Tuesday July 1 Housing and Economic stories

Top Stories: Do these look like healthy bank/lender stock charts? (click on chart for larger view)

Ron Paul on Federal Reserve and Inflation - (www.youtube.com) New Ron Paul video from 6/25/08 on Fed Reserve meeting results.

Is IndyMac on the verge of Bankruptcy? Stock falls below $1 after being hit with a run on the bank on Saturday
· After some depositors pull funds, IndyMac responds to latest rumors about its health; says it's working with regulators - (latimesblogs.latimes.com) Pasadena-based mortgage lender IndyMac Bancorp, battling fresh rumors that it is near collapse, conceded today that its financial position "has deteriorated since last quarter," and said it was working on a plan with its regulators to improve "the safety and soundness" of the bank.
· Late Day Update: Indymac Closes Commercial Unit, Depositors Withdrawing Funds - (www.ml-implode.com) - At 5:45 pm (EST), the following email was sent to customers of Indymac's commercial lending unit, Indymac Commercial Lending Corp.:
"ICLC, due to the current market and capital constraints has ceased lending operations as of 7/1/08. A formal announcement from ICLC will be coming out tomorrow regarding details and loans in process." Referring to today's press release on The IMB Report, Indymac's company web site, an LA Times report refers to "a weekend that saw depositors line up at some of its San Gabriel Valley branches to pull their money, as they reacted to news reports questioning the company's survival." Indymac's article responds with "while branch traffic is somewhat elevated this morning, it is substantially lower than on Saturday, and we are hopeful that this issue appropriately abates soon..."
· Schumer: concerned over IndyMac stability - (www.ap.com)
· [$$] Schumer Asks Regulators For Greater IndyMac Scrutinyat - (us.rd.yahoo.com/finance/external/wsj)
· CRL: Indymac Dug Its Own Grave - (www.thetruthaboutmortgage.com) - The Center for Responsible Lending has impeccable timing, considering the fact that Indymac is trading at its lowest point ever amid mounting solvency concerns.The group released a 22-page report today outlining the Pasadena, CA-based mortgage lender’s failings, accusing the company of “unsound and abusive lending” during the recent boom. The report includes interviews with former employees, which among other things, claim Indymac padded borrower income, used bogus appraisals, worked with misleading mortgage brokers, and treated minorities and the elderly unfairly.
· IndyMac Update: Shares Down On More Bad News - (www.ml-implode.com)


Will Lehman Brothers suffer the same fate as Bear Stearns? It will likely (within next month) be bailed out by the Fed or Barclays
· Lehman falls on talk of possible sale to Barclays - (www.ap.com) - Lehman Brothers Holdings Inc. shares fell sharply (over $2.4/share) Monday amid speculation that the nation's fourth-largest investment bank might be acquired by Britain's Barclays PLC at a discount price.
· Lehman up after Morgan Stanley's overweight rating - (www.reuters.com) – Yet Morgan Stanley changes rating to “overweight”. We should know in less than a month if MS was unethically trying to protect their interest or if Lehman gets acquired at $31/share.
· [$$] Lehman Hits Lowest Level Since 2000 Amid Buzz - (us.rd.yahoo.com/finance/external/wsj)









And how about Wachovia. Prediction is Wachovia will be acquired (or liquidated) in the next 2 months:
· Wachovia Drops On News of Possible $5 Billion Buyback - (www.bloomberg.com) Wachovia Corp., the fourth-largest U.S. bank, fell the most in two months after the New York Post said the company may have to buy back Prudential Financial Inc.'s stake in their joint retail brokerage venture.
· Wachovia halts mortgages with negative amortization featuresat MarketWatch(Mon 5:28pm) – (www.marketwatch.com)
· Wachovia eliminates pick-a-pay loansat bizjournals.com(Mon 5:25pm) – (www.bizjournals.com)
· ALERT! Wachovia Cries ‘UNCLE’ on the Pay Option ARM - (www.ml-implode.com)

