Sunday November 23 Housing and Economic stories

TOP STORIES:

Paulson Was Behind Bailout Martial Law Threat - (www.infowars.com) - Senator James Inhofe has revealed that Henry Paulson was behind the threats of martial law and a new great depression prior to the passage of the bailout bill, having made such warnings during a conference call on September 19th, around two weeks before the legislation was eventually approved by both the Senate and Congress. As we reported at the time, on October 2, Democratic Congressman Brad Sherman gave a stunning speech on the House floor during which he decried the fact that, “Many of us were told in private conversations that if we voted against this bill on Monday that the sky would fall, the market would drop two or three thousand points the first day, another couple of thousand the second day, and a few members were even told that there would be martial law in America if we voted no.” A few days before, Rep. Michael Burgess also told the House, “Mr. Speaker I understand we are under Martial Law as declared by the speaker last night,” referring to a temporary suspension of the rules and procedures of Congress by its leaders so that a bill can be passed quickly. Speaking on Tulsa Oklahoma’s 1170 KFAQ, when asked who was behind threats of martial law and civil unrest if the bailout bill failed, Senator James Inhofe named Treasury Secretary Henry Paulson as the source.

Citigroup Blames Short Sellers For Collapse – (Mish at globaleconomicanalysis.blogspot.com) – Another great piece by Mish. Citigroup is blaming shorts when the short interest is under 3%. That's ridiculous. If Citigroup does not understand this, it is a sign of incompetence. If Citigroup does understand how ridiculous their claim looks (and is), that is additional support for the desperation thesis. Note the dividend. Citigroup is paying a dividend when it is clearly in need of capital . Is that a sign of arrogance or incompetence? ... Citigroup would not be trading under $5 nor would it be down over 50% in two days if it was well capitalized as it claims. There is something wrong somewhere for the stock to be acting this way. Hiding behind accounting rule changes in this market is simply not going to work. Blaming short selling will not work either. Looking ahead, foreclosures, credit card defaults, and bankruptcies are going to soar along with a soaring unemployment rate. Banks in general, and Citigroup specifically, are woefully undercapitalized and unprepared for what is about to happen. One look at a chart of Citigroup should be proof enough. The market seems to believe Citigroup is insolvent and so do I.

US seeks 300 billion dlrs from Gulf states: report - (news.yahoo.com/s/afp) - The United States has asked four oil-rich Gulf states for close to 300 billion dollars to help it curb the global financial meltdown, Kuwait's daily Al-Seyassah reported Thursday.Quoting "highly informed" sources, the daily said Washington has asked Saudi Arabia for 120 billion dollars, the United Arab Emirates for 70 billion dollars, Qatar for 60 billion dollars and was seeking 40 billion dollars from Kuwait.

Citi Weighs Options, Including Firm's Sale - (online.wsj.com) Citigroup Inc. is considering auctioning off parts of the firm or selling the company outright, according to a media report late Thursday. The online edition of The Wall Street Journal, citing unnamed sources, reported that Citigroup executives are in preliminary stages of discussing a possible sale. The report said that the company's management is still insisting that it has ample capital and a sound strategic direction, though its shares fell a further 26% Thursday.

Goldman's Gold Standard Is Less Golden - (online.wsj.com) It's a lost decade for Goldman Sachs Group Inc. On Thursday, shares of the 139-year-old bank, the most admired on Wall Street, fell below the $53 price when they were first sold to the public. At $52 a share, Goldman stock has fallen 76% since the beginning of the year and now is valued 1.9% lower than the day of its original pricing on May 3, 1999. The 2008 stock-market selloff has left no company untouched -- not even Goldman, which made shrewd bets against bad mortgage bonds during 2007. But mounting questions about its business model, future profitability and ...

Unpaid Wages in Russia Recall 1998 - (online.wsj.com) Russians have begun to feel the chill of the crisis, as it triggers layoffs and wage-payment delays reminiscent of the 1990s. Russians have begun to feel the chill of the financial crisis, as it triggers layoffs and wage-payment delays reminiscent of the economic collapse in the late 1990s. Russians are becoming more pessimistic about the economy, polls show; above, a protest against the government in Moscow last month. On Thursday, Prime Minister Vladimir Putin promised new measures, including lower corporate taxes and higher unemployment payments, in addition to an existing bailout package. Government data show that wage arrears jumped in October to over four billion rubles ($145 million), their highest level in a year, and that firms owe back pay to 300,000 people. Economists say the real figures are likely to be higher, though far below those seen in the 1990s, when tens of millions of people were affected. Then, workers went without salaries for months on end, sparking nationwide protests. A Moscow-based advertising executive said she hadn't been paid her salary of 40,000 rubles a month since September. "I keep going to work because I don't want to lose all the money I've earned," she said. "I'm hoping I might get paid before the New Year."

