Wednesday June 18 Housing and Economic stories

Top Stories:

Luxury builders stuck with pricey houses - (www.kgw.com) - The builders came to attract future customers, and they were optimistic about selling the show houses that stretched to $3 million. Normally, two or three homes sell during the show and most are sold within a year. But nine months after the Street of Dreams show, none has sold. The show opened just as the U.S. mortgage market tumbled, triggering the Portland region's biggest home price decline in at least two decades. One Street of Dreams builder tried unsuccessfully to auction his home. Two builders now own their homes and one of them lives in his. Subcontractors who worked on four homes have filed liens to get paid. "The timing was probably about the worst ever," said builder Ray Derby, a Street of Dreams veteran who is still trying to sell his $1.9 million home. "We just hit a bad market."
Colin Powell Slams Bush - (www.canada.com) - Might vote for Obama; Former U.S. secretary of state says presidential voting decision will be based on passion and policiesHome Builders Confidence Touches Record Low; Calls for Congressional Action Mount - (www.ml-implode.com) - Home builders continued to call for Congressional action to bolster the faltering U.S. housing market Monday afternoon, as builder confidence in the market for newly-built single-family homes during June matched a record low seen last December. According to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI), the index slipped to 18 in June; that’s off from 19 one month earlier.
The Bubble - (www.ml-implode.com) - "How the housing bust started a panic in Florida, felled a storied bank and raised the specter of recession."
Ohio homeowners need help - (money.cnn.com) - U.S. Rep Maxine Waters, head of housing subcommittee, wants foreclosure rescue package by July 4; calls Countrywide exec 'poster child' for housing mess.
Plan to clarify mortgage disclosures opposed - (money.cnn.com)
What?s The Difference Between Lehman Brothers & Bear Stearns? Lehman?s CEO Sits On the Board Of The NY Fed - (www.globalresearch.ca). Unlike Bear Stearns, which got decimated by the JPM buyout using Federal Reserve money, Lehman Brothers is probably in line for a massive bailout from the Fed. At least, that’s what its CEO Richard Fuld seems to believe. The June 4, 2008 Financial Times of London quoted him as stating, "The Federal Reserve’s decision earlier this year to lend directly to investment banks should take questions about Lehman’s liquidity off the table." Whether Lehman can come up with the "liquidity" to meet its debts is no longer an issue, because it expects to be feeding at the trough of the Federal Reserve, just as JPM did when it bought Bear Stearns at bargain-basement prices. The difference between the two "bailouts" is that Lehman Brothers, unlike Bear Stearns, will actually get the money. Why is Fuld so confident of this rescue operation? Olagues notes that Fuld, like Dimon (and unlike Bear CEO Alan Schwartz), sits on the Board of the New York Federal Reserve. A conflict of interest? It certainly looks like it. Indeed, Olagues points to a statute defining this sort of self-dealing as a criminal offense. 18 U.S.C. Chapter 11, Section 208, makes it a felony punishable by up to 5 five years in prison for members of the Board of Directors of a Federal Reserve Bank to make decisions that benefit their own financial interests. That would undoubtedly apply here:
Bankruptcy Rising Among Seniors - (www.usatoday.com)

Notice how CNBC typically spins bad news into good. Every story on the main page (except one) spins some bad news into good.
· Housing Starts Fall: Why That's A Good Thing - (www.cnbc.com)
· Core Inflation Slows, Even as Producer Prices Rise - (www.cnbc.com) – Even as PPI hits a 6 month high, they discount the energy and food aspect as non-core.
· JPMorgan Chase: We Got Bear Stearns on the Cheap - (www.cnbc.com) Sounds like JPMorgan Chase is trying to proactively nip anyone implying that the Bear Stearns acquisition is hurting their earnings. JPMorgan’s top investment banking execs said yesterday that their acquisition of Bear Stearns was worth far more than what they paid, but that market turmoil is still taking a toll on investment-banking profits and may result in further layoffs, CNBC has learned.
· Regulators Moving to Curb Speculative Oil Trading - (www.cnbc.com) – Again, politicians trying to temporarily knock down the symptoms but not the cause of high oil prices.
· Oil Trading Below $134 - (www.cnbc.com)
· Market Full of Oil, Price Trend 'Fake': Iranian President - (www.cnbc.com)
· Goldman's Profit Drops 11% But Is Above Expectations - (www.cnbc.com)


Other Stories:

BIS Warns Of Great Depression – (www.bankingtimes.co.uk)
Corporate Bond Yields Hit Six-Year High - (www.cfo.com)
Renters, Soldiers Feel the Pain of Foreclosure - (news.yahoo.com/s/nm)House price drop means $4 trillion in lost capital - (biz.yahoo.com)
Hard hit cities are set for more steep house-price losses - (money.cnn.com)
NJ NAR fudges numbers - (patrick.net) - NAR sales calculation resulted in the reported New Jersey first quarter sales being
revised from +4% to -30%. While the pundits were busy spinning the positive numbers, blogs were sounding the alarm. Proof once again that popular media is not adding much value to the debate.
Foreclosures Make Up Majority of Sales in Sacramento - (blogs.wsj.com)
Contrasting housing quotes by same guy - (patrick.net)
FBI Halts Some Cases to Investigate Mortgage Frauds - (www.bloomberg.com)

