Thursday January 22 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

Florida Fund Manager Disappears as Clients Report Missing Money - (www.bloomberg.com) Arthur Nadel, a hedge-fund manager in Sarasota, Florida, has disappeared and clients are concerned they may have lost hundreds of millions of dollars, according to law enforcement officials. Nadel, 76, is president of Scoop Management Inc., which oversees funds including Valhalla Investment Partners LP. He was reported missing two days ago after he called his stepson, Geoff Quisenberry, and told him to go to his house where he had left a note, Lieutenant Chuck Lesaltato of the Sarasota County Sheriff’s Office said today in a telephone interview. Nadel’s wife, Peg, and Quisenberry, were “concerned about his welfare,” Lesaltato said. Nadel had sounded “distraught,” Lesaltato said, citing the note. Scoop may have managed as much as $350 million, the Herald- Tribune in Sarasota reported today on its Web site. The newspaper said Nadel was a “prominent player in Sarasota social and philanthropic circles.” It described his note as a suicide note. Nadel was last seen by his wife at 8:45 a.m. on Jan. 14 when he left for work, Lesaltato said. Sarasota police launched an investigation today after receiving calls since 1:30 p.m. concerning allegations about “hundreds of millions of dollars” missing, Captain William Spitler said in a telephone interview.

Madoff does Minneapolis - (money.cnn.com) All you need to know about this story is that the supposed victims that were country club goers and elite within the elite within the community, now believe the government should bail their asses out. Graybow, the communications entrepreneur and victim, is particularly incensed that the government failed to spot Madoff's mischief despite repeated warnings and several investigations into the firm. "It is shameful that after numerous inquiries from the investment community," Graybow says, "the regulators didn't thoroughly research and investigate the truth and uncover the underlying mechanics of the Madoff operations." He believes a government fund for victims is an appropriate solution, citing the failure of regulators to catch Madoff. At a time when everyone from auto companies to investment banks to state governments is holding a hand out to the government, Graybow's notion might have a chance, at least in theory. But in reality, the line at the government till is already very long and is likely to grow longer. For some members of the Oak Ridge club, the only solace may be springtime, which will come not a moment too soon. Tucked into the rolling hills of Hopkins, a suburb west of Minneapolis, the recently refurbished Oak Ridge Country Club looks much like a middle school: beige paneling, a limestone base, and energy-efficient windows. Along the main road to the club is a modest apartment complex with four signs advertising units for rent. Beyond Oak Ridge's modest doors, however, is a well-appointed interior that provides a gathering place for some of the wealthier families in the Twin Cities. In Minnesota's warm summers the club's golf course, tennis courts, and playground bustle with prosperity, but this winter, with the grounds buried in snow, the conversation at Oak Ridge has turned as grim as the weather. Typically at such clubs, members swap tips and ideas. People you golf with, after all, are usually people you trust. And for more than 20 years some of the members have enthusiastically shared one notable financial strategy: investing with Bernard L. Madoff. The predominantly Jewish country club, which dates back to 1921, is the hub of the scandal in the Cities. While fraud victims in Manhattan, Palm Beach, Hollywood, and European cities have grabbed the headlines, Madoff's alleged $50 billion Ponzi scheme reached other towns as well. He had a particularly painful impact on the Cities, where his method of preying on Jewish families and foundations was highly effective in this close-knit and long-established community. While some regional reports put the losses at $300 million, a local attorney working with victims believes $600 million is a more accurate number. He knows of two families who lost a total of more than $130 million. Dozens of other families lost smaller amounts, representing everything from children's college savings to retirement accounts, while local Jewish-funded philanthropies find themselves scrambling to pay for basic core missions for the poor.
Fed May Purchase Treasuries in Days to Ease Credit, UBS Says - (www.bloomberg.com) The Federal Reserve may purchase Treasuries within the next few days or weeks as it broadens its policy beyond interest rate cuts to ease credit conditions amid the worst recession in 25 years, according to UBS AG. “Fed officials use every chance they get to highlight Treasury purchases as an important arrow in their quiver,” William O’Donnell, U.S. government bond strategist at UBS Securities LLC in Stamford, Connecticut, wrote in a research report today. “It now appears as if the Fed may use Treasury purchases as a blunt tool to bring loan rates down further. This makes it more likely that Treasury purchases come sooner.” Fed Chairman Ben S. Bernanke reiterated Jan. 13 that he’s considering buying long-term Treasuries as a way to bring down borrowing rates and unfreeze private credit markets as U.S. economic data and government reports continue to show the recession is deepening.

Minneapolis' 'Star Tribune' newspaper files Chapter 11 - (www.usatoday.com) Less than two years after it was bought by a private equity group, the Star Tribune has filed for reorganization under Chapter 11 bankruptcy. "We determined that the filing was necessary to reduce our operating costs, restructure our debt and create a financially viable business for the future," Publisher and Chairman Chris Harte said in a note to readers posted on the newspaper's website late Thursday. Harte said the filing would allow Minnesota's largest newspaper to continue business as usual as it restructures. The filing came a week after the Star Tribune and the Newspaper Guild ended talks, saying they were unable to agree on management's request for concessions. "Obviously, I think it's unfortunate. It's not our decision, it's the company's, and we take very seriously the future of the newspaper," Graydon Royce, co-chairman for the Star Tribune's unit of the Guild, said of the bankruptcy filing.

