KeNo's Housing and Economic Portal

Wednesday February 1 Housing and Economic stories

2012-01-31T21:49:00.000-08:00

KeNosHousingPortal.blogspot.com

TOP STORIES:

Hedge Funds May Sue Greece if It Tries to Force Loss - (www.nytimes.com) Hedge funds have been known to use hardball tactics to make money. Now they have come up with a new one: suing Greecein a human rights court to make good on its bond payments. The novel approach would have the funds arguing in the European Court of Human Rights that Greece had violated bondholder rights, though that could be a multiyear project with no guarantee of a payoff. And it would not be likely to produce sympathy for these funds, which many blame for the lack of progress so far in the negotiations over restructuring Greece’s debts. The tactic has emerged in conversations with lawyers and hedge funds as it became clear that Greece was considering passing legislation to force all private bondholders to take losses, while exempting the European Central Bank, which is the largest institutional holder of Greek bonds with 50 billion euros or so.

A NY Fed Employee Accused Of Stealing Computer Code Could Face 10 Years In Prison - (www.businessinsider.com) A computer programmer who worked at the Federal Reserve Bank of New York has been accused of stealing computer code used to track government finances. Bo Zhang (zahng) was arrested Wednesday. Authorities say he stole the code last summer while working on it as a contract government employee. The 32-year-old Queens resident could face up to 10 years in prison if convicted. The Federal Reserve Bank of New York is part of a system that helps operate the nation's payment systems and protects consumers dealing with banks.

Kodak Files for Bankruptcy Protection - (www.bloomberg.com) Eastman Kodak Co. (EK), the photography pioneer that introduced the Brownie Camera more than a century ago, filed for bankruptcy after consumers embraced digital cameras, a technology Kodak invented and failed to commercialize. The Rochester, New York-based company, which traces its roots to 1880, listed assets of $5.1 billion and debt of $6.8 billion in Chapter 11 documents filed in U.S. Bankruptcy Court in Manhattan. “They were a company stuck in time,” said Robert Burley, an associate professor at Toronto’s Ryerson University who has photographed shuttered Kodak facilities in the U.S., Canada and France since 2005. “Their history was so important to them, this rich century-old history when they made a lot of amazing things and a lot of money along the way. Now their history has become a liability.”

December Housing Starts MISS Expectations In A Big Way - (www.businessinsider.com) Housing starts fell 4.1% in December, to 657K on an annualized basis. Analysts were predicting that they would fall from 685K to 680K. That would have amounted to a drop of 0.7% from November. Last month, housing starts smashed expectations, jumping 9.3% month over month. We've seen a slew of positive housing data recently, and this negative number could be a sign that the positive trend has been overblown. Or not.

Who Is Being Rescued -- It ain't you or me: It's bondholders - (www.ritholtz.com) Never forget exactly who is being rescued by Central Bank/Political bailouts! Here’s a hint: It ain’t you or me: “…it is important to remember that the attempt to rescue distressed European debt by imposing heavy austerity on European people is largely driven by the desire to rescue bank bondholders from losses. Had banks not taken on spectacular amounts of leverage (encouraged by a misguided regulatory environment that required zero capital to be held against sovereign debt), European budget imbalances would have bit far sooner, and would have provoked corrective action years ago. The global economy has not been well-served by the financial companies that leaders are trying so desperately to protect. Our vote is for receivership and restructuring so that losses can be taken by those who willingly accepted the risk of loss, and the legacy of bad investments and poor capital allocation doesn’t have to be converted into a future of suppressed economic growth.” (emphasis added)

John Hussman, January 3, 2012 “The Right Kind of Hope”

OTHER STORIES:

Banks Flush With $623 Billion ECB Cash Beating Sovereigns: Credit Markets - (www.bloomberg.com)

Crunch time arrives for European lenders - (www.bloomberg.com)

China Mulls Relaxing Capital Rules for Banks - (www.bloomberg.com)

Philippines Cuts Key Rate for First Time Since 2009 as Growth Outlook Dims - (www.bloomberg.com)

U.S. Jobless Claims Drop More Than Expected - (www.bloomberg.com)

AT&T jacks up data plan prices as usage booms - (www.reuters.com)

Commerzbank Says It Can Meet Capital Rules - (www.bloomberg.com)

Warm Winter Deflates Prospects for Retailers - (www.nytimes.com)

Tuesday January 31 Housing and Economic stories

2012-01-30T21:25:00.000-08:00

KeNosHousingPortal.blogspot.com

TOP STORIES:

Housings potential 'Death Spiral' - (money.cnn.com) Goodman often pauses several seconds before speaking, choosing her words deliberately. So it is especially distressing to hear her warn of a potential housing "death spiral." On top of the 2.5 million homes that have already fallen to foreclosure since the bubble burst, another 4.5 million mortgage holders have given up paying and are likely to lose their homes, she calculates. Millions more are underwater -- owing more than their home is worth -- and may give up if things don't improve soon. All told, Goodman warns that more than 10 million of the nation's 55 million mortgage holders could default by 2018. If home prices fall much more than the 6% or so she's projecting over the next 12 to 18 months, the picture worsens, as more foreclosures drive prices down further, in turn causing more sheriffs' sales. Goodman's research into who defaults shows that many governmental and private efforts at saving borrowers -- and reducing investors' losses -- by modifying mortgages weren't helping because they only extended payments or reduced interest rates. They didn't fix the fundamental problem of unsupportable debt loads.

Inside the Fed in 2006: A Coming Crisis and Banter - (www.nytimes.com) As the housing bubble entered its waning hours in 2006, top Federal Reserve officials marveled at the desperate antics of home builders seeking to lure buyers. The officials laughed about the cars that builders were offering as signing bonuses, and about efforts to make empty homes look occupied. They joked about one builder who said that inventory was “rising through the roof.” But the officials, meeting every six weeks to discuss the health of the nation’s economy, gave little credence to the possibility that the faltering housing market would weigh on the broader economy, according to transcripts that the Fed released Thursday. Instead they continued to tell one another throughout 2006 that the greatest danger was inflation — the possibility that the economy would grow too fast. “We think the fundamentals of the expansion going forward still look good,” Timothy F. Geithner, then president of the Federal Reserve Bank of New York, told his colleagues when they gathered in Washington in December 2006.

Eurozone's 'big bazooka' bail-out fund is left in tatters by S&P downgrade - (www.telegraph.co.uk) Plans for a €1 trillion "big bazooka" to stem the debt crisis were crushed on Monday night as Standard & Poor's stripped the European Financial Stability Fund (EFSF) of its AAA credit rating. The EFSF, which is tasked with supporting indebted countries, was itself hobbled as S&P gave it a AA+ rating, reflecting the downgrade of France and eight other eurozone countries on Friday. As the standoff with Greece's creditors continued, Mario Monti, the Italian prime minister, pleaded for Germany and other creditor countries to help lower his country’s borrowing costs. He warned there would be a “powerful backlash” among voters in smaller EU countries if they did not. S&P said the EFSF's rating would be cut again if member states' creditworthiness eroded further.

Wall Street justice system is a kangaroo court - (www.bloomberg.com) Probably unbeknownst to the millions of people who interact with Wall Street every day -- either as brokerage customers or as employees of Wall Street firms -- there is a price of admission to this world tucked deep inside the boilerplate documents that one must sign to open an account or to get hired. This catch is a nonnegotiable agreement for when disputes arise, say, about a bonus promised but not paid, or about a rogue broker who sticks his client’s money in a synthetic collateralized debt obligation that goes bust. Under the deal, the only venue to litigate the claim is a mediation or arbitration process overseen and administered by the Financial Industry Regulatory Authority, Wall Street’s powerful self- regulatory organization. Finra oversees some 4,460 brokerage firms and 630,000 registered representatives, mostly brokers, traders and bankers. By signing the initial agreements -- and if you don’t, you can forget about working on Wall Street or having a brokerage account with a Wall Street firm -- you agree not to pursue any future monetary claim against Wall Street in the U.S. court system.

Greece Looks More And More Like A Collapsed Society – (www.businessinsider.com) I spoke with someone from Athens today. It's not a pretty picture. Issues related to subsistence have replaced the fervor for demonstrations. This may not last according to this resident. The closing of stores and shops is escalating. Apparently, 20% of all retail establishments are shuttered. Nearly every block has one reminder of the ongoing depression in the economy. The Greek Diaspora is in full swing. People are leaving the country, old and young alike. They are going to Europe, where the prospects of jobs stink, but not as badly at Greece. They are also fleeing to America (family members in the US have been helping out), Australia (where some are welcome) and South America. The talk is that the Greeks are becoming the new Palestinians. They leave their homes, as there is no future there, but all the time they wish they never left.

OTHER STORIES:

Traders brace for eurozone crisis fallout - (www.telegraph.co.uk)

France is stripped of AAA credit rating by Standard & Poor's - (www.telegraph.co.uk)

France credit rating cut puts eurozone bail-out fund at risk - (www.telegraph.co.uk)

Spend, Spend, Spend, It's the American Way - (www.nytimes.com)

Secrets of a sales machine - (www.nytimes.com)

Monday January 30 Housing and Economic stories

2012-01-29T21:08:00.000-08:00

KeNosHousingPortal.blogspot.com

TOP STORIES:

Irish Occupation of Empty Offices Escalates Fight Over Boom-to-Bust Legacy - (www.bloomberg.com) A new front in the battle for Ireland’s empty properties has opened up. Before dawn on Christmas Day, activists took control of an unfinished six-story glass-fronted building in the city of Cork called Stapleton House. Instead of using the 25,000 square feet (2,300 square meters) for offices and stores, they plan to create a cafe, creche, library and music school for community groups. They already hosted a ceili, a traditional Irish dance. “We are taking it back for the people of Cork,” Liam Mullaney, a 35-year-old spokesman for the group of about a dozen protesters that seized the government-controlled building, said in an interview at the site. “It belongs to the taxpayers.” Mullaney and his group are putting an Irish twist on the Occupy Wall Street movement, which began in New York and has spread to cities around the world, and highlighting Ireland’s record number of empty properties, or so-called ghost estates and orphan sites.

Spain Offers Aid to Cash-Starved Regions - (www.bloomberg.com) Spain’s central government will provide a credit line and other liquidity measures to ease pressure on cash-strapped regions while demanding tighter deficits in return, Budget Minister Cristobal Montoro said. The central government in the coming weeks will pay the regions an 8 billion-euro ($10 billion) transfer that had initially been scheduled for July, Montoro told radio station Cadena Ser in an interview today. It will also offer loans via the Official Credit Institute to help regions settle bills for suppliers in a couple of months, he said. “We are submitting these mechanisms on the condition that the regions present fiscally viable plans,” said Montoro. He first announced the measures yesterday after meeting with regional finance chiefs following a pledge by Prime Minister Mariano Rajoy to “rescue” regions with liquidity problems.

Hungary faces ruin as EU loses patience - (www.telegraph.co.uk) The European Commission has launched legal action against Hungary's Fidesz government for violations of European Union treaty law and erosion of democracy, marking a dramatic escalation in the war of words with the EU's enfant terrible. Hungary's defiant premier Viktor Orbán has no hope of securing vital funding from the EU and the International Monetary Fund until the dispute is resolved, leaving him a stark choice of either bowing to EU demands or letting his country slide into bankruptcy. Yields on Hungary's two-year debt jumped to 9.17pc on Tuesday, an unsustainable level for an economy in recession with public debt of near 80pc of GDP. Hungary's debt was cut to junk status by rating agencies last week. Capital Economics said Hungary must repay €5.9bn (£4.9bn) in EU-IMF loans and raise external funds equal to 18pc of GDP this year, the highest in Eastern Europe. Two-thirds of household debt is in Swiss francs, leading to a lethal currency mismatch as capital flight weakens the forint.

