Wednesday February 11 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

Ohio Rep to Foreclosed America: Squat in Your Own Homes - (www.rawstory.com) If you're poor and the bank is coming for your home, Congresswoman Marcy Kaptur has a plan for you. Just squat, she says. Yes, this Ohio Democrat is actually encouraging her financially distressed constituents whose homes have been foreclosed upon, to simply stay put. In a Friday report, CNN's Drew Griffin explored the case of Ohioan Andrea Geiss, whose home was foreclosed upon in April. "Behind in payments, out of work, a husband sick, she had nowhere to go," said Griffin. "So, she decided to follow the advice of her Congresswoman and go nowhere." In Lucas County, Ohio, over 4,000 properties were foreclosed upon in 2008, reports CNN. "So I say to the American people, you be squatters in your own homes," said Congresswoman Kaptur before the House of Representatives. "Don't you leave." She's called on all of her foreclosed-upon constituents to stay in their homes and refuse to leave without "an attorney and a fight," said CNN. "If they've had no legal representation of a high quality, I tell them stay in their homes," Kaptur told Griffin. Kaptur is a high-profile advocate of an increasingly popular mode of fighting foreclosures best known for it's key phrase: "Produce the note." By telling a bank to "produce the note," a homeowner can delay foreclosure by forcing the lender to prove the suing institution is actually the same which owns the debt. "During the lending boom, most mortgages were flipped and sold to another lender or servicer or sliced up and sold to investors as securitized packages on Wall Street," explains the Consumer Warning Network. "In the rush to turn these over as fast as possible to make the most money, many of the new lenders did not get the proper paperwork to show they own the note and mortgage. This is the key to the produce the note strategy." And Friday's segment on this growing foreclosure fighting "movement" was not the network's first. Earlier in January, CNN explored one person's strategy in demanding her bank "produce the note," only to find that the lender had "lost or destroyed" the evidence of debt ownership. Such a revelation can significantly strengthen a homeowner's position when asking to renegotiate a mortgage. That these banks, many of which received billions of dollars in government bailout funds, continue to boot defaulted owners from their homes, makes them "vultures" says Kaptur.

Nobel Economist: Let the Banks Fail - (www.telegraph.co.uk) The Government should allow every distressed bank to go bankrupt and set up a fresh banking system under temporary state control rather than cripple the country by propping up a corrupt edifice, according to Joseph Stiglitz, the Nobel Prize-winning economist. Professor Stiglitz, the former chair of the White House Council of Economic Advisers, told The Daily Telegraph that Britain should let the banks default on their vast foreign operations and start afresh with new set of healthy banks. "The UK has been hit hard because the banks took on enormously large liabilities in foreign currencies. Should the British taxpayers have to lower their standard of living for 20 years to pay off mistakes that benefited a small elite?" he said. "There is an argument for letting the banks go bust. It may cause turmoil but it will be a cheaper way to deal with this in the end. The British Parliament never offered a blanket guarantee for all liabilities and derivative positions of these banks," he said. Mr Stiglitz said the Government should underwrite all deposits to protect the UK's domestic credit system and safeguard money markets that lubricate lending. It should use the skeletons of the old banks to build a healthier structure. "The new banks will be more credible once they no longer have these liabilities on their back." Mr Stiglitz said the City of London would survive the shock of such a default because it would uphold the principle of free market responsibility. "Counter-parties entered into voluntary agreements with the banks and they must accept the consequences," he said.

Glenn Beck Calls Social Security a Ponzi Scheme - (www.dailypaul.com) Well, nothing shocking here as we all know that SS is a complete government ponzi scheme. Around the middle of the piece Stephen Moore says "This is very much llike social security works, It's a ponzi scheme. It's like a big vault of IOU's"

