Monday February 9 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

China’s 20m unemployed raise risk of unrest - (www.ft.com) More than 20m rural migrant workers in China have lost their jobs and returned home as a result of the global economic crisis according to government figures, raising the spectre of widespread unrest in the authoritarian country. By the start of the Chinese New Year Spring Festival on 25 January, 15.3 per cent of China’s 130m migrant workers had lost their jobs and returned from manufacturing centres in the south and east of the country to their home villages or towns, according to Chen Xiwen, Director of the Office of Central Rural Work Leading Group, who was quoting a survey from the Ministry of Agriculture.EDITOR’S CHOICE

People robbing banks, murdering and suicides in this ECONOMIC DEPRESSION! - (thecomingdepression.blogspot.com) - Pushed past their breaking points, people are robbing banks to pay the rent, setting homes on fire -- even taking their own lives. The body count is still rising. For months on end, marked by bankruptcies, foreclosures, evictions, and layoffs, the economic meltdown has taken a heavy toll on Americans. In response, a range of extreme acts including suicide, self-inflicted injury, murder, and arson have hit the local news. By October 2008, an analysis Here of press reports nationwide indicated that an epidemic of tragedies spurred by the financial crisis had already spread from Pasadena, California, to Taunton, Massachusetts, from Roseville, Minnesota, to Ocala, Florida. In the three months since, the pain has been migrating upwards. A growing number of the world's rich have garnered headlines for high profile, financially-motivated suicides. Take the New Zealand-born "millionaire financier" who leapt in front of an express train in Great Britain or the "German tycoon" who did much the same in his homeland. These have, with increasing regularity, hit front pages around the world. An example would be New York-based money manager René-Thierry Magnon de la Villehuchet, who slashed his wrists after he "lost more than $1 billion of client money, including much, if not all, of his own family's fortune." In the end, he was yet another victim of financial swindler Bernard Madoff's $50 billion Ponzi scheme. WISN-TV uncovered a host of similar tragedies including:
* A 21-year-old Milwaukee man who shot himself in the face after "he ran out of unemployment [insurance]."
* A 43-year-old West Allis man who hanged himself in his basement with a belt. "[T]he mortgage payments are behind," his girlfriend told the police. "There are astronomical medical bills."
* A 40-year-old Milwaukee woman who overdosed after having "financial problems."
* A 24-year-old Milwaukee man, "fired from his job three weeks before," who suffocated himself with Saran Wrap.
* And a 38-year-old Milwaukee man who shot himself in the head. He'd lost his job six weeks earlier.

As recession ravages their assets, the rich retrench - (www.usatoday.com) The rich may not be quite so different than you and me these days: They, too, have less money. Their fortunes have fallen along with the prices of stocks, oil and real estate. Luxury condos on Florida beaches languish; champagne sales are down; private jets sit idle. Times may be tough for the wealthy, but they're tougher for those who serve and sell to them. "Business may be a bit off this year," allows Doug Turner, president of Millionaire's Concierge in Fort Lauderdale, which offers everything from VIP concert tickets to $13,000 rides in fighter jets for the wealthy. The rich are cutting non-essential items, and that hurts his business. "Everything I sell, you don't need," he says. Just what defines "wealthy" is subject to debate. The Securities and Exchange Commission defines a high-net-worth person as someone with $750,000 or more in investible assets. Under President Obama's tax plan, people earning $250,000 or more annually are wealthy enough to get a tax increase — and those people are in the top 2% to 5% of all income levels.

‘Grimmest’ Davos Ever Brings Anger, Finger-Pointing at Bankers - (www.bloomberg.com) The search for scapegoats and the worst economic prospects since World War II resulted in a gathering marked by fear, anger and bitterness, a far cry from the usual search for consensus. Turkish Prime Minister Recep Tayyip Erdogan stormed out of a panel discussion and Russian Prime Minister Vladimir Putin hectored the U.S. as the font of the world’s economic woes. Almost everyone blamed the few bankers who showed up for the near-collapse of the financial system. Attendees were “less reluctant to criticize, and sometimes very vocally criticize, the U.S. and its capitalist system because of the problems we’re having,” said David Rubenstein, co-founder of the Carlyle Group, who first came to Davos a decade ago. “Maybe that’s deserved, but it’s a big change.” “Everyone I spoke to says it’s the grimmest Davos they’ve ever been to,” said Kenneth Rogoff, professor of economics at Harvard University and a World Economic Forum regular since 2002. “The mood has been very depressed. It’s a low-burn depression.” Another big change was the virtual absence of Wall Street figures among the 2,500 delegates at the conference, which ended yesterday. ‘Stupid Things’ JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon was the only U.S. banking chief who showed up. He made a concession to the mood of this year’s event by accepting some blame for the collapse that has led to more than $1 trillion of writedowns. He deflected the rest at regulators. “God knows, some really stupid things were done by American banks and by American investment banks,” Dimon said. “To policy makers, I say: ‘Where were they?’” That attitude was tough for some to swallow. At one session, a call for curbs on bankers’ bonuses was met with applause by sections of the audience. “We should not trust these bankers,” said Nassim Nicholas Taleb, author of the best-selling book “The Black Swan.” “Look at their track record. The only way to stop the process is for the government to own those banks.”