The euro is pushing Italy into depression - (www.telegraph.co.uk) Here is the latest money supply chart from the Banca d'Italia. Just look at M3. Horrendous. See page 7 of this report. This speaks for itself. There is no clearer indictment of the dysfunctional nature of monetary union. Italy is being pushed into depression. Criminal. Obviously, Italy and Germany can no longer share the same monetary policy. Ergo, Germany should leave EMU, pronto. The Banca said Italy's economy contracted by 0.5pc in the last quarter of 2011. It will shrink by a further 1.5pc this year, with no growth in 2013. This is a direct result of the misguided pro-cyclical austerity polices imposed by Angela Merkel and the ECB – the infamous Trichet letter – without offsetting monetary and exchange stimulus.

OTHER STORIES:

Inside the Fed in 2006: A Coming Crisis and Banter - (www.nytimes.com)

Housings potential 'Death Spiral' - (money.cnn.com)

Germany Cuts 2012 Economic Growth Forecast as Crisis Dims Export Outlook - (www.bloomberg.com)

U.K. Jobless Rate Rises to 16-Year High of 8.4% - (www.bloomberg.com)

China Said to Warn Banks as Local Officials Seek New Loans - (www.bloomberg.com)

Fed Officials Open to Additional Easing as They Monitor Risks to Economy - (www.bloomberg.com)

World Bank slashes global GDP forecasts, outlook grim - (www.reuters.com)

Wholesale Prices in U.S. Unexpectedly Decline - (www.bloomberg.com)

World Bank warns emerging nations - (www.ft.com)

Confidence Among U.S. Homebuilders Climbs to Highest Since 2007 - (www.bloomberg.com)

Analysis: China's housing slowdown to cut a big hole in GDP - (www.reuters.com)

Friday January 27 Housing and Economic stories

2012-01-26T21:36:00.000-08:00

KeNosHousingPortal.blogspot.com

TOP STORIES:

A Nightmare Home Appraisal Story That Shows Why The Housing Market Is Still So Messed Up - (www.businessinsider.com) My senior staff appraiser shared the following nightmare story – about a friend of his who is going through a mortgage refinance with one of the big US national banks regarding a house in Long Island, NY. Rather not say the bank name but a stagecoach comes to mind. An appraisal was ordered through a big appraisal management company – Rels. Their appraiser used a condemned house with a big hole in the side of it – visible from the street – as a comparable sale presented in the report: Attached are the photos of the condemned house used by the appraiser in my friends appraisal…They are still fighting to have a new appraisal done. I will be honest the house was not this bad (when it was sold) as most of the siding has been removed. However, it was bought by a developer/LLC (not a person) and the condemned sign was on the door had the appraiser gotten out of the car. The hole in the side I believe was there as you can see that is the side with some siding still remaining.

MF Global Probe Focuses on Back Office - (online.wsj.com) Investigators on the hunt for an estimated $1.2 billion in customer money missing since MF Global Holdings Ltd. collapsed are zeroing in on the securities firm's back-office operations in Chicago, people familiar with the situation said. One back-office employee has told people she disputes congressional testimony by Jon S. Corzine, MF Global's former chairman and chief executive, that she provided assurance that a $200 million transfer was proper, according to people familiar with the matter.

Overnight deposits at ECB top half a trillion euros - (www.reuters.com) Commercial banks parked over half a trillion euros at the European Central Bank, the highest on record, as the mix of debt crisis worries and a recent giant injection of ECB cash left banks awash with money but too scared to lend it. Overnight deposits at the ECB have been hitting new records even since last month's first ever offering of three-year loans from the ECB pumped 490 billion euros ($620 billion) into the banking system. ECB data on Tuesday showed deposits topped the half a trillion mark for the first time ever, as banks parked a staggering 502 billion euros, up from the 493 billion euros the previous day. It is likely to mark at least a temporary peak in the level of hoarding.

Greeks strike against austerity as EU, IMF visit - (www.reuters.com) But ordinary Greeks, who have been hit hard by tax hikes and spending cuts which were part of a first bailout agreed in 2010, fear more austerity and wage cuts with the second bailout and say they cannot take more belt-tightening. Thousands of angry Greek workers marched to parliament to protest against the lenders' visit, waving banners reading "EU, IMF out!." "We want them to get lost. They are pushing the country towards collapse with these measures. They are selling off Greece," said Yannis Tsalimoglou, a 51-year old dockworker, whose income has taken a 30-percent hit with the crisis. Greece has entered its fifth consecutive year of austerity-fuelled recession, with unemployment reaching a record high of 17.7 percent in the third quarter of 2011.

How Ireland's Richest Man Went From $6 Billion To -$3.5 Billion - (www.businessinsider.com) Sean Quinn, once Ireland’s richest man, was declared bankrupt on Monday, Bloomberg reported. Quinn, whose fortune was valued at around $6 billion (4.7 billion euros) by Forbes magazine in 2008, owes the bank almost 2.9 billion euros ($3.5 billion). Quinn, 64, didn’t contest the bankruptcy petition brought by Irish Bank Resolution Corp. (IBRC), formerly Anglo Irish Bank, the lender at the center of Ireland's property crash. Here's how it happened... Quinn started in construction, and went on to become a real estate magnate. However, his trouble came when he became involved with the Anglo Irish Bank Corp.

OTHER STORIES:

China Home Sales Rise at Slowest Pace in Three Years on Government Curbs - (www.bloomberg.com)

Canada Courts Housing Bubble IMF Sees as Risk With Record Rates: Mortgages - (www.bloomberg.com)

Iceland makes fledgling recovery from its economic meltdown - (www.washingtonpost.com)

China’s Slowest GDP Growth in 2 1/2-Years Boosts Scope for Easing: Economy - (www.bloomberg.com)

Manufacturing in NY Region Expands Faster - (www.bloomberg.com)

Citigroup Profit Falls 11%, Misses Estimates - (www.bloomberg.com)

Morgan Stanley Said to Limit Cash Bonuses, Increase Deferrals - (www.bloomberg.com)

Thursday January 26 Housing and Economic stories

2012-01-25T21:06:00.000-08:00

KeNosHousingPortal.blogspot.com

TOP STORIES:

Impending FHA bailout to be justified by "saving banks" - (www.ochousingnews.com) The FHA has been the lender of last resort during the collapse of the housing bubble. Conventional lending dried up once they realized how lax lending standards became, and how likely it was that borrowers would strategically default and cause more losses. Without the FHA, a Las Vegas style crash of 70% or more would have been common to markets across the country. The banks would have been obliterated. The FHA insured many of the loans issued as prices declined. Since the FHA down payment is only 3.5%, and since it takes a 6% commission plus closing costs to exit a property, nearly every FHA loan issued over the last 10 years is effectively underwater. The losses are going to be enormous. The use of the FHA as the lender of last resort will be justified as a necessary act to save the banks. That’s bullshit. The FHA probably did save many of our too-big-to-fail banks, but this was not necessary. We could have let them fail, nationalized them, and recapitalized them with government money later to be sold at a profit. The government basically did this with Citi buying a huge amount of stock at $3 and selling it at $4 after it stabilized. The government took over the GSEs and assumed their liabilities. They currently own most of their worthless stock, but at some point, they may spin these off and recoup some of the losses on stock sales. The FHA has no such resale option.

Shadow inventory estimated to be at 9.8 million. Oh dear. - (www.nakedcapitalism.com) “Shadow inventory,” the number of homes that are either in foreclosure or are likely to end up in foreclosure, creates substantial but hidden pressure on housing prices and potential losses to banks and investors. This is a critical figure for policymakers and financial services industry executives, since if the number is manageable, that means waiting for the market to digest the overhang might not be such a terrible option. But if shadow inventory is large, housing prices have a good bit further to go before they hit bottom, which has dire consequences for communities, homeowners, and the broader economy. Yet estimates of shadow inventory, and even the definition of what constitutes shadow inventory property, vary widely. For example, the Wall Street Journal published a Nov. 11, 2011 article, “How Many Homes Are In Trouble?” where values varied from 1.6 million (CoreLogic), to “about 3 million” (Barclays Capital), to 4 million (LPS Applied Analytic), to 4.3 million (Capital Economics), to LPS Applied Analytics, to between 8.2 million and 10.3 million (Laurie Goodman, Amherst Securities).

Senators Say Fed Overstepped Its Role With Advice on Housing - (www.bloomberg.com) Republican Senators Orrin Hatch of Utah and Bob Corker ofTennessee criticized the Federal Reserve for overstepping its role by making policy recommendations on how the U.S. government should try new ways to spur the housing market. Hatch, the top-ranking Republican on the Senate Finance Committee, said the housing study sent by Chairman Ben S. Bernanke to Congress last week, along with recent Fed speeches, “intrudes too far into fiscal policy advice and advocacy.” Corker said New York Fed President William C. Dudley’s suggestion last week that Fannie Mae and Freddie Mac reduce the principal of the loans they guarantee was “absolutely egregious.” Fed officials have been increasing their calls for government measures to boost the housing market after record-low interest rates failed to revive borrowing. Bernanke last week sent lawmakers a staff study discussing policy options to help boost the housing market that said Fannie Mae and Freddie Mac might have to bear greater losses to stoke a broader recovery.

Americans Gorge on Credit Card Offers - (www.timiacono.com) It would appear that the Federal Reserve’s guarantee of freakishly low interest rates until at least 2013 (soon to be extended into 2014 or beyond) and the resulting push by credit card companies to clog mail boxes with all sorts or tempting offers had the desired effect on Americans as they racked up new credit card debt in November at a rate not seen since before the wheels fell of the global financial system back in early-2008. The data for December might be even more impressive since, what U.S. citizen in their right mind wouldn’t borrow a thousand dollars or two to get that big flat screen TV and new sound system at Christmas time if they could do so without incurring any interest charges and making only minimal payments for the next year or two. While some say this indicates renewed confidence in the U.S. economy – one where 70 percent of all activity is based on consumer spending - others think this is akin to a drunk “falling of the wagon” after almost three years of sobriety.

The due-on-sale time bomb: be aware and ready - (www.firsttuesdayjournal.com) Thus, while the housing market lingers in the purgatory of low interest rates and low prices, waiting for interest rates to begin their inevitable rise, there exists a due-on time bomb ticking silently just below the surface of real estate sales volume numbers. The bomb will not explode all at once but in slow motion, as rates will rise gradually with creeping inflation and as the employment rate picks up. This calculus is well-known to brokers who arranged sales during the high interest rate period of 1977 to 1982, a period during which the due-on clause was held at bay by the courts and the strong-arm sheriff – until deregulation let the bears of Wall Street roam at will and build strength, gorging themselves on profits for the last 30 years. However, once those who have been lucky enough to secure a mortgage at today’s low rates are ready to sell and interest rates have begun to rise (likely during a 2016-forward real estate boomlet), prospective buyers everywhere will be asking the same question that most did in the late ‘70s and early ‘80s: how can I assume the seller’s low-rate loan? At that moment, real estate brokers and agents will have to take the opportunity to educate their client buyers and sellers about the due-on-sale clause included in every trust deed.

OTHER STORIES:

Underwater Houseowners May Swim Freely - (www.patrick.net)

Prop 13: The Building-Sized Loopholes Corporations Exploit - (www.sfweekly.com)

Whose Encampment Should Crowd-Control Police Be Breaking Up? - (www.boingboing.net)

Candidate Blind Date: Who matches you? - (www.chartporn.org)

Influence Explorer - (www.influenceexplorer.com)

What We Can Learn From How Doctors Choose to Die - (www.oftwominds.com)

Little Change in Public's Response to Terms Capitalism, Socialism - (www.people-press.org)

Wednesday January 25 Housing and Economic stories

2012-01-24T21:55:00.000-08:00

KeNosHousingPortal.blogspot.com

TOP STORIES:

Plans for high-speed rail are slowing down - (www.washingtonpost.com) Critics began panning the first leg of California’s futuristic high-speed rail network as a “train to nowhere” soon after officials decided to build it not in the major population centers of Los Angeles or San Francisco, but through the state’s Central Valley farming belt. Since then, things have only gotten worse. Spiraling cost estimates and eroding political and public support now threaten a project crucial to a 21st-century vision of train travel that President Obama promised would transform U.S. transportation much as interstate highways did more than a half-century ago. A national high-speed rail network would not only support tens of thousands of construction and manufacturing jobs, but it would get Americans out of their cars, revitalize struggling downtowns, and spare the environment millions of tons of carbon emissions and travelers untold hours wasted in traffic or in airport terminals waiting out delays.

