Thursday February 12 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

Auto Suppliers Next In Line For Bailout? - (www.cbsnews.com) U.S. auto parts suppliers are in discussions with the Treasury Department about ways to address their financial troubles, industry trade groups said Wednesday. However, no formal request for financial help has been made and no dollar amount has been requested, according to a joint statement by the Motor Equipment and Manufacturing Association and the Original Equipment Suppliers Association. Dave Andrea, vice president of industry analysis and economics for the latter group, declined in an interview to confirm media reports that suppliers are asking for as much as $20.5 billion in aid. "We don't have a formal request in to the U.S. Treasury," Andrea said. "We have been in working discussions with them to scope out the ... problems with the supply base."

Obama gets tough on executive pay - (www.ft.com) Misguided Obama getting tough on executive pay. If we are going to crack down on one class of people, then why not Hollywood, Singers, Barbara Streisand, Athletes, and others. Actors/Actresses are making $20M per picture. That sounds excessive to me, but that is what the market is willing to bear, so they deserve what they are getting paid. The point is not to let moron politicians who got us into the mess micromanage the economy or pay at individual companies. President Barack Obama on Wednesday imposed sweeping restrictions on pay for executives at banks bailed out by taxpayers in an attempt to curb Wall Street excesses and stem public anger before an expected White House request for new emergency funds for the financial sector. Describing recent Wall Street bonuses as “shameful” and expressing “disgust” at chiefs who reward themselves for failure, Mr Obama said the curbs were aimed at “taking the air out of the golden parachute.”

Senate OKs $15,000 tax break for homebuyers - (www.usatoday.com) Politicians doing all they can to re-inflate the housing market again and incenting overbuilding again. The Senate voted Wednesday night to give a tax break of up to $15,000 to homebuyers in hopes of revitalizing the housing industry, a victory for Republicans eager to leave their mark on a mammoth economic stimulus bill at the heart of President Obama's recovery plan. The tax break was approved without dissent and came on a day in which Obama pushed back pointedly against Republican critics of the legislation even as he reached across party lines to consider a reduction in the spending it contains. "Let's not make the perfect the enemy of the essential," Obama said as Senate Republicans stepped up their criticism of the bill's spending and pressed for additional tax cuts and relief for homeowners. He warned that failure to act quickly "will turn crisis into a catastrophe and guarantee a longer recession."

Bank of America Shares Decline 11% to Lowest Price Since 1990 - (www.bloomberg.com) Bank of America Corp., the nation’s largest bank, declined to its lowest level in New York trading since 1984 on concern regulators may seize the company after a $138 billion U.S. bailout package failed to halt the slide. The bank fell 15 cents, or 3.2 percent, to $4.55 at 12:20 p.m. in New York Stock Exchange composite trading, and earlier declined as much as 20 percent to its lowest level since October 1984. The stock of the Charlotte, North Carolina-based company has dropped for six days and lost more than two-thirds of its value this year. The descent follows the U.S. government’s latest infusion of $20 billion in fresh capital and a plan to share losses on $118 billion in mortgages, corporate loans and derivatives. The U.S. previously committed $25 billion to the bank and Merrill Lynch & Co., acquired earlier this year. Bank of America lost $1.79 billion in the fourth quarter, its first deficit since 1991, as more borrowers fell behind on paying their loans.

Illinois Budget Gap May Reach $8.95 Billion, Comptroller Says - (www.bloomberg.com) Illinois’s budget deficit may reach $8.95 billion in the fiscal year starting July 1 as sales and income taxes fall, Comptroller Daniel Hynes said today. The projected 2010 deficit compares with a $2.1 billion shortfall in the current 12 months, Hynes said. Part of the current deficit was closed by continuing payment delays to Medicaid providers begun by former Governor Rod Blagojevich. The state Senate removed him from office last week. Unfunded Medicaid liabilities and pension obligations will pressure the 2010 budget that lawmakers have begun addressing under Governor Pat Quinn, who succeeded Blagojevich. The state may end the fiscal year on June 30 with $4.5 billion of unpaid bills, Hynes’s report said. “The state must now deal with the reality of a structural budget deficit,” wrote Hynes in his 2010 budget outlook. “Illinois’ revenues have gradually deteriorated due to the national economic recession with income taxes flat and sales taxes down.”

Citigroup, Eight U.S. Banks Spending Millions on Stadium Deals - (www.bloomberg.com) Citigroup Inc., targeted by lawmakers for paying $400 million to put its name on the New York Mets’ new ballpark, and seven other banks that received government funds may face questioning by Congress for spending $845 million on stadium sponsorships. Bank of America Corp., which like Citigroup received $45 billion in government funds, is paying $140 million to have its name on football’s Carolina Panthers stadium. JPMorgan Chase & Co., which received $25 billion from the Troubled Asset Relief Program, is spending $66 million for branding Chase Field in Phoenix, home to baseball’s Arizona Diamondbacks. Ohio Democratic Representative Dennis Kucinich, who last week urged the Treasury department to cancel Citibank’s deal, called spending by banks for naming rights “frivolous” and said Feb. 3 that he plans to hold hearings. Companies that received TARP funds are under scrutiny as President Barack Obama and lawmakers respond to public outcry over executive bonuses and questionable expenditures. “I am not aware of any precedent for Congress pressing to void contracts that are not illegal,” said Ettie Ward, a law professor at St John’s University in Queens, New York, who edited “Courting the Yankees,” a book on legal issues in sports.

