Friday March 13 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

DC fixer-uppers become tax ruins - (www.washingtontimes.com) Thousands of tax bills will arrive in the mailboxes of D.C. property owners this week, and some taxpayers no doubt will recoil from the large increases staring them in the face. The D.C. government doubled the annual property tax rate from 5 percent to 10 percent for unoccupied residential buildings and vacant lots known as "Class 3" properties. The new tax rate will be reflected on the bills, which cover the period from October 2008 through March 2009. The tax rate isn't the only big change in D.C. real estate. Housing market conditions have changed drastically since the D.C. Council first considered legislation to address nuisance properties in 2007. Many of the people about to be hit by the new tax rate said it does not make sense when home prices are plunging and credit is hard to obtain. The D.C. Council passed the Nuisance Properties Abatement Reform and Real Property Classification Amendment Act in October, ostensibly to reduce blight and promote renovation of dangerous, decrepit buildings into marketable real estate. The legislation was signed by Mayor Adrian M. Fenty, a Democrat, whose office declined to comment for this article. Council member Mary M. Cheh, the Ward 3 Democrat who introduced the nuisance-abatement legislation, worried that "a wide variety of [tax] exemptions" allowed property owners to "game the system and not put their vacant property to productive use." "If you don't hit [property owners] in the pocketbook, they're not going to respond," said Kwame Brown, the at-large Democrat who co-sponsored the legislation that doubled the Class 3 tax rate to 10 percent.

Merchants ditching stores in San Diego, rent unpaid - (www.signonsandiego.com) Merchants at the eclectic Seaport Village shopping complex are seeing something they've rarely seen amid the T-shirt shops and jewelry stores: empty storefronts and liquidation signs. There's the shop near the waterfront that once housed The Cabbage Tree. Its owners recently took the “midnight run” – emptying the gift store in the wee hours and disappearing, leaving landlord Terramar Retail Centers to try to collect on the lease obligation. Across the sidewalk, there's the “Closed for Inventory” sign hanging in the window of Whitt/Krauss Objects of Fine Art. The art gallery filed for Chapter 7 bankruptcy in January, owing creditors for everything from a $5,640 catering bill to about $250,000 in projected 2009 rent and maintenance fees. And a few steps away, the Big Dogs sportswear shop is holding a liquidation sale as the Santa Barbara chain prepares to close all of its 71 stores. It's the perplexing problem afflicting many shopping malls, strip malls and retail complexes across the United States: Owners of commercial properties are trying to preserve cash flow to maintain their mortgage obligations and make a profit. Retail tenants, hard-hit by the recession, are asking for rent reductions and in some cases are shuttering their businesses and leaving empty storefronts.

Time To Rollback Government Salaries Across The Board - (globaleconomicanalysis.blogspot.com) In response to falling state revenues, the state of Oregon slashed $11.1 million from its judicial budget. That in turn prompted the Chief Justice to order Oregon State Courts to Close Fridays. Oregonians will wait longer for their day in court after Chief Justice Paul De Muniz announced today he's closing all state courts on Fridays and forcing 1,800 judicial staffers to take Fridays off without pay. The decision came after the Legislature's combined Ways and Means Committee voted today to cut $11.1 million from the state Judicial Department's 2007-09 budget. That's a 28 percent cut from the parts of the budget available to cut. The closures will begin Friday, March 13 and last at least through June 30, says Phil Lemman, a Judicial Department spokesman. They affect the state Supreme Court, Court of Appeals, Tax Court, county circuit courts and administrative offices. About 1,800 judicial staffers statewide will face a 20-percent pay cut when they're forced to take Fridays off. But Lemman says judges' salaries are protected by state law and cannot be reduced until they finish their elected term. As a result, Lemman says, circuit court judges will keep the 17-percent pay raise they received last year from the Legislature. Their current annual salary is $112,488. Chief Justice Paul J. De Muniz Blasts The Legislature: Chief Justice Paul J. De Muniz blasted the legislature in a Press Release On Court Closures. “These budget reductions are a huge blow to Oregon’s courts and the people we serve and will affect public safety, the welfare of children, and everyone who needs their day in court,” Chief Justice De Muniz said. “Oregonians will have the unfortunate opportunity to learn how justice delayed means justice denied.”…… If Chief Justice De Muniz feels so badly then he and the circuit court justices ought to agree to forgo their 17% pay hike to keep the court open on Fridays. Instead, De Muniz along with the Supreme Court, Court of Appeals, Tax Court, and the county circuit court judges are taking a 17% raise while working 20% fewer days. I see no shared sacrifice offer from the judges, instead I see crocodile tears and an extra day of golf. Tough decisions are going to have to be made but for now they were postponed. It's time to roll back the salaries of all elected and appointed government officials at every level including local, state, and federal. It would be nice to see this happen voluntarily instead of by force.

