Wednesday November 13 Housing and Economic stories

TOP STORIES:

Something Is Not Right With This $6 Million Bid To Buy The World Largest Industrial Ruin - (www.mfi-miami.com)  Pandemonium erupted in Detroit media last night and today when it was announced that a doctor from suburban Houston named Jill Van Horn was the top bidder for the abandoned Packard plant on Detroit’s east side with a winning bid of $6,038,000. The 40 acre Packard Plant opened in 1903 and churned out the Packard luxury automobile until the plant closed in 1956.  It was replaced by smaller manufacturing businesses for the next 25 years but as more automobile suppliers relocated outside the City of Detroit. The Packard Plant became a hot spot for for artists, photographers, graffiti artists, tourists, urban spelunkers and urban adventurers from the around the globe all interested in Rust Belt Chic. Two enterprising photographers even began taking tourists on “Ruin Porn” tours. The site is extremely dangerous. Fires break out daily as both the Detroit Police and Detroit Fire Department refuse respond to calls from the site. Steve Neavling from the Motor City Muckraker wrote about how large chunks of the abandoned Packard Plant spilled onto the road nearly striking a pedestrian and about two tourists who were carjacked. The enigmatic bid is shrouded by cryptic answers by the people involved. According to the Detroit Free Press, someone responded via text message from her husband’s cell phone confirming the Van Horns put in an offer and refused to say anything else.

Many Americans accumulating debt faster than they're saving for retirement - (www.washingtonpost.com)  A majority of Americans with 401(k)-type savings accounts are accumulating debt faster than they are setting aside money for retirement, further undermining the nation’s troubled system for old-age saving, a new report has found. Three in five workers with defined contribution accounts are “debt savers,” according to the report released Thursday, meaning their increasing mortgages, credit card balances and installment loans are outpacing the amount of money they are able to save for retirement. The imbalance is expanding even as policymakers are encouraging people to set aside more by offering generous tax breaks and automatically enrolling workers in retirement accounts that in some cases automatically escalate the amount of money over time. Currently, workers with retirement savings accounts put aside more than 11 percent of their pay for retirement — 5 percent in their own accounts, and 6.2 percent in Social Security. Despite that — and despite the $2.5 trillion the report says employers have poured into defined contribution accounts from 1992 to 2012 — the retirement readiness of most Americans has been slipping, according to the report by HelloWallet, a D.C. firm that offers technology-based financial advice to workers and conducts research of economic behavior. “Policy has tunnel vision. It tends to tackle problems on a piecemeal basis. The impact of policy on consumer finances is a bit like playing a game of Whac-A-Mole,” said Matt Fellowes, founder and chief executive of HelloWallet and a former Brookings Institution scholar. “We raised the victory flag as people increased retirement contributions, but in reality the ability of people to retire is a function of lots of different variables, most important of which is what they are doing on the other side of the ledger.”

Bank layoffs rise as mortgage refinances fall - (www.usatoday.com) Banks are laying off thousands of people, but it's because the economy is actually getting a little better. Bank of America's announcement that it is laying off 1,200 people who work on mortgage refinancings was only the latest salvo. The company also said it will cut another 3,000 people who work on restructuring problem loans before the end of the year. Banks from Citibank to Wells Fargo to SunTrust are also laying off hundreds or more than a thousand workers each. The reason: With the economy improving, not nearly as many old loans are going bad, and not nearly as many new ones are being made. Because home values have been rising in many areas fewer fewer homes underwater, so there are far fewer requests for loan modifications and extensions.

Madoff has insisted all along that J.P. Morgan knew about Ponzi scheme - (www.marketwatch.com) “It was very obvious to the banks what was going on.” Bernie Madoff has been insisting for five years that the banks knew and were complicit in his massive Ponzi scheme, that defrauded customers out of billions of dollars and left people devastated. “With me, they turned a blind eye,” said Madoff in an in-person interview in early May, at a federal prison in Butner, North Carolina. Madoff spent much of the two hours emphatically insisting the banks on Wall Street were complicit in his Ponzi scheme, but left him alone because he was a major client for them. “This is not a matter of taking my word for it, they (the authorities) don’t have to take my word for it,” he said. He specifically pointed fingers at J.P. Morgan Chase & Co. as a major culprit.

Puerto Rico -- "America's Greece" -- Faces Default - (www.businessinsider.com)  A heavily indebted island weighs on America’s municipal-bond market. ALTHOUGH investors are now less jittery about a possible default by the American Treasury, they are rightly still nervous about a drama unfolding in the market for state and local debt. Since May, yields on bonds issued by Puerto Rico, a self-governing American territory, have shot up to between 8% and 10%, despite their (barely) investment-grade rating and tax-exempt interest. Puerto Rico carries outsized importance in America’s almost $4 trillion municipal-debt market, which includes bonds issued by states and other local authorities as well as by cities. The island’s current debt, between $52 billion and $70 billion (depending on how it is measured), is the third-largest behind California’s and New York’s, despite a far smaller and poorer population. In America’s 50 states the average ratio of state debt to personal income is 3.4%. Moody’s, a ratings agency, puts Puerto Rico’s tax-supported debt at an eye-watering 89% (see chart).

OTHER STORIES:

JPMorgan in $5.1 billion deal with housing agency - (www.reuters.com)

China Seen Losing Sheen for IBM to Nike as Hurdles Mount
China leader promises 'unprecedented' reforms at key Party meeting - (www.reuters.com)
Japan PM says ready to be more assertive against China: media - (www.reuters.com)

German paper says Obama aware of spying on Merkel since 2010 - (www.reuters.com)
Merkel, Hollande want to forge new intelligence pacts with U.S. - (www.washingtonpost.com)

Wall Street Week Ahead: Focus on Facebook, Apple and the Fed - (www.reuters.com)
Stock market's continuing climb worries some Wall Street experts - (www.latimes.com)

Fed to hold its fire this week, wants clearer economic view - (www.reuters.com)
In Fed and Out, Many Now Think Inflation Helps - (www.nytimes.com)