Wednesday October 15 Housing and Economic stories

TOP STORIES:

Protests in London Against Bailout Plan for Banks - (www.hubpages.com) A couple weeks ago on Sept. 25 Americans protested on Wall St. to convey the collective anger of the country against the pork-filled $700 Billion bailout of financial institutions. Click here to see the videos from that protest, which received scant coverage from the mainstream news media. Now here we sit with Dow Jones down about 2,000 points from where it was a couple weeks ago (sits at about 8451 pts). Banks around the world are in crisis and recession is a certainty. In fact we may actually be on the precipice of a depression. Glad to see the bailout worked so well to restore confidence in the markets!!! I know, I know, it's going to take time for the bailout to have effect etc. etc. and for all the junk assets to be bought up with our tax money so as to have some counter effect on the credit crisis blah, blah, blah. It seems that our counterparts in Great Britain are expressing their collective frustration and anger by staging protests of their own. On October 10 a large protest group stormed the London Exchange (next to the Bank of England) and made their feelings known to the occupants thereof. The protests in London were quite spirited and filled with vitriolic chants such as "The Rich, The Rich we gotta get rid of the Rich!" etc. etc. People are extremely angry to say the least and who can blame them? The Associated Press reported this story, however, I will be very surprised if the U.S. news media even bothers to mention this event, let alone do an in-depth report on it. They will collectively choose to ignore this story, just like they ignored the bailout protest in New York City on Sept. 25. Why? The only reason I can think of is that they don't want to give publicity to these types of protests out of fear that they make grow into something much larger. If the financial and economic situation worsens and there are more bailouts, then there may be nothing to stop the protests from growing larger.

Troops Deployed In U.S. For "Crowd Control" - (www.informationclearinghouse.info) Members of Congress were told they could face martial law if they didn't pass the bailout bill. This will not be the last time. Background: the First Brigade of the Third Infantry Division, three to four thousand soldiers, has been deployed in the United States as of October 1. Their stated mission is the form of crowd control they practiced in Iraq, subduing "unruly individuals," and the management of a national emergency. I am in Seattle and heard from the brother of one of the soldiers that they are engaged in exercises now. Amy Goodman reported that an Army spokesperson confirmed that they will have access to lethal and non lethal crowd control technologies and tanks. George Bush struck down Posse Comitatus, thus making it legal for military to patrol the U.S. He has also legally established that in the "War on Terror," the U.S. is at war around the globe and thus the whole world is a battlefield. Thus the U.S. is also a battlefield. He also led change to the 1807 Insurrection Act to give him far broader powers in the event of a loosely defined "insurrection" or many other "conditions" he has the power to identify. The Constitution allows the suspension of habeas corpus -- habeas corpus prevents us from being seized by the state and held without trial -- in the event of an "insurrection." With his own army force now, his power to call a group of protesters or angry voters "insurgents" staging an "insurrection" is strengthened. U.S. Rep. Brad Sherman of California said to Congress, captured on C-Span and viewable on YouTube, that individual members of the House were threatened with martial law within a week if they did not pass the bailout bill:

Fannie, Freddie Promise to Waste $40B/Mo Taxpayer Money - (Mish at globaleconomicanalysis.blogspot.com) Not content to waste $700 billion of taxpayer money, Fannie and Freddie are going to waste another $40 Billion a month buying troubled assets. Federal regulators directed Fannie Mae and Freddie Mac to start purchasing $40 billion a month of underperforming mortgage bonds as the Bush administration expands its options to buy troubled financial assets and resuscitate the U.S. economy, according to three people briefed about the plan. Fannie and Freddie began notifying bond traders last week that each company needs to buy $20 billion a month in mostly subprime, Alt-A and non-performing prime mortgage securities, according to the people, who asked not to be identified because the plans are confidential. The purchases would be separate from the U.S. Treasury's $700 billion Troubled Asset Relief Program. Adding underperforming assets to Fannie and Freddie's combined $1.52 trillion mortgage portfolios would come at a time when the two mortgage-finance companies already hold as much as $210 billion of bad debt that may be eligible itself for the Treasury's relief program, their regulator said Oct.

