Thursday June 19 Housing and Economic stories

Top Stories:

The Sad Tale of Chrysler's Impending Failure - (www.bloomberg.com) - With the company using this much cash and with high gasoline prices, Chrysler has months, not years, to establish alliances to get products it doesn't have,'' says John Casesa, managing partner of Casesa Shapiro Group, a New York-based consulting firm. ``The timeline has been shortened dramatically,'' says Casesa, who predicts Chrysler is unlikely to survive as a free-standing car company.
Morgan Stanley Warns of "Catastrophic Event" as ECB Fights Federal Reserve - (www.telegraph.co.uk)
Wooden Nickels and Steel Pennies - (www.mises.org) "Don't take any wooden nickels" was an admonition to be careful in your dealings because someone might try to pay you with worthless money. Wooden coins were actually used in trade in America in certain limited circumstances on a local level. A contemporary equivalent could be "don't take any steel pennies." The United States House Of Representatives has already passed a bill, HR 5512, authorizing the Treasury Department to substitute steel for the nickel and copper now used in American pennies and nickels. This is not the first time in history that the currency of a country has been debased. In centuries past, kings would debase gold and silver coins by reducing metal content, making smaller coins and actually replacing the original metals with cheaper alloys, while holding the legal-tender value the same. This gave rise to Gresham's Law, a principle in economics that bad money drives out good money. Consumers will use the devalued currency in transactions and take the more valuable money out of circulation. Since the establishment of the Federal Reserve, American coins have been debased numerous times, replacing more valuable metals with less valuable ones. The dollar, which was backed by gold decades ago, is now backed by nothing but legal-tender laws.
** Bloomberg: Fed's Bear Stearns Books Look Prime for Cooking ** - (www.bloomberg.com) The Federal Reserve is just days away from completing the financing for its bailout of Bear Stearns Cos., after which the central bank will have another big decision to make: how to account for it. Flip through the footnotes to the Fed's latest annual report, and you'll come across an open secret. The Fed doesn't follow normal accounting rules, as promulgated by any of the major standard-setting boards. Rather, the Fed writes its own, in a document called the Financial Accounting Manual for Federal Reserve Banks. If you ever wanted to design an accounting regime to help a bank cook its books, the Fed's would be perfect. This doesn't exactly inspire faith in the U.S. financial system, at a time when a good example might help a lot.
WaMu To Announce More Layoffs Thursday - (www.ml-implode.com) - Washington Mutual, battered by the nationwide housing downturn, is poised to announce another round of layoffs Thursday that wil...
MBIA Refuses to Downstream Cash, Uses CDS Fears to Defy Regulators - (www.ml-implode.com)
U.S. Senate to probe Countrywide loans - (www.ml-implode.com)
Wachovia to Borrower- “Are You Sure You Understand the Pay Option ARM?” - (www.ml-implode.com) Once the borrower gets a hard-recast letter saying “you have reached your maximum allowable negative amortization for this loan program, so now you must either a) refinance b) pay a minimum of interest only payments so as not to accrue any more negative amortization (this could double the payment)”, borrowers will default. First, you can’t refi in most cases. Second, why in the world would you want to pay twice the monthly payment for a home that has dropped 30% in value and where you have accrued 15 to 25% negative amortization depending on the lender? By the time they get this letter, a borrower could be upside down 50%!
Some buy new house to bail on the old - (www.pressdemocrat.com)
Housing woes hit community banks - (www.latimes.com)
Banker's lament: 'Nobody foresaw what would happen' - (latimesblogs.latimes.com) – Yes, and these are the morons that are paying each other so much money because they say they are so smart.


Other Stories:

Cerberus Rues Chrysler Drain as Nardelli Fails to Arrest Losses - (www.ml-implode.com) The worst U.S. housing crisis since the 1930s was spilling into car buying. Chrysler, which had survived past struggles thanks to a 1980 federal loan guarantee and Daimler-Benz AG's $36 billion purchase in 1998, needed to face reality and forget about making more cars.
Are You Covered if Your Broker Fails? - (www.investorbrain.com)
Recession fears after housing bubble burst - (msnbc.msn.com)
Is America's suburban dream collapsing into a nightmare? - (cnn.com)
What real estate experts aren't telling you - (www.businessreport.com)