Wall Street and Washington conspired to defraud Japanese banks - (www.globalresearch.ca) Intelligence agencies in China and Japan are focusing on the role of a successor entity of Salomon Brothers as being behind a fraud against Japanese banks by the U.S. Treasury, the Federal Reserve, and Wall Street to bail out unscrupulous Wall Street bankers and mega-investors. Salomon was the first to offer mortgage bonds to infuse capital into failing firms. It began its mortgage bond business in 1935 to circumvent a “capital strike” organized by Wall Street’s top investment firms to protest Securities and Exchange Commission Chairman Joseph P. Kennedy’s tough new regulations on Wall Street following the Great Depression. In 1962, Salomon teamed up with Merrill Lynch, Blyth & Co., and Lehman Brothers to form the “Fearsome Foursome.” The foursome became aggressive as block traders of stocks and bonds and took over bond trading from traditional underwriters. When the Republican Congress approved deregulation of mortgage trading in the 1980s, Salomon was in the cat bird’s seat as savings and loans began selling mortgages as bonds. Under John Gutfreund as CEO, Salomon became the king of the mortgage-backed securities market. However, the savings & loan scandal, a Treasury bill (T-Bill) scandal in which Salomon submitted false bids to the Treasury Department to purchase more Treasury bonds than legally permitted, and involvement in the junk bond business ultimately led the SEC to fine Salomon and bar Gutfreund from ever serving as a CEO of a brokerage firm. Salomon was acquired by Travelers Group and later by Citigroup and was briefly known as Salomon Smith Barney. Salomon is now an autonomous division of Citigroup Global Markets. Chinese and Japanese intelligence agencies that look closely at financial malfeasance are alarmed that the Salomon division of Citigroup has managed to take over all of Lehman Brothers’ viable assets, leaving the U.S. bankruptcy court holding the debt of the failed securities firm. Lehman Brothers filed for Chapter 11 bankruptcy on September 15, 2008. Lehman had borrowed billions from two Japanese banks -- Nomura and Sumitomo Mitsui -- to stay afloat. Our Asian intelligence sources report that the Salomon division of Citigroup engaged in a massive fraud scheme with the connivance of the Treasury Department of Henry Paulson and the Federal Reserve Bank of Ben Shalom Bernanke. The Japanese government of Prime Minister Taro Aso realizes the impact of the fraud committed against its banks by Salomon/Citigroup and has backpedaled on an earlier promise to hold snap early elections. The opposition Democratic Party, which controls the upper house of the Japanese parliament, smells blood in the water and wants to see early elections.

Suspect in triple-slaying owned 19 properties - (www.sfgate.com) Jing Hua Wu, the engineer who police say fatally shot three executives at a Santa Clara startup company last week just hours after being fired, spent the last few years amassing a large portfolio of investment properties. According to public records from eight counties in three states, Wu and his wife own at least 19 homes and vacant lots worth more than $2.4 million. One house in Arkansas, which is now being offered for rent by Wu, is in Hot Springs Village, the largest gated community in the nation. It has a screened porch with a golf course view. But Wu, after his arrest in the Friday slayings of SiPort's chief executive, its human resources manager and its vice president of operations, told the Santa Clara County public defender's office that he could not afford a private attorney, officials said. While refusing to discuss details, authorities said they are looking into whether Wu's financial situation had been affected by his foray into real estate before the nation's foreclosure crisis. A review of public records does not make clear how much equity the father of three from Mountain View has in the homes or how much debt he is carrying.

Bank CEO who took bailout opposes aid for automakers - (www.chron.com) The chief executive of a major U.S. bank that received $25 billion from the government's financial bailout package said Tuesday that federal aid shouldn't be dispensed to the ailing Detroit Three automakers — unless they become the Detroit Two. "I think there's one too many" automakers, Bank of America CEO Kenneth Lewis told the Detroit Economic Club during a meeting in Cobo Center, the downtown convention center that's home to the North American International Auto Show each January. He added he would require consolidation if he was deciding on a bailout. "I think the American people are suspect of just giving more money and buying more time," he told reporters after the speech. "They want to see that the companies have in fact changed and the strategies have changed." Auto executives, appealing to the Senate Banking Committee on Tuesday, insist they need $25 billion in emergency bridge loans to avert a collapse of one or more of their companies. Charlotte, N.C.-based Bank of America has received its $25 billion in government funds as part of the bailout effort envisioned to rescue the financial system. Nine large banks, including Bank of America Corp., Wells Fargo & Co., Citigroup Inc. and JPMorgan Chase & Co., received $125 billion last month. Lewis said Bank of America's was "invited" by the Treasury Department to take its share — $15 billion for the bank and $10 billion for Merrill Lynch, which Bank of America has acquired — to stimulate the market by providing more loans. The bank is committed to that goal, he said.

