Thursday, January 31, 2013

Friday February 1 Housing and Economic stories


In latest debt-ceiling move, Treasury to tap Thrift Savings Plan money - ( The Treasury Department said Tuesday it would begin tapping civil service retirement funds because Congress has not raised the federal debt ceiling, the latest reminder that time is running out before the government is at risk of defaulting on the national debt. The action will allow the government to spend $156 billion that otherwise would have been invested in the federal Thrift Savings Plan. As a result of that action and others the Treasury is taking, Congress has until between mid-February and early March to raise the $16.4 trillion debt limit. So long as the debt ceiling is raised on time, federal workers and retirees should not be affected.

MFI-Miami In Talks With Black Panthers To Help Battle Illegal Eviction By Taxpayer Owned Fannie Mae - ( Eviction Battle Over Inner-City Teacher Could Get Dicey For Bailed Out GSE: Steve Dibert, President of MFI-Miami, an internationally recognized leader in investigating mortgage fraud, announced that MFI-Miami is in talks with the Detroit Chapter of the New Black Panther Nation/New Marcus Garvey Movement to join the fight to keep Amy Plumb, an inner-city school teacher from Genesee County, Michigan from being evicted by Fannie Mae and their attorneys, Orlans Associates.  Orlans Associates is home to alleged multi-state robo-signer Marshall Isaacs. “I’m excited about the possibility that the New Black Panther Nation/New Marcus Garvey Movement will be joining us in this fight to keep Ms. Plumb in her home,” said MFI-Miami President Steve Dibert, “She’s been dealt a bad hand by the Michigan legal system that is clueless about the systemic breakdown and utter corruption of the U.S. financial system. I’m hoping their involvement will get Fannie Mae’s attention”
Ms. Plumb, a teacher who specializes in working with at-risk elementary school children in the heart of economically ravaged Flint, Michigan, is a victim of whatMFI-Miami believes to be an illegal foreclosure and eviction by taxpayer ownedFannie Mae and their taxpayer owned servicer, Citimortgage.

Secrets of the crisis revealed: What to expect from transcripts of 2007 Fed meetings - ( This is a big deal. It will be our first official glimpse into policymakers’ deliberations during the crisis, or at least its earliest phases. We will gain a better understanding of what the Fed knew and when it knew it. The release of 2006 transcripts last January was fascinating for the portrait painted of Fed officials failing to grasp the grave peril facing the economy; the 2007 transcripts should show us when and how that assessment changed—and how they came to take some early actions to combat it. Here is what to expect out of the transcripts, based on both minutes of the meetings and my reporting over the years with people who were in the room: A slide toward pessimism. Recall that 2007 was a year in which the U.S. economy largely held up—the recession didn’t begin until December. But it was also a year in which long-building fissures in the global financial system started to become evident. The start of the global financial crisis can be dated to Aug. 9, 2007, when the European Central Bank first intervened to prop up the continent’s banks. 

In French malaise, a broader source of risk - ( As France’s socialist government raised taxes on the wealthy and threatened to nationalize a steel plant last year, neighboring Spain reveled in the news that exports were rising and several auto plants would be expanded by their owners. It was a small sign of what could become a defining trend in the euro zone. The most troubled nations, including Spain, have slashed wage costs and overhauled labor and social rules in an effort to become more competitive. Now there is mounting pressure on France to do the same — or risk falling behind in Europe’s struggle for economic revival. The government of new President Francois Hollande has veered between promises of reform and sometimes fiery attacks on corporate interests and the rich, a fact that has worried public officials in Washington and elsewhere about the direction of the euro zone’s second-largest economy. “France is losing ground in a relative sense to these other countries,” said Edward Gardner, assistant head of the IMF’s Europe department. “The outlook remains very weak, not only because of external conditions [in the global economy], but also an internal lack of dynamism.”

