Monday August 4 Housing and Economic stories

Top Stories:

Like a regular Friday night date - (www.themessthatgreenspanmade.blogspot.com) Let's see. It's Friday, what bank(s) is the FDIC taking over this weekend? According to this report in CNN/Money, it's Florida's First Priority Bank whose first priority apparently wasn't solvency. This is the eighth bank failure of the year and the fourth in the last month."

FHA Personal Accounts - (calculatedrisk.blogspot.com) It took approximately twelve minutes for some of the bigger economic illiterates in Congress to sponsor a bill to reauthorize FHA DAPs--a form of money-laundering in which property sellers can inflate their sales prices by funneling money to a "non profit" which then "gifts" the funds to the buyer of the property."

New Rules at Freddie Mac Likely to Backfire - (globaleconomicanalysis.blogspot.com) - Pressure to raise servicer spreads may have just gotten a little more intense on Thursday, with Freddie Mac (FRE) announcing a huge, mixed bag of changes to its servicing guidelines — including doubling the amount of money it pays for each workout alternative, and lengthening foreclosure timelines in key states. The GSE also said it would start reimbursing servicers for the cost of door-to-door outreach programs, and make administrative changes intended to streamline the workout process. Perhaps the boldest move by Freddie Mac on Thursday — and one that won’t get much press attention — was its decision to eliminate foreclosure timeline compensation altogether for servicers, effective immediately. In other words, servicers will no longer earn a bonus based on how quickly they can foreclose. Doubling the length of time to do a workout is just begging freeloaders to take advantage.Those who have made up their minds to walk away, may now be able to live rent free for 10 months before the foreclosure proceedings start.

The Echelon In Las Vegas Becomes “Ghost Casino” - (www.housingdoom.com) Analysts said that the delay of Echelon could forestall a complete housing recovery in the local market. Housing observers had long relied on the 2009 opening of CityCenter, combined with the 2009 start of hiring for Echelon, to lift prices and sales of local homes by next summer. With financial markets questioning the number of new jobs the megaresorts will create, and with staffing delayed, prospects for improvement in housing are cloudy

Less Stringent Ethics - ((globaleconomicanalysis.blogspot.com) Ken Wilson, the Goldman Sachs banker who is joining the US Treasury to help the country through the financial crisis, is expected to take a temporary post that will subject him to less stringent ethics rules than many other high-level officials. Mr Wilson was likely to be treated as a “special government employee”, making it unlikely he would have to sell assets or produce the detailed disclosure reports required of officials appointed by the president and confirmed by the Senate, legal experts said.

After the Bubble, Ghost Towns Across America - (online.wsj.com) Dennis Pflueger and his wife won a rent-free year in a nice new house in an expensive subdivision not far from the headquarters of Wal-Mart Stores Inc. As part of the prize, they then have the option to buy the four-bedroom home for $452,000. Mr. Pflueger, a telephone-cable installer who describes himself as an "old redneck," is in the middle of his free year. But the Pfluegers are a bit lonely. Just one other family lives in any of the 28 new or unfinished houses on Foxboro Court. Up the street, a sign announcing "Elegant Homes" sits on a lot choked with weeds. The block is as quiet as an old ghost town.

Small Florida bank is 8th U.S. failure this year - (www.reuters.com) WASHINGTON (Reuters) - Bank regulators closed a small Florida-based bank on Friday, the eighth U.S. bank to fail this year under pressure from a weak economy and a credit crisis precipitated by falling home prices. The Federal Deposit Insurance Corp said First Priority Bank had $259 million in assets and $227 million in deposits and its failure will cost the federal fund that insures deposits an estimated $72 million

Housing Lenders Fear Bigger Wave of Loan Defaults - (www.nytimes.com) The first wave of Americans to default on their home mortgages appears to be cresting, but a second, far larger one is quickly building. Homeowners with good credit are falling behind on their payments in growing numbers, even as the problems with mortgages made to people with weak, or subprime, credit are showing their first, tentative signs of leveling off after two years of spiraling defaults. The percentage of mortgages in arrears in the category of loans one rung above subprime, so-called alternative-A mortgages, quadrupled to 12 percent in April from a year earlier. Delinquencies among prime loans, which account for most of the $12 trillion market, doubled to 2.7 percent in that time.

