Monday March 23 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

Why to avoid working for a subprime lender - (movies.yahoo.com) Can this be a real movie?? Of course, it was only a matter of time before Hollywood used the subprime mortgage crisis for a new horror film.

Freddie Mac 4th-qtr loss $23.9 bln; Needs capital, again - (in.reuters.com) Freddie Mac, one of the two main U.S. mortgage companies that the U.S. government is depending on to help stabilize the housing market, said on Wednesday it needs $30.8 billion from the Treasury to survive after a massive fourth-quarter loss. Freddie Mac (FRE.P: Quote, Profile, Research)(FRE.N: Quote, Profile, Research) reported a net loss of $23.9 billion, nearly 10 times that of a year ago. The loss followed $25.3 billion in red ink for the third quarter of 2008, it said in a statement. The company, the second-largest provider of funding of U.S. mortgages and government-controlled since September, recorded $7.2 billion in credit-related expenses, $7.5 billion in write-downs on securities and $13.3 billion of losses on derivative hedges and mortgage guarantee assets, it said. Freddie Mac is struggling to contain losses as the Obama administration is asking it and rival Fannie Mae (FNM.P: Quote, Profile, Research) (FNM.N: Quote, Profile, Research) to boost their support of housing. The U.S. recently doubled its capital commitment to Freddie Mac and Fannie Mae to $200 billion each, adding to a funding agreement made in September when the stressed companies were forced into conservatorship.

'Clawback' suits loom - (online.wsj.com) Investors who lost money with financier Bernard Madoff are girding for potential "clawback" suits that might be brought by the trustee in charge of liquidating Mr. Madoff's firm. Such suits, which would seek to reclaim funds that some investors pulled out and redistribute them, are prompting some investors to protect their remaining assets by transferring them to irrevocable trusts, homes, annuities or life-insurance policies, according to attorneys. The alleged Madoff fraud is now being viewed as a classic Ponzi scheme in which new money from some investors was used to fund withdrawals of fictitious profits for other investors. The trustee, Irving Picard, has said he would go after -- or claw back -- the profits of investors who withdrew far more money than they contributed to Bernard L. Madoff Investment Securities. Mr. Picard said he intends to distribute clawed-back funds to investors who were wiped out. A spokesman for Mr. Picard wasn't immediately available. Under the bankruptcy code, those who will be most susceptible to a clawback are investors who withdrew any money in the 90 days before Mr. Madoff's arrest on Dec. 11, attorneys say. Those who invested in Madoff through feeder funds like Fairfield Greenwich Group and Tremont Group Holdings could be in a better position to fend off clawback suits since the trustee, among other things, would have to "trace" the funds to the end investors, says bankruptcy partner Philip Bentley of New York, who represents Madoff investors.

45% of world's paper "wealth" destroyed - (www.iht.com) Private equity company Blackstone Group LP CEO Stephen Schwarzman said on Tuesday that up to 45 percent of the world's wealth has been destroyed by the global credit crisis. "Between 40 and 45 percent of the world's wealth has been destroyed in little less than a year and a half," Schwarzman told an audience at the Japan Society. "This is absolutely unprecedented in our lifetime." But the U.S. government is committed to the preservation of financial institutions, he said, and will do whatever it takes to restart the economy. U.S. Treasury Secretary Timothy Geithner plans to unfreeze credit markets through a new program that will combine public and private capital in a fund that would buy bank toxic assets of up to $1 trillion (728 billion pounds). "In all likelihood, that will have the private sector buy troubled assets to clean the banks out in terms of providing leverage ... so that we can get more money back into the banking system," Schwarzman said.

50% Of Americans 2 Paychecks Away From Problemos - (www.consumerist.com) Whatever happened to developing an emergency fund to cover rainy day expenses? Apparently many Americans haven't heard of this practice (or at least aren't applying it) and now with the economy in the tanker, their financial lives are hanging by a thread. US News reports that half of Americans are two paychecks away from hardship. They quote this from a recent MetLife study to highlight the problem:"Without a steady paycheck, 50% of Americans say they could not meet their financial obligations for more than a month - and, of that, a disturbing 28% couldn't support themselves for more than two weeks of unemployment." Ouch. Ok, so some of these are probably people that are earning just enough just to get by, with little to save at all. But even accounting for this, there are still significant numbers who simply didn't plan for the future, didn't sock away extra money, didn't think they needed savings. Or conversely, they simply spent all they had without a care for the future. And now that the future has turned very ugly, they are in deep trouble if a job loss comes their way.