State Budget Troubles Worsen - (www.cbpp.org) States are facing a great fiscal crisis. At least 46 states faced or are facing shortfalls in their budgets for this and/or next year, and severe fiscal problems are highly likely to continue into the following year as well. Combined budget gaps for the remainder of this fiscal year and state fiscal years 2010 and 2011 are estimated to total more than $350 billion. States are currently at the mid-point of fiscal year 2009 — which started July 1 in most states — and are in the process of preparing their budgets for the next year. Over half the states had already cut spending, used reserves, or raised revenues in order to adopt a balanced budget for the current fiscal year — which started July 1 in most states. Now, their budgets have fallen out of balance again. New gaps of $46 billion (over 9% of state budgets) have opened up in the budgets of at least 42 states plus the District of Columbia. These budget gaps are in addition to the $48 billion shortfalls that these and other states faced as they adopted their budgets for the current fiscal year, bringing total gaps for the year to over 14 percent of budgets. The states’ fiscal problems are continuing into the next two years. At least 41 states have looked ahead and anticipate deficits for fiscal year 2010 and beyond.[1] These gaps total almost $88 billion — 16 percent of budgets — for the 34 states that have estimated the size of these gaps and are likely to grow as gaps are re-estimated in the next few months

Newt Gingrich: Economy Headed "Off a Cliff" - (www.washingtontimes.com) Former House Speaker Newt Gingrich on Monday morning painted a dire picture of the U.S. economy, saying that it is headed "off a cliff" and that President Obama has failed to bring fresh and original thinking to the problem so far. Mr. Gingrich, 65, said that the nightmare scenario used by top financial officials to persuade President Bush into crafting the $700 billion bailout last fall is still on the way. "Probably I would have voted yes," Mr. Gingrich said of the bailout, "just because if you have the secretary of the Treasury and the Federal Reserve chairman saying to you, 'Vote yes or we're all going to go off a cliff.'" "Well, the fact is, we're all going to go off a cliff. That's what's happening. This is a much more profound problem than people think," said Mr. Gingrich, a Republican from Georgia, during a breakfast with reporters and columnists organized by the Christian Science Monitor. "I keep getting told there's another [$1.2 trillion] in losses coming down the road, minimum. Goldman Sachs, I think, said Friday, $4 trillion to finish bailing out the banks," he said, predicting another "three to five years, at a minimum, of working our way through this." And Mr. Gingrich, who has earned a reputation for irascibility, slammed the Obama administration's current response. "The continuity between the Bush bailout and the Obama bailout will be mildly amazing. This is not the change you can believe in. This is more of the same," he said, mocking one of Mr. Obama's campaign slogans. Mr. Gingrich's harshest words were reserved for recently confirmed Treasury Secretary Timothy Geithner, whom he mentioned repeatedly as a symbol of the government and business class refusing to learn lessons. "Geithner is fronting for the banks. Frankly, that's what I think Paulson ended up doing. Paulson ended up being a Wall Street deal-maker who was happy to take your money to bail out Wall Street deal-makers. That's not the purpose of the secretary of the Treasury."

California Goes Broke - (www.rawstory.com) California, the eighth largest economy in the world, is broke. "People are going to be hurt starting today," said Hallye Jordan, speaking on behalf of the state Controller. "There's no money." Since state legislators failed to meet an end of January deadline on an agreement to make up for California's $40 billion budget gap, residents won't be getting their state tax rebates, scholarships to Cal Grant college will go unpaid, vendors invoices will remain uncollected and county social services will cease. At least, temporarily. Services and payments will resume once state legislators come to an agreement on the budget. "This time, there are real-world consequences," said H.D. Palmer, spokesman for the California Department of Finance, in a report by KCRA in Sacramento. "Because we have not been able to get to a budget agreement, payments aren't going to be made." "This is an issue of fairness," said Assemblyman Ted Gaines, R-Roseville, in the KCRA report. "It hurts hardworking families the most. Refunds, in fact, will stimulate the economy, and taxpayers need their money."

Dimon Defends Paying Bonuses for Tough Jobs- (www.cnbc.com) JPMorgan Chase Chief Executive Jamie Dimon, weighing in on the firestorm over bonuses paid by banks who got taxpayer bailouts, defended paying staff for tough jobs. Many executives, including Dimon, whose bank has taken $25 billion from the U.S. government's Troubled Asset Relief Program (TARP), have said they will not seek a bonus for 2008 after the credit crisis that began more than a year ago spiraled into a global recession. "Are banks to blame? Well, of course," said Dimon, but he warned against just blaming banks and bankers for the crisis, noting that other players in financial markets, including U.S. consumers, had borrowed more than they held in assets. Dimon told delegates at a conference that if there is a tough job to do at a company, a manager wants to know he can persuade his best person to do that job. Referring to the theoretical tough job as "Vietnam," Dimon said he would want to support the person handling the role and be able to recognize that they have a difficult job. The issue of TARP recipient banks providing bonuses to executives has irritated many key members of the Democratically-controlled Congress.



