Thursday, December 20, 2012

Friday December 21 Housing and Economic stories


Transit district stuck with house after former GM strategically defaults - ( AC Transit directors sank more than half a million dollars into an Oakland hills home for their former general manager – and now they’re stuck with it. The cash-strapped district foreclosed on the four-bedroom house in July, six months after ex-GM Rick Fernandez stopped making his loan payments. That has saddled the agency with an estimated $232,000 loss, based on a pair of loans totaling $500,000 that directors gave to Fernandez starting in 2004, plus additional sale and foreclosure costs. “It turned out, in hindsight, not to be a good idea,” said longtime AC Transit Director Greg Harper, who was among the board majority that supported the loan. The district is now $232,000 underwater after the former GM strategically defaulted. Yes, it was not a good idea. I can’t believe the people who approved this aren’t losing their jobs. The loans were always rather odd. Fernandez first requested $400,000 in 2004 so he could buy the house that had belonged to his late girlfriend, a former AC Transit employee, for $350,000. Why does a guy need $400,000 to purchase a $350,000 house? Did he and his girlfriend get a $50,000 signing bonus out of the deal?

Depression Deepens Greek Middle Class Despair With Crime - ( Anastasia Karagaitanaki, 57, is a former model and cafe owner in Thessaloniki, Greece. After losing her business to the financial crisis, she now sleeps on a daybed next to the refrigerator in her mother’s kitchen and depends on charity for food and insulin for her diabetes. “I feel like my life has slipped through my hands,” said Karagaitanaki, whose brother also shares the one-bedroom apartment. “I feel like I’m dead.” For thousands of Greeks like Karagaitanaki, the fabric of middle-class life is unraveling. Teachers, salaries slashed by a third, are stealing electricity. Families in once-stable neighborhoods are afraid to leave their homes because of rising street crime. Karagaitanaki’s family can’t afford gas to heat their home this winter and will rely on electric blankets in the chilly northern Greek city. “We are waiting every month for my mother’s pension,” Karagaitanaki said. “If my mother dies, what can I do? Everyone here is dependent on their parents' pensions.”

Greece jobless rate up to 26 percent - ( Greece's unemployment rate rose to 26 percent in September, as the country heads toward a sixth year of recession. The Greek Statistical Authority announced Thursday that 1.295 million people were recorded as being unemployed in September — pushing up the jobless rate up from 25.3 the previous month and 18.9 percent a year earlier. The number of people employed stood at 3,695,053 while another 3,373,692 were listed as financially inactive, according to a statement with September data.

S&P cuts Greece to 'selective default'  - ( Standard & Poor's has lowered Greece's credit rating to "selective default" in light of its offer to buy back bonds at well below their face value. Greece has announced plans to spend up to $13 billion on the buyback in a bid to bring its staggering debt load under control. S&P says it sees the buyback as essentially a distressed debt restructuring tantamount to a default. The rating agency says it may raise its long-term credit rating on Greece back to junk-grade "CCC" once the buyback is complete. Greece has fallen under S&P's default rating before. It returned to junk status this spring after it completed a major debt write-down with private creditors.

Deutsche Bank Whistleblowers Claimed Crisis Coverup, FT Says - ( Eric Ben-Artzi, a former quantitative risk analyst for Deutsche Bank AG (DBK), alleged thatEurope’s biggest lender engaged in a multibillion-dollar securities violation. Deutsche Bank denied the allegation. Ben-Artzi, who is suing the company for wrongful dismissal, told the U.S. Securities and Exchange Commission that from 2007 to 2010 the bank misrepresented the value of a portfolio with a notional value of as much as $130 billion, Labaton Sucharow LLP, the New York-based law firm representing Ben-Artzi, said on its website yesterday. “The valuations and financial reporting were proper, and a significant portion of these positions were subsequently unwound in an orderly sale,” Renee Calabro, a spokeswoman for Deutsche Bank in New York, said in a statement. The claims were false, and the bank will continue to cooperate with the SEC’s investigation, she said.

1 comment:

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