The elderly and retired are screwed by low interest rates - (www.hip-consultant.co.uk) Amidst the slashing of interest rates from 5% since October last year to 1% which has largely been reported on in regard to home buyers, many savers are seeing their income from their nest eggs almost disappear. Bank of England figures detail branch notice accounts were paying an average of just 0.29% in January, down from 0.9% in December and 3.9% in January 2008. Alongside the average tax-free ISA which now provides interest of only 1.38% - a dramatic cut from the 5.06% rates that new customers were getting 12 months ago and the lowest since cash ISA’s were brought in April 1999. These rates are of concern to those reliant on their savings providing an income who are quite often elderly or retired individuals. In addition, almost inexistent interest rates for savers provides little incentive to ‘new’ customers to save which inevitably limits the deposits that banks and building societies have available for mortgage lending. It is with such little return on savings at present it is vital to examine and revisit the risk to your capital. Karen Blakeman recently discussed this issue in ‘Are your savings safe?‘ referencing a handy chart from MoneySavingExpert’s article regarding ‘What counts as a ‘financial institution’?.

The Next Big Bailout Decision: Insurers - (online.wsj.com) - The tumbling financial markets are dragging down the life-insurance industry, an important cog in the U.S. economy, as mounting losses weaken the companies' capital and erode investor confidence. A dozen life insurers have pending applications for aid from the government's $700 billion Troubled Asset Relief Program, and the industry is expecting an answer to its request for a bank-style bailout in the coming weeks. The government so far hasn't said whether insurers will be eligible for the program. The government has already proven it is willing to rescue insurance by bailing out derivatives-laden AIG and the big banks. Why not insurance of the traditional sense? The government has not yet felt any pain whatsoever from its bailout spending, so why would it stop now?

Client shoots SC real estate broker - (news.yahoo.com/s/ap) Police say an 88-year-old client who wanted his down payment back on a deal shot a South Carolina real estate broker. Rock Hill Police Lt. Michael Belk says Richard Blow burst into a Coldwell Banker office in Rock Hill Wednesday and shot 68-year-old Jerry O'Neil in the abdomen and was taken to a hospital. Belk says Blow had been charged with assault with intent to kill and could face more charges. Belk says he wanted his money back. Coldwell corporate spokeswoman Kim Cox told several media outlets O'Neil was the broker in charge, which is the equivalent of a manager. Belk says about 10 other employees were in the office at the time, but only O'Neil was injured.

You May Be Arrested Soon For Growing A Tomato - (www.friendseat.com) As our government hands over billions to Wall Street bankers, jobless Americans live in tent cities and collect food stamps in record numbers. Now when we need it the most, growing our own food may be against the law and punishable by a fine of up to $1,000,000. Think I’m joking? Meet Bill HR 875, The Food Safety Modernization Act of 2009, introduced by Rosa DeLauro whose husband Stanley Greenburg works for Monsanto. The insanity doesn’t stop there—fishing boats, hotdog stands, neighborhood vegetable booths and farmers’ markets will be federally regulated under the same draconian law. As always, the spin is designed to make you (the public) believe these new provisions are for your own good. Under the deceitful guise of protection, the goal of this bill is crystal clear: to prevent us from locally growing our own food so multinational agribusiness can completely control the production and distribution of our food supply. I refer you to the usual suspects—Monsanto, ADM, Sodexo, Tyson, and Smithfield. This bill is designed to allow corporations, with the help of their hired government guns, to force small competitors (you and me) out of business. This is as evil as it gets, folks. Since the dawn of man we have hunted and farmed our own food——it’s second nature. To be stripped of the most fundamental act of survival is equivalent to the kind of mass enslavement you only read about in history books, like the kind under Pharaohs in ancient Egypt. Lurking within the maze of technical lawyer-like jargon, the bill places wildly restrictive regulatory incumbrances on the average vegetable growing Joe-The-Plumber, small organic farmer, or anyone for that matter who may one day decide to grow a small garden. The bill would require anyone associated with growing, storing, transporting or processing food to be subject to inspections by federal agents of their property and all records related to food production; you would be required to conduct specials tests, maintain samples and records, and allow government officials to mandate the use of chemical pesticides, fertilizers, specific types of nutrients, packaging, and temperature controls. Violation of any of these provisions would subject the offender to property seizure, imprisonment and fines up to $1,000,000. The implementation of these bogus regulations are designed to be so cost and time prohibitive, no one would bother to grow their own food or risk being jailed and fined for participating in a black market. Linn Cohen-Cole with Oped News writes: “The bill is monstrous on level after level - the power it would give to Monsanto, the criminalization of seed banking, the prison terms and confiscatory fines for farmers, the 24 hours GPS tracking of their animals, the easements on their property to allow for warrantless government entry, the stripping away of their property rights, the imposition by the filthy, greedy industrial side of anti-farming international ‘industrial’ standards to independent farms - the only part of our food system that still works, the planned elimination of farmers through all these means.

