Sunday December 21 Housing and Economic stories

TOP STORIES:

Illinois corruption: deep roots, tough to weed out - (news.yahoo.com/s/ap) More than 25 years ago, a visiting small-town judge stashed a tape recorder in his cowboy boot and came away with shocking evidence of bribe-taking and bagmen in Chicago's courts. Former Judge Brocton Lockwood was part of an unprecedented FBI sting operation in the Cook County courts called "Operation Greylord" that uncovered judges, lawyers and clerks taking cash, fixing cases and engaging in other brazen judicial corruption. The case is a stark example of the corruption that has become a cottage industry in Illinois and contributed to its long history of scoundrels and scandals. Last week, there was an addition to the list: Gov. Rod Blagojevich's arrest on charges that he schemed to auction off President-elect Barack Obama's open Senate seat. So when the governor was escorted by federal agents from his home in handcuffs, it seemed painfully familiar to Lockwood. "I thought nothing has changed," the retired judge said. "I'm embarrassed for the state. I'm disappointed for the nation because this is going to divert attention from Obama's efforts to deal with bigger issues than Blagojevich. ... It just makes politics a sleazy business." Lockwood's puzzlement was echoed by people around the nation as the Blagojevich scandal unfolded: What is it about Illinois that seems to breed political corruption, and why hasn't anyone been able to do anything about it?

Chicago Tribune: Rahm Emanuel had conversations (on wiretap) with Blagojevich administration before election on vacant Obama seat – (www.connpost.com) The scandal continued to hound Reps. Jesse Jackson Jr. and Rahm Emanuel, Obama's choice for chief of staff. About a dozen protesters stood outside Jackson's office Saturday demanding his resignation, and Republicans called for more information from Obama about Emanuel's role in the Senate selection process. The Chicago Tribune reported that Emanuel had conversations - captured on wiretaps - before the election with the Blagojevich administration about who would replace Obama in the Senate. The report did not suggest any dealmaking in the conversations, and Obama has strongly denied that anyone on his team committed wrongdoing. Jackson was identified as one of the candidates Blagojevich was considering to replace Obama, and a criminal complaint said his supporters were willing to raise $1.5 million for the governor to make the appointment happen.

J. Ezra Merkin, Chairman of GMAC Financial Services is a failure at managing GMAC, his Hedge Fund, and his own money. Fire this clown!!! – (www.examiner.com) Madoff, 70, said in regulatory filings that he only had around 25 clients, but it has become apparent that the list of people who lost money may number in the hundreds or even thousands. Among those who have acknowledged potential losses so far: Former Philadelphia Eagles owner Norman Braman, New York Mets owner Fred Wilpon and J. Ezra Merkin, the chairman of GMAC Financial Services. Harry Susman, an attorney in Houston, said he represents a group of clients who had unknowingly become entangled in the scandal by investing in a hedge fund managed by Merkin, which then put almost all of its $1.8 billion in capital in Madoff's hands. "They had no idea they had exposure," Susman said. He said his clients were now dumbfounded as to how the fund came to invest all of its holdings with just one man, especially since concerns had been circulating for years about Madoff's operations. For decades, Madoff had dual reputations among investors. Many wealthy New Yorkers and Floridians considered him a reliable investment whiz. Others, more skeptical, had questioned whether his returns were real, pointing to the firm's secrecy and lack of a big-name auditor. But when he met privately with a family member at his firm earlier this month, something clearly was amiss. First, federal authorities say the 70-year-old Madoff surprised the unidentified family member by saying he wanted to pass out hefty annual bonuses two months earlier than usual, court papers said. Then, when challenged on the idea, he said he "wasn't sure he would be able to hold it together" if they continued the discussion at the office, and invited him to his apartment.

Poor economy is the nail in the RV industry's tire - (www.mercurynews.com) All I can say to this story is “Duh”. Have they not heard of the credit crisis? The summer's run-up in fuel prices has also dissuaded customers from plunking down money on the fuel-swilling vehicles. Type A RVs typically get 8 to 12 mpg, according to RVIA spokesman Kevin Broom. Type B and Type C vehicles are more fuel efficient, with some models getting as much as 20 mpg, Broom said. Although gas prices have fallen more than 56 percent from their summer highs, RV sales have not picked up, Thompson notes. "The No. 1 thing we need right now is consumer confidence and the restoration of credit," she said.

