KeNo's Housing and Economic Portal: Thursday April 12 Housing and Economic stories

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TOP STORIES:

A Bailout by Another Name - (www.nytimes.com) ED DeMARCO is a marked man. The acting director of the Federal Housing Finance Agency and overseer of Fannie Mae and Freddie Mac, Mr. DeMarco is a soft-spoken, career public servant — and under fire. In the thankless job of conservator for the loss-ridden mortgage finance giants, he has a duty to ensure that the companies operate in the best interests of the taxpayers who own them. That means working to keep a lid on the companies’ losses, which now total $183 billion. But in recent weeks, Mr. DeMarco has come under increasing pressure to chuck his obligation to taxpayers and make Fannie and Freddie write down principal on mortgages held by troubled borrowers. He says, with reason, that such a program would run counter to his legal obligation to pursue only those activities that pose the least cost to taxpayers. Representative Barney Frank, the Massachusetts Democrat who supported Fannie Mae almost to its collapse, has called for Mr. DeMarco’s resignation because he is “too rigid” on the issue. Representative Elijah E. Cummings, a Maryland Democrat and ranking member of the House Committee on Oversight and Government Reform, told a field hearing in Brooklyn last week that Mr. DeMarco “may be the biggest hurdle standing between our nation and the recovery of our housing market.”

An emergency room story to make anyone ill - (www.latimes.com) The tale of an 11-year-old's $5,000 stomachache reveals the Twilight Zone of hospital billing. The charges seem arbitrary if not indefensible. The story of 11-year-old Ella Moser's $5,000 tummy ache begins in October, when her Studio City parents called their pediatrician one night and were advised to go to an emergency room, just to be safe. Ella's father, John Moser, was mindful of the fact that emergency room costs can be sky high. He's the son of a doctor who teaches medicine at Yale and has written several articles about excessive medical testing and overcharging. But Ella was in a lot of pain and as the pediatrician had advised, it might be smart to rule out appendicitis and other serious ailments. So they went to Providence Tarzana Medical Center's emergency room, where Moser handed over his insurance information. He had lost his job in TV production, and later bought his own medical insurance. To keep the monthly premiums manageable, he went for a plan with a $5,000 deductible. "I kept asking, 'Is this really necessary?' " said Moser, who first questioned the emergency room staff about the need for an IV drip to administer a saline solution. The staff agreed not to do the saline solution. After some blood work, the doctor recommended an ultrasound, which Moser questioned. He relented, though, when the doctor said it wasn't absolutely necessary but would rule out anything serious. And it did, so Ella went home with what was diagnosed as nothing more than an upset stomach, from which she quickly recovered. But when the bill arrived, John Moser felt a sharp pain in his own gut.

Libor Flatlines as Europe-Wary See Stress: Credit Markets - (www.bloomberg.com) Stresses in the global financial system have stopped easing as European policy makers signal they’re unlikely to extend a third round of unlimited loans to the region’s banks and as bond yields in Spain and Portugal begin to rise again. The three-month London interbank offered rate has held at about 0.47 percent every day in March, after sliding from this year’s high of 0.58 percent on Jan. 3. Measures from interest- rate swap spreads to the relative yields on short-term bonds sold by the world’s biggest banks also show the health of the financial system isn’t improving. Former European Central Bank Governing Council member Axel Weber said yesterday financial institutions shouldn’t count on additional three-year loans following more than 1 trillion euros ($1.3 trillion) in two long-term refinancing operations beginning in December.

Barclays Gas ETN Plummets as Credit Suisse VIX Note Crashes - (www.bloomberg.com) A Barclays Plc (BARC) exchange-traded note that traded 134 percent above the value of the natural-gas index it’s tied to lost 47 percent of the premium in three days as investors exit funds that diverge from underlying assets. The iPath Dow Jones-UBS Natural Gas Total Return Sub-Index ETN has plunged 29 percent since March 21 as its benchmark index decreased 6.5 percent, according to data compiled by Bloomberg. Barclays suspended issuance of new shares in August 2009, which may cause the notes “to trade at a premium or discount in relation to their indicative value,” the bank said in a statement at the time. The ETN fell 2.7 percent today to $3.66.

South Bend Neighbors Embracing Abandoned Properties - (www.nytimes.com) When the grand Queen Anne on Portage Avenue lost its last occupants a few years ago, plunging into foreclosure and abandonment, the century-old gem risked the same fate as hundreds of empty houses here: collapse or demolition. Either way, what had been a lumber baron’s masterpiece was bound to become just another forgotten lot on the Rust Belt. This time, however, one group of people decided that they could not abide by the slow dance of architectural death. They were not real estate investors hoping to make a killing off this market, which is not even remotely on the upswing. They were its neighbors, come together against significant odds to save the house, and others like it, in the hope of saving their community