Court Ruling Could Shock Entire U.S. Mortgage Industry - (www.ml-implode.com) - A lawsuit filed by a Wisconsin couple against their mortgage lender could have major implications for banks should a U.S. appeals court agree that borrowers can cancel their loans en masse when their lenders violate a federal lending disclosure law.
BIS slams central banks, warns of worse crunch to come - (www.telegraph.co.uk) A year ago, the Bank for International Settlements startled the financial world by warning that we might soon face challenges last seen during the onset of the Great Depression. This has proved frighteningly accurate. The venerable body, the ultimate bank of central bankers, said years of loose monetary policy had fuelled a dangerous credit bubble that would entail "much higher costs than is commonly supposed". In a pointed attack on the US Federal Reserve, it said central banks would not find it easy to "clean up" once property bubbles have burst. If only we had all listened to the BIS a long time ago. Ensconced in its Swiss lair, it has fired off anathemas for years, struggling to uphold orthodoxy against the follies of modern central banking. Bill White, the departing chief economist, has now penned his swansong, the BIS's 78th Annual Report, released today. It is a disconcerting read for those who want to hope the global crisis is over. "The current market turmoil is without precedent in the postwar period. With a significant risk of recession in the US, compounded by sharply rising inflation in many countries, fears are building that the global economy might be at some kind of tipping point," it said. "These fears are not groundless. The magnitude of the problems yet to be faced could be much greater than many now perceive," it said. "It is not impossible that the unwinding of the credit bubble could, after a temporary period of higher inflation, culminate in a deflation that might be hard to manage, all the more so given the high debt levels."
Next Victim of Real Estate Bubble: Government - (www.businessweek.com) - State and local governments were flush with tax revenue during the five-year housing boom. They pulled from bulging pools of property, income, and sales tax to expand education, law enforcement, health care, and infrastructure programs without needing to burden residents and corporations with tax hikes. Those days are over. Home prices are falling, and foreclosures, gas prices, unemployment, and inflation are on the rise. At least 29 states, plus the District of Columbia, reported budget shortfalls that total about $48 billion as they finalized their 2009 fiscal budgets, which typically begin July 1, according to the Center on Budget & Policy Priorities.
Credit crisis fallout to limit houseowner spending - (www.reuters.com) "(U.S.) household spending now seems likely to weaken in response to high debt and service burdens, falling employment and the general tightening of credit conditions," it said.
A growing trend of negative equity -- where falling house prices leave homeowners with a mortgage bigger than their property's value -- is also expected to corset the borrowing ability of U.S. households. In some parts of the United States, houses have halved in value over the last two years as the property bubble has popped and mortgage defaults surge while builders flood already saturated markets with new properties. "As housing prices fall and credit conditions tighten, (more) such loans are likely to default because borrowers have few alternative financial resources," BIS said.
The Greenspan Gamble - (www.rgemonitor.com) it appears to me that the "Super Fed" could actually happen. Many of the other changes require consolidation of regulatory agencies, and bureaucracies seldom go gently into that good night. They and their constituents will fight for survival and probably win. But the Fed expansion is likely to be seen as the solution the problem of risk that the housing bust has made apparent. But wait. Isn't this the same Fed whose 1 percent fed funds rate helped inflate the great Housing and Mortgage Bubble that is now popping? Didn't this lead to massive losses, illiquidity, and panic? Wasn't the bubble exactly the sort of systemic risk that the new, more powerful Fed is expected to effectively manage?



Other Stories:

Deflationary Hurricanes to Hit U.S. and U.K. - (Mish at globaleconomicanalysis.blogspot.com) British households are now more indebted than those of any other major country in recorded history, it has emerged. Families in the UK now owe a record 173pc of their incomes in debts, official figures have shown. The ratio of debt to income is higher than any other country in the Group of Seven leading industrialised economies, and is sharply higher than the 129pc of incomes it was five years ago.
OPEC pres sees oil at $170 this year, blames Fed - (www.marketwatch.com)
28 in Michigan Charged With Mortgage Fraud - (www.ml-implode.com)
The end of the superbubble - (articles.moneycentral.msn.com)
FL Joins List Of States Lining Up With Suits Against Countrywide - (www.ml-implode.com) - Florida sued mortgage lender Countrywide Financial Corp for predatory lending practices on Monday, alleging the company at the c...
Central Bank Schizophrenia - (www.ml-implode.com) - "What is Ben Bernanke to do? Since his job is simultaneously to avoid recession while protecting against inflation, and right no...
Is Any Company Safe from Subprime Related Lawsuits? - (www.ml-implode.com)
California Under Schwarzenegger Underperforms Davis Debt Burden - (www.bloomberg.com) As the most populous U.S. state, with a gross domestic product that's No. 8 in the world, California is so strapped for cash that it must consider a short-term, $10 billion loan to cover its bills. The widening deficit means the financing may be about 0.85 percentage point more expensive than five years ago, when Davis lost his job over a budget gap twice as large as the $17 billion deficit the state now faces. That's an added $8.5 million on every $1 billion borrowed.

Consumers fail to save despite the gloom - (www.ft.com)
Subprime, Alt-A Bonds to Extend Drop as Banks Retreat - (www.bloomberg.com)
Homeowners Fall Further Behind on Mortgage Payments, Group Says - (www.bloomberg.com)
Engineering the Housing Bubble Through Monthly Payments - (mrmortgage.ml-implode.com)
Lenders create a bankruptcy monster - (articles.moneycentral.msn.com)
Crash not be an altogether bad thing - (www.atimes.com)
Lehman Selling Archstone - (patrick.net)
Second-Largest New England City Seeks Foreclosure Moratorium - (www.ml-implode.com)
Is Oil Having an Impact on Housing? Taking a Look at Los Angeles County - (www.ml-implode.com)
Mr Mortgage: Engineering the Housing Bubble Through Monthly Payments - (www.ml-implode.com)
Who owns my mortgage? - (msnbc.msn.com)
You ain't seen nothing yet - (www.informationclearinghouse.info)
Gloom and Doom? Nah; Just for the U.S. - (online.barrons.com)
One bullish American economist amid growling bears - (www.telegraph.co.uk)
Is Oil Impacting Housing? Look at Los Angeles County - (www.mybudget360.com)
Will the USA Invade Canada For Its Oil? - (www.sandersresearch.com)
Economist describes why inflation hits harder now - (www.marketwatch.com)

Hoarding Nations Drive Food Costs Ever Higher - (www.nytimes.com)
One Rebate Isn’t Enough - (www.nytimes.com) , Shiller
World needs tough monetary policy to tackle inflation - (www.reuters.com)
Northeast braces for home heating oil increases - (www.usatoday.com)

Banks seek market-based pricing scheme - (www.ft.com)
MBIA Has Sufficient Assets to Meet Collateral Call - (www.bloomberg.com)
Legg Mason Support for Money Funds to Cut Earnings by 64 Cents - (www.bloomberg.com)
Businesses Scramble To Offset Rising Cost Of Transportation - (online.wsj.com)
Small US banks feel the pinch - (www.ft.com)

European Prices Rise More Than Forecast as Oil Surges - (www.bloomberg.com)
China Stocks Fall; Benchmark Index Completes Worst Month Ever - (www.bloomberg.com)
Eurozone inflation jumps to 4% - (www.ft.com)

Monday June 30 Housing and Economic stories

Top Stories:
Desperate Housewife - 42 yr old single mom combining offer for her home with shot of marrying her - (www.foxnews.com) - Single Mom Selling Home and Self Online. Deven Trabosh poses at her home in West Palm Beach, Fla. Trabosh listed the home -- and her love-- on Craigslist.

