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New Jersey Housing Suffers as Defaults Exceed Nevada: Mortgages
- (www.bloomberg.com) Wendell and Margret Brady
haven’t paid their mortgage in more than three years, withholding the money
amid a foreclosure dispute on the couple’s 11-bedroom house in Morristown, New
Jersey. The Victorian home, built in 1887 and owned by the retired
couple for 38 years, is part of the growing backlog of properties facing repossession in the state, which now
has the second-highest serious delinquency rate in the U.S. While shrinking
nationwide, the pipeline of distressed real estate, or shadow inventory, is
also growing in New York, Connecticut,
Maine and Pennsylvania because of state laws that slow the foreclosure process.
The Bradys heard nothing from their lender from May 2011, until a letter
arrived in the mail last week. “This was
like going back to day one,” said Margret Brady, 77, after she and her husband
received on Sept. 15 the certified letter saying they must pay $223,730 by the
end of the month or face losing the house. “It was like we hadn’t gone through
any of the stuff of the last three years.” New Jersey’s judicial review of all
foreclosures, which delays seizures to help borrowers, threatens to hold down
prices for years as properties remain subject to repossession and then may be
sold at a discount. That’s buffeting a housing market already hurt by
unemployment that’s risen to a 35-year high.
Bankers
nabbed in bid-rigging scandal - (money.cnn.com)
A federal crackdown is
proceeding quietly against bankers accused of systematically defrauding states,
local governments and non-profits. Since 2009, federal authorities have secured
19 convictions or guilty pleas as part of the investigation, including seven
since April. The cases have put a spotlight on the municipal bond market, an esoteric corner
of the finance world where prosecutors say Wall Street firms have repeatedly
used inside information to pad their bottom lines at the public's expense. "[T]hese
complex, seemingly uninteresting backroom deals have a real impact on
taxpayers," Richard Weber, head of the Internal Revenue Service's criminal
division, said following the convictions of three former UBS bankers
last month. Those implicated over the course of the investigation have come
from firms including Bank of America, JPMorgan and General
Electric. Government agencies have collected more than $740 million in
penalties, restitution and other fees from the institutions involved.
Spain should seek aid, Greece needs more time to pay: IIF -
(www.reuters.com) Greece will meet its nominal 2012
deficit reduction targets but faces growing strain because of the deepening
recession, Finance Minister Yiannis Stournaras said on Tuesday as pressure grew
on international creditors to give Athens more time to catch up. Forecasting
that by 2014, the Greek economy would have shrunk by 25 percent since the start
of the crisis, Stournaras said Athens would broadly meet a target of cutting
the 2012 primary deficit, excluding debt servicing costs, to 2 billion euros in
nominal terms. But he said the primary deficit figure would reach 1.5 percent
of gross domestic product, compared with a previous estimate of 1 percent, as
the recession bit and he repeated a plea for more time from the European Union
and International Monetary Fund troika.
FedEx says economy is worsening, cuts outlook - (finance.yahoo.com) FedEx Corp. says the global
economy is worsening and it's cutting its forecast for the fiscal year ending
in May. The world's second largest package delivery company also said Tuesday
that net income for the current quarter ending in November should fall well
below last year's quarter. The stock lost about 2 percent in premarket trading.
The Memphis, Tenn. company now expects to earn between $6.20 and $6.60 per
share for the full fiscal year, compared with a previous forecast of $6.90 to
$7.40 per share. FedEx is seeing a drop in demand for more expensive priority
services. As the global economy has slowed, FedEx customers have switched to
cheaper deferred delivery services. FedEx hasn't been able to cut costs fast
enough to match the decline in demand.
Gross:
Central banks, where bad bonds go to die - (money.cnn.com) The Bond King came out
swinging against the most recent easing plans out of the Federal Reserve and
European Central Banks on Twitter late Monday. The comments from Bill Gross,
founder of investing firm Pimco, come just days after the Fed unveiled its plan
for a third round of quantitative easing -- or QE3. The Fed
will buy $40 billion of mortgage-backed securities each month for as long as
the economy warrants it. A week earlier, ECB president Mario Draghi said the
central bank is prepared to make "outright monetary transactions," or
OMTs, in the secondary bond market to help alleviate strains on troubled
European nations. Spain and Italy are expected to benefit from this plan. Gross
isn't just talking (or tweeting as the case may be) tough. He cut the holdings
of Treasury bonds to 21% at the end of August in the Pimco Total Return Fund (PTTRX). That fund is the world's biggest
bond fund, with $273 billion in assets. Treasury holdings were at a peak of 35%
in May and June.
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