Saturday February 21 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

Popular Rage Grows as Global Crisis Worsens - (www.spiegel.de) As the global economic crisis deepens, tempers around the world are getting shorter. French and British trade unions are organizing strikes, Putin is sending troops into the streets and Beijing is trying to buy itself calm. A rally against car import duties in Krasnoyarsk, Russia: Citizens around the world are protesting against their governments' handling of the economic crisis. In the cabinet of French President's Nicolas Sarkozy, there was talk of a "Black Thursday," and from Sarkozy's perspective, that was exactly what Jan. 29, 2009 turned out to be. Schools were closed, and so were railroads, banks and stock markets. Theaters, radio stations and even ski lifts were shut down temporarily. Trash receptacles were set on fire in Paris once again, and a crowd gathered on the city's famed Place de l'Opéra to sing the "Internationale," the anthem of revolution. The global financial crisis has already reached France, bringing business failures, mass layoffs for some workers and reduced working hours for others. On that infamous Thursday, it drove up to 2.5 million people into the streets, in cities from Marseilles to Brest and Bordeaux. The situation was not like in May 1968, when France was in a state of emergency. Nevertheless, the country's unions called the demonstrations "historic," characterizing them as the most important protest movement to date against the current French president. Paris is not the only place plagued by unrest. Across the English Channel in Britain, workers protested at a refinery near Immingham in Lincolnshire, triggering solidarity strikes in 19 other locations in the United Kingdom. The demonstrations became a symbol for the fears of the British lower classes, because the country -- according to the International Monetary Fund -- faces the worst downturn among all highly developed economies. Prime Minister Gordon Brown's approval rating is following the decline of the British pound. In Russia, dismal labor statistics have driven Communists and anti-government protestors into the streets from Pskov to Volgograd in recent days, and in Moscow members of the left-wing opposition even ventured onto Red Square. They ripped up pictures of Prime Minister Vladimir Putin, until police arrested and removed them. In China, workers returned from festivities marking the spring festival to hear shocking news from their own government. Beijing announced that about 20 million migrant workers -- more than the combined populations of Denmark, Sweden and Norway -- would likely become unemployed in the coming months. The fast pace of economic growth that has lent legitimacy to the Communist Party's hold on power until now has slowed considerably. According to a government spokesman, 2009 will be the "most difficult" year since the turn of the millennium.

Charterers call for huge rate cuts and threaten defaults - (www.lloydslist.com) THE economic downturn is pushing some charterers to demand that rates be slashed by up to 75%, with one top London shipping law firm now receiving an average of one instruction per day from owners seeking to avoid threatened charter default. In some cases, charterers flatly state that they cannot keep up agreed terms and will hand back the ship unless a sweeping reduction is granted. Banks are keeping a weather eye on the situation, in the awareness that if a charterer does not pay an owner, the owner may not then be able to keep up its mortgage payments. While market sources confirm that banks remain reluctant to foreclose given the precipitous plunge in secondhand vessel values, one leading shipmanager has indicated that it is involved in two potential foreclosures, and expects more such cases in 2009. Harry Theochari, head of the shipping group at Norton Rose, revealed: “We’ve seen one situation where a charterer has come to an owner and asked for a reduction in a small tanker from $30,000 per day down to $10,000.” He has also heard tell of requests pitched even higher in percentage terms, with one charterer reportedly asking for day rates to be dropped by 75%.

Ailing banks on the brink of insolvency - (www.nytimes.com) Some of the nation’s large banks, according to economists and other finance experts, are like dead men walking. A sober assessment of the growing mountain of losses from bad bets, measured in today’s marketplace, would overwhelm the value of the banks’ assets, they say. The banks, in their view, are insolvent. None of the experts’ research focuses on individual banks, and there are certainly exceptions among the 50 largest banks in the country. Nor do consumers and businesses need to fret about their deposits, which are federally insured. And even banks that might technically be insolvent can continue operating for a long time, and could recover their financial health when the economy improves.

As Housing Prices Plunge, Refinancing Gets Harder - (www.cnbc.com) - With mortgage rates at 25-year lows, refinancing applications have reached record levels in the last two months. But homeowners who bought during the boom years are getting squeezed out of refinancing because the value of their home has plummeted. "I tried to refi but they won't give me a new mortgage because I bought at the peak of the market and my house has depreciated," says Connecticut homeowner James McCusker. "I don't have the 20 percent equity in the house I need. When they turned me down, they said to me to qualify for any government-related loan program, I need to lose my job." McCusker, a public relations executive, and his wife, a school teacher bought their home in July of 2005 for $462,500 with a 30 year fixed loan at 6.3 percent. But today, the home has a value today of $433,000. "We have good jobs, never missed a mortgage payment, "says McCusker. "But I can't get any help. There's something wrong with that."