Bank of America's Parking Meter Play - (globaleconomicanalysis.blogspot.com) - As B of A stock continues to fall apart since announcing the acquisition of Countrywide, they are resorting to new cash raising tricks. Reader Gary used his Bank of America credit card to pay $2 on a parking meter in Washington, DC. Bank of America treated it as a cash advance and slapped him with a $10 fee, as well as a higher APR. When Gary called to complain, he learned that it wasn't an error: Bank of America has started treating payments to parking meters as cash advances and may even treat all payments to government entities as cash advances. In the meantime, please remember that any cash or pseudo cash transactions might get you whacked for $10 or higher, plus interest.

- Cash Transactions
- Cash back at grocery stores or service stations on credit card purchases.
- Buying chips at a casino.
- Parking meters.
- Cash Advances.

If you are doing any of those things... Stop now. Banks are so greedy, and/or so desperate that not only are they charging ridiculous interest rates, they are willing to ding you with a $10 fee on a $2 transaction.

The Real Estate Nightmare I Found In Las Vegas - (www.ml-implode.com) - The Indy Mac performing loan sale that was reported to have been done at about 60% of asking price has fallen apart. Most of the bids at the 60% level were withdrawn after further due diligence. The actual prices the stuff went for is between 20% and 45%. By the way Indy Mac had current appraisals supporting their asking price. The Wall Street Wizards are proving to be particularly inept at working out real estate problems. Essentially, they don’t know anything about operating real estate. On top of that, many of the banks don’t have expertise so there seem to be a lot of bad decisions going down (much more about this later). Things are going downhill so fast that deals that were struck 3 months ago need to be restructured.
Congress makes same mistake: lending assuming prices will go up - (www.csmonitor.com) Congress hopes to pass a bill soon that aims to rescue enough at-risk homeowners to put a price floor under a collapsing housing market. In theory, everyone benefits. In practice, well, the rescue plan itself might end up needing a rescue, at taxpayers' expense. While those points may well be grounds for federal action, the bill that is likely to pass could end up committing the same mistake careless lenders and borrowers did in inflating the housing bubble: It assumes prices will soon rise and that the new government-backed loans to be negotiated in coming months won't go belly up. The bill, in other words, sets up Uncle Sam to try and catch a falling dagger. The heart of the measure would allow the Federal Housing Administration to insure up to $300 billion in new loans for at-risk borrowers, but only if lenders take a hit by volunteering to issue a new loan at 15 percent below the appraised value of the borrowers' homes. Sure, borrowers would need to meet strict criteria and show they have the income and credit record to accept the new, lower-interest mortgages. And they must actually be living in the home, which shoos away many speculators. (Studies show a majority of the foreclosures so far involved financial misrepresentations by the borrower.)
CEPR's Dean Baker - "It would be the height of foolishness to create a house price support program to try to sustain the bubble" - (www.ml-implode.com) " CEPR's Dean Baker - "It would be the height of foolishness to create a house price support program to try to sustain the bubble" "
Dow Jones: Worst June Since Depression - (www.bloomberg.com) U.S. stocks tumbled, sending the Dow Jones Industrial Average to its worst June since the Great Depression, as record oil prices, credit-market writedowns and a slowing economy threatened to extend a yearlong profit slump. General Motors Corp., the largest U.S. automaker, plunged the most in three years as Goldman Sachs Group Inc. advised selling the stock and crude rose by $5 a barrel. Citigroup Inc. led the KBW Bank Index to an almost 10-year low as Goldman said the lender may report an $8.9 billion second-quarter charge and cut its dividend. Research In Motion Ltd., maker of the BlackBerry, posted its biggest drop since 2001 on concern competition with Apple Inc.'s iPhone is reducing earnings.
Lawmakers' zeal versus speculators could backfire - (www.reuters.com) U.S. Congress is suddenly determined to bring rampant trading under control. But rather than looking at excess consumption and demand, Congress is entering the murky waters of trying to control soaring prices, mulling bills that could well backfire and drive funds to less transparent but more accommodative bourses offshore. In just one of a slew of bills, the House of Representatives overwhelmingly passed largely symbolic legislation on Thursday ordering regulators to "curb immediately" excessive speculation in commodity markets.
Global markets reel after first-half carnage - (http://www.ft.com/) Global equities were heading for their worst first-half performance in 26 years after a week in which oil surged to a record and there were renewed worries about the health of the financial system and ­global growth - 22:26
Credit-Card Debt Snaring More High-Income People - (www.cnbc.com)
Fed Worried About Its Own Risk During Bear Rescue - (www.cnbc.com)
As Bill Evolves, Mortgage Debt Is Snowballing - (www.nytimes.com) Congress’s rescue package for homeowners may only be able to touch a fraction of those in trouble, analysts say.
Public service work can wipe out student loans - (www.latimes.com) A new law will make it possible for student debt to be forgiven for people who choose public service jobs. >>
Senators warn Fed, SEC to halt expansion of oversight duties - (www.latimes.com) Federal Reserve Chairman Ben S. Bernanke and Securities and Exchange Commission Chairman Christopher Cox were warned by two top senators not to proceed with a plan to take on more oversight of Wall Street until they consult with Congress.
Cramer: GM Should File for Bankruptcy - (www.thestreet.com)

Other Stories:

Merrill weighs sale of stakes worth $15bn - (www.ft.com) Bloomberg, BlackRock holdings under review
Representatives of Financial Irresponsibility? - (baglady.dreamhosters.com)
Open Letter to Borrowers Waiting for Bailout - (www.homeguide123.com)
Countrywide's Giant Fall - (media.sacbee.com)
Wachovia To Dump Loans - (www.charlotteobserver.com)
Deleveraging will transform banking industry - (www.iht.com)
Rates on 30-year mortgages at 9-month high - (www.contracostatimes.com)
Builders Battling Foreclosures Of Own Construction - (money.cnn.com)
Will Housing Bottom in 2010 or 2012? - (www.seekingalpha.com)
Dow Falls In Worst June Since Depression - (www.bloomberg.com)
Are equities entering Great Crash territory? - (www.independent.co.uk)
Inflation becomes Fed's prime focus - (www.signonsandiego.com)
Slump knocks 40% of price of house in four months - (www.thisislondon.co.uk)
Delinquencies Rise at Fannie, Freddie; Taxpayers On Hook - (www.washingtonpost.com)
FHAs Risky Zero Down Payment Loan Program - (www.seekingalpha.com)
It's crazy to buy in Australia at current prices - (www.bubblepedia.net.au)
Family shocked when roofers find skull in attic - (www.sltrib.com)
Local house for sale includes wife - (www.wptv.com)
Comments about that wife - (forums.fark.com)

The Crack Up Boom, Part III - Balance Sheet Destruction and Repair! - (www.ml-implode.com) - ``As you can see, this part of the collapse is still in its beginnings as option arms (also known as EXPLODING arms, as when the...
What do Fleck, Fortis, RBS and Barclays Have in Common? - (www.ml-implode.com) - "What they have in common is all have recently predicted a massive unraveling of the US financial 'system' within a few weeks. I...
Developers, investors take Estate to court - (www.ml-implode.com) - "Southern California plaintiffs push for Chapter 11 bankruptcy for Estate Financial"
Risk is still risk, no matter who manages it - (www.ml-implode.com) - "Citi has made huge pricing changes to their government products which make these supposed “affordabilty” products much more exp...
Condo Association Seeks Foreclosure On Wells Fargo - (www.ml-implode.com) - "In an interesting twist to the massive wave of foreclosures in residential mortgages, a Condo Association Seeks Foreclosure On ...
Barclays warns of a financial storm as Federal Reserve's credibility crumbles - (www.ml-implode.com)
Agency Mortgage-Bond Yield Spreads Rise to Highest Since March - (www.ml-implode.com)
Vanguard Update: CEO Joe and Frank Guilty as Charged? - (www.ml-implode.com)
Ginnie Mae Ramps Up Securitization of Reverse Mortgages - (www.ml-implode.com)
Housing Needs to Fall 30% From Peak to Maintain Affordability - (www.ml-implode.com)
1099C: Is Foreclosure Or Short Sale Better? - (www.ml-implode.com)
Bloggers’ Influence on Consumers Continues to Rise - (www.ml-implode.com)
Fish Kill Watch - (www.ml-implode.com)
Homebuilders Get Demolished - (www.ml-implode.com)
Financial Experts Reassure Nervous Investors - (www.ml-implode.com)

In Bear Bailout, Fed Says It Tried to Avert Contagion - (www.ap.com)
Inflation on rise in Europe and US - (www.ft.com)
Fears Mount Over Threats To Economy - (online.wsj.com)
Kohn hints at call to loosen pegs to the dollar - (www.ft.com)

Report: OPEC president sees oil at $170 this year - (www.marketwatch.com)
As Bill Evolves, Mortgage Debt Is Snowballing - (www.nytimes.com)
Dow Hits Bear-Market Territory, Signaling Woe for Economy - (online.wsj.com)
VIX 26% Below 2008 High Points to U.S. Stocks Drop - (www.bloomberg.com)
World Stocks Sag as Oil Price Surges - (www.nytimes.com)
Gloom Descends Over Wall Street Again - (www.nytimes.com)
Value of M&A falls sharply as buy-out boom ends - (www.ft.com)
Homes Less Affordable as Prices Fall, Rates Rise, Zillow Says - (www.bloomberg.com)

Travelers Facing Deep Flight Cuts by Summer’s End - (www.nytimes.com)
Merrill weighs sale of stakes worth $15bn - (www.ft.com)
AIG Poised to Absorb $5 Billion Losses From Securities-Lending - (www.bloomberg.com)
U.S. carmakers are flat-out hurting - (www.latimes.com)
Countrywide CEO Helped Many Get Loans - (online.wsj.com)
Lennar 2Q loss narrows; sees worsening conditions - (www.chicagotribune.com)
Merrill may take $5.4 bln in Q2 writeoffs: Lehman - (www.reuters.com)
Suit Claims UBS Misled Investors - (www.nytimes.com)
Brunswick to cut plants, jobs - (www.chicagotribune.com)
Construction materials costs go through roof - (www.dallasnews.com)
American Airlines to reduce management, support ranks 8% - (www.dallasnews.com)
Analyst sees 10 million fewer cars by 2012 - (www.signonsandiego.com)
Renovators in Limbo - (online.wsj.com)
Fishing industry reeling from leaping fuel prices - (www.chicagotribune.com)

Hot and bothered - (www.economist.com)
Europe Business, Consumer Confidence Falls; Retail Sales Slump - (www.bloomberg.com)
Japan Spending, Inflation Data Fuel Recession Concern - (www.bloomberg.com)
India Inflation Accelerates to 13-Year High of 11.42% - (www.bloomberg.com)
China's forex reserves hit 1.8 trillion dollars: report - (news.yahoo.com/s/afp)
Japan's core inflation surges to decade high - (news.yahoo.com/s/afp)
E-Mail That Investors Might Like to Read - (www.nytimes.com)
Easy Target, but Not the Right One - (www.nytimes.com)