Russia Says World Is Nearing Currency War as Europe Joins  - ( The world is on the brink of a fresh “currency war,” Russia warned, as European policy makers joined Japan in bemoaning the economic cost of rising exchange rates. “Japan is weakening the yen and other countries may follow,” Alexei Ulyukayev, first deputy chairman of Russia’s central bank, said at a conference today in Moscow. The alert from the country that chairs the Group of 20 came as Luxembourg Prime Minister Jean-Claude Juncker complained of a “dangerously high” euro and officials in Norway and Sweden expressed exchange-rate concern. The push for weaker currencies is being driven by a need to find new sources of economic growth as monetary and fiscal policies run out of room. The risk is as each country tries to boost exports, it hurts the competitiveness of other economies and provokes retaliation.

Wednesday, January 30, 2013

Thursday January 31 Housing and Economic stories


Muni arrives in S.F.'s top overtime spot - ( San Francisco municipal overtime spiked $18 million over budget in the first year of Mayor Ed Lee's administration - with one Muni mechanic raking in an extra $163,856. Khoa Trinh, who heads the Muni signal shop, more than doubled his base of $106,036 by clocking in 1,954 hours of overtime - which is roughly equal to working an extra 40 hours a week, every week, at $83.85 an hour. Add in more than $23,000 in premium pay and shift differentials, and Trinh's salary for fiscal 2011-12 totaled $293,370. As for how he could pile up all those hours: "We had to do a lot of work at night, when the trains weren't running, to get the new train control system working," said Muni chief Ed Reiskin. While Trinh was tops in OT earnings, Muni Transit Supervisor Evette Geer-Stevens clocked the most hours - with 2,262 hours of overtime, for $147,446. According to Reiskin, Geer-Stevens is one of the supervisors you often see on street corners, keeping an eye on the buses and trains - and helping out in emergencies. Last year, 10 Muni supervisors made more than $100,000 in overtime - bringing their pay to $200,000-plus apiece.

Ranks of working poor increasing - ( Nearly a third of the nation’s working families earn salaries so low that they struggle to pay for their necessities, according to a new report. The ranks of the so-called working poor have grown even as the nation has created new jobs for 27 consecutive months and is showing other signs of shaking off the worst effects of the recession. “Although many people are returning to work, they are often taking jobs with lower wages and less job security, compared with the middle class jobs they held before the downturn,” said a report released Tuesday by the Working Poor Families Project, a national initiative aimed at fostering state policies to help low-income working families. With the nation’s economy in recovery, the report said, more than 70 percent of low-income families and half of all poor families were working by 2011, the report said. The problem is they did not earn enough to cover their basic living expenses.

U.S. Crop-Insurance Claims Rise to Record After 2012 Drought - ( The worst U.S. drought since the 1930s led to record payouts on crop-insurance claims, with farmers collecting $11.581 billion as of yesterday for damage in 2012, government data show. Payments are up 6.8 percent from 2011, when claims reached the previous record of $10.843 billion, according to a Risk Management Agency report published today on the U.S. Department of Agriculture website. In 2010, the total was $4.251 billion. Last year’s Midwest drought sent corn and soybean prices surging to records as output fell, while dry fields across the Great Plains left winter-wheat conditions in November at their worst since at least 1985, when the USDA began collecting the data.

Hedge funds nurse heavy losses after UPS-TNT deal collapses - ( United Parcel Service's decision to abandon its 5.2 billion euro bid for TNT Express has left hedge funds nursing potential losses of more than $700 million, as the Dutch delivery firm's shares slid. So-called merger arbitrage funds - which make money betting on the outcomes of corporate events including takeovers - are estimated to have owned around 30 percent of TNT shares before Monday's news European anti-trust regulators would veto it, several sources familiar with the sector said. With TNT shares losing half their value when the market opened and ending the day down 41 percent, funds collectively could have lost more than 540 million euros. "This was one of the only large, liquid, all-cash deals in Europe right now. It's going to have been really painful across the street," one merger arbitrage manager who owned TNT shares before selling them on Monday morning told Reuters.