Corrupt union can’t manage a non-profit, yet makes recommendations on how to close CA state budget gap. Do not listen to these corrupt union bosses:
· SEIU Union-founded nonprofit spent zero on its charitable purpose in two years - (www.latimes.com) Tyrone Freeman, then head of the SEIU’s largest California local, helped start the Long Term Care Housing Corp. in 2004. He is under investigation by the federal government. The charity was founded by a scandal-ridden Los Angeles chapter of the Service Employees International Union. Its stated aim was to provide housing to low-income workers.
A nonprofit organization founded by California's largest union local reported spending nothing on its charitable purpose -- to develop housing for low-income workers -- during at least two of the four years it has been operating, federal records show. The charity, launched by a scandal-ridden Los Angeles chapter of the Service Employees International Union, had total expenses of about $165,000 for 2005 and 2006, and all of the money went to consulting fees, insurance costs and other overhead, according to its Internal Revenue Service filings. Records show no recent aid to two charities from union golf event. Charity watchdogs say that nonprofits should never have zero program expenses in two successive years and that well-performing charities direct at least 70% of their annual spending to their charitable purpose. "Of the 5,000-plus charities we've looked at, I don't think we've ever seen one that didn't spend anything on its charitable programs," said Sandra Miniutti, vice president of Charity Navigator, an online rating service. Last year, the nonprofit reported spending $513,000 in connection with a Compton housing development, and $59,200 in consulting fees for its charitable programs, which together accounted for about 88% of its total outlays. The primary mission of the charity -- the Long Term Care Housing Corp. -- is to provide affordable homes for the local's members, most of whom earn about $9 an hour caring for the elderly and infirm. But SEIU officials declined to discuss the charity, saying it is a separate legal entity from the union, even though its board is dominated by officials from the local. The charity is located at the local's headquarters.
· California lawmakers get plenty of suggestions for closing budget gap - (www.sacbee.com) If there's one thing legislators don't have to worry about in their never-ending struggle with the state budget – and there may be only one thing – it's suffering from a lack of advice. In the past two weeks alone: • The Service Employees International Union, which represents 700,000 California workers, began airing TV commercials that at least implicitly call for tax increases to fill a looming budget gap of about $40 billion over the next 19 months. The union wants tax increases on the wealthy and a federal bailout to solve the deficit.

Worker protests show that squeaky wheel gets the oil - (www.insidebayarea.com) When the employees at Republic Windows & Doors in Chicago showed up to work on a recent Tuesday, they were informed that their services would no longer be needed. The factory — another casualty of the anemic economy — was shutting down. Come Friday, all 300 worker would be out on the street. No health insurance. No severance. No nothing. Just git. Stories like these have become all-too familiar. As our nation's economic crisis continues to deepen, millions of Americans have been laid off. The ranks of the unemployed have swelled. What makes Republic Windows unique — and what captivated the nation for nearly a week — is that the workers there decided they weren't going to slink quietly into the night when they had mortgages to pay and families to feed. Instead, they did what workers in this country have not done since the height of the labor movement 70 years ago. On Dec. 5, they took over the factory. For the next five days, they stubbornly refused to leave the premises until they were paid the severance and vacation pay owed them. Most of the workers were members of Local 1110 of the United Electrical, Radio and Machine Workers of America. Under federal law employees are entitled to 60 days severance when a plant closes. However, Republic Windows said it couldn't pay because Bank of America had canceled the company's line of credit. Bank of America said, so sorry, but it was the company's responsibility, not the bank's, to pay its workers.

Desperate real estate advisor says: Don’t Wait for 4.5% loans to arrive!! - (seattletimes.nwsource.com) Could a 4.5 percent mortgage be your personal piece of the bailout pie? Apparently, large numbers of consumers thought precisely that during the week following disclosure that the Treasury Department was working on plans to slash loan rates for consumers who buy houses in the coming months. But in the meantime, the news threw a wrench into the marketplace — making some shoppers reluctant to commit to buying without guaranteed access to 4.5 percent mortgage money. In some cases, it stalled deals that were ready to go. "It put us into limbo," said Dennis Badagliacco, CEO of Altera Real Estate, a brokerage firm based in San Jose, Calif. "Once [news] leaked out, it immediately slowed down" the pace of sales contracts and discussions, he said — an ironic side effect of a plan ultimately meant to stimulate real-estate transactions. Customers didn't want to gamble that they'd be locked into a 5.5 percent mortgage when 4.5 percent financing might be readily available if they simply waited a week or two, Badagliacco said. Interestingly, the National Association of Realtors, of which Badagliacco is a director, was the primary force behind the concept of federal intervention to lower rates by a full percentage point. Representatives of the association brought the proposal to federal officials as part of a multiple-point plan to kick-start the economy through housing.