Friday June 27 Housing and Economic stories

Top Stories:

Fears grow of new stage in credit crisis - (www.ft.com) Progressive Moulded Products has become the latest motor parts company to file for Chapter 11 bankruptcy protection, inflicting losses on its owner, private equity firm Thomas H. Lee Partners and lenders led by Goldman Sachs. Thomas H. Lee is expected to see its $200m investment go to zero while Goldman, which provided a slug of junior, mezzanine debt is also likely to lose everything. The company has about $550m debt.
US commerce secretary upbeat on economy - (www.ft.com) - The US economy emerged from the first quarter in better shape than the initial data suggested and remains on a positive growth trajectory, Carlos Gutierrez, commerce secretary, has told the Financial Times. “The composition of growth looks healthier than what we showed the first time when inventories were doing most if not all of the growth,” said Mr Gutierrez, the former chief executive of Kellogg. “I find it very interesting and very impressive that the economy grew 1 per cent in spite of all the dire predictions we had at the time,” he said. Mr Gutierrez said consumer spending was on a more resilient trajectory than many analysts thought even before households received tax rebate cheques. Good news (Sarcasm intended). It is great to be the owner of the data, free for you to manipulate.
Tavakoli On Ignoring Ratings - (watch.bnn.ca) Must watch video. Stay Away From Bond Insurance & Please Ignore Ratings Agencies: BNN discusses with Janet Tavakoli, president, Tavakoli Structured Finance. Very good discussion on additional $125B in product that still needs to be written down.
Fed may ease rules on bank buy-outs - (www.ft.com) The Federal Reserve is considering making it easier for private equity firms to take large stakes in banks, without being subject to existing restrictions and commitments, as part of efforts to encourage capital-raising in the troubled US financial system.
Reverse: Condo Association foreclosing on Wells Fargo - (www.dailybusinessreview.com) Yes, the tables have been turned!!! The Residences at the Bath Club Condominium Association in Miami Beach is pressing a foreclosure action against Wells Fargo as trustee for an investment pool that owns the mortgage on a unit that isn’t paying its maintenance fees. The lender owes $32,252 in late maintenance fees on the unit it took back more than a year ago
Update: IndyMac slides below $1.00 -- 50/50 chance? - (www.ml-implode.com) - IndyMac shares are finally down to a mid-day low of $0.94 at one point. One of our sources states, "Pretty much we were told informally that if we did not get a capital infusion we would not make it and that we had a 50/50 chance of obtaining said infusion.
Chrysler woes spark bankruptcy rumour - (www.theaustralian.new.com.au) Speculation Chrysler might seek bankruptcy protection has served to further deflate investor confidence in the company's debt. Some loans are trading as low as US50 cents on the dollar. A Chrysler spokesman said the company has ample liquidity and that a bankruptcy filing is "not on the table."
Chrysler denies bankruptcy talk, welcomes Iacocca - (www.businessweek.com)
German shares close markedly lower on Chrysler bankruptcy talk UPDATE - (www.forbes.com)
Low-rated borrowers getting squeezed out of debt markets - (www.financialweek.com) – And this is a problem??? This was the same reasoning that allowed 70% home-ownership. There is a reason people and companies should not get loans. They have proven they have no ability to repay these loans.
Root cause of bubble disaster: Federal Reserve - (www.sfgate.com) – BINGO. Time to try and jail Alan Greenspan for hiding the truth from the American people and creating a large disaster. Federal Reserve policy lies at the heart of the crisis. In response to a high-tech bust, the Fed lowered interest rates to stimulate a housing sector that already enjoyed boom conditions. That mismatch of diagnosis and treatment built the foundation of all that followed, including the Fed's current difficulty in resuscitating residential real estate.
House of Cards - (www.lacitybeat.com) - While many eyes are focusing on the housing meltdown and its hugely negative effect on an economy clearly moving into recession, few are paying attention to the next bubble expected to burst: credit cards. Combined with the subprime losses, such a credit card nightmare has the potential, experts say, of bringing down the entire financial system and global economy. You and your credit card have become key players in the highly unstable financial crunch. Mortgage lender cupidity and bank credit card greed wedded to financial institution deregulation supported by both political parties, have been made manifestly worse by Bush administration support-the-rich policies. It has brought us to a brink not seen since just before the Great Depression
Vital Part of Housing Bill Is Brainchild of Banks - (www.washingtonpost.com) A key provision of the housing bill now awaiting action in the Senate -- and widely touted as offering a lifeline to distressed homeowners -- was initially suggested to Congress by lobbyists for major banks facing their own huge losses from the subprime mortgage crisis, according to congressional staff members and bank officials. Credit Suisse, a large investment bank heavily invested in mortgage-backed securities, proposed allowing hundreds of thousands of homeowners to refinance their mortgages with lower-cost government-insured loans, relieving financial institutions of the troubled debt.
After the bank proposed this to Congress in January, it became known as the "Credit Suisse plan" among congressional staffers and lobbyists. It later formed the basis of housing provisions in both the House and Senate.
Bank of America, which is acquiring Countrywide Financial, the country's largest mortgage lender, followed with a similar and more detailed proposal, principal negotiators on the legislation said. In approaching congressional aides, the lobbyists suggested that banks take less than full payment for the distressed loans on their books. But the measures would allow financial institutions to get cash out of foreclosed properties that would otherwise sit on their books as dead weight.