Fitch warns on US and Spanish ratings - ( The United States faces a "material risk" of losing its triple-A status if there is a repeat of the wrangling seen in 2011 over raising the country's self-imposed debt ceiling, credit ratings firm Fitch said on Tuesday. Fitch also said Spain will continue to face downgrade risks even if it avoids having to ask for a bailout, while Ireland could claw its way back into the single-A rating band if a deal is struck to share the burden of its banking debts. Despite December's deal by U.S. politicians to avoid the so-called "fiscal cliff" of spending cuts and tax hikes, Fitch's head of sovereign ratings, David Riley, said pressure on the country's rating was increasing.

Tuesday February 19 Housing and Economic stories


Banks tighten loan standards, see more coming: ECB - ( Banks began early repayment of crisis funds to the European Central Bank on Wednesday, shrinking the ECB's balance sheet while the world's other big central banks are still spending to support their economies. Combined with lackluster demand for weekly funding, it helped boost the euro to its highest level against the dollar since November 2011. An ECB survey separately showed that banks' access to market funding improved in recent months following the ECB's pledge to do what it takes to preserve the euro and the launch of a new bond purchase program. However, new capital requirements and financial regulation led them to toughen loan standards.

Writedowns Near $50 Billion as M&A Haunts Mine CEOs: Commodities - ( The world’s biggest mining and steel companies have wiped about $50 billion off project valuations in the past year and the purge is poised to continue this earnings season as managers reassess expensive takeovers. Anglo American Plc (AAL)Vale SA (VALE3) and Rio Tinto Group (RIO) led the writedowns as declining metal prices, rising project costs and slowing demand forced reviews. Glencore International Plc (GLEN) may write down some nickel and copper assets acquired through its takeover of Xstrata Plc (XTA), Liberum Capital Ltd. has said. BHP Billiton Ltd. (BHP) may trim aluminum operation valuations, according to Goldman Sachs Group Inc. and Sanford C. Bernstein Ltd.

Analysis: Pall of bank "legacy assets" hangs over euro zone - ( In September last year, at a below-the-radar meeting in Helsinki, three euro zone finance ministers came up with a two-word phrase that sounded harmless at the time but has since troubled European leaders a great deal. Banks' "legacy assets" sound innocent enough but in the context of Europe's debt crisis, and particularly for Ireland and Spain, the question of how to deal with existing bad debts is a time bomb that has not been defused. In the months since the term entered the EU's lexicon, efforts have been made to parse it or play it down. But those that came up with it -- the finance ministers of Finland, Germanyand the Netherlands -- appear determined to keep it alive, and until June 2013, the deadline leaders have set themselves to resolve it, the issue will fuel uncertainty.

Spain Recession Deepens More Than Forecast Amid Austerity - ( Spain’s recession deepened more than economists forecast in the fourth quarter as the government’s struggle to rein in the euro region’s second-largest budget deficit weighed on domestic demand. Gross domestic product fell 0.7 percent in the three months through December from the previous quarter, when it declined 0.3 percent, the Madrid-based National Statistics Institute said today. That’s more than the 0.6 percent contraction the Bank of Spain predicted on Jan. 23. GDP dropped 1.8 percent in the fourth quarter from a year earlier and 1.37 percent in the full year from 2011, INE said. The European Commission this week signaled it may recommend easing Spain’s budget goals for the fourth time in a year as unemployment in the euro region’s fourth-largest economy rose to a record 26 percent at the end of Prime Minister Mariano Rajoy’s first year in power.

Fed Risks Losses From Bonds - ( The Federal Reserve could be charting a course that leaves the highly profitable central bank with no extra income to hand over to the U.S. Treasury for several years. That is the conclusion of five Fed staff economists who examined how the central bank's bond-buying programs will affect its profitability over the long run. Right now the Fed is earning large returns on its bond portfolio and sending most of its profits to the Treasury. Several years from now, when the economy is stronger, the Fed is expected to sell bonds and raise short-term interest rates to tighten credit and restrain inflation. The group found the Fed might have to sell bonds at a loss and incur higher expenses on interest it pays to banks on the reserves they hold at the Fed.

