Saturday January 10 Housing and Economic stories

TOP STORIES:

GE Capital to Raise $10 Billion in Sale of FDIC Notes - (www.bloomberg.com) Another government bailout, allowing GE Capital to sell debt backed by FDIC. GE Capital Corp., the lending arm of General Electric Co., plans to raise $10 billion in the biggest offering of debt backed by the Federal Deposit Insurance Corp. The sale will include $2 billion of two-year notes, $5.5 billion of 3.5-year debt and $2.5 billion of 18-month securities, according to a person familiar with the sale who declined to be identified because terms aren’t set. The sale may take place as soon as today. Today’s offering would put GE Capital halfway toward its goal to “pre-fund” $45 billion in debt that the company plans to refinance this year. GE Capital sold about $12.5 billion of FDIC-backed notes last year, according to data compiled by Bloomberg.

Ron Paul: Social Security & Fractional Reserve Banking are Ponzis that Dwarf Madoff - (www.housingdoom.com) - Good video from today's Madoff Fraud Allegations & Financial Markets Regulation hearing during which Ron Paul calls fractional reserve banking and our social security system Ponzi schemes.

Harley International Fund Said to Have Invested With Madoff - (www.bloomberg.com) Hmm, interesting to see how many $$s in fees. Harley International Ltd., a hedge fund run by Cayman Island-based Euro-Dutch Management Ltd., invested all its assets with Bernard Madoff, the financier arrested last month in an alleged $50 billion fraud, a person familiar with the matter said. The fund managed $2.76 billion as of Oct. 31 and returned an average of 10.9 percent annually since April 1996, according to a monthly update sent to investors. Jamie Moss, a New York- based spokeswoman for the fund, declined to comment. Madoff, 70, was arrested in New York last month after confessing to employees that his investment company was “a giant Ponzi scheme,” according to an FBI complaint. Investment firms including Tremont Group Holdings Inc. and Fairfield Greenwich Group also set up hedge funds whose assets were overseen by Madoff. Euro-Dutch’s directors are Anthony L.M. Inder Rieden and Dawn Davies, according to the firm’s 2007 financial statement. Rieden is a former director and Davies a retired deputy managing director of Fortis Fund Services. Fortis Prime Fund Solutions Ltd. is the administrator of Harley International, the report to investors shows. Fix Asset Management, which has managed portfolios since 1984, provides research and data services to Euro-Dutch, according to the person, who asked not to be identified because the firm is private.

FSA to end ban on short selling - (www.ft.com) Short sellers will be allowed to target financial stocks once again after the City watchdog said that it would relax the contentious ban it introduced during the market chaos of September. The Financial Services Authority said on Monday that it would not renew the restrictions, when they expire on January 16, but added that it would still require those shorting financial stocks to continue disclosing their positions – at least until the end of June. The FSA added that it retained the right to reintroduce the ban without consultation "if necessary". The decision, released after London markets closed yesterday took traders by surprise as prominent politicians had called for the ban to be extended. It also prompted warnings that the resumption of shorting could cause falls in financial stocks.

Manhattan Apartment Sales Drop for Fourth Quarter in Recession - (www.bloomberg.com) Manhattan apartment sales fell for the fourth straight quarter and prices for the most expensive apartments dropped for the first time since the recession began as the national housing slump hit the metropolitan area. Fourth-quarter transactions dropped 9.4 percent to 2,282 units from a year earlier, New York property appraiser Miller Samuel Inc. and broker Prudential Douglas Elliman Real Estate said in a report today. While the overall median sales price rose 5.9 percent, luxury prices dropped 3.9 percent and the median for all resale apartments slid 3.6 percent.

This Great Depression Is Just Getting Started - (www.seekingalpha.com) Arguably, what we can see here is that the current collapse in industrial activity is starting to get near the US historic one in terms of proportions, but we still aren't quite there yet. What we could note that JP Morgan, in its monthly report suggests, is that the present rates of output are equivalent to an annual fall of between 12% and 15%. Really to compare with the fall in the US, we need to get up into the 20% region, but remember the global index is based on an average for 26 countries, and some of these are much worse than others (Japan, Spain, possibly Russia) and will already be around the 20% annual contraction rate in December. The point is also that the situation is still deteriorating, so hang on a bit, since it is not at all excluded that we will hit a 20% annualised contraction rate for the whole aggregate 26 sometime during the first quarter.