Other Stories:

U.S. Stocks Tumble, Sending Dow to Worst June Since Depression - (www.bloomberg.com)
Oil Surges Above $140 to Record as Libya Warns of Output Cut - (www.bloomberg.com)
Shares hit as fears grow over financial turmoil - (www.ft.com) - Investors’ fears of a prolonged period of financial uncertainty deepen as a raft of downgrades for blue-chip companies sends US and European shares into a tailspin and oil prices jump above $140 a barrel for the first time - 00:33
High Medicare Costs, Courtesy of Congress - (www.nytimes.com) On Wal-Mart’s Web site, you can buy a walker for $59.92. It is called the Carex Explorer, and it’s a typical walker: a few feet high, with four metal poles extending to the ground. The Explorer is one of the walkers covered by Medicare. But Medicare and its beneficiaries aren’t paying $59.92 for the Explorer or any similar walker. In fact, they’re not paying anything close to it. They are paying about $110. For years, Congress has set the price for walkers and various medical equipment, and it has consistently set them well above the market rate, effectively handing out a few hundred million dollars of corporate welfare every year to the equipment makers.
Fitch Cuts Issuer-Default Ratings Of GM, Chrysler - (online.wsj.com)
Citigroup May Write Down $8.9 Billion, Goldman Says - (www.bloomberg.com)
Delinquencies Rise at Fannie Mae, Freddie Mac - (www.washingtonpost.com)
Buffett Says He's Concerned About U.S. Stagflation - (www.bloomberg.com)
Emptying the attic to pay for Fed's deliberate inflation - (articles.moneycentral.msn.com)
House inflation good, but energy and food inflation bad? - (www.huffingtonpost.com)
Housing Bailout Bill Created By Banks To Profit Banks - (www.washingtonpost.com)
Approval Is Near for Law to Stick Taxpayers with Bill for Bad Mortgages - (www.nytimes.com)
Marshals Make Millions Serving Foreclosure Papers - (www.ml-implode.com) Last year, John T. Fiorillo earned almost twice as much as University of Connecticut women’s basketball coach Geno Auriemma and more than 10 times the salary of Gov. M. Jodi Rell. The Bristol resident grossed more than $2 million, but not by coaching a team to the Final Four or running state government. Fiorillo is a self-employed state marshal who serves legal papers to people about to lose their homes through foreclosure. Fiorillo’s bounty can be attributed to his relationship with two law firms — Hunt Leibert Jacobson and Reiner, Reiner and Bendett — that have a virtual monopoly on the burgeoning foreclosure market.

Indymac Teetering Above One Dollar a Share - (www.ml-implode.com) - Indymac Bancorp saw its shares fall nearly 20 percent over the last week, and the company now faces the strong possibility of trading below $1"
BofA to cut 7,500 jobs after Countrywide deal - (www.ml-implode.com) - "Bank of America said Thursday it will cut about 7,500 jobs after it closes its acquisition of mortgage lender Countrywide Finan...
As Freddie Pushes Pedal to the Metal, Fannie Taps the Brakes on Mortgage Investments - (www.ml-implode.com) - In the midst of a historic housing crisis and the green light from regulators to ramp up their mortgage portfolios, long-standing second fiddle Freddie Mac has been seen regularly blowing by its historically larger GSE cousin as of late, at least in terms of its mortgage investment activity
Foreclosure Resales Boost Existing Home Sales - (www.ml-implode.com)
Mortgage Rates, Home Sales Rise Mildly - (www.ml-implode.com)
American Express Says Late Card Payments Increasing - (www.bloomberg.com)
Small Banks: How Fragile Are They? - (www.businessweek.com)
The Rental Non-Bubble - (www.cbsnews.com)
Beat the crunch: Why it can pay to rent - (www.independent.co.uk)
Investors wise to ignore real estate industry shills - (www.seekingalpha.com)
House-price declines eat baby boomer nest eggs - (www.marketwatch.com)
U.S. housing going, going... - (www.theglobeandmail.com)
Lennar Reports Net Loss as Sales of New Homes Slump - (www.ml-implode.com)
Exisiting Home Sales Fall 15.9% - (www.ml-implode.com)
Condos and Lenders and Foreclosures- Oh What A Tangled Web - (www.ml-implode.com)
Download Washington's Countrywide Indictment - (www.ml-implode.com)
Peak Credit - (www.ml-implode.com)
At Countrywide's End, an Emotional CEO - (www.ml-implode.com)
California Median Home Price Falls at Record Pace - (www.ml-implode.com)

Senators Are Becoming More Affordable - (thelastgoodidea.blogspot.com)
Bank of America's Countrywide Purchase to be Paid for by Taxpayers - (www.bloomberg.com)
Illinois to Sue Countrywide - (www.nytimes.com)
CA attorney general sues Countrywide - (www.sfgate.com)

Gold Surges Most in Two Years as Fed Fuels Inflation Concerns - (www.bloomberg.com)
Yen, Swiss Franc Rise as Stock Slump Reduces High-Yield Demand - (www.bloomberg.com)
Treasuries Gain as Stocks Tumble, Credit Losses Seen Worsening - (www.bloomberg.com)
Economists worry about consumer spending for holiday season - (www.chicagotribune.com)
U.S. Initial Jobless Claims Unchanged at 384,000 Last Week - (www.bloomberg.com)
Fed Shifts Its Concern to Inflation - (www.nytimes.com)
Buffett says inflation exploding - (money.cnn.com)
More Americans Delay Health Care - (online.wsj.com)
Fed Sounds Inflation Alarm, Moves Toward Rate Rise - (www.bloomberg.com)
Worst to Come as Credit Crisis Chokes Growth, Nucor CEO Says - (www.bloomberg.com)
American Express Slump Signals Economic Strain - (www.washingtonpost.com)
75% blame Bush's policies for deteriorating economy - (www.latimes.com)
Fed Holds Rate Steady As Inflation Worries Rise - (online.wsj.com)
New faces join ranks of nation's homeless - (www.usatoday.com)

