Monday February 2 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

Family murder-suicide blamed on firings - (www.latimes.com) Suspected Wilmington gunman, wife had lost jobs at Kaiser Permanente. A man who had recently been laid off from a local hospital opened fire at his Wilmington home today, killing his five young children as well as his wife, police said. The gunman then took his own life, according to authorities. Police said the children were an 8-year-old girl, twin 5-year-old girls and twin 2-year-old boys. LAPD Deputy Chief Kenneth Garner said police found notes inside the house in which the gunman referred to "work-related issues." "In these tough economic times, there are other options," Garner said. "In my 32 years, I've never seen anything like this." Police discovered the bodies after a bizarre series of events this morning that included, authorities said, the gunman faxing a letter to KABC Channel 7 shortly before killing himself. Someone, possibly the gunman, called the LAPD about 8:20 a.m. saying, "I just returned home, and my whole family has been shot," according to Garner. According to Channel 7, the faxed letter detailed workplace problems both the man and his wife were having at a Kaiser Permanente hospital in West Los Angeles. The letter said that an unnamed administrator told him one day that he shouldn't have come to work and said "you should have blown your brains out." The man said in the letter that he complained to his union to no avail. Then both he and wife were fired, Channel 7 reporter Gene Gleeson said in summarizing the letter. The couple, Ervin Antonio Lupoe and his wife, Ana, were both former employees of Kaiser Permanente West Los Angeles Medical Center. "They were recently terminated," a spokesman for the hospital group confirmed. "We are deeply saddened to hear of the tragic deaths of Ana, Ervin and their five children," Kaiser said in a statement, extending the hospital group’s sympathies to their family and friends. "We are providing support to Kaiser Permanente employees." Kaiser officials said they are cooperating with the ongoing LAPD investigation.

L.A. County Supervisors to transfer $29.1 million in reserves to cover welfare, building costs - (www.latimes.com) Los Angeles County supervisors voted this morning to transfer $29.1 million from county reserves to cover an upsurge in welfare and construction costs, saying they still may have to cut services and jobs next month if state leaders follow through on plans to defer health and social services payments. Supervisors voted 4 to 1 to approve the proposal by County CEO William T. Fujioka after removing $5 million in proposed spending for solar energy and other construction projects. Supervisor Gloria Molina voted against the plan after questioning several expenses, including $2 million earmarked for a county television channel. “I just can’t support a whole series of budget adjustments that do not make sense to me at a time when a whole lot of people might miss out on services because of issues that are not of our doing from the state,” Molina said. The state controller is expected to delay $105.6 million in payments to Los Angeles County next month, and the governor has proposed deferring $1.4 billion in such payments during the following six months. “We do not have the cash flow to deal with this,” Fujioka told supervisors this morning. “We would have to go on the market to borrow the money.” Supervisor Zev Yaroslavsky said borrowing “is not an option.” “How much are we going to have to pay in interest — if we can get a loan?” Yaroslavsky said, adding that tapping reserves and borrowing are simply “deferring the inevitable.” “This is ridiculous,” he said. “The state deferring its responsibility so it can defer balancing the budget.” Supervisor Don Knabe, who chairs the board, questioned whether the county can transfer legal responsibility for welfare payments back to the state or refuse to cover the state portion of payments.

Faking Your Own Death for Dummies - (www.cnbc.com) Another fugitive, suicide-faking fraudster is in police custody and all I can say is — I'm appalled! Wall Street guys like to make you think they're the smartest guys in the room. And they talk a lot of trash that money management is risky business and if you can't run with the big dogs, you'd better get your assets back on the porch. And then they deliver these ridiculous fake suicides like Florida's Art Nadel, who left a suicide note for his wife and then vanished for a month before turning himself in to police. For such "smart" guys, these fake suicides are getting ridiculous! The previous one-hit wonder, Marcus Schrencker, gets points for style — faking a plane crash, parachuting out and making a getaway on a motorcycle. (Let's just say it's got a lot more made-for-TV potential than, writing "Suicide is painless" in the dust and getting your girlfriend in trouble. I'm talking to you, Sam Israel.) But the fact that Schrencker sent a "By-the-time-you-get-this-I'll-be-gone" email to a neighbor the day before, turned the light off in the cockpit before he jumped, issued a “distress” call early enough for military jets to escort the empty plane to its crash site, then picked a red—RED!—motorcycle to make his getaway is an insult to the collective IQ of Wall Street. Don't you people watch CSI? I may not know much about forensics but I can tell you this much: You always pick the gray Yamaha, not the red. You wait to make the distress call until just before the plane crashes — IN THE OCEAN. (Sharks are excellent accomplices.)

Consumer confidence darkens further in January – (www.latimes.com) Americans' mood about the economy darkened further in January, sending a widely watched barometer of consumer sentiment to a new low, a private research group said today, as people worry about their jobs and watch their retirement funds dwindle. The Conference Board said its Consumer Confidence Index edged down to 37.7 from a revised 38.6 in December, lower than the reading of 39 that economists surveyed by Thomson Reuters had expected. In recent months the index has hit its lowest troughs since it began in 1967, and is hovering at less than half its level of January 2007, when it was 87.3. "It appears that consumers have begun the new year with the same degree of pessimism that they exhibited in the final months of 2008," Lynn Franco, director of The Conference Board Consumer Research Center, said in a statement. "Looking ahead, consumers remain quite pessimistic about the state of the economy and about their earnings."