Banks Plan To Dump $50 Billion In Troubled Mortgages On Taxpayers - (globaleconomicanalysis.blogspot.com) - As reported Thursday, Obama officials are working on a plan to spend $50 billion on foreclosure prevention and establish national standards for modifying home loans. The program would include possible government subsidies for homeowners who qualify. Treasury Secretary Timothy Geithner Tuesday announced a plan to stabilize the financial system. One element of the plan is $50 billion of assistance to "prevent avoidable foreclosures" of middle-class homes occupied by their owners, according to a document Geithner released. The Obama plan under consideration would seek to help homeowners before they fall into arrears on their loans. Current programs only assist borrowers that are already delinquent. Under the evolving plan, homes would undergo a standardized reappraisal and homeowners would face a uniform eligibility test, sources said. In an interview, James Lockhart, the regulator that oversees government-controlled mortgage finance companies Fannie Mae and Freddie Mac, told Reuters the industry was eager to have a standardized loan modification standard. "I've talked to all the major servicers—both the big bank ones and the big independent ones—and they are all ready to go, they're chomping at the bit,'' Lockhart, the director of the Federal Housing Finance Agency, said. "The other thing they're asking for standardization.''



OTHER STORIES:

Government May Subsidize Mortgage Modifications - (www.ml-implode.com)
Save banking, not the bankers or the banks; the case of ING - (www.ml-implode.com) - ``It is a good deal for ING and a bad deal for the tax payer because the market valuation of the Alt-A portfolio did not imply t...
Europe's industrial base may never recover from crisis - (www.telegraph.co.uk)
Fed Calls Gain in Family Wealth a Mirage - (www.nytimes.com)
Oil plummets on global demand report - (money.cnn.com)
Home prices in record plunge - (money.cnn.com)

Big Banks Halt Foreclosures - (www.cnbc.com)
Mortgages May Be Subsidized - (www.cnbc.com)
House Passes Stimulus Package, Next Is Senate - (www.cnbc.com)
Who Gets Tax Cuts - (www.cnbc.com)
Where The Money's Going - (www.cnbc.com)
Why This Recession Seems Worse Than '70s and '80s - (www.cnbc.com)
Consumer's Mood Falls Further - (www.cnbc.com)
Sirius XM Bankruptcy Could Come Tuesday - (www.cnbc.com)
Forgot to Buy Flowers? Just Drop the ‘R’ Bomb - (www.cnbc.com)
Why Are Gas Prices Going Up While Oil Keeps Falling? - (www.cnbc.com)
Americans Hitting Road Again As Gas Prices Fall - (www.cnbc.com)

Stocks decline as world finance ministers meet - (finance.yahoo.com)
Treasuries Fall After Sales Amid Speculation on Revival Efforts - (www.bloomberg.com)
Oil breaks out of weeklong price slide - (finance.yahoo.com)
Subsidies For Loan Workouts Weighed - (www.washingtonpost.com)
What’s in the Bill for You - (www.nytimes.com)
O.C. condo prices at Dec. 2002 level - (www.ocregister.com)
Charity sues Highland Capital for more than $1.8 million - (www.dallasnews.com)
Euro-Area Economy Shrinks Most Since 1995 as Recession Deepens - (www.bloomberg.com)
China’s Economy Shows Signs of Recovery on Stimulus - (www.bloomberg.com)
German GDP plunges 2.1% in fourth quarter - (www.marketwatch.com)
Japan economy seen shrinking at 10 pct pace in 4Q - (www.washingtonpost.com)
Rescue Plan for Housing in the Works - (www.nytimes.com)
Stimulus Aims Two-Phase Jolt at U.S. With Tax Cuts, Spending - (www.bloomberg.com)
Geithner Hampered by Staff Deficit as Wall Street Demands Speed - (www.bloomberg.com)
To save or to spend? Americans ponder their duty - (www.reuters.com)
Fed Calls Gain in Family Wealth a Mirage - (www.nytimes.com)
Stimulus Would Alter Depression-Era Unemployment Benefit System - (www.bloomberg.com)
Ailing Banks May Require More Aid to Keep Solvent - (www.nytimes.com)
Cost-conscious customers wreaking havoc on ailing restaurants - (www.latimes.com)
Cost-conscious customers wreaking havoc on ailing restaurants - (www.latimes.com)
Charter to file for bankruptcy protection - (www.ft.com)
In Japan’s Stagnant Decade, Cautionary Tales for America - (www.nytimes.com)