Saddled With Debt, Some Decide to Torch Vehicles - (www.washingtonpost.com) Burdened by debt and driving home from a night of gambling in West Virginia, Sergio Lopez launched a scheme that at the time must have seemed like a good idea. He pulled his Volkswagen Jetta up to a random corner in Silver Spring, doused the interior with gasoline, set it on fire and walked away. He later made a claim to Nationwide Insurance. The car was missing, he said -- someone must have stolen it. Add Lopez, who pleaded guilty in the case this year, to the band of Washington area residents who have torched their cars hoping for a quick insurance check. A Baltimore police officer did it. So did a Baltimore firefighter. A Prince William County resident burned a minivan for a friend. Investigators estimate that hundreds of such crimes occurred in the Washington area in the past two years, although the exact number is unclear, and experts predict the number will increase because of the worsening economy. Many offenders have fallen behind on payments to car dealerships. This year, more people are behind on such loans than in nearly two decades.

Iceland suspends equity trading again - (biz.yahoo.com/ap) Iceland has suspended trading on its stock exchange for the third consecutive trading day, citing "unusual market conditions." Monday's decision follows a turbulent week in Iceland, where the government has taken control of the country's three major banks. Iceland has been particularly hard hit by the global credit squeeze because of its heavyweight banking sector. Its troubles are also having repercussions elsewhere in Europe where tens of thousands of private savers have accounts

Funds of Hedge Funds are Under Pressure - (online.wsj.com) Citigroup credit analyst Matt King said anecdotal evidence suggested at least 20% of industry assets could be pulled out in the December redemption window, a figure that, if accurate, would reverse 3½ years of inflows, depleting hedge funds as well as funds of funds. Mr. Manser said funds of hedge funds with mainly wealthy individuals as investors will be "feeling the pain in terms of redemptions probably a little bit more than those with institutional investors." The redemptions are already inflicting pain on some funds. Hedge-fund manager Man Group PLC has ended the Close Man hedge fund after investor withdrawals and modest returns left the structured product with less than £4 million ($6.8 million), almost 95% down from its size in 2004. Its Swiss peer Gottex Fund Management also temporarily halted redemptions from one of its funds of hedge funds owing to valuation issues of underlying portfolios.

Harbinger loses a third in three months - (www.ft.com) Harbinger Capital, the activist New York hedge fund that shot to fame last year with a lucrative bet against subprime mortgages, has made and lost about $5bn (€3.7bn, £2.9bn) this year after dropping by a third in the past three months. The main $14bn fund of Harbinger, run by Phil Falcone, fell 17.9 per cent last month, to leave it down 5.4 per cent for the year so far. Investors said it had given back all the gains of its first six months, when it made close to 43 per cent, and that there would be more losses from its exposure to Lehman Brothers, the failed bank.

Margin Calls Bite Insiders - (online.wsj.com) Aubrey K. McClendon liked to boast that he hadn't sold a single share of Chesapeake Energy Corp. in years. As the company's founder and chief executive, he was a frequent buyer, borrowing against his holdings to accumulate more as the natural-gas company boomed. The value of his stake soared above $2 billion. Then came the stock market meltdown and, last week, the calls on those loans. After a series of rapid-fire sales, Mr. McClendon now owns less than $32 million in Chesapeake shares.

Dubai May Need Help From Abu Dhabi to Repay Debts - (www.bloomberg.com) Dubai may depend on support from neighboring Abu Dhabi and the federal government of the United Arab Emirates to help pay for a surge in borrowing, Moody's Investors Service Inc. said. Government-controlled companies owe at least $47 billion in total, more than Dubai's gross domestic product, according to Moody's data based on economic statistics from 2006. ``We believe that leverage raised primarily through state- owned corporations will continue to grow faster than GDP for at least the next five years, during which time the Emirate's susceptibility toward execution, financing and geopolitical risks will be at its most pronounced,'' Philip Lotter, Dubai- based senior vice president at Moody's, said in a report today.

Fed Says ECB, Others to Offer Unlimited Dollar Funds - (www.bloomberg.com) The U.S. Federal Reserve led an unprecedented push by central banks to flood financial markets with dollars, backing up government efforts to restore confidence in the banking system. The ECB, the Bank of England and the Swiss central bank will offer unlimited dollar funds in auctions with maturities of seven days, 28 days and 84 days at a fixed interest rate, the Washington-based Fed said today. The Bank of Japan may introduce ``similar measures.'' The dollar declined and some money-market rates fell.