Newest Corporate Worry: Pension Under-Funding - (www.cnbc.com) Well, we knew that this was a problem despite what companies have been saying. Since the 2001 tech bubble implosion, they have been taking on more risk to make up for lost returns back then. Only they started using leverage and more aggressive tactics. Pension under-funding is becoming the latest problem for corporations. In the last couple days, Hershey, U.S. Steel, Delta, and Canadian Pacific have noted that their company pensions were underfunded. This means more cash will have to be put into them in 2009 (barring an amazing turnaround in the markets), which will be an additional hit to earnings. It's not a minor amount, either. For example, in the case of Hershey, pension expenses might cost $70 million in 2009, a hit of $0.20 per share to earnings (they are expected to earn $1.90). There's no doubt pension fund managers have been stunned by the rapid decline in the value of assets under management. The question is, what do they do? Remember, they have to match their assets with liabilities. Aside from getting more cash from their parent companies, they have to decide whether they want to:

State Farm to exit Fla. homeowner insurance - (money.cnn.com) In the face of clueless politicians who are trying to micro-manage the economy and the companies who operate in their state. They are beginning to make it impossible for companies to make a profit in certain states so I applaud State Farm. State Farm Florida says it will no longer renew policies for 1.2 million customers after request for a 47% rate hike was denied. Florida's largest private insurer is pulling the plug on homeowners' policies in the state, citing the losses suffered since the brutal 2004 hurricane season. The decision by State Farm Florida comes two weeks after state insurance regulators rejected the company's request to raise rates by more than 47%. The decision means State Farm Florida - a subsidiary of national insurance giant State Farm Mutual - will no longer renew policies for its roughly 1.2 million customers in the Sunshine State. "This is not an action we wanted to take, but one we must take given the realities of the Florida property insurance market," company President Jim Thompson said in a statement announcing the decision. The company said it has paid out $1.21 in claims for every dollar of premiums it has collected since 2000 and suffered billions in losses after the 2004 hurricane season, when four major storms hit the state. And it said its net worth had dropped by nearly 25% since 2006 even with no major disasters.

Layoffs aren't the answer - (money.cnn.com) Clueless media economists don’t realize that companies have no other choice if they have no access to credit and can’t borrow money from TARP. Corporate America is trying to downsize itself back to health. But mass job cuts are just going to make the recession worse. Another day, another job cut announcement by a major company. Corning (GLW, Fortune 500) joined the pink slip parade Tuesday, saying that it would cut 3,500 jobs. The news follows a brutal Monday, where companies such as Home Depot (HD, Fortune 500), Caterpilliar (CAT, Fortune 500), Sprint Nextel (S, Fortune 500) and Pfizer (PFE, Fortune 500) combined to announce more than 70,000 job cuts. The reason that companies are rushing to reduce their headcount is obvious. Businesses are faced with sagging demand for their products and services in the wake of this global recession. That's causing sales, earnings and stock prices to dip. So one way to try and preserve profits is to lower costs -- and payroll is usually one of the first places a company looks at to slash expenses.



OTHER STORIES:

Delta reports loss; shares plunge – (www.latimes.com) Delta Air Lines Inc., the world's biggest carrier, said today it lost $1.4 billion in the final three months of 2008 as it recorded a massive charge related to employee stock awards and wasn't able to fully benefit from the decline in oil prices because of bad bets on fuel hedges. Delta shares nearly 18 percent. The results, when one-time items are excluded, fell short of Wall Street expectations. The airline operator also projected that 2009 consolidated passenger unit revenue would be down 4 percent. It reiterated its previously announced plans to cut systemwide capacity 6 percent to 8 percent this year.
Citigroup Names Interim CEO of Citi Holdings Unit - (www.cnbc.com)
Treasury 'Pressured' Citi To Stop Jet - (www.cnbc.com)
Geithner's Assets Are Notably Lower than Paulson's - (www.cnbc.com)
Geithner: Patience Needed for the Economy - (www.cnbc.com)
Former Merrill CEO Thain Subpoenaed Over Bonuses - (www.cnbc.com)
Wall Street Bonuses Shrink - (www.cnbc.com)
Slideshow: Decorate Like Thain - (www.cnbc.com)
Missing Fund Manager Nadel Is Arrested in Florida - (www.cnbc.com)
Regulators: We Probed Madoff - (www.cnbc.com)
Investment Boss Surrenders - (www.cnbc.com)
Former AIG Exec Slapped with Four-Year Sentence - (www.cnbc.com)

Stocks inch higher Bonds bounce off lows - (money.cnn.com)
Recession realities: Back to school - (money.cnn.com)
Unemployment sweeps nation - (money.cnn.com)

Coming soon: Electric band-aids - (money.cnn.com)
Love your job? Then save it! - (money.cnn.com)
All eyes on Wells Fargo - (money.cnn.com)
Home prices fall at record pace - (money.cnn.com)
Get your economic questions answered - (money.cnn.com)

State Jobless Rates Top 10% Map - (online.wsj.com)
Financials Spark Small Rally - (online.wsj.com)
Regulatory Holes in Madoff Case - (online.wsj.com)
Target Cuts 9% of Headquarters Staff - (online.wsj.com)