Monday June 16 Housing and Economic stories

Top Stories:

The Specter of Default Haunts Argentina (Again) - (www.ft.com) - Argentina's debt levels are now higher than they were when it crashed into the biggest sovereign debt default in history in 2001, and a worsening crisis of confidence in the government has brought the spectre of a new default closer, a report to be published next week says
Fed talks tough -- and hopes that's all it has to do - (www.latimes.com)
WaMu's Atrocious Mortgage Servicing - (www.portfolio.com) - "You know that if you're running into problems with your mortgage you should contact your servicer, right? Well, best hope your servicer isn't WaMu.” WaMu stock has gone from about $40 to $6.50 in the past 2 years.
Foreclosures Rise 48% in May - (www.bloomberg.com) - Banks repossessed twice as many homes in May and foreclosure filings rose 48 percent from a year ago as falling house prices trapped borrowers in mortgages they couldn't afford, RealtyTrac Inc. said in a report today. One in every 483 U.S. households either lost the home to foreclosure, received a default notice or was warned of a pending auction, RealtyTrac said. That was the highest rate since the Irvine, California-based company began reporting in January 2005 and the 29th consecutive month of year-over-year increases. Nevada, California and Arizona posted the highest rates in the U.S. and New Jersey entered the top 10. ``It's definitely a different kind of market than what we got used to a couple years ago,'' said Devin Reiss, owner of Realty 500 Reiss Corp. in Las Vegas. ``We used to sell homes in a day. Now 50 percent of our sales are foreclosures.''
Oh No! Here come the politicians, meddling in markets they don't understand: - (www.nytimes.com) – More on Lieberman and Carl Levin not addressing the cause of the rise in commodity markets, just trying to blame others and regulate. Just this week, Senator Joseph I. Lieberman, the Connecticut independent, said he was working on a proposal to ban large institutional investors from the commodity markets entirely. In Washington, financial speculators have fat targets on their backs. They are being blamed for high gas prices, soaring grocery bills and volatile commodity markets, and lawmakers are lashing out at market regulators for not cracking down on them more vigorously.
The Lieberman plan: "Let them eat dollars." - (www.ml-implode.com)
Dodd and Conrad In Elite "Friends of Mozilo" Club, Too - (www.ml-implode.com) - Those VIPs who received loans through the program that waived points, lender fees and company borrowing rules included Senators Chris Dodd and Kent Conrad, former HUD Secretary Alphonso Jackson, former HHS Secretary Donna Shalala and former UN ambassador Richard Holbrooke, according to Conde Nast Portfolio magazine. Senator Dodd reportedly received two loans in 2003 through the program, borrowing $506,000 and $275,042 to refinance homes in Washington and East Haddam, Connecticut. Countrywide waived $2,000 on the first loan and $700 on the second, according to Portfolio. Since 1997, Countrywide has contributed $21,000 to Dodd's campaigns. During his presidential campaign last year, Dodd introduced legislation to ban practices reportedly used by loan officers at Countrywide _ charging prepayment penalties and steering buyers to costly loans. The picture of where Countrywide's privileged public status comes from is getting clearer:
When Conrad refinanced an eight-unit apartment building in Bismarck, North Dakota, which violated the company's policy of not providing loans for larger buildings, Mozilo told a staffer in an email to "make an exception due to the fact that the borrower is a senator," according to Portfolio.
They all claim to be unknowing, of course. Not so sure I believe that.
NAR: 4% Quarterly Gain is (Oops) Actually a 30% Loss - (www.ml-implode.com) - TBP has long complained about the spinmeisters at the National Association of Realtors (NAR) for their pollyannish views and their continual bottom calling.
It turns out that the spin from the NAR isn't the only thing that is suspect. It seems their data collection and basic math skills are questionable, also.
Hong Kong Shares Slide - End Week Down 7.4% - (uk.reuters.com) - The benchmark index lost 7.4 percent in the shortened trading week, mainly in reaction to harsher-than-expected credit tightening measures by Beijing, which raised the amount that lenders must hold in reserve by a full percentage point.


Other Stories:

Austin Housing Market: So This Is Better? - (www. housingdoom.com) - There was a funny article in yesterday’s Austin Statesman trying to put a positive spin about local foreclosures: [Although I don’t think it was meant to be funny]. Foreclosures in the four-county Austin metro area are up 42 percent from a year ago, according to the latest figures from Foreclosure Listing Service, an Addison company that tracks foreclosures. Postings for the July 1 auction show a 39 percent jump in Travis County, 48 percent in Williamson, 27 percent in Hays and 61 percent in Bastrop. OK, that part wasn’t so funny. Here’s where I started laughing: Central Texas is in better shape than many other areas of the country, where foreclosures have been sharply rising for months and real estate sales are in a deep slump. But George Roddy, president of Foreclosure Listing Service, said local postings "are at the high end of the foreclosure cycle." The Austin area has less exposure to subprime mortgages, which are behind high foreclosure rates in other cities. Another factor is adjustable-rate loans that are resetting to higher rates, resulting in bigger mortgage payments that homeowners can’t handle. We were just told sales were down 47%, then told that Austin doesn’t have sharply rising foreclosures like other areas? The article doesn’t report the sales numbers that show Austin is not in a "deep slump", but here are May’s figures courtesy the Austin Real Estate Scene: The Month in Review for May 2008 (compared to May 2007): - New listings were up 26%. Pendings were down 67%. Solds Units decreased by 28%. Maybe down 28% is just "slump" instead of "deep slump".
Maestro of Major Scam on the Lam? - (www.ml-implode.com) - The former Plymouth resident and his companies remain the subject of a federal investigation, according to Evans and several buyers. If allegations prove true, it would be the largest mortgage fraud scheme to surface in Minnesota. So, where is Michael Prieskorn?
Stage Two of the Mortgage Collapse - (www.ml-implode.com) - The next stage of the mortgage debacle is only starting to rear its ugly head and all early signs tell us that this is going to be even worse than the subprime mortgage collapse. We need to remember that the subprime mortgage debacle was only one facet of a global debt boom that has taken a stranglehold over the industrialized world. The United Kingdom is now starting to realize that even they are going to face a housing meltdown. Yet there is still a perception out there from pundits and those in the media that this housing meltdown was caused purely by subprime loans, which could not be anything further from the truth.
Short-Sellers, The Ackman Approach - (www.ml-implode.com) - Over at TBP, a video of "The Ackman Approach" to shortselling. Essentially, shortsellers serve an incredibly useful purpose by ...
Condo-mania In Downtown Austin - (www.ml-implode.com)
In came the waves: "Where home prices could fall another 50%" - (www.ml-implode.com)
Pay Option ARMs Imploding…Right on Schedule - (www.ml-implode.com)
Wachovia Hits 16-Yr Low - (www.ml-implode.com) - Wachovia Corp shares fell as much as 10.2 percent to their lowest level since 1992
How to forecast house price direction - (www.fidelitypacificrealestate.com)
Debt Slavery Emancipation - (jonnyob.blogspot.com)
Stagflation is back, but grimmer - (www.marketwatch.com)
Fannie, Freddie STILL putting taxpayers on hood for no-cash mortgages - (www.nashuatelegraph.com)
FHA In Jeopardy? - (www.nuwireinvestor.com)
Update: Downey's Non-Performing Assets Top 14% - (www.ml-implode.com)
30-year mortgage rates at eight-month high - (www.ml-implode.com)
Countrywide eliminating Non-Conforming Fast & Easy stated-income loans today - (www.ml-implode.com)

FHA Faces $4.6 Billion in Losses - (www.nytimes.com)
How HUD Mortgage Policy Fed The Crisis - (www.washingtonpost.com)
CPI Up Big Due to Surging Food, Energy - (www.nytimes.com)Bad Tomato Outbreak Hits More States - (www.marketwatch.com)The Great Seduction - (www.nytimes.com)
Global Junk Bond Default Rate Doubled in Five Months - (www.researchrecap.com)
US house prices may dip 30 pct, junk bonds weaken - (www.reuters.com)
Better off renting in Silicon Valley - (www.techcrunch.com)
Anatomy of a Bank Failure (corrected link) - (www.charleston.net)
Pending Houses Sales are Misleading Tease - (Mike Morgan at www.realestateandhousing2.blogspot.com)

G8 frets over commodity shock - (www.reuters.com)
Greenspan sees Fed getting tough on inflation - (www.reuters.com)
Surging Oil and Food Prices Threaten the World Economy, Finance Ministers Warn - (www.nytimes.com)
Two Bubbles, Two Paths - (www.nytimes.com)
U.S. Michigan Consumer Sentiment Index Drops to 56.7 - (www.bloomberg.com)
US foreclosure filings surge 48 percent in May - (www.ap.com)
U.S. Consumer Prices Rise 0.6% as Fuel Costs Soared - (www.bloomberg.com)
Workers are sleepwalking towards an impoverished old age - (www.cfo.com)
Energy prices not helping farming losses from wind, drought - (www.lubbockonline.com)
AZ foreclosure filings surge 48 percent in May - (www.azcentral.com)

Viewed with suspicion, short sellers play important role - (www.ft.com)
Midwest Floods Push Grain Prices Higher, Weigh on Ethanol - (online.wsj.com)
Goldman, Banks to Sell `Big Brother' Loans at a 27.5% Discount - (www.bloomberg.com)
S&P, Following Moody's, Finds Errors in CPDO Ratings Models - (www.bloomberg.com)
S&P says it's uncovered a glitch in its CPDO ratings, too - (www.financialweek.com)
A Bull Market Sees the Worst in Speculators - (www.nytimes.com)
As Banks Shun Loans, Hedge Funds Move In - (www.nytimes.com)
SEC, Justice probing whether AIG plumped up value of swaps: Report - (www.financialweek.com)
Mortgage rates up on inflation fears - (www.newsday.com)

Countrywide's 'VIP' loans to Washington insiders raise questions - (www.latimes.com)
Stung by Soaring Transport Costs, Factories Bring Jobs Home Again - (online.wsj.com)
More airlines impose fee on first checked bag - (www.latimes.com)
Exxon getting out of retail gas business - (www.signonsandiego.com)
Rising oil prices squeeze homebuilding sector - (www.signonsandiego.com)
Time Warner reportedly pulls bid for Weather Channel - (www.ajc.com)
High fuel prices, sluggish economy ease trucker shortage - (www.chicagotribune.com)

Plan Would Lift Saudi Oil Output to Highest Ever - (www.nytimes.com)
Eurozone inflation fears mount - (www.ft.com)
China clearly overtakes U.S. as leading emitter of climate-warming gases - (www.iht.com)
European Banks May Need $110 Billion in Capital, Says Merrill - (www.bloomberg.com)
India's inflation jumps to 7-year high - (www.ap.com)
UK retail market 'worst since early 1990s' - (www.ft.com)
China `Not Smart' to Invest in U.S. Bonds, Cheng Says - (www.bloomberg.com)
Finnish inflation hits 8-year high - (www.ap.com)

Approve This Deal, or Else - (www.nytimes.com)
The Bubble - (www.washingtonpost.com)
Good Times Left Lehman Unprepared for the Bad - (www.nytimes.com)
The new stagflation: an Asian export - (www.ft.com)
The Perils of Staying Too Close to Home - (www.nytimes.com)
Western banks fall into the addiction trap, Japanese-style - (www.ft.com)