FDIC, regulators shut down two banks - (www.marketwatch.com) The Federal Deposit Insurance Corporation and state regulators on Friday shut down banks in Illinois and Washington - the first bank failures of the year and the 26th and 27th since the start of the current credit crisis. Berkeley, Ill.-based National Bank of Commerce was shut down and he FDIC said Republic Bank of Chicago will assume all of National Bank of Commerce's deposits. The two locations of National Bank of Commerce will reopen Saturday as branches of Republic Bank, the FDIC said. The FDIC estimated that the cost of National Commerce Bank's failure to the Deposit Insurance Fund will be $97.1 million. Also on Friday, the Bank of Clark County, Vancouver, Wash. was shut down and the FDIC was named receiver. The FDIC said Umpqua Bank (UMPQ) , based in Roseville, Ore., will assume the insured deposits.

Circuit City to Go Out of Business After 60 Years, Sell Assets - (www.bloomberg.com) Circuit City Stores Inc., the bankrupt consumer-electronics retailer, will shut down all of its 567 U.S. stores after failing to find a buyer that would keep the chain in operation. Great American Group WF LLC; Hudson Capital Partners LLC; SB Capital Group LLC; and Tiger Capital Group LLC won the right to liquidate the company’s assets in a court-sanctioned auction. Circuit City creditors are guaranteed to get the first 70.5 percent of the value of the $1.2 billion to $1.3 billion in inventory. Stockholders will probably get nothing, Circuit City said today in a statement. Sales declined at Circuit City, once the biggest U.S. electronics retailer, as it lost market share to Best Buy Co., Wal-Mart Stores Inc. and online retailers. On Nov. 10, it filed for bankruptcy in Richmond, Virginia, after suppliers cut off credit and demanded cash up front for shipments. At the time, Circuit City, which employs more than 30,000 people in the U.S., planned to exit court protection as a going concern.

Stimulus may bolster dairy industry - (www.watertowndailynew.com) A stimulus package may be a lifeline for the nation's economy, but it could be a death sentence for a lot of cows. Lawmakers are looking for ways to use the forthcoming stimulus bill to help dairy farmers, and the number one priority is to dampen milk supplies and prop up prices. Translation: reduce the nation's dairy herd. Exactly how Congress will accomplish that remains uncertain. An initial effort to use stimulus money to pay farmers to retire cows failed when House Appropriations Committee Chairman Rep. David R. Obey, D-Wis., objected on the grounds that it violated a promise not to include earmarks in the bill, said Rep. Collin C. Peterson, D-Minn., chairman of the House Agriculture Committee. Taking milk cows out of production as a way to control milk prices is a controversial approach. The federal government tried that in the 1980s through the whole herd buyout program, and while the policy worked for a time, milk production eventually bounced back and farmers were once again grappling with low milk prices.

Olympic Sized Depression Hitting Vancouver - (futronics.blogspot.com) The Olympics in Vancouver-Whistler are turning out to be an unmitigated disaster. All of the planning going into the preparations assumed that economic expansion was a given. There was no contingency for a worldwide business slowdown. Surely, the economists they had hired assured them that no such thing had any statistical probability of occurring, and therefore wasn't worth planning for. This arrogance was prevalent regardless of numerous Olympic experiences gone awry over the decades (the Montreal 1976 summer games had debts only repaid 30 years later, in 2006). I'm guessing the attendance figures the Olympic committee have assumed will also turn out to be wildly optimistic and revenue for the games and small businesses alike will turn out to be far lower than expected. I'll give my readers two guesses as to who will be paying for this financial disaster, but you'll likely only need one. That is an extremely well documented post on the Olympic madness in Vancouver. Inquiring minds will want to take a look. I hope Chicago is looking but I am sure its eyes are shut.

OTHER STORIES:

Solbes Says Spain Faces Deepest Recession in 50 Years - (www.bloomberg.com)
French Business Confidence Index Falls to 21-Year Low - (www.bloomberg.com)
Dublin nationalises Anglo Irish Bank - (www.ft.com)
Obama Financial Rescue May Revive Effort to Resolve Bad Assets - (www.bloomberg.com)
U.S. `Bad Bank' Plan Gets Momentum to Revive Lending - (www.bloomberg.com)
U.S. Consumer Price Gains Slow to 0.1% Annual Pace - (www.bloomberg.com)
Senate Votes To Release Bailout Funds To Obama - (www.washingtonpost.com)
Schwarzenegger Says Deficit has ‘Incapacitated’ State - (www.bloomberg.com)
Rescue of Banks Hints at Nationalization - (www.nytimes.com)
California faces insolvency, governor warns - (www.ft.com)
World Oil Demand Set for First 2-Year Drop Since 1983, IEA Says - (www.bloomberg.com)

Bank of America Posts Quarterly Loss After Bailout - (www.bloomberg.com)
Citigroup Reports $8.3 Billion Loss, Split Into Two Businesses - (www.bloomberg.com)
Bank of America Receives $138 Billion of Rescue Funds - (www.bloomberg.com)
National Bank of Commerce in Illinois Seized by OCC - (www.bloomberg.com)
$1.5 Billion U.S. Loan for Chrysler Financial - (www.nytimes.com)
Citigroup Reports Big Loss and a Breakup Plan - (www.nytimes.com)
GE Capital May Target Up to 11,000 Jobs This Year - (www.bloomberg.com)
Hertz Will Cut More Than 4,000 Jobs to Reduce Costs - (www.bloomberg.com)
Honda slashes Japan production by further 56,000 vehicles amid global slump - (www.usatoday.com)

Can Apple Fill the Void? - (www.nytimes.com)
Will U.S. Finally Take Bad Assets Off Banks’ Books? - (www.nytimes.com)