Wednesday December 24 Housing and Economic stories

TOP STORIES:

Arena Football League cancels 2009 season - (news.yahoo.com/s/ap) The decision throws the future of the 22-year-old league into question just days after it said next season had not been suspended. The AFL's owners voted against playing next year during a conference call Sunday night. It was unclear what had changed since the league issued a statement Wednesday night that said the 2009 season had not been suspended "despite rumors and reports to the contrary." The league said in Monday's statement it was "developing a long-term plan to improve its economic model." "Every owner in the AFL is strongly committed to the league, the game, and, most importantly, the fans," acting commissioner Ed Policy said in a statement. "Owners, however, recognize that, especially in light of the current unprecedented economic climate, the AFL, as a business enterprise, needs to be restructured if it is to continue to provide its unique brand of this affordable, fan-friendly sport."

Toyota indefinitely delays Blue Springs, Miss., Prius plant amid auto industry downturn – (www.latimes.com) Toyota Motor Corp. is delaying the start of production at its plant in Blue Springs, Miss., indefinitely as the top Japanese automaker copes with the downturn in the auto industry. The plant was scheduled to begin production in 2010 and make the Prius hybrid. Mike Goss, a spokesman for Toyota's U.S. arm, said Monday that the plant's construction is about 90 percent complete, and Toyota will finish the building. However, the installation of the factory's equipment and machinery — "the most time-consuming" element of construction, he said — is delayed indefinitely. The roughly 100 people who have been hired to oversee construction and install human resources plans at the plant will not lose their jobs and will be assigned other duties, Goss said.

Homebuilder Sentiment Remains at Record Low - (www.cnbc.com) US home builder sentiment held steady at a record low in December as deepening economic turmoil, a deteriorating job market, and a flow of foreclosed homes on to the market continued to hurt market conditions, an industry group said on Monday. The National Association of Home Builders said its preliminary NAHB/Wells Fargo Housing Market Index was 9 in December, unchanged from November when it reached its lowest level on record since being launched in January 1985. Readings below 50 indicate more builders view market conditions as poor than favorable.

Foreign investors fled agencies, bought T-bills – (www.marketwatch.com) Monthly inflows hit record as investors sought safety from U.S. troubles in U.S. assets. Foreign investors shed their holdings of Fannie Mae and Freddie Mac debt after the U.S. government's takeover of the floundering mortgage institutions, and instead piled into short-term Treasury bills, October data released Monday show. The rush to safety lifted monthly inflows of net foreign investments in U.S. securities to a record high of $286.3 billion, said the U.S. Treasury in its monthly Treasury International Capital, or TIC, report. The upshot was that foreigners increased their holdings of U.S. dollar assets even after the U.S. financial system delivered a list of historic failures and near-misses, including the September bankruptcy of Lehman Brothers and bailout of American International Group, Ltd., and then had its worst October for stock trading since 1987. See article on October trading records.

State budgets expected to drop for first time in a generation – (www.marketwatch.com) States will experience a bleak fiscal 2009, a new report said Monday, with spending expected to decrease for the first time since 1983 and budget cuts to follow in coming fiscal years. Spending is expected to drop by 0.1% in fiscal 2009, according to the report issued jointly by the National Governors Association and the National Association of State Budget Officers. "Given the continued stall in credit availability, rising unemployment rates and increasing demand for state services such as Medicaid and welfare as people lose their jobs, the fiscal outlook for states is likely to get worse," said Raymond Scheppach, executive director of the governors association. He said the decline in the housing market has impacted state revenues, especially corporate and sales tax revenues. Read the report.

Madoff Victims: Big Banks, Hedge Funds, Celebrities - (www.cnbc.com) The list of investors who say they were duped in one of Wall Street's biggest Ponzi schemes is growing, snaring some of the world's biggest banking institutions and hedge funds, the super rich and the famous, pensioners and charities. The alleged victims who sunk cash into veteran Wall Street money manager Bernard Madoff's investment pool include real estate magnate Mortimer Zuckerman, the foundation of Nobel laureate Elie Wiesel, and a charity of movie director Steven Spielberg, according to the Wall Street Journal. Among the world's biggest banking institutions, Britain's HSBC Holdings, Royal Bank of Scotland Groupand Man Group, Spain's Grupo Santander, France's BNP Paribas and Japan's Nomura Holdings all reported that they had fallen victim to Madoff's alleged $50 billion Ponzi scheme.

One Retired Couple's Plight: We Lost Everything - (www.cnbc.com) Retired carpet salesman Arnold Sinkin, 75 years old, of Boynton Beach, Fla. and his wife Joan invested their life savings of nearly $1 million with Madoff. "It was the little guys like us that just had our life savings—not seven-figure life savings—and that just disappeared because of a hungry, mean man," said Joan Sinkin. "We have to sit down and figure what kind of life we have left." The Sinkins say they don’t know how they will manage bills and everyday expenses. "We don’t know where to go; we don’t know where to get help,” said Arnold Sinkin. “We’re hoping that because of this interview someone will come around and say, ‘maybe we can help.'"

