Tuesday February 3 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

There are no words to describe the following. – (www.dailybail.com) Funny rant on the stimulus bill. This is the possibly the funniest RANT ever made. It's the best we'ver ever come across, for sure. Watch the entire video to the end! It takes him about 30 seconds to get sufficiently warmed up. You will not be sorry. Wallstreetpro, as he is known on youtube, welcome to DailyBail. ABSOLUTELY, COMPLETELY NOT SAFE FOR THOSE WHO DON'T LIKE EXPLETIVES

A Tale of Two Squatters - (www.sfgate.com) Three guys dressed in black sit with me on the steps of the Basilica of Mission Dolores in San Francisco's Mission district. It's past midnight on a clear winter night, and the stone stairs are numbingly cold. I suggest we go to a cafe, but Tim, Sasha and Steve -- they don't want to give their last names -- are squatters; they live in abandoned, unheated buildings where they don't pay rent and are used to being out in the elements. Plus, they are nursing bottles of Newcastle beer, so we stay outside to talk about how the economic downturn is affecting them. Millions of foreclosed properties have flooded the housing market and more are coming every day. There are 6.2 million vacant housing units in the United States, according to a recent study by the Joint Center for Housing Studies at Harvard University. Paradoxically, some estimate there are 3.5 million homeless people in America. Grim news, and yet the squatters see these statistics as an opportunity. "In the avenues, there are foreclosures on every block," says Tim, a soft-spoken man wearing a wool fishing cap. For squatters like him, that could mean a free home for a while. In fact, he's been squatting in an abandoned house in the Mission district for the last two years.

Bankruptcy Lawyers Seek $18.50 a Minute as Creditors Get Less - (www.bloomberg.com) Lawyers at Kirkland & Ellis LLP, home to former Whitewater prosecutor Ken Starr, are asking as much as $1,110 an hour for bankruptcy work while creditors are recovering less of their loans through company restructurings. Kirkland requested a top rate equal to $18.50 a minute for advising Tronox Inc. in its bankruptcy, according to court papers filed Jan. 26. Chicago-based Sidley Austin LLP and New York’s Skadden, Arps, Slate, Meagher & Flom LLP also requested hourly rates exceeding $1,000 in the past two months in separate bankruptcy cases, as lenders’ recoveries are forecast by ratings company Moody’s Corp. to drop 22 percent in the recession. Professionals’ fees in bankruptcy cases are growing at four times the rate of inflation, estimated Lynn LoPucki, a professor of bankruptcy law at the University of California, Los Angeles. Total fees paid for lawyers, accountants and other professionals in bankruptcies from 1998 to 2007 doubled, while the consumer price index rose about 25 percent, he said. “As the economy gets worse, the bankruptcy lawyers are charging more,” LoPucki said. “It seems that each month one sets a new record for hourly billing rates. $1,110 is, to my knowledge, a record for the debtor’s bankruptcy counsel.”

Cosmo, Accused of Ponzi Scheme, Raised $370 Million, U.S. Says - (www.bloomberg.com) Nicholas Cosmo, founder of Agape World Inc. in Hauppauge, New York, swindled investors out of more than $370 million and used the money to pay for limousines, fund a baseball league and pay off a restitution order from an earlier fraud, U.S. authorities said. Cosmo, 37, operated a Ponzi scheme at least from October 2003 to December 2008 that victimized more than 1,500 individual investors, putting the money into Agape World bank accounts, according to a 51-page affidavit by U.S. Postal Inspector Richard Cinnamo detailing the government’s allegations. “By paying investors partial returns -- represented to be profits from interest-generating loans -- Cosmo persuaded current investors to invest additional funds in Agape and AMA, and also encouraged new victims to invest in the two companies,” U.S. Attorney Benton J. Campbell’s office said in a statement today.

Lehman's Fuld sold Florida mansion to wife for $100 U.S. most likely to protect from shareholder lawsuit or bankruptcy filing - (www.reuters.com) Fallen Lehman Brothers Chief Executive Richard Fuld sold his $13.3 million mansion to his wife for just $100 last November, according to Florida real estate records. The 62-year old executive, who could face civil lawsuits after overseeing the storied investment bank's collapse into Chapter 11 proceedings last September, transferred ownership of the 3.3 acres seaside home to Kathleen Fuld on November 10, records show. The couple had jointly bought the home for $13.75 million in March 2004, as first reported by Cityfile.com. Fuld has been blamed for Lehman's collapse on September 15 after it was weighed down by bad assets leading to the largest-ever U.S. bankruptcy when it was unable to find a buyer to come to its rescue. He was widely criticized for not acting quickly enough to save the 158-year old bank. Though Fuld told U.S. lawmakers he took full responsibility for his actions and felt "horrible about what has happened to the company," he insisted he shared the blame with U.S. regulators and Congress.

The Next Real Estate Crisis: Shuttered Stores and Empty Malls - (www.alternet.org) For a picture of the US real estate crisis, imagine New Orleans wrecked by Hurricane Katrina, and before the waters even begin to recede, a second Katrina hits. The 1,120,000 lost US retail jobs in 2008 are a signal that the second stage of the real estate bust is about to hit the economy. This time it will be commercial real estate -- shopping malls, strip malls, warehouses, and office buildings. As businesses close and rents decline, the ability to service the mortgages on the over-built commercial real estate disappears. The over-building was helped along by the irresponsibly low interest rates, but the main impetus came from the slide of the US saving rate to zero and the rise in household indebtedness. The shrinkage of savings and the increase in debt raised consumer spending to 72% of GDP. The proliferation of malls and the warehouses that service them reflect the rise in consumer spending as a share of GDP. Like the federal government, consumers spent more than they earned and borrowed to cover the difference. Obviously, this could not go on forever, and consumer debt has reached its limit.

