Wednesday, December 26, 2012

Thursday December 27 Housing and Economic stories


TOP STORIES:

$822,000 Worker Shows California Leads U.S. Pay Giveaway - (www.bloomberg.com) The numbers are even larger in California, where a state psychiatrist was paid $822,000, a highway patrol officer collected $484,000 in pay and pension benefits and 17 employees got checks of more than $200,000 for unused vacation and leave. The best-paid staff in other states earned far less for the same work, according to the data. Rising employee expenses are crowding out other priorities for state and local governments and draining resources for college tuition, health care, public safety, schools and other services, Schwarzenegger said in an e-mailed response to questions. “California spends most of its money on salaries, retirement payments, health care benefits for government workers, and other compensation,” said Schwarzenegger, 65, who replaced Davis as governor. “State revenues are up more than 50 percent over the past 10 years, but still we’ve had to cut spending on services because so much of that revenue increase went to increases in compensation and benefits.”

UBS to Charge Bank Clients for Franc Deposits Starting Next Week - (www.bloomberg.com) UBS AG (UBSN), Switzerland’s biggest bank, said it will start charging financial institutional clients for cash balances held in Swiss francs, adding to measures imposed last year to control inflows into clearing accounts. The charge, which will be communicated individually to clients within days, will be levied from Dec. 21, the Zurich- based lender said in a notice to bank clients via the Swift system yesterday and made available by UBS. The company cited “continued prevailing market situation affecting the Swiss franc” for the move. The franc weakened against the euro. UBS has been levying a “temporary excess balance fee” since August 2011 in cash clearing accounts where net inflows were above a certain undisclosed threshold. Credit Suisse Group AG, the second-biggest Swiss bank, said last week it would start imposing negative rates on cash clearing accounts in francs and other currencies above a certain threshold as of yesterday.

Spain’s Weakened Banks Shackle Builders’ Drive for Growth Abroad - (www.bloomberg.com)  Spanish builders find themselves increasingly dependent on foreign banks as they seek growth abroad to weather the worst property slump on record. “We are having more difficulties with access to credit,” said Susana Monje, chief executive officer of Grupo Essentium, a construction firm based near Madrid that turned to Germany’s Deutsche Bank AG for backing to win a contract in India this year. “There’s a label for Spanish companies and if you have that label, then you have it more difficult.” Spanish builders such as Essentium and Actividades de Construccion & Servicios SA are paying the price for the frail state of the country’s banking system as they seek to tap growth abroad to compensate for a collapsed market at home. While helping fuel a housing boom before the bubble burst in 2008, lenders have since become reluctant to support the construction industry’s growth ambitions, instead focusing on reducing domestic real estate losses and cutting lending risks.

Obama Prepares To Kick Out Fannie's Ed DeMarco - (www.zerohedge.com) The man who singlehandedly fought the administration over the idea of converting Fannie and Freddie into the latest taxpayer-funded handout machine, FHFA head Ed DeMarco, and refused to write down Fannie and Freddie home loans in yet another Geithner-conceived debt forgiveness scheme, whose cost like any other non-free lunch will simply end being footed again by yet more taxpayers (what little is left of them), appears to have lost the war, and with the second coming of Obama appears set to be replaced as head of the FHFA. The WSJ reports that "The White House has begun preparations to nominate a new director to lead the agency that oversees Fannie Mae and Freddie Mac as soon as early next year, according to people familiar with the discussions. This would pave the way for President Barack Obama to fill what has become one of the most important economic policy positions in Washington." And so the impetus for as many as possible to default on their mortgage in a wholesale scramble to obtain debt forgiveness, will soon take the nation by storm.

Berlusconi Calls Spread a ‘Scam,’ Says Monti Beholden to Germany - (www.bloomberg.com) Former Premier Silvio Berlusconi said Italy’s bond yield difference with Germany is a “scam” and Prime Minister Mario Monti’s policies have made the economy worse than when he was in power. “Monti’s government has followed the Germany-centric policy that Europe has tried to impose on other states and it has produced a crisis that is much worse than when we were in power,” the 76-year-old billionaire said in an interview today on Canale 5 television, controlled by his Mediaset SpA (MS) broadcast company. Berlusconi said the excessive focus on the difference between Italian bonds and comparable German bunds was used to bring down his government a year ago. That gap reached a euro- era record 575.6 basis points on Nov. 9, 2011, days before he resigned and Monti was appointed to lead an unelected government of non-politicians.




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