Merchant rent revolt in LA - (www.downtownnews.com) A tenants' mutiny at Grand Central Market was resolved last week after a group of merchants who had withheld their February rents came to an agreement with the landlord and paid up. As part of the resolution with landlord The Yellin Company, rents will be lowered and advertising fees charged to the tenants will be eliminated. The fracas, which resulted in many rents being paid two weeks or more late, is yet another sign of the financial hardships stemming from the national recession. Although most visitors to the Downtown Los Angeles landmark were unaware of the situation, several tenants said their future survival is in question. Adele Yellin, president of the Yellin Company, said that the move will lower costs for the 40 merchants. "We do understand the pressure that our tenants are under in these times and we've taken steps to reduce their rent by eliminating the advertising budget," Yellin said.

Detroit's outlook falls along with house prices - (www.chicagotribune.com) It may be tough to get financing for a new car these days, but in Detroit you can buy a house with a credit card. The median price of a home sold in Detroit in December was $7,500, according to Realcomp, a listing service. Not $75,000. Remove a zero—it's seven thousand five hundred dollars, substantially less than the lowest-price car on the new-car market. Among the many dispiriting numbers that bleakly depict the decrepitude of this onetime industrial behemoth, the steep slide of housing values helps define the daunting challenge to anyone who wants to lead this shrinking, poverty-pocked city of about 800,000 people. "We're always fighting ourselves out of a hole," said Wayne County Sheriff Warren Evans. Despite the depth of the hole, Evans is running for mayor. In fact, he is one of 15 people who have raised their hands to be mayor of Detroit and fill the remaining months in office of the former mayor who now wears a green jumpsuit and resides in Evans' spartan house of justice, the Wayne County Jail.

You Walk Away LLC sued in class action lawsuit - (Mish at globaleconomicanalysis.blogspot.com) Last week You Walk Away LLC was sued for alleged violations of California State Law. Here is a copy of the News Release. Distressed Homeowners Sue Carlsbad-based “Foreclosure Consultant” YOU WALK AWAY, LLC for Violations of California State Law. The Law Offices of Benjamin L. Meeker, APC announced today that it represents the plaintiffs in a class action lawsuit filed against You Walk Away, LLC, a “foreclosure consultant” company located in Carlsbad, California. According to the complaint filed in San Diego County Superior Court on February 13, 2009, You Walk Away peddles foreclosure consulting “services” and “protection kits” through which it entices desperate homeowners into paying an upfront fee of $995 for an essentially worthless service. “We believe that You Walk Away’s conduct falls within that described by the California Attorney General’s Office as the ‘Foreclosure For a Fee Scam’” says attorney Benjamin Meeker. As described by the California Attorney General’s Office, foreclosure consultants who perpetrate this scam advertise to homeowners that they can provide “advice” on staying in their home until they are evicted. “As its business name illustrates, the plaintiffs allege that You Walk Away entices homeowners into believing that simply walking away from a foreclosed home has few, if any, consequences, while charging hefty fees for its products” Mr. Meeker explained.