The Banks Have Stolen Enough; It's Time to Take Them Over - (www.huffingtonpost.com) Hold onto your wallets. The bankers are coming back for more money. They burned through the $350 billion that we gave them in the first round of the Troubled Asset Relief Program (TARP) and they are worried that even the second $350 billion will not be enough money to keep them solvent. The selective leaks from Treasury tell us that the banks will need far more money to cover their bad debts. The latest story is that the banks want to sell us their bad assets at above market prices, which was the original plan that Treasury Secretary Paulson proposed, except the banks want to push off their junk on an even bigger scale. In one version, the government would set up a Resolution Trust-type corporation (RTC), like we did with the bankrupt Savings and Loans in the 80s, which would hold all the garbage and then gradually resell it to the private sector to recover a portion of what the government paid. This is a reasonable course, except there is one big difference between what we did with the S&Ls in the 80s and the leaked plan being floated. The S&Ls were taken over by the government and then resold to the private sector. These were bankrupt institutions that were put out of business. The stockholders were wiped out, which is what is supposed to happen to stock holders when their company goes bankrupt.

Paying in Ameros – (www.marketwatch.com) The financial crisis may have all kinds of unintended consequences, including, possibly, a single North American currency. In 2006, it seemed counterintuitive to forecast a "prolonged socioeconomic malaise entirely more depressing than a recession." For years, the notion of an "invisible hand" was conspiracy theory until we learned that the Working Group on Financial Markets was a central policy tool. And now, as we gaze across our historically significant horizon, we must open our minds to thoughts and ideas that may seem foreign to folks conditioned by the past and stunned by the present. As governments take on more risk -- as they price assets on behalf of the market and transfer debt from private to public -- the common denominator, or release valve, becomes the currency. If our economic condition is allowed to take medicine in the form of debt destruction, the greenback will appreciate, and asset classes as a whole will deflate. If we continue to inject drugs that mask symptoms rather than address the disease, the likelihood of a seismic readjustment increases in kind. The deflationary forces in the marketplace are pervasive, and the "other side" of our current equation, hyperinflation, may be years away. Given the magnitude, breadth and pace of the global financial epidemic, however, we must explore each side of the twisted ride. Years ago, the Federal Reserve wrote a "solution paper" regarding the need to combat zero-bound interest rates. The concern was the flight of capital from the U.S. and an option discussed was a two-tiered currency, one for U.S citizens and one for foreigners. Canadian economist Herbert Grubel first introduced a potential manifestation of this concept in 1999. The North American Currency -- called the "Amero" in select circles -- would effectively comingle the Canadian dollar, U.S. dollar and Mexican peso.




OTHER STORIES:

Rents Drop Nationwide - (finance.yahoo.com)
Bloody Monday: Over 71,400 jobs lost - (money.cnn.com)
Fannie Mae Could Need $16 Billion From You - (www.cnbc.com)
Freddie Mac may need another $35 billion from you - (mortgage.freedomblogging.com)
Bank failures in 2009 on track for historic highs - (money.cnn.com)


Geithner Sets Limits on Lobbying for Bailout Money - (www.nytimes.com)
Confidence evaporates, currency row brews - (www.reuters.com)
Capital flows to developing world at risk - (www.ft.com)
OPEC Calls for Curbing Speculators, Blames Hedge Funds for Rout - (www.bloomberg.com)
Troubled Times Bring Mini-Madoffs to Light - (www.nytimes.com)

How to rescue the bank bailout - (www.cnn.com)
Nationalization Gets a New, Serious Look - (www.nytimes.com)
Media's Role In The Financial Crisis - (tpmcafe.talkingpointsmemo.com)
Taxpayers supporting the lemons - (tpmcafe.talkingpointsmemo.com)
The Housing Endgame - (Charles Hugh Smith at www.oftwominds.com)
Just plane despicable - (www.nypost.com)
Thain Strikes Back: Bank of America Knew Everything - (www.finance.yahoo.com)
Stoned Southerner Has More Sense Than Most Economists - (www.dailybail.com)
Credit Crunch provokes instability in China - (www.youtube.com)

FDIC May Run ‘Bad Bank’ in U.S. Plan to Remove Toxic Assets - (www.bloomberg.com)
Consumer Confidence in the U.S. Fell to Record Low - (www.bloomberg.com)
November Home Prices in 20 U.S. Cities Fall 18.2% - (www.bloomberg.com)
Layoffs Spread to More Sectors of the Economy - (www.nytimes.com)
New York Fed Said to Name Dudley as President Today - (www.bloomberg.com)
For Fed Policy-Making, Murky Era Lies Ahead - (www.nytimes.com)
Layoffs Cut Deeper Into Economy - (www.washingtonpost.com)
Geithner Sworn in at Treasury; Dudley May Get Fed Job - (www.bloomberg.com)
Fannie, Freddie may tap U.S. Treasury for $51 billion - (www.reuters.com)
Valero shuts refinery as slowdown bites - (www.ft.com)
Dow considers first dividend cut since 1912 - (www.ft.com)
Corning to Cut 3,500 Jobs After Profit, Sales Plunge - (www.bloomberg.com)
Obama moves to force automakers to produce more fuel-efficient vehicles - (www.latimes.com)
Madoff Enablers Winked at Suspected Front-Running - (www.bloomberg.com)