Tension Rises Over Starbucks Leases - (online.wsj.com) As Starbucks Corp. switches its growth plans to decaf, landlords are experiencing withdrawal. A handful of property owners and developers have filed lawsuits alleging that the Seattle coffee giant owes them money for rent or other expenses on properties where the company has shut down a store or decided not to open one after entering a lease. At least seven lawsuits have been filed against Starbucks since last year, but the anger isn't limited just to litigants. Starbucks, which is facing slow sales and weak earnings growth as customers cut back on lattes and Frappuccinos, intends to shut down more than 600 U.S. locations by early next year as part of a broader plan to revive the company. The lease battles represent a turnabout for Starbucks, which has been one of the most sought-after retail tenants of the past decade. The chain helped draw other retailers to shopping centers and spent top dollar to get the best real estate during its rapid U.S. expansion.

Shipping sector hit by credit crisis - (www.ft.com) The credit crisis sweeping around the globe is drastically curtailing shipping activity as shippers cancel contracts with shipowners because of the mounting difficulty of obtaining trade finance. Dry bulk shipping – the movement of large quantities of coal, iron ore, wheat and other bulk commodities – has also seen its problems exacerbated by the unwinding of speculative activity surrounding the sector. The Baltic Dry index, a measure of shipping costs for commodities, suffered its biggest drop on record on Friday, falling 11 per cent to 2,221. The index is 81 per cent down from its peak five months ago. Although it is traditionally regarded as one of the safest forms of financial activity, rates for trade credit have risen sharply in recent months as banks have withdrawn facilities to bolster liquidity.


OTHER STORIES:

Homebuyers balk amid Wall Street meltdown - (biz.yahoo.com)
Fast and loose housing market is history - (www.dallasnews.com)
Housing won't see rebound until 2014 - (www.insidebayarea.com)
They Warned Us About the Mortgage Crisis - (biz.yahoo.com)
Savers on the Hook for Squanderers - (finance.yahoo.com)
Global Deflation Watch - (deflationwatch.blogspot.com)
Deflation may be the main policy challenge - (www.hindu.com)
Bailout means paying the banks to prolong this crisis - (www.mykle.com)

Morgan Stanley, Goldman Reap Cash From U.S. Treasury - (www.bloomberg.com)
Some good news maybe - (optionarmageddon.ml-implode.com)
The Debt Party Is Over - (www.europac.net)
Not So Wonderful Now - (www.washingtonpost.com)
This panic is not irrational, it's quite rational - (www.guardian.co.uk)
Debt to the Penny Daily History Search Application - (www.treasurydirect.gov)
We've Done All This Before - (www.nytimes.com)
Nature loss 'dwarfs bank crisis' - (news.bbc.co.uk)

Global Stocks Climb, Euro Rises on Bailout Plan; Banks Advance - (www.ml-implode.com) - This probably has less to do with anything the authorities did than with exhaustion.
How to capitalise the banks and save finance - (www.ml-implode.com) - The recapitalisation scheme outlined here would suffer from none of the difficulties of reverse auctions for hard-to-price secur...
Bond Market Collapse is Imminent - (www.ml-implode.com) - ``All the bailouts and “recapitalization” plans of the Treasury and the FED are highly inflationary and require issuing massive ...
HBOS Takeover: On or Off? - (www.ml-implode.com) - ``Pestowire is now saying the terms of the deal could be altered because HBOS is planning to tap the government for £12bn.''
The Woman Who Could Have Prevented This Financial Mess Was Silenced by Greenspan, Rubin and Summers - (www.ml-implode.com) - More than a decade ago, a woman you're likely never to have heard of, Brooksley Born, head of the Commodity Futures Trading Comm...
LIBOR is in Backwardation and Significantly Divergent from Effective Fed Funds - (www.ml-implode.com)
Some good news (maybe) - (www.ml-implode.com)
Fannie & Freddie Should Be Fully Privatized - (www.ml-implode.com)
The Fed Now Owns the World's Largest Insurance Company -- But Who Owns the Fed? - (www.ml-implode.com)
Gold: The Last Carry Trade - (www.ml-implode.com)
Now Morgan Stanley Needs "$60 Billion" Of New Equity - (www.ml-implode.com)
Bank deposits guaranteed for 3 years - (www.ml-implode.com)
3 posh projects go bust as Valley dreams bite the dust - (www.ml-implode.com)