US lawmakers discuss retirement poverty - (www.ft.com) US lawmakers last month began efforts to revitalise corporate defined benefit plans, amid worries that Americans are not saving enough for retirement. The effort comes as numerous companies are closingDB pensions and offering new employees defined contribution plans, which provide much less in retirement. A joint economic committee hearing on the issue in early July followed two years after the Pension Protection Act was introduced to ensure companies' pension plans had enough money to pay retirees - a law many say has backfired and helped fuel DB scheme closures. The act took effect this year and, among other things, requires companies to maintain a higher funded status to cover their liabilities. Lawmakers and the experts they interviewed at the hearing said those closures could undermine the economy.


Other Stories:

Speculators don't create commodity bubbles - (www.ml-implode.com) - The evidence does not support the claim that speculation has been the source of, or has exacerbated, the price increases. Indee...
Housing bill - A hair of the dog - (www.ml-implode.com) - It is not entirely clear why the core business of the enterprises—providing guarantees for mainstream (not subprime) mortgages—n...
Greedy bankers, lousy government led to housing mess - (www.ml-implode.com) - "In Washington," the New York Times reports, "Fannie and Freddie’s sprawling lobbying machine hired family and friends of polit...
Spain's Inflated Home Values Infect Mortgage Bonds - (www.ml-implode.com) - `` The Spanish market is not the U.S. property market,'' Bertoni says. ``We don't have the famous subprime. Generally speaking, the collateral for each loan is always quite high.''
That hasn't prevented Kutxa's bond from losing 8 percent since it was issued in February last year. That contributed to the Pioneer fund underperforming the JPMorgan EMU Bond Index by 2.7 percentage points over the past 12 months.”
U.S. May Be in `Very Long' Recession, Harvard's Feldstein Says - (www.ml-implode.com)
Henry Paulson has lost Control over US Finance, Economy - (www.ml-implode.com)
Revisions matter. So do levels - (www.ml-implode.com)
Doscientos Mes - (www.ml-implode.com)
America's Smartest Banker - (www.ml-implode.com)

Rich begin feeling the pain in down economy - (www.ap.com)
Fed Session to Confront Trio of Economic Threats - (online.wsj.com)
Only luck can save America's economy - (www.ft.com)
U.S. Vehicle Sales Fall 13.2% Amid High Gas Prices and Tight Credit - (www.nytimes.com)

Finance Has Become the Business of America - (online.barrons.com)
Graduates' Job Hunts: Majorly Frustrating - (www.washingtonpost.com)

The big freeze: A year that shook faith in finance - (www.ft.com)

Hedge-Fund Sluggers Strike Out - (online.wsj.com)
Derivatives put equities in the shade - (www.ft.com)
Fewest Treasury Traders Since 1960 Hit Taxpayers - (www.bloomberg.com)
S&P Email: 'We Should Not Be Rating It' - (online.wsj.com)
Van Wagoner to Step Down As Manager of Growth Fund - (online.wsj.com)
New York to File Charges Against Citigroup Over Securities - (www.nytimes.com)

Highland to Pay in Stages - (online.wsj.com)
Finance Unit of Chrysler Fails to Renew Some Funding - (online.wsj.com)
Disney raises ticket prices at US theme parks - (www.chicagotribune.com)
Fannie faces glut of unsold homes - (www.chicagotribune.com)
RV sales fall as families stay home - (www.ft.com)
Fannie, Freddie Push Aims to Contain Defaults - (online.wsj.com)
Chrysler offers 72-month finance deals as it tries to attract customers after ending leasing - (www.chicagotribune.com)
Clorox to raise prices further to offset commodity costs that contributed to profit drop - (www.chicagotribune.com)
Automakers Race Time as Their Cash Runs Low - (www.nytimes.com)
The Chips Are Down in Vegas but Steve Wynn Is Betting Big - (www.nytimes.com)

Japan close to declaring recession - (www.ft.com)
European companies braced for slowdown - (www.ft.com)
High-rise plans stalled as gloom grows - (www.ft.com)
Bank Tries to Allay Fears of Instability in Venezuela - (www.nytimes.com)
Shipping Costs Start to Crimp Globalization - (www.nytimes.com)
Growing inflation pressures point to more pain - (www.ft.com)
China's economic miracle at a crossroads as Olympics start - (www.telegraph.co.uk)

Up, Up and Away ... - (www.newsweek.com)
An S.B.A. Lender, Uncensored - (www.nytimes.com)
Three Strikes Against Consumers - (www.nytimes.com)
Wave Goodbye to the Invisible Hand - (www.washingtonpost.com)