Tuesday, January 29, 2013

Wednesday January 30 Housing and Economic stories


'Zombie titles' haunt victims of house foreclosure - ( Joseph Keller doesn't expect he'll live to see the end of 2013. He blames the house at 190 Avondale Avenue. Five years ago, Keller, 10 months behind on his mortgage payments, received notice of a foreclosure judgment from JP Morgan Chase. In a few weeks, the bank said, his three-story house with gray vinyl siding in Columbus, Ohio, would be put up for auction at a sheriff's sale. The 58-year-old former social worker and his wife, Jennifer, packed up their home of 13 years and moved in with their daughter. Joseph thought he would never have anything to do with the house again. And for about a year, he didn't. Then it started to stalk him. First, in 2010, the county sued Keller because the house, already picked clean by scavengers, was in a shambles, its hanging gutters and collapsed garage in violation of local housing code. Then the tax collector started sending Keller notices about mounting back taxes, sewer fees and bills for weed and waste removal. And last year, Chase's debt collector began pressing Keller to pay his mortgage, which had swollen, with penalties and fees, from $62,100.27 to $84,194.69.

AIG sues NY Fed over right to sue Bank of America, others - ( American International Group Inc has filed a lawsuit against a vehicle created by the Federal Reserve Bank of New York to help bail out the insurer, in a bid to preserve its right to sue Bank of America Corp and other issuers of mortgage debt that went sour. The complaint, filed in the New York State Supreme Court in Manhattan, seeks a declaration that AIG has not transferred billions of dollars of "litigation claims" to Maiden Lane II, including many related to the insurer's $10 billion lawsuit against Bank of America. Maiden Lane II was created in December 2008 to buy residential mortgage-backed securities (RMBS) from AIG and ease liquidity strains.

Obama refuses to negotiate debt ceiling raise - ( The showdown over the nation's debt ceiling could force the government to consider drastic steps to manage its limited cash, including delaying trillions of dollars of payments to employees, Social Security recipients, contractors and others. The Obama administration has said it has no backup plan to pay the government's bills if Congress refuses to raise the $16.4 trillion federal borrowing limit. The White House said Saturday in a statement that "there are only two options to deal with the debt limit: Congress can pay its bills or it can fail to act and put the nation into default." The Treasury could be forced to revisit proposals it considered during the 2011 borrowing-limit crisis, most of which it said were unworkable. Those included selling assets such as gold or mortgage-backed securities to raise funds, cutting all spending by 40% or prioritizing some payments over others—for example, paying Social Security recipients before military contractors.

Ugly Choices Loom Over Debt Clash - ( President Barack Obama on Monday rejected any negotiation with Republicans over the most pressing U.S. fiscal issue, refusing to trade cuts in government spending in exchange for raising the borrowing limit. "If the goal is to make sure that we are being responsible about our debt and our deficit - if that's the conversation we're having, I'm happy to have that conversation," Obama said. "What I will not do is to have that negotiation with a gun at the head of the American people," he told a news conference. Republican leaders quickly reiterated their demand that increasing the debt limit must be accompanied by spending cuts. With an agreement to prevent the so-called fiscal cliff of sharp spending cuts and tax increases barely two weeks old, Obama faces another fiscal showdown with congressional Republicans.

Breaking News: OMFIF Report Advocates the Official Re-monetization of Gold - ( In a report published today, the Official Monetary and Financial Institutions Forum (OMFIF), a global organization of central banks and sovereign wealth funds, recommends that gold be re-monetized for use as international money, alongside major currencies. OMFIF gives a number of reasons for this but they boil down it to gold's historical role in establishing and maintaining confidence and stability in international monetary relations. Such confidence and stability have dramatically declined as a result of the global financial crisis that began in 2008, to the detriment of the global economy.

Monday, January 28, 2013

Tuesday January 29 Housing and Economic stories


Pentagon moving to freeze hiring, delay contracts - ( The Pentagon will begin taking steps to freeze civilian hiring, delay some contract awards and curtail some maintenance to prepare for drastic budget cuts if Congress can't reach an agreement on a final spending plan, Defense Secretary Leon Panetta said Thursday. Speaking to reporters, Panetta said that department officials must also develop detailed plans to implement unpaid furloughs for civilian personnel. The furloughs would kick in if the automatic cuts are triggered. But Panetta said he has asked defense leaders to ensure that any initial moves they make now should be reversible if at all possible, and they must minimize harmful effects on military readiness. "The simple fact is that this fiscal uncertainty has become a serious threat to our national security," Panetta said during a Pentagon press conference. "We really have no choice but to prepare for the worst."