One million-dollar O.C. home faced foreclosure for every two sold - (www.ocregister.com) DataQuick reported that 1,718 homes that had previously sold for $1 million or more either faced foreclosure last year or actually was seized by a bank. By comparison, Orange County recorded 2,862 home sales of $1 million or more in 2008, the market research firm reported. In its latest report on 2008 million-dollar home sales, DataQuick found that 1,179 Orange County homes that had previously sold for seven figures received a notice of default in 2008, entering the first stage of the foreclosure process. In addition, 539 O.C. homes that previously sold at $1 million or more were lost to foreclosure last year.

Credit card delinquencies at record high - (www.ft.com) US credit card delinquencies hit a record high in January, and further deterioration is likely as the economy slows down and unemployment rises, Fitch Ratings says. Payments at least 60 days late rose almost half a percentage point last month to a record 3.75 per cent, said Fitch. Credit card lenders also wrote off loans to delinquent borrowers at close to record levels, and such “charge-offs” were expected to breach records in the coming months.

Greatest Sports Deal Undone ... By Madoff? - (www.cnbc.com) So I just combed through the Bernie Madoff client list that was released last night. You've probably seen by now that famed Dodgers pitcher Sandy Koufax, who reportedly attended high school with New York Mets owner Fred Wilpon, is on the list. The biggest sports name not out there yet? Ozzie and Dan Silna, the former owners of the ABA team, the Spirits of St. Louis. I wrote about their incredible story a year and a half ago. Quick version is this. The two brothers owned one of the teams that wasn't absorbed into the NBA-ABA merger in 1976. They negotiated to get a $2.2 million buyout and, read closely here, 1/7th of the television revenue of the four teams (the Nuggets, Nets, Pacers and Spurs) going into the league in perpetuity. Since 1976, the Silnas (with no team) have made, by my calculations, more than $200 million from the deal. But how much of that money did they lose with Madoff? The brothers' names each appear once on the list, but Dan Silna's name also appears twice under a firm called ODD Investment LP and once under a company called White Lake Associates, where he is listed as a general partner. A company called Silna Investments, that corresponds to Ozzie's address, is also listed.



OTHER STORIES:

Wall Street's Newest Party: Resumes With Cocktails - (www.cnbc.com) Throngs of unemployed bankers, traders and other workers from Wall Street gathered at the latest Pink Slip Party last night, looking for work
Jobless Claims Hit 26-Year High - (www.cnbc.com)
Six Job-Hunting Tips - (www.cnbc.com)
Is Your Firm Cutting Jobs? - (www.cnbc.com)
Senate May Pass Stimulus Today: Majority Leader Reid - (www.cnbc.com)
Bogle: Stimulus Needed Now - (www.cnbc.com)
Warnings Over 'Buy American' - (www.cnbc.com)
Smaller Bank-Aid Package To Be Unveiled on Monday - (www.cnbc.com)
TARP Overpaid Banks: Watchdog - (www.cnbc.com)
Bankers' Perks Scrutinized - (www.cnbc.com)
Madoff Clients: Relatives, Celebrities and Charities - (www.cnbc.com)
GE's Immelt: US Economy at Lowest Point Since '70s - (www.cnbc.com)
P&G Hires Goldman to Sell Pharma Unit-Sources - (www.cnbc.com)
The Real Crisis In The Auto Industry - (www.cn bc.com)

Gold Rises as Investors Seek Store of Value; Silver Advances - (www.bloomberg.com)
Treasuries Little Changed as Stocks Rise, Debt Auctions Loom - (www.bloomberg.com)
Crude Oil Trades Near $40 in New York Before U.S. Jobs Report - (www.bloomberg.com)
Dollar rallies vs. yen, but falls vs. other rivals - (www.marketwatch.com)
US stocks jump on relief over retail sales - (finance.yahoo.com)
Treasury in plans for record debt sale - (www.ft.com)
Buffett Invests $2.6 Billion in Swiss Re - (www.cnbc.com)
Volcker Suggests Ways to Refine Bank Regulations - (www.nytimes.com)
Freddie Mac Says 30-Year Fixed Mortgage Rate Gained This Week - (www.bloomberg.com)

Bank of England Reduces Interest Rate to 1% to Fight Recession - (www.bloomberg.com)
Short-term debt market shrinks in Europe - (www.ft.com)
Trichet’s Sticky Prices Help ECB Save Interest-Rate Ammunition - (www.bloomberg.com)
U.S. Initial Unemployment Claims Jump to 26-Year High - (www.bloomberg.com)
U.S. December Factory Orders Fell More Than Forecast - (www.bloomberg.com)
U.S. Productivity Advances; Labor Costs Increase 1.8% - (www.bloomberg.com)
Volcker Warns Against Overloading Fed - (www.washingtonpost.com)
Obama Calls for ‘Common Sense’ on Executive Pay - (www.nytimes.com)
EDITOR’S CHOICE
EDITOR’S CHOICE

Burger King 2Q profit falls, cuts 2009 forecast - (finance.yahoo.com)
US company earnings hit by FX turbulence - (www.ft.com)
Swiss Re Gets $2.6 Billion From Buffett After Loss - (www.bloomberg.com)