The Plunge Protection Team - (en.wikipedia.org) "Plunge Protection Team" was originally the headline for an article in The Washington Post on February 23, 1997,[2] and has since become a colloquial term used by some mainstream publications to refer to the Working Group.[3][4] Initially, the term was used to express the opinion that the Working Group was being used to prop up the markets during downturns.[5][6] Financial writers for British newspapers The Observer and The Daily Telegraph, along with U.S. Congressman Ron Paul and writers Kevin Phillips (who claims “no personal firsthand knowledge” and is “not interested in becoming a conspiracy investigator”) [7] and John Crudele,[8] have charged the Working Group with going beyond their legal mandate. Conspiracy theory claims about the Working Group generally include that it is an orchestrated mechanism that attempts to manipulate U.S. stock markets in the event of a market crash by using government funds to buy stocks, or other instruments such as stock index futures—acts which are forbidden by law. However, these articles usually refer to the Working Group using moral suasion to attempt to convince banks to buy stock index futures.

Adult children moving back house with parents - (www.latimes.com) Donald Garcia, 35, and his wife, Augustine, were living in a Burbank apartment when Augustine's mother approached them for help. She had refinanced her three-bedroom Tujunga home a year and a half earlier with an interest-only loan, and what had been a $900 monthly house payment had doubled. "Her mortgage company told her she couldn't refinance for seven years, so we moved in to help out," says Garcia, who added that a change in his apartment's pet policy would have forced a move anyway. Then, a few months ago, more change: Augustine lost her $60,000-a-year job as a manager at a hardware store. Garcia, trained as an electrician's assistant, could find no such work following the collapse of the housing market, so he started driving a tow truck. Now he and Augustine, he says, owe money to her mother because they haven't been able to help much with household expenses. "It's hard because I've been living on my own since I was 17," Garcia says. "We went in like roommates -- we wouldn't be in her business, and she wouldn't be in ours. She lived here alone for the last six years, and to have her son-in-law and daughter back -- I'm sure it's been hard on her not having her own privacy."

House prices still falling in Colorado - (www.denverpost.com) The median price of single-family homes sold in Denver, Colorado Springs and Boulder continued to fall during the third quarter compared with a year ago, according to a report Tuesday from the National Association of Realtors. But home prices in all three markets revealed a steadying trend compared with the first and second quarters. In the Denver-Aurora area, the median price of single-family home sales was $225,100, down 11.4 percent from the median of $254,100 in the third quarter of 2007, according to the association.



OTHER STORIES:

Berkshire Is Down Almost 50% from All-Time High - (www.cnbc.com)
Fannie Mae, Freddie Mac to Suspend Foreclosures - (www.cnbc.com)
Oil Settles Below $50 as Investor Confidence Sinks - (www.cnbc.com)
In Levittown, Old Myths Meet Hard Reality - (www.nytimes.com)
Save and go to hell - (cgis.jpost.com)
Shilling for a New World Order - (from 2004) - (www.sandersresearch.com)
Citigroup May Seek Merger as Stock Plunges Further - (www.cnbc.com) Citigroup, trying to arrest the sharp slide in its stock price, may look for a possible merger partner or take other steps to raise cash, senior officials told CNBC.
The English buy-to-rent dream has turned into a nightmare - (www.independent.co.uk)
The Mother of All Bailouts Keeps Growing, and Growing - (www.survivalblog.com)

Asia Continues Downward Spiral on Wall Street Blues - (www.cnbc.com)
What Financial Crisis? Congress Returns to Gridlock - (www.cnbc.com)
Democratic Leaders Push Auto Bailout to December - (www.cnbc.com)

Fear Gripping Commercial Real Estate—Buy Why? - (www.cnbc.com)

Funds of hedge funds see $22 billion of outflows as performance ... - (www.marketwatch.com) Investors withdrew $40 billion from hedge funds in October as the industry suffers record losses, Hedge Fund Research said Thursday. Funds of hedge funds, which allocate money to a range of underlying managers, saw the most redemptions at $22 billion last month, HFR reported
The Economics and Ethics of Mortgage Default - (www.seekingalpha.com)
The Great Mortgage Modification Pump - (mrmortgage.ml-implode.com)
Median US Housing Prices Poised to Fall Back Below $200K - (www.seekingalpha.com)
Microsoft May Tap Debt Markets - (www.cnbc.com)
Fast Money: When Will The Selling End? - (www.cnbc.com)

Housing Slump Hits Canada - (www.bloomberg.com)
Screenplay: Surviving the Coming Collapse - (www.rawles.to)
Real estate agent kept slave. Typical. - (www.sfgate.com)