A Look At How Health Reform Is Driving Doctors Out Of Business - (www.businessinsider.com) American doctors are facing a financial crisis. According to Parija Kavilanz of CNN Money, physicians blame "shrinking insurance reimbursements, changing regulations, and rising business and drug costs" for their recent financial troubles. As private practices become victims of health care reform and Medicare and Medicaid cuts, many doctors are being forced to shut their doors.

Record ECB deposits show stress in banking system - (finance.yahoo.com) Banks deposited a record euro493.3 billion ($630 billion) at the European Central Bank on Friday night in a sign the eurozone banks remain concerned over a government debt crisis. The overnight figures released Monday exceed the previous record of euro490 billion deposited on Thursday. Banks are awash with ready cash thanks to euro489 billion in low interest crisis loans handed out to 523 banks by the ECB in late December. But many are afraid to lend the money to another bank for fear they won't get paid back. Banks face potential losses on government bonds issued by countries with heavy debt levels. Some banks are also believed to be hoarding the ECB loan money to pay off their own bonds maturing this year because they can't issue new bonds.

In Silicon Valley, the Ripe Scent of New Money - (www.nytimes.com) Sam Odio expected a few congratulatory e-mails when he sold Divvyshot, his online photo-sharing service, to Facebook last April for millions of dollars. Instead, his in-box was flooded with pitches from Goldman Sachs, Morgan Stanley and other Wall Street firms looking to manage his newfound wealth. Goldman has the inside track, having courted him with an exclusive factory tour of Tesla, the electric sports-car maker, and tickets to a screening of the final Harry Potter film. “They sure know the way to a geek’s heart,” said Mr. Odio, 27. Wall Street, as always, is going where the money is — and right now that is Silicon Valley. The latest Internet boom means there are more newly minted millionaires, and even billionaires, than at any time since the technology bubble a decade ago. Many are brilliant young entrepreneurs and computer engineers. But for all their knowledge, the technology executives, many of whom are fresh out of college, are relatively clueless when it comes to estate planning. “Betting the ranch on building a widget for the Facebook platform is very different than managing a long-term nest egg,” said Jay Backstrand, a vice president atJPMorgan Chase’s private bank.

Greek creditors bridle at demands, default fears grow - (www.reuters.com) Greece's private sector creditors warned on Monday that the Athens government must urgently break a deadlock in debt swap talks triggered by "unreasonable" demands from international lenders if is to avoid a disorderly default. Barely a month after an injection of bailout funds helped to avert bankruptcy, Greece is back at the centre of the euro zone crisis as fears of a default and a subsequent euro zone exit overshadow a mass credit downgrade of euro zone countries. Cash-strapped Athens needs a deal with the private sector within days to avoid going bankrupt when 14.5 billion euros of bond redemptions fall due in late March.

OTHER STORIES:

Euro Leaders Race to Salvage Rescue Plans - (www.bloomberg.com)

Euro zone faces lower EFSF lending power or higher guarantees - (www.reuters.com)

Nowotny Says S&P Favors Fed’s Bond Buying Over ECB’s ‘Restrictive’ Policy- (www.bloomberg.com)

Wary banks boost ECB deposits; reserve change due - (www.reuters.com)

Markets are calm _ too calm. Why pros are spooked - (finance.yahoo.com)

The Risks in ECB's Crisis Moves - (online.wsj.com)

Analysis: China must reform to beat shadow lending, loan sharks - (www.reuters.com)

As Reforms Flag in Greece, Europe Aims to Limit Damage - (www.nytimes.com)

Inefficient Economies Seen as Drag on Europe - (www.nytimes.com)

Bank results threaten to dash US hopes - (www.ft.com)

Tuesday January 24 Housing and Economic stories

2012-01-23T21:27:00.000-08:00

KeNosHousingPortal.blogspot.com

TOP STORIES:

The Fed's Sleazy Idea Of “Transparency” - (www.implode.com) The Fed announced on the New Year’s Holiday that it is going to start releasing its internal forecasts of short-term interest rates. Advocates of Fed transparency (I am one) might reflexively welcome this prospect. However, even the New York Times article (sourced above) is not so naive. At least, this was apparent when it was originally published, as it said in this version of the article (apparently the copy at that location didn’t get changed — try again, guys!): In January 2012 the Fed board adopted a plan to publish a forecast of its own actions, inaugurating a policy that is intended to magnify the power of those actions by shaping market expectations. The article even opens with a comment about the Fed asserting its power to influence the economy through manipulating interest rates and engaging in quantitative easing (asset purchases). Oddly enough, the replacement version of the same article only uses the word “power” to suggest the Fed is powerless… “to address the most important issues weighing on growth, including a lack of demand from gloomy consumers, high levels of debt throughout the economy and the depressed condition of the housing market”.

Ponzi Planet: The Danger Debt Poses to the Western World - (www.spiegel.de) The most spectacular case was that of New York financier Bernard Madoff, who was responsible for losses of about $20 billion by 2008. Snowballs are set into motion, becoming bigger and bigger as they roll along. In the worst case, they end in an avalanche that takes everything else with it. Western economies have not acted much differently than the fraudster Madoff. In 2011, they were virtually inundated with bad news and old sins. Almost everyone -- in Europe and in the United States -- has been living beyond their means, from consumers to politicians to entire countries. Governments have become servants to the markets upon which they have become dependent.

Bigger Snowballs

On an almost weekly basis, the reports have become more worrisome and the sums of money involved more staggering. Many are now concerned that, as 2012 begins, the snowballs will only get bigger -- and roll faster:

§ There are the banks in Europe, which will have to repay about €725 billion in combined debt in 2012, including €280 billion in the first quarter alone. With the private market largely off-limits to them, the banks have had to rely on the European Central Bank (ECB) to bail them out. The ECB is now lending them fresh money -- as much as they want -- at minimal interest rates.

Fed urges entrapment of more Americans with mortgage debt - (www.reuters.com) The Federal Reserve has launched a potentially controversial push to revive the battered U.S. housing market, calling on other government officials to act after largely exhausting its own tools to support the fragile economic recovery. After the Fed slashed interest rates to near zero more than three years ago and amassed $2.3 trillion in bonds to spur growth, the U.S. economy showed some momentum toward the end of 2011. But many analysts are doubtful the recovery will achieve take-off velocity in 2012 and housing is one of the biggest drags. House prices have fallen 33 percent from their 2006 peak, resulting in an estimated $7 trillion in household wealth losses, the Fed said last week as it took the unusual step of making an array of recommendations on housing policy to Congress.

Wall Street's Big Banks Are The Real Threat To Our Economy - (www.foxnews.com) Rebuilding our economy and restoring trust in our government will require a leader with the independence to implement bold reforms that take on the establishment, from Washington to Wall Street. Thus far, however, we are the only campaign willing to confront honestly and directly one of the greatest threats to our long-term economic prosperity: Too-Big-To-Fail Wall Street banks. In 2008, with the nation’s economy in crisis, Washington and Wall Street offered American taxpayers a Sophie’s Choice: spend hundreds of billions of dollars to save big banks from failure, or witness the collapse of our financial system and irreparable economic harm. This was not only a betrayal of the public’s trust; it was also a betrayal of our free market system, which only works when every business plays by the same rules.

As house prices fall, more borrowers walk away - (www.msn.com) When David Martin and his wife bought their north Seattle condo five years ago, they figured they had plenty of time to downsize if they needed to before they retired. Now, with the property worth roughly $60,000 less than the balance of their mortgage, Martin, 68, has been giving serious thought to just walking away, a process lenders call "strategic default." "Guilt and morality are one side, and objective financial analysis are on the other side," Martin said. "They're coming to two opposite conclusions. I wonder how many other people are struggling with the same question." Strategic defaults like the one contemplated by Martin are on the rise. A survey last year by two Chicago-area finance professors, Paola Sapienza at Northwestern University and Luigi Zingales at the University of Chicago, found that roughly three out of 10 mortgage defaults in 2010 were by homeowners who could afford to make their payments, up from 22 percent in 2009.

OTHER STORIES:

November house prices still in free fall - (www.centralvalleybusinesstimes.com)

Commercial real estate stalls after rebounding - (www.latimes.com)

Housing market blooms in Cuban provinces - (www.reuters.com)

Table Of Total Mortgage Debt Outstanding - (www.federalreserve.gov)

America's Unlevel Playing Field - (www.nytimes.com)

The cost of shopping for health insurance - (www.washingtonpost.com)

This Ripe Moment - (www.kunstler.com)

Want to pursue the American Dream? Move to Canada or Europe! - (www.rt.com)

The myth of Japan's failure - (www.nytimes.com)

Monday January 23 Housing and Economic stories

2012-01-22T22:13:00.000-08:00

KeNosHousingPortal.blogspot.com

TOP STORIES:

Americans Clueless Paying Wall Street $20 Billion for Bad Swaps - (www.bloomberg.com) Seven months after Hurricane Katrina ripped holes in the Superdome’s roof in 2005, Louisiana State Bond Commission members made what they were told would be “the best of a bad situation” in financing the stadium’s renovation. Acting against the recommendation of their staff, the commissioners voted for a Merrill Lynch & Co. plan to use debt and interest-rate swaps to pay for the job. While the deal helped keep the National Football League’s New Orleans Saints from leaving town -- and the arena got new scoreboards while 12,000 seats were converted to luxury class -- taxpayers became the losers for supporting a winning team. The cost of financing the work has reached $42 million, almost a quarter of the $187 million spent on Katrina-related repairs and enhancements and three times as much as expected. The deal became so expensive that the state repurchased the debt sold by the New York investment bank to stop the bleeding. “It was a flawed idea out of the gate,” said Robert Brooks, who teaches financial management at the University of Alabama in Tuscaloosa.

ECB sees "substantial" effect from cheap money - (www.reuters.com) The European Central Bank's flood of cheap three-year money is helping the euro zone's banking system substantially and supporting confidence in the bloc's economy which is showing some signs of stabilization, its president said on Thursday. The ECB left interest rates on hold, pausing to assess the impact of back-to-back cuts and a slew of other measures it unleashed late last year that are showing signs of helping fight the euro zone debt crisis.

Little Alarm Shown at Fed At Dawn of Housing Bust - (online.wsj.com) The leaders of the Federal Reserve went around the room saluting Alan Greenspan during his last day as chairman of the central bank. Then Timothy F. Geithner, the future Treasury secretary, made a prediction. “I’d like the record to show that I think you’re pretty terrific, too,” Geithner, who was president of the Federal Reserve Bank of New York, told Greenspan amid laughter on Jan. 31, 2006. “And thinking in terms of probabilities, I think the risk that we decide in the future that you’re even better than we think is higher than the alternative.” On Thursday, the Fed released transcripts of its meetings in 2006, offering a new window into what was on the minds of some of the nation’s top economic and financial thinkers just ahead of the financial crisis and subsequent great recession. The transcripts, which are customarily released after five years, show that Fed leaders, armed with the best economic data available, had little idea of what was looming less than two years off.

Data: Bernanke Ignorant of Housing Bust - (www.newsmax.com) Ben Bernanke presided over his first meeting as Federal Reserve chairman in March 2006 believing the nation's economy could pull off a "soft landing" from falling home prices. Three months later, Bernanke had begun to grasp that he and others had underestimated the risk housing posed to the economy. Newly released transcripts of Fed meetings during Bernanke's first year as chairman show that, among Fed officials, he often expressed the most concern about housing. But no official, according to the transcripts, recognized the extent of the damage a housing bubble would cause. A year later, the housing market's collapse helped send the nation into its worst recession since the Great Depression. In fact, Treasury Secretary Timothy Geithner, then a Fed official, expressed confidence in September 2006 that "collateral damage" from housing could be avoided. The transcripts released Thursday covered the eight meetings of the central bank's chief policy-making body, the Federal Open Market Committee, during 2006. That included the last meeting of Federal Reserve Chairman Alan Greenspan in January of that year and Bernanke's first meeting in March after he had succeeded Greenspan as chairman.