AIG warns on ratings, collateral calls, solvency - (www.marketwatch.com) American International Group estimated Monday that another downgrade by ratings agencies would trigger $8 billion in collateral and termination payments to counterparties and warned that without extra funding from the government or other sources it could become insolvent. A one-notch downgrade to Baa1 by Moody's Investors Service and BBB+ by Standard & Poor's would allow AIG's trading partners in derivatives and other markets to demand the extra payments, the insurer explained in a regulatory filing with the Securities and Exchange Commission. A two-notch downgrade to Baa2 by Moody's and BBB by S&P would force AIG to come up with another $2 billion in collateral and termination payments, the company added. "If AIG is unable to secure sufficient additional funding through the Fed Facility or otherwise, AIG could become insolvent," the insurer said in its filing. The U.S. government changed its bailout of AIG for a third time Monday, increasing its commitment of taxpayer money and other support for the insurer by $30 billion to roughly $163 billion. See full story.



OTHER STORIES:

Dow below 7,000 Tracking the economy's pain - (money.cnn.com)
World's 50 most admired companies - (money.cnn.com)
Time to nationalize GM? - (money.cnn.com)
$800 billion - where the waste will be - (money.cnn.com)
UBS raises bankers' salaries - (money.cnn.com)
Weak economy ... strong dollar - (money.cnn.com)
6 growing businesses: Surplus sales boom - (money.cnn.com)
Southwest settles unsafe jet complaints - (money.cnn.com)
Uncle Sam to dole out more college loans - (money.cnn.com)
BMW's diesel debut - (money.cnn.com)
Talkback: Surviving on unemployment - (money.cnn.com)

Bailing out houseowners is a mistake - (www.cnn.com)
"It's usually speculators" getting foreclosed on - (www.minnpost.com)
Mortgage Refinancing Is Not the Solution - (www.seekingalpha.com)
Burdened by a dream. Debt Slavery Emancipation - (www.jonnyoblog.com)
Learning From Houston: Housing should not exceed three times income - (www.scoop.co.nz)
BofA carries loans $44 billion above market value - (www.reuters.com)
Who Owns the Fed? - (www.nolanchart.com)
Berkshire annual report has good analysis - (www.berkshirehathaway.com)
How Many Houses Do We Need Anyway? - (news.morningstar.com)

Most Asian markets extend slump amid finance gloom - (news.yahoo.com/s/ap)
Dollar, Yen Weaken as RBA Rate Decision Boosts Demand for Yield - (www.bloomberg.com)
Oil Rebounds After 10% Drop Amid Dollar Decline, OPEC Outlook - (www.bloomberg.com)
Treasuries Fall on Speculation Rescues Will Increase Debt Sales - (www.bloomberg.com)
Stock futures point to bounce as Geithner awaited - (www.reuters.com)
Steep Market Drops Highlight Despair Over Rescue Efforts - (www.nytimes.com)
‘Unscathed’ JPMorgan Said to Reap $5 Billion Derivatives Profit - (www.bloomberg.com)
College-Savings Plans Shed $23.4 Billion in 2008, a 21% Decline - (www.bloomberg.com)
Toyota, Facing First Loss in 59 Years, Seeks Loans From Japan - (www.bloomberg.com)
Fall in Canadian GDP mirrors link to US slump - (www.ft.com)
Switzerland enters recession - (www.marketwatch.com)
Darling Suggests BOE May Create Money This Week - (www.bloomberg.com)
Northern Rock Residential Lending Drops 90%, Posts 2008 Loss - (www.bloomberg.com)
Downturn to be deeper even than IMF forecast: OECD - (www.reuters.com)
Lawmakers take first whack at Obama budget plan - (news.yahoo.com/s/ap)
U.S. Likely to Keep the Reins on Fannie and Freddie - (www.nytimes.com)
Chip Makers Watch Sales Fall Sharply - (www.nytimes.com)
HSBC unit ‘destroyed’ $10bn - (www.ft.com)

Jim Rogers: Let AIG Go Bankrupt, Not America - (www.cnbc.com)
Jim Rogers Buys Land, Starts Farming - (www.cnbc.com)
Recessions, depressions, take your pick - (finance.yahoo.com)