Realtors Slam New Fannie Mae Fees, Bloggers - (www.thetruthaboutmortgage.com) In the past week, the National Association of Realtors has slammed both Fannie Mae for imposing new fees and bloggers for creating misperceptions about required housing down payments. In a letter sent to the Federal Housing Finance Agency, the trade group argued that fees set to be added to certain types of mortgages as of April 1 will be passed onto consumers. The fees in question will make it costlier for borrowers to get an interest-only option on their loans, and make it more expensive for those looking to buy a condo or a co-op. The Wall Street Journal cited one fairly typical example that would raise associated costs by two percent, though a Fannie Mae spokesman said the fees are targeted at the highest-risk loans. Which begs the question, why offer such loans to begin with? But I suppose that’s a completely different kettle of fish.


OTHER STORIES:

Bailout Costs Now Exceed That of American Wars - (www.ml-implode.com) - "According to CRS, all major U.S. wars (including such events as the American Revolution, the War of 1812, the Civil War, the Sp...
Pending Sales of Existing Homes Fell 4% in November - (www.ml-implode.com) - The index of pending home resales fell 4 percent to 82.3, the lowest level since the series began in 2001, from a revised 85.7 i...
A bottom in home prices in 2009? 2010? - (www.ml-implode.com) - "If the 1990s housing boom/bust cycle in California is a good guide, we won't see a bottom in home prices nationally until five ...
Home Sale Decline Continues Amid Bleak Economic Forecast - (www.ml-implode.com) - "Pending home sales continued to decline in November but show signs of stabilization, according to data released Tuesday by the ...
Confessions of a former real estate bull - (www.ml-implode.com)
Is The COMEX Doing Fractional Reserve Delivery of Gold? - (www.ml-implode.com)

Treasuries Drop as U.S. Prepares to Sell Record Amount of Debt - (www.bloomberg.com)
Oil up to over $50 on Russia gas, Mideast - (www.reuters.com)
Most Asian Stocks Rise, Led by Electronics; Utilities Decline - (www.bloomberg.com)
Gold Drops for 4th Day in London as Stronger Dollar Cuts Demand - (www.bloomberg.com)
U.S. stock futures return to rising path - (www.marketwatch.com)
European Stocks Gain for Sixth Day; U.S. Index Futures Advance - (www.bloomberg.com)
IPOs at standstill as economy stalls - (www.latimes.com)
Venture firms find turning investments tougher - (www.sfgate.com)

Russia Reduces Gas Deliveries Via Ukraine; Balkan Supply Halted - (www.bloomberg.com)
U.K. December house prices see record annual drop - (www.marketwatch.com)
Indian Exporters May Cut 10 Million Jobs on Global Recession - (www.bloomberg.com)
Toyota to suspend production for 11 days in Japan - (finance.yahoo.com)
Obama Is Said to Favor About $775 Billion for Stimulus Plan - (www.bloomberg.com)
U.S. December Auto Sales Dive 36%, Drag Industry to 16-Year Low - (www.bloomberg.com)
Consumer bankruptcies surge 33% in 2008 - (www.latimes.com)
Metro-Area Foreclosure Sales Tripled in First 10 Months of 2008 - (www.bloomberg.com)
Fed Focuses on Consumer, Corporate Rate Spreads Over Treasuries - (www.bloomberg.com)
Automakers Fear a New Normal of Low Sales - (www.nytimes.com)
GM’s 2008 U.S. Sales Fall to 49-Year Low; Ford Declines - (www.bloomberg.com)
Toyota to shut car plants for 11 days - (www.ft.com)
GMAC’s Sweet Government Ride - (www.nytimes.com)
Hyundai offers US buy back scheme - (www.ft.com)
Eating Crow at a Dinner for Wall St. - (www.nytimes.com)
Grandiosity: Fraud's Perfect Cloak - (www.washingtonpost.com)
TV converter coupon program's out of cash; wait list started - (www.usatoday.com)