Hedge funds hunker down for Greek debt standoff – (www.reuters.com) Hedge funds are positioning to profit from a plan to slash Greece's towering debt pile as Athens enters final talks that could sway the country's membership of the euro. York Capital, the $14 billion fund part-owned by Swiss banking giant Credit Suisse, New York-listed Och Ziff, and $10 billion-strong Marathon Asset Management are among those who collectively may have built up sufficiently large positions to scupper the bailout deal, several sources close to the debt restructuring told Reuters. The deal asks creditors to voluntarily write down 50 percent of the notional value of their bond holdings. But hedge funds may opt out, hoping that Athens will let them get away with it to save itself political embarassment.

OTHER STORIES:

US corporate creditworthiness falls, says S&P - (www.ft.com)

Italian Funding Cost Falls to 4.83% at Auction of 6% November 2014 Notes - (www.bloomberg.com)

China Forex Reserves Drop for 1st Qtr Since ’98 - (www.bloomberg.com)

U.S. Trade Deficit Widens Beyond Forecast - (www.bloomberg.com)

Fed’s image tarnished by newly released documents - (www.washingtonpost.com)

Inside the Fed in 2006: A Coming Crisis, and Banter - (www.nytimes.com)

JPMorgan Profit Falls 23% on Weak Trading - (www.bloomberg.com)

Potential suitors circle American Airlines: sources - (www.bloomberg.com)

Friday January 20 Housing and Economic stories

2012-01-19T21:46:00.000-08:00

KeNosHousingPortal.blogspot.com

TOP STORIES:

Broker who touted subprime mortgages kills himself - (www.miamiherald.com) Cliff Popper was in the midst of a federal fraud trial, accused of defrauding investors across the country of more than $100 million. For years Cliff Popper, financial wheeler dealer, pleaded in his defense that he was being made a scapegoat for the nation’s sub-prime loan crisis by ambitious regulators who failed at their jobs to police the volatile industry. The charismatic South Florida trader, who rode the crest of the housing boom by popularizing risky investments in mortgage pools, defended himself at his federal civil fraud trial in November in West Palm Beach. But before the judge could give his decision, Popper killed himself this week, his body found on Tuesday in his oceanfront condo in Highland Beach. The death of the flashy broker who symbolized the nation’s mortgage craze is the latest chapter in the government’s case against him and others accused of wiping out the finances of people in investments that defined the country's economic crisis: speculative mortgage-backed securities.

Stop working, stop paying the mortgage. It's OK with Freddie Mac! - (www.chicagotribune.com) Freddie Mac announced Friday that it was giving mortgage servicers the authority to offer up to 1 year of mortgage forbearance to unemployed homeowners who have Freddie Mac-backed mortgages. The change, with takes effect Feb. 1, means loan servicers can offer six months of forbearance to jobless borrowers without Freddie's approval and another six months with approval. Currently, servicers can grant up to three months of no mortgage payments without prior agency approval, or six months of reduced payments with approval . Fannie Mae is expected next week to announce guidelines that will align with the new ones at Freddie Mac. The expansions are the result of a directive from the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac.

Calif. county's new deed fraud notification program catches suspect - (www.contracostatimes.com) Not so long ago, the news might have been worse for an elderly Clayton couple whose son is accused of trying to pilfer their $300,000 home. Just a few months ago, Contra Costa County prosecutors say they might never have discovered that the son, Walter Roberts, apparently tried to forge deed documents -- much less prevented the alleged crime. Instead, they say, Roberts is sitting in jail, and his parents still have the title to their home because of a new fraud notification program in Contra Costa County. The program -- the first of its kind in Northern California -- went into effect in November and sends automated letters to homeowners whenever the title of their property shifts from one taxpayer to another. Roberts, 63, of Clayton, was arrested Dec. 16 on suspicion of forging his parents' signatures on a grant deed filed at the county Recorder's Office two weeks earlier. One of Roberts' five siblings saw the notification letter from the Recorder's Office and contacted the county, sparking an investigation. Roberts, an unemployed real estate agent who lived with his parents, remains in County Jail in Richmond on $280,000 bail. He also is charged with forging his father's signature on a $28,644 check and financial elder abuse. A preliminary hearing on the charges has been scheduled for Monday.

Retirement Fund Fees Squeezed By Disclosure Rules - (www.bloomberg.com) When Marc Spirn took a close look at retirement-plan costs at his Philadelphia-based medical office, they were so high he helped the business change 401(k) providers and save about $30,000 a year. “All of the partners in our practice were surprised with how much we were spending in revenue-sharing fees,” said Spirn, a physician who’s a retina specialist at Mid Atlantic Retina. “It wasn’t broken down well.” U.S. Department of Labor rules requiring detailed disclosure of 401(k) expenses and revenue sharing are scheduled to take effect this year, making it easier for companies and their employees to see what they’re being charged. They may spur small employers (SBOIHIRE) and their workers, who generally pay higher fees for their plans than larger companies, to shop for better deals, and put pressure on providers such as mutual-fund firms and insurers to cut costs.

President of U. California system gets higher pay than Presdent Obama - (www.ocregister.com) Over the past few months, the University of California has raised undergraduate tuition by 18 percent, awarded raises of as much as 23 percent to a dozen high-ranking administrators and announced a possible 81 percent tuition increase over the next three years. Students haven't taken the news well. At campus rallies across the state, thousands of students and their faculty supporters have decried the actions, staging raucous rallies and "Occupy"-style sit-ins that in some cases have ended in clashes with law enforcement. They've also descended en masse on UC regents' meetings, disrupting proceedings and even forcing officials to retreat to a private room. Behind the angry chanting and acts of civil disobedience is a growing sense that the 10-campus UC system is no longer a public institution accessible to the middle class, but rather a sprawling bureaucracy of hospitals and auxiliary research institutions buffeted by an ever-expanding roster of administrators.

OTHER STORIES:

Where did all our infrastructure money go? To military contractors. - (cluborlov.blogspot.com)

Public deposit scheme: an alternative to "regulate and insure" banking - (www.macroresilience.com)

Why don't we have standardized health insurance choices? - (www.nytimes.com)

The untold story of General Electric's subprime debacle - (www.iwatchnews.org)

The Secret Shadow Housing Crisis - (www.youtube.com)

Sean Quinn and Ireland's Boom and Bust - (www.nytimes.com)

So... You've Been Indefinitely Detained! Helpful Information From Gov't - (www.boingboing.net)

Using Social Networks To Reveal A Slumlord Conspiracy - (www.orgnet.com)

Thursday January 19 Housing and Economic stories

2012-01-18T22:11:00.000-08:00

KeNosHousingPortal.blogspot.com

TOP STORIES:

Too-Big-to-Fail Definition May Expand to National Lenders, Shadow Banking - (www.bloomberg.com) Global regulators may expand the definition of a too-big-to-fail financial firm, signing up domestic lenders, clearing houses and insurers to capital rules designed for the world’s biggest banks. The “framework should be in place for domestically systemically important banks by the end of the year,” Mark Carney, chairman of the Financial Stability Board, said yesterday after a meeting of the group in Basel, Switzerland. Deutsche Bank AG (DBK), BNP Paribas SA (BNP) and Goldman Sachs Group Inc. (GS) were among 29 banks subject to the so-called capital surcharge on globally systemic financial institutions drawn up by the FSB in November. Banks will have to boost reserves by 1 to 2.5 percentage points above minimum levels agreed on by international regulators.

Spain May Need Back-Door Bailout for Regions - (www.bloomberg.com) Prime Minister Mariano Rajoy may need to skirt Spanish law to backstop the nation’s indebted regions, mimicking the European Union’s dodging of its no- bailout rule to save Greece, Ireland and Portugal from default. “We consider the Spanish government should guarantee or take responsibility for the debt it has authorized the regions to issue,” said Albert Carreras de Odriozola, Catalonia’s deputy finance chief, in a telephone interview. “It must be possible to talk and find a mechanism.” Catalonia, Valencia, Andalusia and Madrid, which account for 60 percent of Spain’s economy, are shut out of markets as they brace to repay 9 billion euros ($11.5 billion) to lenders this year, according to data compiled by Bloomberg. Spain’s 10- year yield has risen to 5.3 percent from 5.09 percent on Dec. 30 when the government said its 2011 deficit had ballooned to a third larger than its target.

Spanish Banks Try to Build Their Way Out of Home Glut - (online.wsj.com) On a weedy dirt lot here, lender Bankia is pursuing its answer to a banking and property crisis that has left Spain with a glut of around one million vacant homes. Its approach: Build even more. Bankia and a local developer plan to build a 212-unit housing complex featuring a gym and movie theater on the central Madrid site where a bus station once stood. Construction begins early this year, even though sales of existing properties are practically nonexistent and only 45 of the planned new units have been sold in advance.

Europe’s $39T Pension Threat Grows as Economy Sputters - (www.bloomberg.com) Even before the euro crisis, people were worried about Europe’s pension bomb. State-funded pension obligations in 19 of the European Union nations were about five times higher than their combined gross debt, according to a study commissioned by the European Central Bank. The countries in the report compiled by the Research Center for Generational Contracts at Freiburg University in 2009 had almost 30 trillion euros ($39.3 trillion) of projected obligations to their existing populations. Germany accounted for 7.6 trillion euros and France 6.7 trillion euros of the liabilities, authors Christoph Mueller, Bernd Raffelhueschen and Olaf Weddige said in the report. “This is a totally unsustainable situation that quite clearly has to be reversed,” Jacob Funk Kirkegaard, a research fellow at the Peterson Institute for International Economics in Washington, said in a telephone interview.

EU Banks Resist Draghi Bid to Avert Credit Crunch - (www.bloomberg.com) Banks are hoarding the European Central Bank’s record 489 billion-euro ($625 billion) injection into the banking system, thwarting attempts by policy makers to avert a credit crunch in the region. Almost all of the money loaned to 523 euro-area lenders last month wound up back on deposit at the Frankfurt-based central bank instead of pouring into the financial system, ECB data show. Banks will use most of the three-year loans to meet their refinancing needs for this year and next, analysts at Morgan Stanley and Royal Bank of Scotland Group Plc estimate. “It’s illusory to think that the measure will translate into credit generation,” Philippe Waechter, chief economist at Natixis Asset Management in Paris, said in an interview.

OTHER STORIES:

Germany Bond Auction Bids Are Double Target - (www.bloomberg.com)

China’s Gold Imports From Hong Kong Climb to Record on Investment Demand - (www.bloomberg.com)

Europe Fears Rising Greek Cost - (online.wsj.com)

Trouble Is Brewing for Office Market - (online.wsj.com)

EU treaty draft spells out escape clause - (www.reuters.com)

Monti Warns of Italy Protests as He Meets Merkel - (www.bloomberg.com)

Greek Crisis Dries Up Drug Supply as Even Aspirin Can’t Be Found - (www.bloomberg.com)

Germany May Be on Brink of Recession - (www.bloomberg.com)

Bernanke Doubling Down on Housing Bet Asks Government to Help: Mortgages - (www.bloomberg.com)

Mortgage applications picked up last week: MBA - (www.reuters.com)

For those hurting most, Fed’s remedies limited - (www.washingtonpost.com)

Wednesday January 18 Housing and Economic stories

2012-01-17T21:59:00.000-08:00

KeNosHousingPortal.blogspot.com

TOP STORIES:

Foreclosure Lawyer Stern Sued by His Old Company - (www.nytimes.com) David J. Stern, who became one of the country's best-known foreclosure lawyers before shutting his business under regulatory pressure, has been sued for fraud by the publicly traded company he helped create to take on his now-defunct law firm's back-office operations. DJSP Enterprises Inc said Stern, a former chief executive, concealed that his law firm David J. Stern PA inflated revenue by systematically "cutting corners" in the foreclosure process. It said this took place even though the firm knew that such clients as Citigroup Inc, Fannie Mae and Freddie Mac might flee. DJSP said the shortcuts included letting workers sign foreclosure documents without reading them, known as "robo-signing," and submitting false or backdated documents to courts. It also said Stern awarded bonuses and "extravagant gifts" to workers who could churn out foreclosures quickly.