Congress takes on oil speculators Oil prices flat - (money.cnn.com)
Bond yields up on inflation fears Dollar weakens - (money.cnn.com)
Housing rescue group steps up efforts - (money.cnn.com) – We have seen this one before: Life may get a little bit easier for troubled borrowers.
Hope Now, the alliance of lenders, mortgage servicers, investors and community advocacy groups put together to fight the foreclosure epidemic, announced new guidelines Tuesday that should help speed up the process of helping borrowers who are trying to hang onto their homes.
Builders' mood stays glum - (money.cnn.com)
6 real estate bargains - (money.cnn.com)
Study Confirms US Foreclosure Growth - (money.cnn.com)
Property-flipping rule suspended - (money.cnn.com)
Betting on a housing rebound - (money.cnn.com)
Record-breaking may CA foreclosure report - (mrmortgage.ml-implode.com)
Case for Abolishing the FHA and GSEs - (Mish at globaleconomicanalysis.blogspot.com)

Banks May Need $65 Billion in Capital: Goldman - (www.cnbc.com)
Dinosaur Sightings Redux - (www.ml-implode.com) - "Mad Max conditions for truckers are putting them out of business. Last week in the commentary we got into some kind of debate a...
Housing Slump Helps the Draw of Fixer-Upper TV - (www.nytimes.com)
Are People Smarter than Media Pundits? Yes - (Charles Hugh Smith at www.oftwominds.com)
Will Housing Provide a Hedge in Inflationary Times? - (Charles Hugh Smith at www.oftwominds.com)
"Real Property Lenders" gets permit suspended - (www.sanluisobispo.com) - Paso Robles-based Real Property Lenders gets permit suspended; it's the second NoCo firm to have investment activities curtailed by state regulators
“Second Magnus” Rises From The Ashes Of The First One - (www.ml-implode.com) - "It’s hard to say whether this counts as "un-imploded" or not…. The demise of First Magnus Financial Corp. last August wasn’t ev...
A Special Message for Angelo Mozilo - (www.ml-implode.com)

U.S. Stocks Retreat, Led by Financials; Regional Banks Tumble - (www.bloomberg.com)
Dollar Drops Versus Euro as Outlook for Fed Rate Increase Dims - (www.bloomberg.com)
Oil Falls a Third Day on Signs Demand to Drop, Field May Start - (www.bloomberg.com)
Treasuries Rise as Traders Scale Back Bets on Rate Increases - (www.bloomberg.com)

U.S. Producer Prices Climb 1.4%; Core Rate Rises 0.2%, Matching Forecasts - (www.bloomberg.com)
Fed Unlikely to Affirm Rate Increase - (online.wsj.com)
Housing Starts in U.S. Fell 3.3% Last Month to 975,000 Pace, a 17-Year Low - (www.bloomberg.com)
Fed divided on when to raise rates - (www.ft.com)
Obama Expands on Economic Plan - (online.wsj.com)
U.S. Pushes a European Method To Help Banks Make Home Loans - (online.wsj.com)
Health costs to see big jump - (www.startribune.com)
Employer Health Costs to Rise 10 Percent, Double Inflation Rate - (www.bloomberg.com)
Bankruptcy rising among seniors - (www.usatoday.com)
BIS continues to warn of depression - (www.bankingtimes.co.uk)

New guidelines for US lenders - (www.ft.com)
Goldman deal could point way for SIVs - (www.ft.com)
Gas prices latest worry for real estate market - (www.latimes.com)
Buyout firms limit debt - (www.chicagotribune.com)
Shakeout Roils Hedge-Fund World - (online.wsj.com)
Lenders Agree to Plan To Stem Foreclosures - (online.wsj.com)
Bond rate debacle - (www.nypost.com)
Despite Irish Vote, the Euro Remains Strong - (www.nytimes.com)

Goldman Earnings Decline Less-Than-Estimated 11% - (www.bloomberg.com)
Housing woes hit community banks - (www.latimes.com)
Rising fuel price is taking its toll on truckers - (www.dallasnews.com)
Morgan Stanley, Citi Lose Oil Analysts as Hedge Funds Hire - (www.bloomberg.com)
Goldman close to $7 billion SIV restructure: source - (www.reuters.com)
McClatchy slashes 1,400 jobs in cost-cutting drive - (www.signonsandiego.com)

U.K. Inflation Reaches Decade-High, King Predicts Acceleration - (www.bloomberg.com)
Booming, China Faults U.S. Policy on the Economy - (www.nytimes.com)
Russian Oil Dispute Renews Concerns - (www.nytimes.com)
King forced to explain surge in inflation above 3% - (www.ft.com)

The Bubble - (www.washingtonpost.com)