OTHER STORIES:

High-End Housing Market Ravaged by Stock Selloff - (www.cnbc.com)
Pending Home Sales Rebound - (www.cnbc.com)
California Struggles to Cover Delayed Payments - (www.cnbc.com)
US Property Owners Post $3.3 Trillion loss - (www.bloomberg.com)

Auto Sales Start 2009 at an Abysmal Pace - (www.nytimes.com) United States sales fell49 percent for General Motors, about 40 percent for Ford and 32 percent at Toyota.
Obama Officials Still Struggling Over 'Bad Bank' Plan - (www.cnbc.com)
Insurers' Corporate-Bond Losses May Exceed Subprime - (www.bloomberg.com)
Bad Bank is a Bad Idea - (www.nydailynews.com)
Rise in Pending Home Sales Reported - (www.nytimes.com) Sales rebounded in December as buyers snapped up properties at deep discounts, an industry group reported.
Markets, Pushed and Pulled, Finally Turn Higher - (www.nytimes.com) Encouraging news on housing and corporate earnings helped Wall Street set aside some of its angst about the economy.
BP Posts $3.3 B Loss - (www.nytimes.com)
Dow Chemical Posts $1.5 B Loss - (www.nytimes.com)
Motorola Posts $3.6 B Loss - (www.nytimes.com)
2 Drug Makers’ Results Beat Expectations - (www.nytimes.com) Schering-Plough and Merck are aided by cost cuts in the fourth quarter, despite declining sales for their shared cholesterol treatments.
Magazines Aimed at Bankers Suspend Operations - (www.nytimes.com) Boom times have dried up and employees are asked to take unpaid leaves.
BP Posts 1st Quarterly Loss in 7 Years - (www.nytimes.com) The British energy giant reported a fourth-quarter loss of $3.3 billion and warned that demand would probably continue to drop as the global recession deepened.
US Auto Sales Plummet to Near 27-Year Low - (www.cnbc.com)

Why the Bank Bailouts are Doomed - (money.cnn.com)
Vacant Homes at Record High - (www.cnbc.com)
Citi Announces $36.5 Billion TARP-Backed Loans - (www.cnbc.com)
Senate Begins Amending Stimulus Plan - (www.cnbc.com)
Warren Buffett to Invest $300 Million in Harley-Davidson - (www.cnbc.com)
Daschle Suddenly Withdraws From HHS Post - (www.cnbc.com)
InterMune Stock Soars on Results of Lung Disease Drug Study - (www.nytimes.com) InterMune, a California biotechnology company, said that it would apply for approval of what could be the first drug to treat a fatal lung disease that affects about 100,000 Americans.
UPS Profit Hit by Charge for Trucking Unit - (www.nytimes.com) The company said the global economic decline had taken a heavy toll on package volumes and announced cost-cutting steps including a freeze on matching contributions for retirement plans.
D.R. Horton Narrows Loss - (www.nytimes.com) The quarterly results were better than expected at the nation’s biggest homebuilder, which has cut costs to cope with the worsening housing market slump.
SAS Cuts 3,000 Jobs and Seeks New Cash - (www.nytimes.com) The troubled Scandinavian airline said that it would cut 3,000 jobs and ask shareholders for more cash as it seeks to ride out the global economic crisis.
Australia and Japan Offer New Stimulus Plans - (www.nytimes.com) Australia announced a $26.5 billion stimulus plan and a deep interest rate cut as the Japanese central bank said it would start buying shares held by financial institutions.
Wall St., a Financial Epithet, Stirs Outrage - (www.nytimes.com) As investment bankers adjust to a new role as targets of scorn, they aren’t expecting pity, or a sympathetic ear.