Spike in serious delinquencies for FHA loans - (www.cnn.com) Concerns are growing that the Federal Housing Administration will need to be bailed out by taxpayers. The agency's latest monthly outlook report revealed a spike in serious delinquencies for FHA-insured loans, posing a further threat to the agency's already depleted cash reserves. According to the report, the percentage of loans in the FHA's portfolio with three missed payments or more rose to 9.3% in November, up from 8.4% in August. "It's highly likely that the FHA will need a taxpayer bailout over the next three to five years," said Joseph Gyourko, a real estate professor at the University of Pennsylvania's Wharton School and author of a report entitled "Is FHA the Next Big Housing Bailout?." In November, an independent audit of the FHA's finances found that losses from mortgage defaults had depleted the agency's reserve fund to 0.24%, or $2.6 billion, during fiscal 2011 -- well below the Congressionally-mandated 2% level. (The ratio measures the net worth of the reserve fund compared with the value of the loans FHA has insured.) In 2006, the reserve fund stood at 7%.

Declaring Ron Paul Unelectable shows signs of desperation - (www.oftwominds.com) The Ministry of Propaganda has chosen to suppress the only dangerous-to-the-Power Elites candidate by declaring him "unelectable." The Status Quo's Ministry of Propaganda has a single political task for 2012: eliminate the sole threat to the Status Quo (Ron Paul) from the running, leaving voters with a "choice" of clueless stooges for the Power Elite. That roster includes President Obama and the daytime-TV/soap-opera field of Republicrat contenders. The Ministry of Propaganda has settled on a ludicrous strategy to eliminate Ron Paul: declare Paul "unelectable." As with all propaganda, the basic idea is that if it is repeated often enough on officially sanctioned stages, it will eventually be accepted as "true."

The New American Dream: Rent, Don't Buy - (www.thefiscaltimes.com) Call it the Big Selloff—America is headed toward a future in which fewer people own the spaces they call home. The effective homeownership rate, which excludes borrowers whose homes are underwater, stands at 62 percent, down from 69 percent in 2006, according to a 2010 report by the New York Federal Reserve. As more people move from owning to renting, apartment vacancy rates have fallen fast, from 8 percent in 2009 to 5.6 percent in third quarter 2011. That’s pushed up rents in all markets by 2.5 percent, including apartments and single-family homes, to an average of $846 nationwide, according to Local Market Monitor, a home price forecaster. For a two-bedroom dwelling, the average rent was at $1,020 in June 2011. Those trends are just the beginning, concludes a July report from investment bankMorgan Stanley: the United States is becoming a nation of renters and home ownership will keep falling. And that, say some experts, could be good for the country.

The NDAA Repeals More Rights - (www.marketoracle.co.uk) Little by little, in the name of fighting terrorism, our Bill of Rights is being repealed. The 4th amendment has been rendered toothless by the PATRIOT Act. No more can we truly feel secure in our persons, houses, papers, and effects when now there is an exception that fits nearly any excuse for our government to search and seize our property. Of course, the vast majority of Americans may say "I'm not a terrorist, so I have no reason to worry." However, innocent people are wrongly accused all the time. The Bill of Rights is there precisely because the founders wanted to set a very high bar for the government to overcome in order to deprive an individual of life or liberty. To lower that bar is to endanger everyone. When the bar is low enough to include political enemies, our descent into totalitarianism is virtually assured. The PATRIOT Act, as bad is its violation of the 4th Amendment, was just one step down the slippery slope. The recently passed National Defense Authorization Act (NDAA) continues that slip toward tyranny and in fact accelerates it significantly. The main section of concern, Section 1021 of the NDAA Conference Report, does to the 5th Amendment what the PATRIOT Act does to the 4th. The 5th Amendment is about much more than the right to remain silent in the face of government questioning. It contains very basic and very critical stipulations about due process of law. The government cannot imprison a person for no reason and with no evidence presented or access to legal counsel.

OTHER STORIES:

Cohan: Did Psychopaths Take Over Wall Street? - (www.bloomberg.com)

Overclass vs. Underclass - (www.nytimes.com)

The Debtwatch Manifesto - (www.debtdeflation.com)

Tale of Two Markets: Breaking Down Case-Shiller Tiered Indices - (www.bayarearealestatetrends.com)

2012 Forecast: Bang and Whimper - (www.kunstler.com)

The Storm Surge of Decentralization - (www.blogspot.com)

Is Shadow Housing Inventory Vastly Larger Than Widely Believed? - (www.nakedcapitalism.com)

Iowa: The Meaningless Sideshow Begins - (www.rollingstone.com)

Progressives And Ron Paul - (www.npr.org)

Gold Standard Is An Election Winner for 2012 - (www.rollcall.com)

No longer the land of opportunity - (www.washingtonpost.com)

Tuesday January 17 Housing and Economic stories

2012-01-16T21:44:00.000-08:00

KeNosHousingPortal.blogspot.com

TOP STORIES:

Government Set to Sell Foreclosures in Bulk - (www.cnbc.com) The Obama administration, in conjunction with federal regulators and led by the overseer of Fannie Mae and Freddie Mac, is very close to announcing a pilot program to sell government-owned foreclosures in bulk to investors as rentals, according to administration officials. There currently are about a quarter of a million foreclosed properties on the books of Fannie Mae, Freddie Mac, and the Federal Housing Administration (FHA), and millions more are coming. The foreclosure processing delays of last year created a mammoth backlog of properties yet to be processed, which are just now being re-started. One of the initiatives of this program is for the federal government to be in the position to mitigate and manage any new wave of foreclosures, sources say.

Norway Makes Its Second Huge Oil Discovery In The Past Year - (www.businessinsider.com) Norway's Statoil said Monday it has discovered a large oil reserve in the Barents Sea, its second major oil find in the Arctic region in less than a year. The state-controlled oil company said a well drilled in the Havis prospect in the Barents Sea proved both oil and gas at an estimated volume of between 200 million and 300 million barrels of recoverable oil equivalents. Last April, Statoil said it had discovered between 150 million and 250 million recoverable barrels of oil equivalents in the nearby Skrugard prospect.

Most Americans worry about ability to pay mortgage or rent - (www.washingtonpost.com) A majority of Americans now say they are worried about making their mortgage or rent payments, underscoring the extent of economic anxiety in the country heading into midterm elections. A new Washington Post poll shows that concerns about housing payments have spiked since 2008 despite some improvements in the overall economy. In all, 53 percent said they are "very concerned" or "somewhat concerned" about having the money to make their monthly payment. Worries are the most intense among those with lower incomes and among African Americans. The poll results highlight the political challenge facing the Obama administration: Despite committing hundreds of billions of dollars to bail out troubled financial firms, create jobs and keep distressed borrowers in their homes, it has not been able to make many people feel better about their personal situations or even relieve fears about the cost of a need as basic as shelter.

US Government Debt Is Now As Big As the Entire Economy - (www.cnbc.com) The soaring national debt has reached a symbolic tipping point: It's now as big as the entire U.S. economy. The amount of money the federal government owes to its creditors, combined with IOUs to government retirement and other programs, now tops $15.23 trillion. That's roughly equal to the value of all goods and services the U.S. economy produces in one year: $15.17 trillion as of September, the latest estimate. Private projections show the economy likely grew to about $15.3 trillion by December — a level the debt is likely to surpass this month. "The 100% mark means that your entire debt is as big as everything you're producing in your country," says Steve Bell of the Bipartisan Policy Center, which has proposed cutting nearly $6 trillion in red ink over 10 years. "Clearly, that can't continue."

European Banks Now Get Loans From Cash-Rich Firms - (www.cnbc.com) Blue-chip names like Johnson & Johnson, Pfizer, and Peugeot are among firms bailing out Europe's ailing banks in a reversal of the established roles of clients and lenders. One source with knowledge of the so-called repo deals, or short-term secured lending, said the two U.S. pharmaceutical groups and French car maker were the latest to sign up for them. Europe's banks are struggling to secure the cash to fund their day-to-day business and have largely stopped lending to each other for fear Europe's sovereign debt crisis could land any of their peers in trouble. As a result a group of well-known, cash-rich companies with solid cash flows has stepped in the repo market, which provides a form of lending so far almost exclusively in use between banks, and between banks and central banks. One market participant said in one key area of lending companies now accounted for 25 percent of these deals.

OTHER STORIES:

The myth of Japan's failure - (www.nytimes.com)

How Wall Street turned a crisis into a cartel - (www.bloomberg.com)

Historical cycle bodes ill for the markets - (www.nytimes.com)

From East and West, foreclosure horror stories - (www.nytimes.com)

Who's in charge the next time banks fail? - (www.telegraph.co.uk)

Monday January 16 Housing and Economic stories

2012-01-15T22:50:00.000-08:00

KeNosHousingPortal.blogspot.com

TOP STORIES:

Fed Report Says Fannie, Freddie Losses May Aid Housing Recovery - (www.bloomberg.com) A report from Federal Reserve Chairman Ben S. Bernanke called the weakness in the housing market a “significant barrier” to U.S. economic health and said Fannie Mae and Freddie Mac might have to bear greater losses to stoke a broader recovery. The study, delivered today to leaders of the Senate Banking and House Financial Services committees, noted “tension” between aiding the economy and minimizing losses of the failed government-sponsored enterprises, which depend on taxpayer aid for survival. “Some actions that cause greater losses to be sustained by the GSEs in the near term might be in the interest of taxpayers to pursue if those actions result in a quicker and more vigorous economic recovery,” according to the study.

Wall Street Journal report says Kodak might file for bankruptcy in coming weeks - (www.washingtonpost.com) An uncomfortable suspicion that an icon of American business may have no future pushed investors to dump stock in Eastman Kodak Co. Wednesday. The ailing photography pioneer’s shares fell to a new all-time low after the Wall Street Journal reported that Kodak is preparing for a Chapter 11 filing “in the coming weeks” should it fail to sell a trove of 1,100 digital-imaging patents. Analysts have said the patents could fetch $2 billion to $3 billion, but no takers have emerged since Kodak started shopping them around in July. In November, the 131-year-old company said it could run out of cash in a year if it didn’t sell the patents. Even as it looked to a future rooted in its emerging printer business, the company was reporting a third-quarter loss of $222 million — its ninth quarterly loss in three years — and it said its cash reserves had fallen 10 percent in three months.

Pepsi mulls 4,000 job cuts: report - (www.reuters.com) PepsiCo Inc is considering cutting about 4,000 jobs and reducing pension contributions in order to boost its earnings, the New York Post said, citing sources close to the situation. Pepsi currently offers a pension plan and a scheme where it matches contributions to 401(k) retirement savings accounts, and believes offering both is more generous than its peers, a source told the Post. Eliminating the 401(k) match would save Pepsi $75 million, according to the newspaper. The job cuts, amounting to a little more than 1 percent of the company's payroll, will include a modest number of workers at its Purchase, New York headquarters, the Post said. Pepsi employs about 300,000 workers globally, 2,000 of whom are in Purchase, according to the NY Post.