Auto Maker's Fate: A "Disorderly Bankruptcy"?- (www.cnbc.com) As Detroit waits to see how much financial help it will get from the White House and how that aid will be structured, we keep hearing one thing over and over. The Bush administration wants to avoid a "disorderly bankruptcy" in the auto industry. This is not good news for GM and Chrysler. When the Bush administration announced on Friday that it would make sure the auto industry didn't collapse, Detroit breathed a sigh of relief. After all, there was the implication GM and Chrysler would avoid bankruptcy. Now, that's not entirely certain. The White House says it's looking at a number of options, including some type of "pre-packaged bankruptcy." So is this really a possibility? Could we see GM and Chrysler go into chapter 11? The answer to both is yes.

Are Investors Losing Faith in Warren Buffett? - (www.cnbc.com) Hmmm, funny how the media was treating Warren like a god a few months ago. It's been a difficult year for the Warren Buffett faithful. Core beliefs are being tested. Stock prices have plunged as the government struggles to contain the damage from what appears to be the worst financial and economic crisis since the Great Depression of the 1930s. Berkshire Hathaway is no exception. In late November, the Class A shares traded as low as $74,100 each. That was over 51 percent below their December 2007 all-time intraday high of $151,650. After a rebound that took the stock back into six-digit territory, it is once again trading below $100,000. Berkshire's net earnings plunged 77 percent in the third quarter, as Buffett's long-term wager on the health of global stocks racked up billions in short-term paper losses. Bloomberg reports that bets against Buffett, in the form of short selling of Berkshire stock, rose to a six-year high last month.

Primary care doctors struggling to survive - (www.latimes.com) Relatively low earnings, rising overhead and overwhelming patient loads are sending veteran physicians into early retirement and driving medical students into better-paying specialties.



OTHER STORIES:

'Czars' Ascend at the White House - (online.wsj.com)
When a president wants to signal that an issue really matters, there is nothing like a czar. Obama is making clear that many issues matter to him.
U.S. Stocks: Stocks, Dollar in the Red - (online.wsj.com)
Treasury Still Studying Auto Rescue - (online.wsj.com)
Labor Slump Hits Immigrants - (online.wsj.com)
Iraqis Rally for Shoe Thrower - (online.wsj.com)
Opinion: Bush Blinks on Auto Bailout - (online.wsj.com)

Industry woes leave car design students stranded - (www.latimes.com) Few are being hired, leaving some students to switch focus.
U.S. Supreme Court allows suits over 'light' cigarettes - (www.latimes.com) Smokers say they were deceived into thinking 'light' and 'low tar' brands were safer. The justices' action clears the way for class-action lawsuits, which could imperil tobacco companies.
MGM Mirage to sell Treasure Island for $500 million - (www.latimes.com) Casino operator MGM Mirage Inc. is selling the Treasure Island Hotel & Casino on the Las Vegas Strip to billionaire Phil Ruffin for $500 million, the company said today. Ruffin, whose interests include casinos and greyhound race tracks, purchased the property through Ruffin Acquisition for $500 million cash and $275 million in secured notes issued by Ruffin Acquisition and secured by Treasure Island's assets, MGM Mirage said. The combined value of the deal, including debt, is $775 million. "This is a terrific deal for everyone involved," said Alan Feldman, spokesman for Las Vegas-based MGM Mirage. "We are able to complete a transaction at the right price with no financing involved through any other third party."

Northern Trust cuts 4% of staff - (www.ft.com) Expects to save up to $60m. Northern Trust, the Chicago-based bank, said on Monday that it would cut 450 jobs, or 4 per cent of its workforce, to reduce costs and improve efficiency amid worsening economic conditions. The layoffs will begin in January and Northern Trust expects to take a charge of $20m to $25m to cover severance and benefits costs related to the cuts. The move is expected to generate between $50m and $60m in savings.
Can anyone govern California? – (www.latimes.com) ANALYSIS: Some say it's so big, Balkanized and polarized that it is destined for dysfunction no matter who is in charge.

Housing Poised to Recover But Still Needs US Help - (www.cnbc.com)
The US housing market may be primed for a long-awaited recovery but will still need further help from government rescue measures.
Housing Recovery by Spring: Zell - (www.cnbc.com)
Who's On the List So Far - (www.cnbc.com)

Madoff Was a 'Smooth Operater,' Former SEC Official - (www.cnbc.com)
Bush Warns Auto Makers A Deal Is Not Imminent - (www.cnbc.com)
As Rates Race to Zero, Printing Presses Gear Up - (www.cnbc.com)

Fannie Lets Renters Stay, But Evictions Still Loom - (www.cnbc.com)
Supreme Court To Allow 'Lights' Cigarette Cases - (www.cnbc.com)
As Christmas Nears, Expect More Discounts - (www.cnbc.com)