KeNo's Housing and Economic Portal: Monday May 31 Housing and Economic stories

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TOP STORIES:

Freddie Mac's Loss Is Ignored in Washington - (www.nytimes.com) IF you blinked, you might have missed the ugly first-quarter report last week from Freddie Mac, the mortgage finance giant that, along with its sister Fannie Mae, soldiers on as one of the financial world’s biggest wards of the state. Freddie — already propped up with $52 billion in taxpayer funds used to rescue the company from its own mistakes — recorded a loss of $6.7 billion and said it would require an additional $10.6 billion from taxpayers to shore up its financial position. The news caused nary a ripple in the placid Washington scene. Perhaps that’s because many lawmakers, especially those who once assured us that Fannie and Freddie would never cost taxpayers a dime, hope that their constituents don’t notice the burgeoning money pit these mortgage monsters represent. Some $130 billion in federal money had already been larded on both companies before Freddie’s latest request. But taxpayers should examine Freddie’s first-quarter numbers not only because the losses are our responsibility. Since they also include details on Freddie’s delinquent mortgages, the company’s sales of foreclosed properties and losses on those sales, the results provide a telling snapshot of the current state of the housing market.

Iceland arrests ex-chief of collapsed bank - (news.bbc.co.uk) The former chief executive of the collapsed Icelandic bank Kaupthing has been arrested, authorities say. Hreidar Mar Sigurdsson is suspected of embezzlement, trading irregularities, and other breaches of banking laws, the special prosecutor's office has said. It is the first high-profile arrest since the country's financial collapse in 2008. Mr Sigurdsson is being held by police until a bail hearing on Friday at the Reykjavik District Court. Kaupthing, once Iceland's biggest bank, collapsed under a mountain of debt at the height of the country's banking crisis. It was taken over by the government in October 2008, along with Iceland's two other biggest banks, Landsbanki and Glitnir. Prosecutor Olafur Hauksson said Mr Sigurdsson was suspected of falsifying documents, embezzlement, breach of trading laws, market manipulation, and other laws.

Fighting the Deficit By Selling Military Land - (www.nytimes.com) IN a previous column, I introduced the concept of a “paid lunch.”It’s better than a free lunch — which is often thought not to exist — because you’re paid to devour it. But what qualifies as a paid lunch for the government? The answer is a proposal that will stimulate the economy and create tangible benefits while — drum roll, please! — reducing the deficit. My initial suggestion was to sell off some of the radio spectrum now used for television broadcasts. And I’m happy to say that the Federal Communications Commission recently proposed a version of this idea to support its national broadband initiative. So here’s another paid-lunch idea. This one is intended to increase the efficiency of the military and its ability to serve the country — all while reducing military spending. Similar in spirit to the spectrum proposal, it boils down to a simple principle: To allocate resources efficiently, decision makers must make choices based on true market values. For the military, that means taking land prices into account in choosing sites for bases. It may be time to sell off some prime real estate.

High-end pain and suffering - (www.csbj.com) A Colorado Springs defense contractor whose firm lost a government job lost his million-dollar North End home to foreclosure last year. A real estate developer who borrowed on his Broadmoor home to finance new projects ended up in the same boat. And the owner of a Penhurst Park Estates home lost his income and his home in the gated community to the bank. All are among the latest casualties of the foreclosure crisis that has swept the country in the last couple of years. What’s different about them is the value of the homes they’ve lost. Million-dollar home owners have joined their less-affluent counterparts on the El Paso County foreclosure firing line. Their numbers are small but nonetheless dramatic, if only because of the rarity in which high-end homes ever fall into foreclosure. Homes priced at $500,000 and up in foreclosure account for 3.3 percent of the 5,450 foreclosure filings of 2009, said El Paso County Public Trustee Tom Mowle. Since January 2008, at least 100 homes with a loan balance of $700,000 or more have fallen into foreclosure.

Is Your Senator A Member Of The Bankster Party? - (www.dailybail.com) The one main benefit to the financial reform effort so far is that it helps further do away with the false paradigms of "left" or "right" and "Democrat" or "Republican" - fewer and fewer people are falling for those lies anymore. Try to get an ideological conservative to explain why Republicans love spending and so eagerly give welfare to banks. Try to get your local liberal to explain why it was a good idea to make backroom deals with abhorrent corporations and drill, baby, drill. Heck, even try to get a Tea Partier to explain choosing bailout-lover Sarah Palin to keynote their convention, especially when that movement once had at least some pre-astroturf roots in protesting government giveaways. What we have now is a group of politicians with shifting alliances on a case-by-case basis to the special interests who fund them. And currently, the most damaging one to our nation is the rise of the Bankster Party. Thankfully, we can now better identify its members.