China’s Stocks Slide to Lowest Since March 2009 as Small Companies Plunge - (www.bloomberg.com) China’s stocks (IFB1) fell to the lowest level since March 2009 on concern the European debt crisis will curb exports and a potential cash crunch before the Chinese new year holidays may boost lending costs for small companies. China Cosco Holdings Co. (601919), Asia’s largest shipping line, dropped 4.4 percent after Luxembourg’s prime minister said the European Union is facing a recession of unknown scope. Ufida Software Co. plunged 8 percent, leading declines for technology stocks, the worst performing industry. Shanghai Pudong Development Bank Co. (600000) paced gains for lenders after the central bank refrained from selling three-month bills and investors speculated the central bank will cut lenders’ reserve requirements this month.

Star Wall Street Internet Analyst Was Fired From Hedge Fund For Refusing To Use Inside Information - (www.businessinsider.com) Anyway, here's one noteworthy detail in the Mahaney profile, one that can be tucked away in the "integrity wins in the end" file: Mr. Mahaney, age 46, spent the original dot-com bubble of the late '90s at Morgan Stanley as a junior analyst working with Mary Meeker, then a star Internet analyst. He then did a stint at hedge fund Galleon Group, whose founder was imprisoned after an insider-trading conviction. One person familiar with the matter says Mr. Mahaney was fired from Galleon for "not getting enough edge" on stocks. Catch that? Mahaney was fired from Galleon for "not getting enough edge." Know what the synonym for "edge" is in this case? "Information." So it seems reasonable to translate that sentence as: "Mahaney was fired for refusing to obtain and use the same illegal inside information as his boss Raj Rajaratnam." It sucks to be fired, for any reason. But if there's ever a situation that reveals that some things are worth getting fired for, this is it. Mahaney is now enjoying his reign as one of Wall Street's top Internet analysts.

OTHER STORIES:

France’s Borrowing Costs Rise at Bond Sale - (www.bloomberg.com)

Hungary Faces Highest Yields in 2 1/2 Years at Bill Sale as Forint Weakens - (www.bloomberg.com)

EFSF Bond-Yield Boost Fails to Halt Slide in Demand for $4 Billion Issue - (www.bloomberg.com)

ECB Cash Averts ‘Funding Crisis’ for Italy, Spain - (www.bloomberg.com)

Lampert Hedge Fund Slashes AutoZone Stake as Hedge Fund Clients Pull Money - (www.bloomberg.com)

Greece’s survival in euro zone linked to upcoming talks - (www.washingtonpost.com)

China No Country for Old Men as Government Battles ‘Demographic Tsunami’ - (www.bloomberg.com)

Brazil Suffers Assault on Central Bank Integrity With Tombini Pushing Cuts - (www.bloomberg.com)

German Retail Unexpectedly Fell in November - (www.bloomberg.com)

BOE Says Banks Expect to Toughen Loan Criteria on Market Strains, Economy - (www.bloomberg.com)

ISM Services Gauge Rises, Beats Forecast - (www.bloomberg.com)

Jobless Claims Drop by 15,000 Last Week - (www.bloomberg.com)

Job Cuts in U.S. Jumped 31% From Prior Year’s Decade Low, Challenger Says - (www.bloomberg.com)

Euro-Zone Breakup Emerges as Buyer Risk in UniCredit Stock Sale - (www.bloomberg.com)

Friday January 13 Housing and Economic stories

2012-01-12T19:03:00.000-08:00

KeNosHousingPortal.blogspot.com

TOP STORIES:

2012 could be the year Germany lets the Euro die - (www.telegraph.co.uk) There will be no Chinese credit explosion this time, no real help from post-bubble India or over-stretched Brazil. It will be a global downturn on all fronts, aborting what remains of recovery even before industrial output in the OECD bloc has regained its pre-Lehman peak. The second wave will hit with youth unemployment already at 45pc in Greece and 49pc in Spain; and with the US labour participation rate already at depression levels of 64pc. We will hear more about Italy's Red Brigades, Greece's Sect of Revolutionaries, and America's militia groups, and how democracies respond. Proto-fascism in Hungary is our warning. China's surgical soft-landing will slip control, like Fed tightening in 1929 and 2007, or Japan's squeeze in 1990. Once construction has run amok, bears will have their way.

VIDEO: Zillow CEO on housing market: 'Not good' - (money.cnn.com) Good video, but not good if you are bullish on housing….

Bring back boring banks - (www.nytimes.com) CENTRAL bankers barely averted a financial panic before Christmas by replacing hundreds of billions of dollars of deposits fleeing European banks. But confidence in the global banking system remains dangerously low. To prevent the next panic, it’s not enough to rely on emergency actions by the Federal Reserve and the European Central Bank. Instead, governments should fully guarantee all bank deposits — and impose much tighter restrictions on risk-taking by banks. Banks should be forced to shed activities like derivatives trading that regulators cannot easily examine. The Dodd-Frank financial reform act of 2010 did nothing to secure large deposits and very little to curtail risk-taking by banks. It was a missed opportunity to fix a regulatory effort that goes back nearly 150 years.

World�s Biggest Economies Face $7.6T Debt - (www.bloomberg.com) Governments of the world’s leading economies have more than $7.6 trillion of debt maturing this year, with most facing a rise in borrowing costs.

Led by Japan’s $3 trillion and the U.S.’s $2.8 trillion, the amount coming due for the Group of Seven nations and Brazil, Russia, India and China is up from $7.4 trillion at this time last year, according to data compiled by Bloomberg. Ten-year bond yields will be higher by year-end for at least seven of the countries, forecasts show. Investors may demand higher compensation to lend to countries that struggle to finance increasing debt burdens as the global economy slows, surveys show. The International Monetary Fund cut its forecast for growth this year to 4 percent from a prior estimate of 4.5 percent as Europe’s debt crisis spreads, the U.S. struggles to reduce a budget deficit exceeding $1 trillion and China’s property market cools.

A Run On The Global Banking System—How Close Are We? - (gonzalolira.blogspot.com) Nine weeks after its bankruptcy, the general public still hasn’t quite realized the implications of the MF Global scandal. My own sense is, this is the first tremor of the earthquake that’s coming to the global financial system. And how the central banks and financial regulators treated the “Systemically Important Financial Institutions” that had exposure to MF Global—to the detriment of the ordinary, blameless customer who got royally ripped off in its bankruptcy—is both the template of how the next financial crisis will be handled, and an accelerator that will make the next crisis happen that much sooner.

OTHER STORIES:

Did Psychopaths Take Over Wall Street? - (www.bloomberg.com)

Signs Point to Tepid Consumer Spending During 2012 - (www.nytimes.com)

A world in denial about what it knows - (www.nytimes.com)

The Year Governments Lost Their Credibility - (www.nytimes.com)

Charting how house prices are moved by rates - (www.marketwatch.com)

How do decide a reasonable home price for income level - (www.patrick.net)

Banks can't keep up with foreclosures anymore - (www.rt.com)

German Car Makers Pay Workers Twice As Much As US, Still Profitable - (www.remappingdebate.org)

Thursday January 12 Housing and Economic stories

2012-01-11T21:09:00.000-08:00

KeNosHousingPortal.blogspot.com

TOP STORIES:

MF Global sold assets to Goldman before collapse: sources - (www.reuters.com) MF Global unloaded hundreds of millions of dollars' worth of securities to Goldman Sachs in the days leading up to its collapse, according to two former MF Global employees with direct knowledge of the transactions. But it did not immediately receive payment from its clearing firm and lender, JPMorgan Chase & Co, one of the sources said. The sale of securities to Goldman occurred on October 27, just days before MF Global Holdings Ltd filed for bankruptcy on October 31, the ex-employees said. One of the employees said the transaction was cleared with JPMorgan Chase. At the same time MF Global, which was run by former Goldman Sachs head Jon Corzine, was selling securities to Goldman to raise badly needed cash, the futures firm was also drawing down a $1.2 billion revolving line of credit it had with JPMorgan, according to one of the former MF Global employees.

Report: SNB chief personally ordered dollar swaps - (finance.yahoo.com) A Swiss political weekly says Switzerland's central bank chief personally engaged in sensitive currency deals previously thought to have been conducted by his wife. Zurich-based Weltwoche said Wednesday it has obtained bank statements showing SNB President Philipp Hildebrand bought large amounts of U.S. dollars before selling them for profit after the central bank depressed the value of the franc. Weltwoche Deputy Editor Philipp Gut spoke to the Associated Press on the issue. Hildebrand's office couldn't immediately be reached for comment. The SNB has previously stated that "rumors" of wrongdoing by the 48-year-old were unfounded and its rules against insider trading weren't breached.

Refinancing Race Poised to Dominate Third Year of Debt Crisis: Euro Credit - (www.bloomberg.com) Germany sold 4.1 billion euros ($5.3 billion) of bonds today, kicking off a competition for finance that may determine whether euro-area leaders can preserve the 13-year-old single currency. Portugal, forced to seek an EU-led rescue in May, borrowed 1 billion euros selling bills repayable in April. Auctions from Greece, Italy and Spain follow later in the month as common currency members commence sales that may reach 262 billion euros in the first quarter and 865 billion euros in 2012, according to Deutsche Bank AG forecasts. Italy’s 10-year borrowing cost (GBTPGR10) is 6.95 percent, up from a 2011 average of 5.35 percent, while Spain’s 5.42 percent is down from 5.44 percent last year.

UniCredit Sets 43% Discount for Rights Offer - (www.bloomberg.com) UniCredit SpA (UCG) fell the most in two months in Milan after Italy’s biggest bank said it will sell 7.5 billion euros ($9.8 billion) of shares at 43 percent less than yesterday’s closing price, excluding the value of rights. UniCredit will sell shares at 1.943 euros each and offer two for every one held, the Milan-based lender said in a statement today. That exceeds the 30 percent discount offered by Commerzbank AG in its 5.3 billion-euro rights offer last May and the 39 percent discount when HSBC Holdings Plc raised about $17.7 billion in March 2009. “The discount is the highest seen in the European banking sector over the last few months,” Luigi Tramontana, an analyst at Banca Akros who has a hold recommendation on the stock, wrote in a note today. “We remain prudent on the stock.”

You Won't Believe Why One BofA Branch Refused To Let A New Bride Deposit A Check - (www.businessinsider.com) The PR nightmare continues. This time, the bank's gaffe hindered the personal life of a journalist—Pete Iorizzo, a reporter for the Albany Times-Union in Albany, New York. And Iorizzo did what any well-meaning journalist would do—write about it. [via Huffington Post] (See Iorizzo's post here.) In a blog post called "Pete vs. Bank of America," Iorizzo described how his new bride, Mrs. Iorizzo, had decided to keep her maiden name upon their recent marriage and ended up being refused at their local Bank of America branch when she tried to cash wedding gift checks made out to Mr. and Mrs. Iorizzo. Iorizzo had endorsed the check with his signature and the checks were made out for deposit only into their joint account and his wife offered to show the bank their marriage license, but the bank simply refused to let her deposit them.

OTHER STORIES:

China shares off to weak start to year, drag Hong Kong lower - (www.reuters.com)

Bond Exotica Gains Favor as Fed Holds Down Rates: Credit Markets - (www.bloomberg.com)

Traders fear ‘tail risks’ in commodities - (www.ft.com)

China Home Prices Slide Amid Speculation - (www.bloomberg.com)

French Consumer Spending Falls on Joblessness - (www.bloomberg.com)

China 2012 financing seen 14 trillion yuan:report - (www.marketwatch.com)

China mulls plans to boost domestic consumption: report - (www.reuters.com)

Monti to meet Merkel in Berlin Jan. 11 - (finance.yahoo.com)

Euro zone inflation eases in December as expected - (www.reuters.com)

Jobless data show twin-speed Europe - (www.ft.com)

Fed Will Detail Rate Plans, Easing Market Guesswork - (online.wsj.com)

Insurers’ 2011 Catastrophe Losses Hit Record - (www.bloomberg.com)

Wednesday January 11 Housing and Economic stories

2012-01-10T22:03:00.000-08:00

KeNosHousingPortal.blogspot.com

TOP STORIES:

More Awful PR For Bank Of America As They Start Cutting Off Credit To Mom And Pop - (www.businessinsider.com) Apparently Bank of America has totally given up on winning hearts and minds. Because according the L.A. Times, the embattled bank is cutting off credit to small businesses in droves — maybe even in the hundreds of thousands. Take, for instance, Babak Zahabizadeh, the owner of a Burbank, California messaging service. He was told in a letter that he needed to pay off his $96,000 loan by January 25th or (another option) he could pay it off in 2 years at a 12% interest rate. That would make his payment 10 times his current payment. "I was like, 'Dude, you're calling a guy who's barely surviving!' " said Zahabizadeh. "My final word was that I can double my payment — but not triple or quadruple it. I told them if they apply too much pressure they're going to push me into bankruptcy."

