and emptiness and tracts of still-functioning communities and commercial areas. Close to six barren acres of an estimated 17,000 have already been turned into 500 ``mini- farms,'' demonstrating the lengths to which planners will go to make land productive. ``People are moving out of the city, trying to find work,'' said David Martin of Wayne State University's Urban Safety Program. Those who stay ``can't afford to move out.'' That exodus has left Detroit with the highest poverty and foreclosure rates in the U.S. and, at 10.1 percent in October in the area including Livonia and Dearborn, one of the steepest measures of unemployment in the nation as well.



OTHER STORIES:

House loan troubles break records again - (biz.yahoo.com)
Low Rates, Big Problems - (www.seekingalpha.com)
Lower mortgage rates aren't the answer - (money.cnn.com)
Lower mortgage rates no silver bullet - (money.cnn.com)
New lending deals won't bring back 2006 - (www.boston.com)
Homo sillyus strikes again - - (www.theage.com.au)

Housing bottom? It depends whom you ask - (themessthatgreenspanmade.blogspot.com)
Free lunch for Bernanke and Paulson - (www.seekingalpha.com)
Housing Price Corrections in the SF Bay Area - (www.seekingalpha.com)
Analyst predicts deep job cuts at Intel - (www.businessweek.com)
Experts predict housing crisis will continue through 2010 - (www.djcoregon.com)
Interactive timeline: Unemployment rate - (msnbc.msn.com)
Rent Now, Buy Later - (www.nytimes.com)
Be Nice to the Countries That Lend You Money - (www.theatlantic.com)
Why Derivatives WILL Destroy The World - (ashizashiz.blogspot.com)
Former Sen. Fred Thompson on the Economy - (www.youtube.com)

Oil rises towards $44 - (www.reuters.com)
U.S. Stock Futures Gain, Indicate S&P 500 May Rise for 3rd Day - (www.bloomberg.com)
Citadel under siege - (www.fortune.com)
Tight Credit Squeezing Small Businesses - (www.washingtonpost.com)
Hedge Fund Copper River to Liquidate - (online.wsj.com)
Modified Loans Often Lead Homeowners Back to Trouble - (www.nytimes.com)
U.K Manufacturing Slides, Housing Sales at Lowest Since 1978 - (www.bloomberg.com)
Russian GDP Growth Slows in Third Quarter on Retail, Building - (www.bloomberg.com)
California May Have to Halt Public Works Spending Amid Deficit - (www.bloomberg.com)
U.S. First-Quarter Hiring Plans Near 5-Year Low, Manpower Says - (www.bloomberg.com)
Deal to Rescue American Automakers Is Moving Ahead - (www.nytimes.com)
Sony Will Cut 16,000 Jobs as Recession Curbs Demand - (www.bloomberg.com)
Internal Warnings Sounded on Loans At Fannie, Freddie - (www.washingtonpost.com)
FedEx Cuts Earnings View - (online.wsj.com)
Global airlines set to lose $5 billion in 2008: IATA - (www.reuters.com)
Sony to cut 8,000 electronics jobs - (www.chicagotribune.com)

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