Fed comments put dollar under strain - (www.ft.com)
Wall Street Sold Auction-Rate to Investors as It Warned Issuers - (www.bloomberg.com)
Fears grow of new stage in credit crisis - (www.ft.com)
Value of M&A tumbles as buy-out boom ends - (www.ft.com)

Bank of America to Cut 7,500 Jobs on Countrywide Deal - (www.bloomberg.com)
American Express sees worsening credit conditions - (www.chicagotribune.com)
Investors crush Georgia Gulf - (www.ajc.com)
More write-downs for Citi, Merrill, says analyst - (www.financialweek.com)
California Atty. Gen. Jerry Brown sues Countrywide - (www.latimes.com)
Oil costs force P&G to rethink its supply network - (www.ft.com)

Battle of the central bankers - (www.nypost.com)
Trichet reinforces expectation of ECB rate rise - (www.iht.com)
India's Property Boom Coming to an End, Lenders Say - (www.bloomberg.com)
Taiwan Raises Key Rate; Lifts Banks' Reserve Ratios - (www.bloomberg.com)
European Stocks, U.S. Futures Drop; Fortis, Oracle, BSkyB Fall - (www.bloomberg.com)

Thursday June 26 Housing and Economic stories

Top Stories:

Vital Part of Housing Bill Is Brainchild of Banks - (www.washingtonpost.com) A key provision of the housing bill now awaiting action in the Senate -- and widely touted as offering a lifeline to distressed homeowners -- was initially suggested to Congress by lobbyists for major banks facing their own huge losses from the subprime mortgage crisis, according to congressional staff members and bank officials. Credit Suisse, a large investment bank heavily invested in mortgage-backed securities, proposed allowing hundreds of thousands of homeowners to refinance their mortgages with lower-cost government-insured loans, relieving financial institutions of the troubled debt. After the bank proposed this to Congress in January, it became known as the "Credit Suisse plan" among congressional staffers and lobbyists. It later formed the basis of housing provisions in both the House and Senate.
Bank of America, which is acquiring Countrywide Financial, the country's largest mortgage lender, followed with a similar and more detailed proposal, principal negotiators on the legislation said. In approaching congressional aides, the lobbyists suggested that banks take less than full payment for the distressed loans on their books. But the measures would allow financial institutions to get cash out of foreclosed properties that would otherwise sit on their books as dead weight.
High Medicare Costs, Courtesy of Congress - (www.nytimes.com) On Wal-Mart’s Web site, you can buy a walker for $59.92. It is called the Carex Explorer, and it’s a typical walker: a few feet high, with four metal poles extending to the ground. The Explorer is one of the walkers covered by Medicare. But Medicare and its beneficiaries aren’t paying $59.92 for the Explorer or any similar walker. In fact, they’re not paying anything close to it. They are paying about $110. For years, Congress has set the price for walkers and various medical equipment, and it has consistently set them well above the market rate, effectively handing out a few hundred million dollars of corporate welfare every year to the equipment makers.
Calif. attorney general sues Countrywide Financial - (www.ml-implode.com) – First Illinois, now California. Funny how CA AG did not sue until days before the merger with BofA. When Countrywide was a CA corporation, CA was fine with all the lending practices. Now that they are ready to move HQ out to the East Coast, time to sue. "Countrywide Financial Corp. is accused of using misleading advertising and other unfair business practices to trick borrowers i...
Countrywide's Licenses Revoked By State of Washington - (www.ml-implode.com) - Gov. Chris Gregoire says the state is pulling the license of Countrywide Home Loans to write loans in Washington and that invest...
Illinois to Sue Countrywide, CEO Mozilo - (www.cnbc.com) The lawsuit is the first known case of a state authority charging Countrywide, the largest U.S. mortgage lender, for actions related to the housing crisis. It also comes on the same day the company's shareholders are expected to vote on its sale to Bank of America. The acquisition is expected to close on July 1.
Illinois attorney general says she'll sue Countrywide Financial - (www.latimes.com)
Chrysler Taps $2 Billion Line of Credit - (online.wsj.com) Chrysler LLC tapped a $2 billion credit line from its owners, Cerberus Capital Management LP and Daimler AG, to bolster the auto maker's liquidity amid a painful downturn in U.S. sales that is stretching its resources.
California Police Gone Wild: Charity carnival scrapped because of police fees – (www.insidebayarea.com/argus). First Vallejo police/fire department cause Vallejo to file for bankruptcy. Now Police departments are padding their pay by mandating police coverage (rather than private security) at town events. But a carnival fundraiser the group had planned to begin Thursday in Fremont has fizzled because of high police fees, organizers said. The carnival was set to start at the Hub shopping center, but league Executive Director Shirley Sisk said the hoped-for take of up to $30,000 through the weekend was offset by an expected $21,000 bill from Fremont police for security. Gorman said his understanding is that the police department wanted seven officers, two gang task force members and a dispatcher at the Hub event at time-and-a-half pay rather than private security that Butler typically hires at a fraction of the cost.
The Market Created the Money, Not the State - (www.brookesnews.com) – Of course, this conservative think-tank would never blame the Republican Admin or the Fed for creating this credit mess due to lowering interest rates to 1%.
Marshals Make Millions Serving Foreclosure Papers - (www.ml-implode.com) Last year, John T. Fiorillo earned almost twice as much as University of Connecticut women’s basketball coach Geno Auriemma and more than 10 times the salary of Gov. M. Jodi Rell. The Bristol resident grossed more than $2 million, but not by coaching a team to the Final Four or running state government. Fiorillo is a self-employed state marshal who serves legal papers to people about to lose their homes through foreclosure. Fiorillo’s bounty can be attributed to his relationship with two law firms — Hunt Leibert Jacobson and Reiner, Reiner and Bendett — that have a virtual monopoly on the burgeoning foreclosure market.
CIBC likely to take big Q3 writedown - (www.reuters.com)
GMAC's $60 Billion Deal Loses Confidence as Mortgages - (www.bloomberg.com)
Rebate checks diverted to pay $2B in debts - (www.usatoday.com) About $2 billion in economic stimulus rebate checks are being confiscated to pay overdue bills for child support, student loans and back taxes, the government says. So far, 1.8 million rebate checks have been intercepted by Treasury Department computers showing that individuals owe money to federal or state governments.