Stimulus plan seems too unfocused to straighten out mess - (www.chicagotribune.com) The Obama stimulus package seems so unfocused as to be ineffective. Yardeni said the description falls short of truth in advertising. "This is just a pork barrel that gives Democrats fulfillment of every wish they've had on their list for the last 100 years," Yardeni said. Obama and Congress, in short, need to look at the economy the way Hicks is dealing with his patients. On the one hand, he must encourage prudent action where delay might cause infection and further damage. On the other, he should keep an eye on spending, to make certain the investment pays off.

California Crisis Deepens — Are Other States To Follow? - (www.cnbc.com) Today is the day Californians begin to personally feel the pain of the state's massive budget gap. As Gov. Arnold Schwarzenegger and top legislative leaders continue to meet behind closed doors to hammer out a plan covering the current $16 billion gap—projected to grow to $42 billion by June, 2010—the state controller is delaying $3.5 billion in payments to conserve cash.
A self-imposed deadline for coming

Sen. Dodd says he'll refinance Countrywide loans - (news.yahoo.com/s/ap) - Connecticut Sen. Chris Dodd says he'll refinance two mortgages that he received through a VIP program from Countrywide Financial Corp. Dodd told reporters Monday that the mortgages for his homes in Washington and East Haddam, Conn., will be refinanced with a different company. Dodd has acknowledged receiving mortgages in 2003 through a VIP program at Countrywide, which was sold to Bank of America Corp. earlier this year and has been the focus of allegations that it gave favorable loan terms to lawmakers. Dodd says he's moving the loans in part because he was wrongfully labeled a friend of Countrywide's former CEO, Angelo Mozilo. Dodd says he never sought special treatment. The chairman of the Senate Banking Committee, Dodd says a third party will be involved in choosing the new bank.

Willem Buiter: Mismangement by the Officialdom Can Produce a Depression - (www.nakedcapitalism.com) What makes Buiter worth reading, aside from his refreshing bluntness, is that he is largely but not entirely an orthodox economist. He accepts the notion, for instance, that Kenyesian stimulus would be a very good thing, but concludes, heretically, that a lot of the main economic actors can't go very far down that path. Aside from arguing that point (as he has previously) Buiter also warns against the dangers of growing protectionism. That is conventional but well expressed nevertheless. It seems that a collective sour mood has developed, as the ugly reality reveals itself: the economic crisis is going to take quite a bit of time to resolve itself. Countries with overlevered, dud banks and overextended consumers are nearly certain to suffer a permanent hit to their standard of living. The highest profile incidents at Davos were either outbursts or harsh criticisms of the financial order once aggressively promoted by the US. But as telling were journalists' comments about widespread anger (not just gloom), which does not bode well for cooperation. The reason that the talk of protectionism now is unfortunate is that it is ill timed. The juncture for the US to have made noise about China's currency peg was after the Asian crisis had clearly passed and China (which only took a glancing blow) had built up a buffer of FX reserves. Conceptually, an artificially low currency is no different than an across the board export subsidy. But being able to borrow cheaply had certain advantages to the US. Even though the Bush crowd was quite wiling to alienate most of the rest of the world on Iraq, it was craven in its dealings with China (and other countries running dollar pegs). The entire post is worth reading, and includes a very good discussion of how the ECB is behind the eight ball (with useful



OTHER STORIES:

Daschle Apologizes for Failing to Pay Taxes - (www.cnbc.com)
Applied Materials Warns of Loss Due to Falling Demand - (www.cnbc.com)
Pfizer CEO Defends 'Strategic' Wyeth Deal - (www.cnbc.com)
Pot Luck: Michael Phelps' Mistake Will Cost Him - (www.cnbc.com)
Did The Government Force Bank of America To Buy Merrill? - (www.ml-implode.com) - ``Technically the government did not have the authority to force Lewis to buy Merrill. But it hardly matters: In the current cri...

Heartland Update: Reps Respond to Questions - (www.ml-implode.com) - "On Friday January 30, representatives of Heartland Payment Systems (HPY) contacted me via email regarding my recent article whi...
wells fargo top mortgage lender in 2008 - (www.ml-implode.com) - "Wells Fargo was the number one mortgage lender in 2008, according to a report released today by MortgageDaily.com. The San Fran...
Wells Fargo's Balance Sheet: Scaring the Horses - (www.ml-implode.com)
Wall Street pare losses after manufacturing data - (www.reuters.com)
Risks Are Vast in Revaluing Tainted Assets - (www.nytimes.com)
CalPERS investment chief sees 'no place to hide' in the markets - (www.latimes.com)
L.A.'s Westside succumbs as housing goes south - (www.latimes.com)
Euro manufacturing shrinks, Korean exports slump - (www.reuters.com)

Wen looks at fresh Chinese stimulus - (www.ft.com)
Japan auto sales plunge to 37-year low - (www.chicagotribune.com)
Barclays’ credit rating downgraded - (www.ft.com)
U.S. Consumer Spending Falls for Sixth Straight Month - (www.bloomberg.com)
Obama Will Require Banks to Expand Lending as Condition for Aid - (www.bloomberg.com)
Republicans urge major changes to $894bn injection bill - (www.ft.com)
U.S. ISM Manufacturing Index Increased to 35.6 in January - (www.bloomberg.com)
GOP leaders doubt stimulus bill will pass Senate - (www.dallasnews.com)
World Leaders Wary of U.S. Economic Measures - (www.nytimes.com)
Americans saving again, when the economy needs them to spend - (www.chicagotribune.com)
California holds back payments amid budget crisis - (www.reuters.com)
Chrysler turns the screw on part makers - (www.ft.com)