U.S. Justice Foundation's President Arrested - (www.ml-implode.com) Jack Ferm was arrested on felony charges Wednesday morning after a hearing in District Court. He is the head of mortgage rescue company, the U.S. Justice Foundation, which was ordered to close last week. ... According to the complaint, Ferm promised he could stop foreclosure by helping homeowners sue their mortgage companies themselves. Instead, at least two victims claim they paid thousands for services Ferm never provided ... In previous interviews, Ferm insisted his foundation filed as many as 800 lawsuits using boilerplate legal documents prepared by paralegals.



OTHER STORIES:

Foreclosure Filings in U.S. Jumped 30% in February - (www.ml-implode.com) - A total of 290,631 homes received a default or auction notice or were seized by the lender, the Irvine, California-based seller ...
Banks’ Bondholders May Be Next to Share Bailout Pain - (www.ml-implode.com) - Trust-preferred shares of Bank of America and Citigroup were trading at less than 30 cents on the dollar and yielding more th...
Cash-backed buyers chase cheap properties - (www.ml-implode.com) - “We are buying houses and condos between 30 [percent] to 50 percent below the assessed value,” he said. He is buying propertie...
The Mark-to-Market Babble Continues - (www.ml-implode.com) - "Either it’s the moon — full today — or the approach of a House Financial Services Committee hearing scheduled for Thursday, but...

America lost 2.5 million millionaires in 2008 - (money.cnn.com)
Where Is That Mythical Housing Bottom? - (www.seekingalpha.com)
Foreclosure Filings in U.S. Jump 30%, Thwart Prevention Effort - (www.bloomberg.com)
General Electric Loses S&P’s Top-Level Aaa Rating - (www.bloomberg.com)
As Cities Go From Two Papers to One, Talk of Zero - (www.nytimes.com)
National Semiconductor to cut 25% of workforce - (www.sfgate.com)
Gov't bailouts encourage corporate looting of taxpayers - (www.nytimes.com)
Warren Buffett on Money Supply - (www.youtube.com)
Greenspan still hasn't got a clue - (themessthatgreenspanmade.blogspot.com)
Simpsons: No Loan Again, Naturally - (www.hulu.com) After too many years of financing Homer’s annual Mardi Gras party on home equity loans, Homer and Marge’s adjustable-rate mortgage skyrockets.

Largest U.S. pension plan assets fall $217 billion short - (www.usatoday.com)
More U.S. companies headed for junk status: S&P - (www.reuters.com)
Uptick rule revival part of tougher financial markets oversight plan - (www.usatoday.com)
U.S. Millionaires’ Ranks Shrink to Lowest Since 2003 - (www.bloomberg.com)
Mortgage Delinquencies Reach 11% Nationwide - (blog.mortgage101.com)
Swiss Central Bank Cuts Rate to 0.25% to Battle Recession - (www.bloomberg.com)
New Zealand Cuts Key Interest Rate to Record-Low 3% - (www.bloomberg.com)
Japan’s Funding Crunch Deepening, State Lender Says - (www.bloomberg.com)
Moscow Loses Title of Billionaire Capital as Fortunes Tumble - (www.bloomberg.com)
Foreclosures up 30 percent in February - (finance.yahoo.com)
Credit crunch explained in alcoholic terms - (opencast.wordpress.com)

Latest numbers show plenty more pain ahead - (www.marketwatch.com)
Real estate bubble inevitable result of inadequate land-tax - (business.theage.com.au)
Credit card delinquency index in 2nd straight record high - (money.cnn.com)
Piling on more debt is a terrible idea - (optionarmageddon.ml-implode.com)
Greenspan again finds the Fed blameless in housing bubble - (www.latimes.com)
Treasury Seeks Billions More to Aid Ailing Nations - (www.washingtonpost.com)
More about the Federal Reserve - (www.theburningplatform.com)
America's medical system worst in industrialized world - (www.usatoday.com)
Competition and innovation in America stifled by monopolies - (bits.blogs.nytimes.com)
G-20: Can They Find Common Ground? - (www.businessweek.com)