Freddie Mac: Record low mortgage rates haven't rescued housing - (www.latimes.com) Lenders were offering 30-year fixed-rate mortgages to solid borrowers at an average of 3.95% this week, according to Freddie Mac, the ninth consecutive week of rates at or below 4%. That wrapped up a year of record lows for the survey, which dates back to 1971. In 1981 and 1982, the average 30-year mortgage carried an interest rate of more than 16%, and the typical rate was above 8% as recently as 2000, Freddie Mac said. This past year, the average was 4.45%. Despite the record low rates, applications for mortgages to buy homes dropped as the year ended, even after seasonal adjustments, the latest Mortgage Bankers Assn. survey found. Even the demand for refinance mortgages, which accounted for more than 80% of all applications, fell slightly. “Remarkably low rates are not enough," said Mortgage Bankers Assn. economist Michael Fratantoni, noting that many homeowners have difficulty refinancing because of "lack of equity in their properties, poor credit and a weak job market.”

5 Disturbing New Ways Debt Collectors Are Getting Your Money - (www.cracked.com) For an entire generation of college graduates facing a job market with nothing but tens of thousands of dollars in student loan debt and frat party beer guts under their belts, the future is looking grim. Not only will your job at Bath & Body Works not be enough make your various loan payments, but now it looks like the people you owe money to are employing downright ugly strategies to get that money back from you. #5. Social Network Shaming: Just like your brokeass cousin always looking for a handout and your disapproving grandma, debt collectors have figured out how difficult it is to hide on Facebook. And they're using it as well as other social media outlets for some old-fashioned harassin'.

How Cash Has Corrupted Congress - (www.thedailybeast.com) It’s always been about the money. Occupy Wall Street chose to set up its 24-hour outpost of political dissent on the doorstep of the finance industry primarily to underscore the simple fact that money has corrupted our political process so completely that the seat of power in the U.S. isn’t even in Washington, D.C. any more. That said, the Capitol continues collecting its cut, as evidenced in this week’s double-barreled dispatches, in the Washington Post and the New York Times, on the exploding wealth gap between our ever-more affluent representatives in Congress and the financially flat-lined citizens they represent. From its inception, OWS has focused on the concept of legalized bribery, as the continually rising cost of a political campaign—an average of $1.4 million for a successful House run, up fourfold in real dollars since 1976, and nearly $10 million for a Senate seat—has been largely subsidized by wealthy donors, corporations and special interests, in return for legislation that favors their interests.

SOPA bill could mean the end of blogging - (www.politico.com) The conservative and liberal blogospheres are unifying behind opposition to Congress’s Stop Online Piracy Act, with right-leaning bloggers arguing their very existence could be wiped out if the anti-piracy bill passes. “If either the U.S. Senate’s Protect IP Act (PIPA) & the U.S. House’s Stop Online Piracy Act (SOPA) become law, political blogs such as Red Mass Group [conservative] & Blue Mass Group [liberal] will cease to exist,” wrote a blogger at Red Mass Group. Some have asserted that the controversial measures would criminalize pages and blogs that link to foreign websites dedicated to online piracy. In particular, this has concerned search engines like Google, which could face massive liability if some form of the bill passes, some say.

OTHER STORIES:

Food Prices Ease Slightly But Are Still Volatile: UN Official - (www.cnbc.com)

A Gathering Storm Over ‘Right to Work’ in Indiana - (www.cnbc.com)

Why Buying A House Is Still A Bad Idea - (www.farseer.org)

Steve Keen: Credit propels House Prices - (www.patrick.net)

Excellent graphics about US wealth distribution - (www.jaredbernsteinblog.com)

This is crony capitalism - (www.tumblr.com)

Verizon to charge $2 fee for online payments - (www.cnn.com)

House prices fall in Oct, could drop another 5% to 10% next year - (www.nytimes.com)

Do Blogs Present "News" or "Commentary"? Is there a Difference? - (www.blogspot.com)

Tuesday January 10 Housing and Economic stories

2012-01-09T21:46:00.000-08:00

KeNosHousingPortal.blogspot.com

TOP STORIES:

Wealth gap widens between lawmakers and constituents - (www.bangordailynews.com) One day after his shift at the steel mill, Gary Myers drove home in his 10-year-old Pontiac and told his wife he was going to run for Congress. The odds were long. At 34, Myers was the shift foreman at the “hot mill” of the Armco plant in Butler, Pa. He had no political experience, little or no money, and he was a Republican in a district that tilted Democrat. But standing in the dining room, still in his work clothes, he said he felt voters deserved a better choice. Three years later, he won. Back when Myers entered Congress in 1975, it wasn’t nearly so unusual for a person with few assets besides a home to win and serve in Congress. But the financial gap between Americans and their representatives in Congress has widened considerably since then, according to an analysis of financial disclosures by The Washington Post.

Foreclosure free ride: Borrowers keep houses without paying - (www.cnn.com) Delinquent borrowers facing foreclosure are learning that they can stay in their homes for years, as long as they're willing to put up a fight.

Among the tactics: Challenging the bank's actions, waiting to file paperwork right up until the deadline, requesting the lender dig up original paperwork or, in some extreme cases, declaring bankruptcy. Nationwide, the average time it takes to process a foreclosure -- from the first missed payment to the final foreclosure auction -- has climbed to 674 days from 253 days just four years ago, according to LPS Applied Analytics. It takes much longer than that in Florida, where the process averages 1,027 days, nearly 3 years. In D.C., foreclosure averages 1,053 days and delinquent borrowers in New York often stay in their homes for an average of 906 days.

And while some borrowers are looking for ways to make good with lenders and get their homes back, many aren't paying a dime. Nearly 40% of homeowners in default have not made a payment in at least two years, according to LPS.

Looming decline in property tax revenues: "That storm has not yet hit" - (www.washingtonpost.com) The nation’s housing crisis is five years old, but for local governments across the country, the worst of the reckoning might only now be at hand. Because of the time it often takes for property assessments to reflect falling home values, the bust that began in 2007 has just begun to ravage tax revenues in communities from coast to coast. The problem is unlikely to subside soon. For instance, Baltimore collected $815 million in property taxes during the most recent fiscal year, according to Bill Voorhees, Baltimore’s director of revenue and tax analysis. Next year, the figure is predicted to shrink to $803.5 million. The following year, $773 million. The year after that, $735.7 million. The year after that, $729.4 million. Only in 2016 do city officials anticipate tax revenues increasing again. “I don’t see any quick fixes over the next four or five years, to be honest,” said Voorhees, noting that Baltimore already faces a budget deficit of more than $50 million next year. “Obviously, it means we have much lower revenues than we had in past. It’s creating gaps in our budget. . . . It’s a very large problem.”

How SOPA 2.0 Sneaks In Ability To Kill Any Website - (www.techdirt.com) I already wrote a big post about yesterday's SOPA markup day one. While we're moving forward on day two, I wanted to call out one key point that was really made clear by an amendment offered by Rep. Jared Polis late in the day yesterday, which hasn't received nearly enough attention. As you may recall, with the "manager's amendment" version of SOPA (i.e., SOPA 2.0), the "notice-and-shut off funding" section of the private right of action in Section 103 was removed. This was good, because we've seen how the notice-and-takedown provision of the DMCA has been widely abused.

OTHER STORIES:

If Our Debt Is So Dangerous, Why Are People Begging for More? - (www.theatlantic.com)

SOPA Bill Would Censor Your Search Results, Shred 1st Amendment - (www.vortex.com)

GoDaddy Withdraws SOPA Support After Backlash - (www.pcmag.com)

Princeton Brews Trouble for Us 1 Percenters - (www.bloomberg.com)

Mortgage insurance (MI) tax deductibility ending? - (www.mortgagenewsdaily.com)

Unlimited Presidential Fundraising: The Curse Of Steve - (www.opensecrets.org)

Whistleblower documents illuminate case against BNY Mellon - (www.yahoo.com)

Monday January 9 Housing and Economic stories

2012-01-08T22:56:00.000-08:00

KeNosHousingPortal.blogspot.com

TOP STORIES:

Angelo Mozilo still free, but small timer goes to jail - (www.latimes.com) First, he preached the Gospel in South Los Angeles. Then he picked up a badge and gun as an LAPD officer working the Wilshire Division. From there, he moved to the FBI, serving as an undercover agent in Los Angeles, then in Tennessee. His life, he said, was "my American dream." But now Darin McAllister is in federal prison in eastern Kentucky, serving a four-year sentence as part of a Justice Department investigation into mortgage fraud. His life today, he says, is "my American nightmare." His path from Bible to badge to prison bars is in some part a result of the three-year national housing crisis. When real estate loans went bad, he came under scrutiny from his own employer, the FBI, for lying about his income. But it is also a casualty of McAllister's unbridled and ultimately unprincipled ambition to repeatedly reinvent himself and rise above his modest upbringing in the Chicago suburb of Skokie, Ill.

CIA murders own hired killer of ex-Afghan central banker? - (www.reuters.com) Remains of a San Diego man suspected of killing a former head of the Afghanistan central bank who fled to the United States as a political fugitive have been found, police said on Thursday. Bones identified as belonging to Ismael Raul Lopez, 28, were discovered by recreational divers offshore in the Pacific Ocean and later recovered by public safety personnel, San Diego police said in a statement. Lopez was suspected by police of killing self-employed cab driver Mir Najibullah Sadat Sahou, 68, in a robbery-homicide in late September. An arrest warrant had been issued in October. The announcement sheds more light on a mysterious case that some believe was a politically motivated assassination instead of the robbery-homicide police have described.

A first-ever default on municipal general obligation bonds - (www.nytimes.com) People who own what is considered the safest type of municipal bond may be in for a surprise. This safe debt, called a general-obligation bond, is said to be the next strongest thing to Treasuries because it is backed by a “full faith and credit” pledge. That means the government that issued it will pay it on time, no matter what. But now Jefferson County, Ala., has stopped paying such debt, breaking with convention and setting up a fundamental test of what full faith and credit truly means. “We all want to know, ‘What’s the truth here?’ ” said Richard A. Ciccarone, chief research officer at McDonnell Investment Management. “The way I learned it, full faith and credit was considered all the taxing power of a community, and that means there’s an infinite pledge. When you get into bankruptcy court, truth is something that can be revealed in a new way.”

New house sales near all-time low - (www.csmonitor.com) The Commerce Department says new-home sales rose 1.6 percent last month to a seasonally adjusted annual rate of 315,000. That’s less than half the 700,000 new homes that economists say should be sold to sustain a healthy housing market. It’s also below the 323,000 homes sold last year — the worst year for sales on records dating back to 1963. December would have to produce its best monthly sales total in four years for 2011 to finish ahead of last year’s total. New homes account for less than 10 percent of the housing market. But they have a big impact on the economy. Each new home built creates roughly three jobs for a year and generates about $90,000 in taxes, according to the National Association of Home Builders. Economists note that housing is a long way from fully recovering and that many people are opting to rent because they can’t afford to buy or don’t feel a home is a wise investment right now.