Condo tenants fight for their homes in Torrance - (www.contracostatimes.com) Retiree Ann Mitchell has lived comfortably, if frugally, in her Torrance condominium complex near the ocean since 1984. She fell in love with her view, proximity to quaint Riviera Village in a quiet neighborhood and bright, open and airy townhome at Palos Verdes Boulevard and Calle Mayor. She never worried about making the payments on her conventional 30-year mortgage, built up plenty of equity in her two-bedroom condo and boasts an excellent credit rating. Yet the 66-year-old retired project manager fears losing her home and everything she has worked for. That's because the homeowners association at Village Palos Verdes where she lives has levied a $75,000 special assessment on her and the other 180 homeowners to pay for a $13.5 million exterior renovation project.

Tri-valley wealthy cities not immune to the economic slowdown.
· Man robs Pleasanton Motel 6 - (www.contracostatimes.com)
· Armed man robs Walnut Creek gas station - (www.contracostatimes.com)



OTHER STORIES:

States’ Funds for Jobless Are Drying Up - (www.nytimes.com) With unemployment claims reaching their highest levels in decades, some states are turning to the federal government.
Gov. Paterson to Propose $4 Billion in Taxes and Fees to Close Deficit - (www.nytimes.com) New York’s Gov. David A. Paterson will propose levies on a range of items, from soft drinks to furs and boats, in order to help close a ballooning deficit.
Paterson’s Office Is Not Amused by ‘Saturday Night Live’ Skit - (www.nytimes.com) Gov. David A. Paterson’s office criticized a skit on this weekend’s “Saturday Night Live” in which Mr. Paterson, who is legally blind, was portrayed as disoriented and buffoonlike. The governor’s communications director, Risa B. Heller, said on Sunday that the skit amounted to nothing more than cheap ridicule — a surprisingly strong reaction considering that the governor is well known for making light of his vision problems.

Madoff losses ripple into Boston, shut foundation - (www.reuters.com)
Economy taking toll on East Bay students - (www.contracostatimes.com) "With the economy so bad, we have noticed such a great need for our kids to have clothing," said Kemper, a sixth-grade teacher. "We have a lot of kids who don't have what they need right now because the parents can't afford it. It's not that they aren't trying." As the economy worsens and families across the East Bay struggle to make ends meet, many children go without basics such as warm coats, full stomachs or even a permanent place to live. A recent report by advocacy group First Focus estimated that the mortgage crisis will directly affect 311,000 children in California and 2 million nationwide, with many forced to move away from the stability of their homes and schools. Thousands more will be indirectly affected in other ways, leading to distraction in school, stress, depression and more, the report said. "Not only do mobile students do worse in reading and math, they are also more likely to be held back and eventually drop out," the report said. "These children are not just losing their homes, but they also risk losing their friends, schools, and in many ways, their childhood." The recession has hit some areas in the East Bay — Oakland, Richmond, Antioch, Brentwood and Oakley, among others — especially hard, and children are feeling the pinch.
Money for companies' holiday parties rerouted to Silicon Valley charities - (www.mercurynews.com)
Downturn Pummels Int'l Flights - (www.mercurynews.com)
Companies' holiday party funds rerouted to valley charities - (www.mercurynews.com)

Auto Makers May Hold Key to Drive Santa's Rally - (www.cnbc.com) Stocks could chug higher this week, delivering that evasive Santa Claus rally, but it will all depend on whether investors are comfortable with the status of the auto-industry bailout. Plus, let's hope the Fed doesn't deliver any holiday surprises.
Japan Business Sentiment in Biggest Dive Since 70s - (www.cnbc.com)
Asian Markets Jump 4% on Wall Street's Gains - (www.cnbc.com)
OPEC to Make Severe Cuts to Output - (www.cnbc.com)
Bush Says Auto Bailout Is Not Ready - (www.cnbc.com)
Fairfield Greenwich Fund Plans to Sue Madoff - (www.cnbc.com)
More Foreign Institutions Disclose Exposure to Madoff - (www.cnbc.com)
Fed Expected to Drop Interest Rates Close to Zero - (www.cnbc.com)
Why the Fed May Cut Rates Less Than Investors Expect - (www.cnbc.com)
Embattled Illinois Governor Won't Resign Monday - (www.cnbc.com)