Jack Lew had major role at Citigroup when it nearly imploded - ( Treasury secretary nominee Jack Lew has spent most of his career in government, but during the financial crisis, he was embedded inside one of the country’s biggest banks as it nearly imploded. From 2006 to 2008, he worked at Citigroup in two major roles, a notable line in his résumégiven that as Treasury secretary, he would be charged with implementing new rules regulating Wall Street. But Lew did not have just any position at the bank. In early 2008, he became a top executive in the Citigroup unit that housed many of the bank’s riskiest operations, including its hedge funds and private equity investments. Massive losses in that unit helped drive Citigroup into the arms of the federal government, which bailed out the bank with $45 billion in taxpayer money that year. The group had been under pressure to compete with similar units at other big Wall Street firms and, some analysts say, took on too many risks as it played catch-up. “The mismanagement of risk was comprehensive at that organization,” said Simon Johnson, an economist at the Massachusetts Institute of Technology.

Who is going to buy all those houses in Calif when the Gen X/Yers retire? - ( California is in the midst of an unprecedented decline in its child population. Falling birth rates, a decrease in migration and the retirement of the 'baby boom' generation are threatening the future prosperity of America's most populous state, a new report has revealed. The report, by the University of Southern California (USC), shows that in 1970 children made up one third of the state's population. By 2030 that number is expected to have declined to one fifth. "After decades of burgeoning population and economic growth the state now faces a very different prospect," the report, titled California's Diminishing Resource: Children, said. Its author Dowell Myers, a USC demographer, said: "We have a massive replacement problem statewide." He added: "These trends are not yet widely recognised, but they should be a wake-up call for policymakers.

Banks Get Away With Huge Robosigning Fraud By Paying Portion of Illegal Profits - ( The chapter on robosigning, i.e., Fraudclosure, is now closed with a $10 billion wristslap on US banks, of which a whopping $3.3 billion in the form of direct cash and $5.2 billion in "other assistance." The banks who are now absolved from any and all Linda Green transgressions in the past include: Aurora, Bank of America, Citibank, JPMorgan Chase, MetLife Bank, PNC, Sovereign, SunTrust, U.S. Bank, and Wells Fargo. And so, banks can resume to resell properties with mortgages on which the original lien may or may not have been lost in the sands of time. From the Fed: Independent Foreclosure Review to Provide $3.3 Billion in Payments, $5.2 Billion in Mortgage Assistance: Ten mortgage servicing companies subject to enforcement actions for deficient practices in mortgage loan servicing and foreclosure processing have reached an agreement in principle with the Office of the Comptroller of the Currency (OCC) and the Federal Reserve Board to pay more than $8.5 billion in cash payments and other assistance to help borrowers.

Bank of America Pays Far Less in Settlements Than Profits From Causing Bubble - ( The mortgage settlements just keep coming. On Monday morning, Bank of America said it reached an agreement to resolve virtually all existing and future claims that it (and mortgage lender Countrywide, which BofA bought in 2008) misrepresented the quality of home loans it sold to Fannie Mae from 2000 through 2008. In the deal, Bank of America is paying $3.6 billion in cash and is also repurchasing about 30,000 mortgages for $6.75 billion. That money all goes to Fannie Mae, the government-sponsored enterprise that taxpayers bailed out in the financial crisis. Bank of America is paying for the deal by tapping into reserves it had already set aside for mortgage-related losses, plus is kicking in an additional $2.5 billion. That Bank of America needed to draw on extra money has some bank watchers nervous that it hasn’t set aside enough money for other outstanding mortgage cases.