Bankers Still Fail To Disclose Their True Balance Sheets - (www.bloomberg.com) While bankers complain that regulatory uncertainty is hurting growth, their failure to provide balance-sheet transparency is creating uncertainty for the taxpayers who bailed them out. Europe’s sovereign-debt crisis already claimed MF Global Holdings Ltd., the brokerage run by Jon S. Corzine that collapsed on Oct. 31, and credit-default swap prices imply a more than 1-in-5 chance of default for Morgan Stanley, Goldman Sachs Group Inc. (GS) and Bank of America Corp. (BAC) in the next five years. That’s up from about 1-in-10 odds at the beginning of July, according to data provider CMA and a standard credit-swaps industry-pricing model. “European-related risks have overwhelmed whatever cost regulatory uncertainty has imposed on bank lending,” said John Lonski, chief economist at Moody’s Capital Markets Group in New York. “The lack of transparency means we don’t really know what the exposures of major U.S. financial institutions are,” and “we very much have to be concerned about the possible negative repercussions.”

OTHER STORIES:

The East India Company: Model For Our 1% - (www.economist.com)

Rent-seeking by the 1% is not productive work - (www.wikipedia.org)

Man Builds Fairy Tale House for His Family For Only £3,000 - (www.health.com)

Shiller Expects More House Price Declines - (www.patrick.net)

Bill Black on lending fraud and the absense of prosecutions - (www.capitalismwithoutfailure.com)

The Strangest Houses of 2011 - (www.yahoo.com)

2011 Shaping Up As Worst Year Ever For House Sales - (www.npr.org)

U.S. Home Prices Fell More Than Forecast - (www.bloomberg.com)

RBC: House Prices To Drop Up To 30% In 2012 - (www.pragcap.com)

Stories about mainland Chinese buying up Japanese real estate - (www.japanpropertycentral.com)

Friday January 6 Housing and Economic stories

2012-01-05T21:54:00.000-08:00

KeNosHousingPortal.blogspot.com

TOP STORIES:

Economic downturn took a detour on Capitol Hill - (www.nytimes.com) When Representative Ed Pastor was first elected to Congress two decades ago, he was comfortably ensconced in the middle class. Mr. Pastor, a Democrat from Arizona, held $100,000 or so in savings accounts in the mid-1990s and had a retirement pension, but like many Americans, he also owed the banks nearly as much in loans. Today, Mr. Pastor, a miner’s son and a former high school teacher, is a member of a not-so-exclusive club: Capitol Hill millionaires. That group has grown in recent years to include nearly half of all members of Congress — 250 in all — and the wealth gap between lawmakers and their constituents appears to be growing quickly, even as Congress debates unemployment benefits, possible cuts in food stamps and a “millionaire’s tax.”

Federal judge accuses SEC of misleading court - (www.washingtonpost.com) A federal judge who has accused the Securities and Exchange Commission of negotiating weak settlements in Wall Street cases on Thursday accused the agency of misleading a federal appeals court. U.S. District Court Judge Jed S. Rakoff said the SEC also withheld from him important information that he needed to do his job. Rakoff spelled out his allegations in an order that he said was intended to inform the appeals court and prevent anything similar from happening in the future. Meanwhile, the SEC took the dramatic step of asking the U.S. Court of Appeals for the 2nd Circuit to overrule a recent Rakoff decision by issuing a special writ generally reserved for cases in which a judge has grossly overstepped his bounds. Called a writ of mandamus, such a direct and personal challenge to a judge is far from a routine gambit. The judge and the SEC are locked in an extraordinary battle over how the government should police financial fraud, and just when it seemed that the conflict could not get more contentious, Thursday’s development added a dimension

"There Will Be Violence, Mark My Words" - (www.readersupportednews.org) This time, I fear, the public anger will not be deflected. Confessions, not false, will be exacted. Occupy Wall Street has set the snowball rolling; you may not think much of OWS - I have my own reservations, although none are philosophical or moral - but it has made America aware of a sinister, usurious process by which wealth has systematically been funneled into fewer and fewer hands. A process in which Washington played a useful supporting role, but no more than that. Over the next year, I expect the "what" will give way to the "how" in the broad electorate's comprehension of the financial situation. The 99 percent must learn to differentiate the bloodsuckers and rent-extractors from those in the 1 percent who make the world a better, more just place to live. Once people realize how Wall Street made its pile, understand how financiers get rich, what it is that they actually do, the time will become ripe for someone to gather the spreading ripples of anger and perplexity into a focused tsunami of retribution. To make the bastards pay, properly, for the grief and woe they have caused. Perhaps not to the extent proposed by H. L. Mencken, who wrote that when a bank fails, the first order of business should be to hang its board of directors, but in a manner in which the pain is proportionate to the collateral damage. Possibly an excess-profits tax retroactive to 2007, or some form of "Tobin tax" on transactions, or a wealth tax. The era of money for nothing will be over.

Sears to Close 100 to 120 Kmart, Sears Stores - (www.nytimes.com) After a disastrous holiday shopping season, the parent company of Sears and Kmart will close at least 100 stores to raise cash — a move that sparked speculation about whether the 125-year-old retailer can avoid a death spiral fed by declining sales and deteriorating stores. Sears Holdings Corp., a pillar of American retailing that famously began with a mail-order catalog in the 1880s, declared Tuesday that it would no longer prop up "marginally performing" locations. The company pledged to refocus its efforts on stores that make money. Sears' stock quickly plunged, dropping 27 percent. The closings are the latest and most visible move by Eddie Lampert, the hands-on chairman who has struggled to reverse the company's fortunes. As rivals Wal-Mart and Target Corp. spruced up stores in recent years, Sears Holdings confronted falling sales and perceptions of dowdy merchandise.

Congress worried about deficit, ignored jobs - (www.washingtonpost.com) Lori Montgomery has a terrific piece on how little deficit reduction actually got done this year. But perhaps that shouldn't be surprising. The pressure for deficit reduction comes from interest rates. Interest rates, as noted in yesterday's Wonkbook, haven't been this low since 1995. So though there's a lot of talk about the deficit, there's not actually a lot of economic pressure to do anything about it. But the same can't be said for another neglected category of policymaking: jobs. There has been less done for the jobless than for the deficit. After all, the debt-ceiling deal did lead to $900 billion in cuts to domestic discretionary spending, and to the spending trigger that threatens to make a trillion more in cuts starting in 2012. But the jobless? Save for a two-month extension of the payroll tax cut and unemployment insurance benefits, they got nothing.

OTHER STORIES:

A world in denial about what it knows - (www.nytimes.com)

I Just Got Here, But I Know Trouble When I see it! - (www.nytimes.com)

Spain revises up deficit and raises taxes - (finance.yahoo.com)

A year of me firsts, and lessons relearned - (www.nytimes.com)

'If You Think This Is A Bad Economy, You Haven't Seen Anything Yet' - (www.businessinsider.com)

Keynes was right - (www.nytimes.com)

Factory Jobs Gain, But Wages Retreat - (www.nytimes.com)

Deflation's Grip Returns in Japan as Factory Production Declines - (www.bloomberg.com)

Italian Business Confidence Falls to Two-Year Low - (www.bloomberg.com)

Thursday January 5 Housing and Economic stories

2012-01-04T21:44:00.000-08:00

KeNosHousingPortal.blogspot.com

TOP STORIES:

Falling home values mean budget crunches for cities - (www.washingtonpost.com) The nation’s housing crisis is five years old, but for local governments across the country, the worst of the reckoning might only now be at hand. Because of the time it often takes for property assessments to reflect falling home values, the bust that began in 2007 has just begun to ravage tax revenues in communities from coast to coast. The problem is unlikely to subside soon. For instance, Baltimore collected $815 million in property taxes during the most recent fiscal year, according to Bill Voorhees, Baltimore’s director of revenue and tax analysis. Next year, the figure is predicted to shrink to $803.5 million. The following year, $773 million. The year after that, $735.7 million. The year after that, $729.4 million. Only in 2016 do city officials anticipate tax revenues increasing again. “I don’t see any quick fixes over the next four or five years, to be honest,” said Voorhees, noting that Baltimore already faces a budget deficit of more than $50 million next year. “Obviously, it means we have much lower revenues than we had in past. It’s creating gaps in our budget. . . .It’s a very large problem.”

Why Was The Wife Of Switzerland's Central Banker Trading Francs Days Before A Devaluation? - (www.businessinsider.com) The year begins with a scandal. Kashya, the wife of Philipp Hildebrand (head of the Swiss National Bank) sold Swiss Francs just a few days before the Swiss National Bank initiated exchange controls and devalued the Franc. The timing of the transactions was nearly perfect. The suggestion is that “pillow talk” between husband and wife lead to the trades. Don’t expect heads to roll over this transgression. There has been a complete review by Swiss authorities and the conclusion is that there were no insider trading violations by the wife. That’s not to say that trades did not happen. Apparently, Kashya Hildebrand bought ~$500,000 when she shorted the CHF. This relatively small transaction netted the Hildebrand family only ~$50,000 in less than one month.

Washington’s year of drama leaves little done regarding debt - (www.washingtonpost.com) Reid Ribble, a Wisconsin roofing contractor-turned-Republican lawmaker, has helped change the way Washington talks about the national debt. That’s not to say he has done much about the debt itself. Nearly a year ago, Ribble and other newly elected House Republicans came to Capitol Hill on a single-minded mission to shove the federal debt to the top of the congressional agenda. They succeeded. At every opportunity, they demanded cuts in spending, forcing a series of white-knuckle showdowns that have kept the government in a state of perpetual crisis. Washington nudged close to a public conversation about the kind of government taxpayers want and what they are willing to pay for it. Last week, however, Ribble went home for the holidays with little to show for all the political drama. The debt stood at $15.1 trillion, $1 trillion more than when he got to town. By the end of next year, projections show, it will grow by an additional $1 trillion. Ribble said he and his allies had cut spending for 2012 by only about $7 billion, a sliver so tiny Ribble could measure its impact in minutes.

S&P 500 Ends the Year Little Changed - (www.bloomberg.com) U.S. stocks fell, leaving the Standard & Poor’s 500 Index virtually unchanged for the year, as concern over Europe’s debt crisis overshadowed optimism that the American economy will expand in 2012. JPMorgan Chase & Co., the largest U.S. bank by assets, paced declines among financial companies after Spain said its budget deficit will be larger than previously forecast. Sears Holdings Corp. (SHLD)retreated 3.4 percent after Fitch Ratings downgraded its long-term default ratings. Freeport-McMoRan Copper & Gold Inc. (FCX) rose 0.7 percent as the price of gold climbed for the first time in more than a week. The S&P 500 fell 0.4 percent to 1,257.60 at 4 p.m. New York time.

Are We Witnessing A Quiet Putsch In Hungary? - (www.businessinsider.com) The IMF is not pleased. A putsch, as any dictionary will tell you, refers to the violent overthrow of a government. Hungary has not been subject to that kind of action per se, but rather a more insidious grab for power. Its new constitution goes into effect today, and while perfectly legal, marks the end of Hungary's flirtation with liberalism (meant in the classical sense of "liberty" and not the modern partisan sense). On December 30, the Hungarian parliament approved the latest measures ("base laws") to support the constitution and the centralization and consolidation of power that it entails. This latest measure is what has particularly annoyed the EU and the IMF.

OTHER STORIES:

New Stimulus Dovetails With Shift at Fed - (online.wsj.com)

The U.S. Gains Factory Jobs, but Workers Give Ground on Wages - (www.nytimes.com)

Pending home sales rise to 1.5 year high - (www.reuters.com)

Chicago Purchasing Managers Index Declined to 62.5 in December From 62.6 - (www.bloomberg.com)

Jobless Claims in U.S. Hit Three-Year Low in Past Month - (www.bloomberg.com)

Fed seeks to curb repo market risk - (www.ft.com)

Bernanke Drive for Openness May Include More Briefings - (www.bloomberg.com)

Obama to Choose Powell, Stein for Fed Board - (www.bloomberg.com)

Consumer Confidence Rose More Than Forecast - (www.bloomberg.com)

U.S. Home Prices Fell More Than Forecast - (www.bloomberg.com)

Slowing Inflation Cheers Fed - (online.wsj.com)