Slow-Motion Crash Leaves Investors Scrambling - (online.wsj.com) The vertiginous stock-market ride of the past two weeks has left investors from the skyscrapers of New York to the kitchen tables of California struggling with whether to hold, sell or, somewhat improbably, buy. The scenes from the front lines of the carnage looked like this: In a Manhattan high-rise, hedge-fund manager Peter Siris watched in shock as "no" votes cascaded from the House of Representatives on Sept. 29. Lawmakers were rejecting the financial bailout. Soon, he was purging vulnerable stocks.
U.S. Treasury Futures Fall on Stock Rally, Bank Loan Guarantees - (www.bloomberg.com)
Gold Gains in London as Dollar Weakens, Crude Oil Strengthens - (www.bloomberg.com)
Global Stocks Climb, Euro Rises on Bailout Plan; Banks Advance - (www.bloomberg.com)
Euro rallies after Paris-summit agreement - (www.ft.com)
Oil Rises as U.S., European Governments Move to Support Banks - (www.bloomberg.com)

Emerging Markets Stocks, Bonds Rise on Global Support for Banks - (www.bloomberg.com)
One-Week Euro Money-Market Rate Falls Most This Year, EBF Says - (www.bloomberg.com)
U.S. Stock-Index Futures Climb on Bank Plan, Fisher Comments - (www.bloomberg.com)
Private Equity's Loan Danger - (online.wsj.com)

Will Asian financial centers overtake Wall Street? - (www.csmonitor.com)
O.C. maps tell tale of subprime boom, bust - (www.ocregister.com)
Margin Calls Prompt Sales, and Drive Shares Even Lower - (www.nytimes.com)
Scramble to avoid collapse - (www.ft.com)

European banks offer unlimited dollar funding - (www.ft.com)
RBS, HBOS, Lloyds Get 37 Billion-Pound U.K. Bailout - (www.bloomberg.com)
Britain Props Up Banks as Fed Leads Funding Effort - (www.nytimes.com)
Europe Offers Bank Support to Halt Financial Meltdown - (www.bloomberg.com)
Australia and NZ launch bank safeguard plan - (www.ft.com)
UK set to inject over £37bn into banks - (www.ft.com)
State to save HBOS and RBS - (business.timesonline.co.uk)
Norway to Spend $55.4 Billion to Boost Liquidity - (www.bloomberg.com)

Australian government guarantees all bank deposits - (news.yahoo.com/s/afp)
Spain guarantees $135 billion in bank credits - (biz.yahoo.com/ap)
China's Trade Surplus Widens to Record $29.3 Billion - (www.bloomberg.com)

World Leaders Offer Unity But No Steps To Ease Crisis - (www.washingtonpost.com)
Paul Krugman wins the Nobel Prize for economics - (biz.yahoo.com/ap)
Expectations of more rate cuts grow - (www.ft.com)
World May Be Lucky to Get Worst Recession Since 1983 - (www.bloomberg.com)
The Big Apple Losing Some of Its Luster - (www.washingtonpost.com)
Funding freeze casts shadow on the silver screen - (www.ft.com)

Credit squeeze literally hits home as card limits, equity lines pared - (www.signonsandiego.com)
Morgan Stanley Seals $9 Billion Mitsubishi UFJ Stake - (www.bloomberg.com)
Fannie, Freddie to Step Up Purchases of Troubled Mortgage Bonds - (www.bloomberg.com)

US car groups prepare for shake-up - (www.ft.com)
Restaurants' Gloom Spreads - (online.wsj.com)
Annuities Put Pressure on Insurers - (online.wsj.com)

Liquidation unlikely as papers miss obligations - (www.signonsandiego.com)
Intel, Microsoft Squeezed as $170 Billion Cut From Tech Budgets - (www.bloomberg.com)

Regulators in Need of Rehab - (www.nytimes.com)
After Weekend Financial Huddle, No Sign That Lenders Will Thaw - (www.nytimes.com)
How to capitalise the banks and save finance - (www.ft.com)
Got $700 Billion? Sweat the Details - (www.nytimes.com)