Bush, McCain Push to End Offshore Drilling Ban - (www.bloomberg.com)
Obama's Veep - A Republican? - (www.salon.com)
So Cal median below $500,000, 1st time since '04 - (lansner.freedomblogging.com)
So. California house prices, sales plunged in May - (www.apnews.com)
How bad are Things Currently for California Housing? - (www.mybudget360.com)
Ross Perot is Back! With a New Website: Perot Charts - (www.perotcharts.com)
Detroit's Sinking Sales Take a Toll on Dealerships - (www.nytimes.com)
As Costs Rise, Vietnam Becomes the New China - (www.nytimes.com)
Discussion of The Bubble - (www.washingtonpost.com)
Gas prices latest worry for CA real estate market - (www.latimes.com)
Housing, Prices Signal "Some" Stagflation - (www.bloomberg.com)
Central Banks Clash Over Monetary Policy - (Mish at globaleconomicanalysis.blogspot.com)

Thinking About Installments - (www.baltimorechronicle.com)
When Should You Buy And When Is It Better to Rent? - (www.erica.biz)
Seven Indicted In Atlanta Mortgage Fraud Scam - (www.ml-implode.com) - Atlanta federal prosecutors have indicted seven metro Atlanta residents in alleged straw-buyer mortgage fraud scam, centered aro...
Homeowners Offered New Way to Tap House's Equity - (www.ml-implode.com) - "Mortgage rates remain near historic lows. So homeowners entering these deals might be establishing a low baseline for their hom...
Newest Addition to the Ailing/Watch List: American Sterling Bank - Wholesale - (www.ml-implode.com) - See our full report by following the link below.
Fuel Prices Driving Force Behind Foreclosures Down Under - (www.ml-implode.com) - Higher petrol prices could be the straw that breaks the backs of people struggling with their mortgages. Data released yesterd...
SEC Probes Sickly Thornburg - (www.ml-implode.com) - On Wednesday, Thornburg Mortgage revealed the Securities and Exchange Commission had subpoenaed documents on April 24 and May 23 involving the lender's restatement of its 2007 financial results and margin calls it has received; Thornburg said it is cooperating with the agency's probe
LONGEST FORECLOSURE CASE IN HISTORY GOES TO THE U.S. SUPREME COURT - (www.ml-implode.com)
Real Estate Slowdown - (www.ml-implode.com)
Mortgage Applications Drop as Rates Rise, Refis Dry Up - (www.ml-implode.com)
Pink Sheeted - (www.ml-implode.com)
What’s Old is New Again: HOPE NOW Touts Loss Mit Guidelines - (www.ml-implode.com)

U.S. Stocks Fall on FedEx's Loss, Fifth Third's Dividend Cut - (www.bloomberg.com)
Dollar May Fall for Fourth Day Before Report on Manufacturing - (www.bloomberg.com)
Bernanke May Regret Interest-Rate Cuts, Lawson Says - (www.bloomberg.com)
Floods Add Pressure on Gas Prices - (online.wsj.com)
Gym payments too big a stretch - (www.latimes.com)

MBIA Debt Is Setting Up a Quandary - (www.nytimes.com)
Guarantee Gamble: Developers Dread Return of Recourse - (online.wsj.com)
How rising home values, easy credit put your finances at risk - (www.usatoday.com)
Morgan Stanley Suspends Credit Trader on Valuations - (www.bloomberg.com)
Home prices continue downward spiral - (www.signonsandiego.com)
Morgan Stanley Profit Drops 57% on Debt Losses - (www.bloomberg.com)
FedEx Reports Loss on Fuel Costs, Kinko's Writedown - (www.bloomberg.com)
Lenders, trade groups complain that housing bill is too restrictive - (www.latimes.com)
Airlines face billions in losses, Senate panel told - (www.latimes.com)
Can Hershey Survive Candy Wars? - (online.wsj.com)
Fifth Third to Raise $2 Billion on Share, Asset Sales - (www.bloomberg.com)
Kellogg shrinks cereal boxes, not prices - (www.latimes.com)
Low sales force Ford to idle SUV plant for 9 weeks - (www.chicagotribune.com)
Wal-Mart trims spending on new stores - (www.chicagotribune.com)
Northwest Airlines announces larger capacity cuts - (www.chicagotribune.com)
OfficeMax eliminating 2,700 store positions - (www.chicagotribune.com)

As Chinese costs soar, manufacturers expand elsewhere in Asia - (www.iht.com)
Investors Seek Asian Options to Costly China - (www.nytimes.com)
BOJ Is Watching Growth, Inflation Risks, Minutes Show - (www.bloomberg.com)
Rising costs set manufacturers price dilemma - (www.ft.com)
Hot Money into China Hits New Record - (www.businessweek.com)
Globalized Inflation - (online.wsj.com)