Sunday, January 27, 2013

Monday January 28 Housing and Economic stories


Government house loan guarantees ensure the misallocation of credit - ( Government interference in credit markets isn’t new:::   Bastiat, Frédéric — (1801-1850): At all times, but especially in the last few years, people have dreamt of universalizing wealth by universalizing credit. I am sure I do not exaggerate in saying that since the February Revolution the Paris presses have spewed forth more than ten thousand brochures extolling this solution of the social problem. This solution, alas, has as its foundation merely an optical illusion, in so far as an illusion can serve as a foundation for anything. These people begin by confusing hard money with products; then they confuse paper money with hard money; and it is from these two confusions that they profess to derive a fact. In this question it is absolutely necessary to forget money, coins, bank notes, and the other media by which products pass from hand to hand, in order to see only the products themselves, which constitute the real substance of a loan. For when a farmer borrows fifty francs to buy a plow, it is not actually the fifty francs that is lent to him; it is the plow. And when a merchant borrows twenty thousand francs to buy a house, it is not the twenty thousand francs he owes; it is the house.

Spain’s Shrinking Bank Network Leaves CaixaBank Top-Heavy - ( CaixaBank SA is among lenders that look increasingly bloated as Spain’s economic slump adds pressure on banks to cut branches after the busted credit boom. CaixaBank has 6,631 branches to serve its 13.2 million customers, or one branch per 1,991 clients. That compares with 3,093 clients for each of the 4,752 Spanish branches run by Banco Santander SA, the country’s biggest lender, and 3,215 customers at Banco Popular Espanol SA. An economic crisis afflicting Spain follows a decade-long credit boom that saw the number of bank branches surge to the highest per capita in Europe. While lenders including Bankia and Santander have announced plans to close more than 2,000 branches in an economy already grappling with a recession and the region’s highest jobless rate, banks may have to shrink further. “Spain has this problem that it is excessively banked,” said Alvaro Cuervo, director of the University College of Financial Studies in Madrid. “It’s not over.”

Deep Cuts Raise Questions About Morgan Stanley - ( When Morgan Stanley’s top executives gathered in mid-September at the Gramercy Park Hotel in Manhattan to discuss strategy, some participants complained that the room was too small. Apparently, that was the point: James P. Gorman, Morgan Stanley’s chief executive, chose the cramped quarters to force discussion among the executives, said people briefed on his decision but not authorized to speak on the record. These days, it is the Wall Street firm that is finding itself a bit boxed in. Regulatory demands, weak markets and lower credit ratings have weighed on all banks, but perhaps more so on Morgan Stanley, the smallest of the big Wall Street firms. In the three years that Mr. Gorman, 54, has been at the helm, the bank has been progressively shrinking its business of trading bonds, commodities and other investments and expanding into wealth management.

Danish Mortgage Banks Mull Lifeline to Homeowners: Nordic Credit - ( Denmark’s $500 billion mortgage industry is looking at how to keep struggling homeowners afloat as the nation’s push into interest-only loans a decade ago now threatens a jump in losses amid rising unemployment. Loan writedowns for mortgage banks in Denmark jumped 51 percent in the first half of last year, according to a report released last month from the financial regulator. Losses rose 17 percent in 2011, compared with a 25 percent drop in provisions at 35 of Germany’s largest credit banks and a 55 percent drop in net loan losses at Sweden’s mortgage lenders. Loans that allow principal payments to be postponed by as many as 10 years now comprise more than half of outstanding mortgages after being introduced in 2003. Denmark’s two mortgage banking groups, whose members include Nykredit A/S, Europe’s biggest issuer of home-loan backed bonds, are in talks with regulators on how to help homeowners unable to meet principal payments or refinance into similar loans.

House Builders Lobby Weakens Drywall Legislation - ( Last week, federal lawmakers trumpeted the passage of the Drywall Safety Act of 2012 as a bipartisan victory for thousands of homeowners harmed by contaminated drywall. "This is a bill about protecting American families — their health and financial well-being," said Rep. Scott Rigell, R-Va., the measure's primary sponsor in the House. "It is up to Congress to ensure that preventative standards are in place so no American family is faced with the hardship and heartache from contaminated drywall ever again." But the bill doesn't actually set preventative standards. Instead, it asks an industry association committee comprised mostly of drywall manufacturers and builders to develop voluntary limits on sulfur content in drywall for the government to enforce.