Other Stories:

Profits seen off more than 10 percent - (www.bloomberg.com)
Consumer confidence fell sharply in June - (www.latimes.com)
Chapman University forecasters say U.S. is in recession - (www.latimes.com)
Home Not-So-Sweet Home - (www.nytimes.com)
Communities suffer as foreclosure rate rises - (www.msnbc.msn.com)

Phoenix Commercial Real Estate Financier Files Bankruptcy - (www.ml-implode.com) - Mortgages Ltd. filed for Chapter 11 bankruptcy Monday night, under pressure from a borrower that earlier had filed a petition ...
$200 oil? - (www.ml-implode.com) - "If Israel bombs Iran, $200 oil is a distinct possibility. Both look more likely given recent developments."

You Might Want To Think Twice Before Gutting Your Preforeclosure - (www.ml-implode.com) - "We’ve heard tale after tale of bitter homeowners stripping their homes in foreclosure, prior to losing the home. Now they migh...
American Express Says Late Payments Rising Faster Than Expected - (www.ml-implode.com) - ``Business conditions continue to weaken in the U.S. and so far this month we have seen credit indicators deteriorate beyond our...
Mr Mortgage Update: Ultimate Fannie/Freddie ‘Con’ Job - (www.ml-implode.com) - Now, the big guns have come out to weigh in. Today, Bloomberg released a detailed story on just how little demand there is for t...
Mark to Misery in the cash equivalent fund biz - (www.ml-implode.com) - "A bond fund closed down yesterday and it brings up another interesting dilemma that few people if anyone wants to address, incl...
Case-Shiller home prices - (www.ml-implode.com)
Taxpayers Helping Bank Of America Finance Countrwide Deal - (www.ml-implode.com)
Mortgage Rates Continue to Set New 2008 Records, Applications Fall - (www.ml-implode.com)
Man with a Tan Needs a Plan - (www.ml-implode.com)
False Housing Turnaround Expectations - (www.ml-implode.com)
Senate ethics committee proposes Senators disclose their mortgage details, may now be investigating Dodd and Conrad - (www.ml-implode.com)
Countrywide shareholders set to vote on BofA takeover - (www.ml-implode.com)
Update: Vanguard operations illegal? - (www.ml-implode.com)
Politico Gets Mortgage Answers from Senators - (www.ml-implode.com)
Senate seen approving [BofA/CFC] rescue bill - (www.ml-implode.com)

Oil Declines After Supplies Rise for First Time in Six Weeks - (www.bloomberg.com)
Treasuries Decline; Fed May Shift Focus to Fighting Inflation - (www.bloomberg.com)
Gold Futures Decline on U.S. Inflation Outlook; Silver Steady - (www.bloomberg.com)
U.S. Stocks Advance Ahead of Fed; JPMorgan, Jabil Circuit Climb - (www.bloomberg.com)

Durable Goods Orders in U.S. Are Unchanged; Ex-Transportion Decline 0.9% - (www.bloomberg.com)
Consumer confidence fell sharply in June - (www.latimes.com)
U.S. Economy: Home Sales Fall, Durable Goods Orders Stagnate - (www.bloomberg.com)
Stagflation fears vexing for Bernanke - (www.chicagotribune.com)
Fed Vacancies Pose Challenge - (online.wsj.com)
Economist forecasts softer landing - (www.ft.com)
Rethinking the Country Life as Energy Costs Rise - (www.nytimes.com)
Chapman University forecasters say U.S. is in recession - (www.latimes.com)
Bernanke May Halt Rate Cuts, Shift Focus to Inflation Concern - (www.bloomberg.com)
Whatever Happened To Inflation Targets? - (www.forbes.com)
Approval Is Near for Bill to Help U.S. Homeowners - (www.nytimes.com)
Hedge Funds Fear Backlash From Congress - (online.wsj.com)
Speculating on why oil, gasoline prices are soaring - (www.latimes.com)
Short Interest Increases on the Nasdaq - (online.wsj.com)

Oil May Cost Jet Makers Orders - (online.wsj.com)
Illinois to Sue Countrywide - (www.nytimes.com)
Barclays to Raise $8.9 Billion to Shore Up Capital - (www.bloomberg.com)
Pump pain hits independents - (www.signonsandiego.com)
Lowe's Weighs Increases - (online.wsj.com)
Eurozone growth fears as inflation bites - (www.ft.com)
Trichet: ECB determined to combat inflation - (www.marketwatch.com)
New Zealand Consumer Confidence Falls to 17-Year Low - (www.bloomberg.com)