Tuesday, December 13, 2011

Wednesday December 14 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

Fed saves Europe's banks, while ECB stands pat - (www.telegraph.co.uk) The interwoven banking and sovereign debt crisis in the eurozone has become so dangerous for the world that the US Federal Reserve has been forced to take emergency action, acting as global lender of last resort to shore up Europe's banking system. That it should have to do so as Germany and the European Central Bank hold back for legal reasons and refuse to commit decisive power adds a strange diplomatic twist. The move came once it was clear that Europe's prostrate banks would struggle to roll over $2 trillion (£1.3 trillion) of debts denominated in dollars. Data from ratings agency Fitch shows that US money markets have slashed funding for French banks by 69pc and German banks by 50pc. Strains have been ratcheting up over the past two weeks. European banks are mostly shut out of the dollar market, or only able to raise money for a week at a time.

Britain has entered second credit crunch – (www.telegraph.co.uk) Britain has entered a second credit crunch, Downing Street said on Wednesday night, as America was forced to intervene to stop the eurozone crisis leading to a global financial collapse. The US Federal Reserve spearheaded a scheme by central banks around the world, including the Bank of England, to lend money to ailing European banks that were struggling to borrow. The emergency action to stop the international financial system from freezing up again was prompted by rumours that a European bank was facing difficulties and could not raise money. Panic started to spread through the German bond markets, which threatened to result in a credit freeze for European banks. British banks have been warned by the Financial Services Authority, the City watchdog, that they must make preparations for the collapse of the single currency.

Rising cost of long-term care insurance angers seniors - (www.mcclatchydc.com) When Dean Di Tosto bought long-term care insurance in 1998, he believed he was locking in a low rate. Now the 83-year-old Minnetonka, Minn., resident feels duped. His insurance company, John Hancock, raised the premiums twice in the past three years. The payments could go from $140 a month to $202 a month, a 44 percent increase. "I understand the need for these increases," he said. "I'm not a dummy. But it should affect future new policyholders, not those of us who have already put in thousands of dollars. Many people can't go out and make more money to make up the difference." Trapped between fast-rising costs for care and weak returns on their investments, insurers have been raising long-term care premiums by double-digit percentages. In Minnesota, for example, John Hancock, one of many companies to seek increases from the state, secured average rate increases of 13 percent in 2008 and 40 percent in 2010.

FHA loan limits go back up to $729,750 to benefit wealthy - (www.irvinehousingblog.com) The U.S. Congress on Thursday approved a bill to raise the maximum size of mortgages the Federal Housing Administration can insure and sent it to President Barack Obama to sign into law. The measure would push the so-called FHA conforming loan limit in the highest-priced real estate markets back up to $729,750 through 2013, from $625,500, a sign of lawmaker concern over the still-depressed state of the housing sector. It's far more than a sign of concern, it's an acknowledgement of the weakness in the market for high wage earners, a market that didn't used to get government support. The FHA has been perverted. It used to provide home ownership opportunities for low and middle income Americans. It was never intended for supporting overpriced markets dominated by high wage earners like here in Irvine. Markets with prices requiring loans over $417,000 are supposed to be supported by savings and equity from previous sales. Since most Americans have no savings, and since home equity has been largely wiped out in the crash, the markets for high wage earners are looking for the government to bail them out.

The Margin Effect That Is Killing The Housing Market - (www.businessinsider.com) With each and every report comes "hope" that maybe, potentially, somehow the moribund housing market has finally reached its inevitable bottom and is now on the verge of the next great advance. Nothing could be further from the truth. I say this with a bit of pain because I am a homeowner. I do not like seeing the annual appraisal values on my home falling - even though it means lower taxes. My home, as with most, is a very large investment of mine that I would like to see appreciate, however, the reality is that things may remain depressed for quite some time. In order to understand where we are potentially headed we have to understand where we have been.

OTHER STORIES:

Fed action falls far short of solving Europe's problems – (www.businessweek.com)

Fewer New Homes Sales in U.S. Than Forecast - (www.bloomberg.com)

Banker Foreclosure Fraud in a Nutshell - (www.lewrockwell.com)

Getting Young People Dependent On Cars Is Auto Industry Job #1 - (www.streetsblog.org)

Parastic banks took $13 billion in interest from you, thanks to Fed - (www.bloomberg.com)

For Corporations, the Good Old Days Are Now, For Workers, Not Good - (www.nytimes.com)

Grantham Calls Corporate Profits Freakish - (www.bloomberg.com)

Ads-oriented media breeds biased journalism - (www.rt.com)

Julian Assange calls mainstream press editors corrupt - (www.yahoo.com)

Odious debt - (www.bankrupt.com)

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