Thursday, January 24, 2013

Friday January 25 Housing and Economic stories


Raging Against Possible AIG Lawsuit; JPM Personnel Changes Continue - ( Seriously, AIG?: We had a feeling the Internet was going to let out a collective groan once the news that AIG was considering a lawsuit against the federal government over its $182 billion bailout was picked up by news outlets and made the rounds on Twitter. (To summarize, the firm is being asked to join a suit originally launched by former CEO Maurice Greenberg, who claims the terms of the bailout were too harsh and deprived shareholders of billions of dollars.) And, oh, what a collective groan it was. "AIG, bailed out by U.S., may now sue U.S., claiming bailout terms were too harsh. We should counter-sue for stupidity," Berkeley professor and former U.S. Secretary of Labor Robert Reich tweeted with a link to an article from ABC news explaining the potential suit. "AIG considers suing government for bailing it out, world implodes in on itself," one Washington Post headline reads. Blogger Andrew Borowitz penned a satirical letter from AIG to the taxpayers for the New Yorker. (Sample line: "by suing … we are standing up for one of the most precious American rights of all: the right to sue someone who has just saved your life.") And David Weidner from MarketWatch goes so far as to suggest the government retaliate by charging AIG with treason.

Short sales in California surpass sales of foreclosed homes - ( In recent months, short sales have surpassed sales of foreclosed homes in California for the first time since the start of the housing crash in 2007, data show. When housing prices first went off the cliff, most mortgage lenders refused to cut deals with homeowners, choosing instead to repossess homes on a grand scale. Five years and billions of dollars in losses later, many banks can't cut those deals fast enough, writing off large chunks of mortgage debt and even paying homeowners to move out. In recent months, short sales — in which banks allow homeowners to sell for less than they owe — have surpassed sales of foreclosed homes in California for the first time since the start of the housing crash in 2007, according to real estate research firm DataQuick. The transactions now represent about a quarter of the market, a surge driven by rising home prices, government crackdowns on foreclosures and banks' increasing capacity to process the deals.

Greek Banks to need more money for their recapitalization - ( Surprise, Surprise!!!  The country’s main banks are considering requesting additional funds for their recapitalization. Senior bank officials say that the rapid deterioration in financial conditions caused by the back-to-back elections in mid-2012 has led to a greater increase in nonperforming loans than originally foreseen in the BlackRock report a year ago. They add that banks should proceed to greater share capital increases in order to respond to the new reality. Ernst & Young estimates that nonperforming loans in Greece approached 24 percent of all loans at the end of 2012.

Morgan Stanley Said to Cut 1,600 Investment-Banking Jobs - ( Morgan Stanley, the sixth-largest U.S. bank by assets, plans to eliminate about 1,600 jobs from its investment bank and support staff in coming weeks, a person familiar with the matter said. The cuts total about 6 percent of the New York-based company’s institutional securities group, which includes investment banking and trading units, and support staff, the person said, asking not to be identified because the decision hasn’t been made public. About half the reductions will be in the U.S., the person said. Morgan Stanley reduced its staff by about 4,200 people in the first nine months of last year through job cuts and unit sales, after saying in December 2011 it would eliminate 1,600 jobs. Chief Executive Officer James Gorman, 54, has pledged to lower costs as return on equity remains below the bank’s cost of capital.

The California Social Contract (redux) - ( You fence-sitters are failing to fulfill your part of the California Social Contract. Your failure to continue buying homes is disrupting the social order, and it is causing those of us who bought before you psychological, emotional and financial damage. It is time for you to get off the fence and buy–NOW!!! In any social contract, you give up something personally for the greater good. When those of us who bought before you purchased our homes, we had to commit unrealistic percentages of our income to housing, lie on mortgage applications, and take out financing on unstable mortgage terms in order to do our part for the continuing social good. We made these sacrifices willingly because the benefits of maintaining the social contract are worth the price we paid.