Wednesday March 11 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

Money motivated Pleasanton country club killings, police say - (www.contracostatimes.com) Just days before his parents were beaten and stabbed to death in their Castlewood Country Club home, Ernie Scherer III had tried to get his hands on a gun. According to an affidavit written by Alameda County sheriff's Sgt. Scott Dudek, two friends of the 30-year-old professional poker player separately told detectives that he had asked them to purchase a gun for him in Las Vegas. Both friends, who were approached March 4 and March 6 of last year, said they refused to oblige. Investigators believe that on March 7 the son of Ernie Scherer Jr., 60, and Charlene Abendroth, 57, drove from Las Vegas to his parents' Pleasanton country club home and killed them, returning to his home in Brea afterward. Their bodies were found March 14, after his sister called the club because she was worried having not heard from her parents…. Investigators believe the younger Scherer's motive for killing his parents was financial. His parents' will stated that their two children would receive their inheritance at age 30. Scherer turned 30 on July 3 and had mounting debt, investigators said. The father of a young son, he was struggling to keep up with mortgage and property tax payments on his Brea home, and he and his wife, who were $40,000 in debt, had been denied a loan. Although he was considered a good poker player — playing full time since about 2002 and collecting more than $300,000 — he developed a gambling habit — a habit that concerned Scherer Jr. enough to mention it to Scherer III's grandfather. "His son told him it that it appeared Scherer III had become a compulsive gambler, and it would not be wise to leave Scherer III any inheritance money," Dudek writes in the affidavit. Scherer III told others he thought he may be coming into $1.5 million. Two days after his parents were killed, Scherer went to his parents' home and told investigators that he needed to get inside so he could look for his parents' will, but he wasn't allowed in because the house was still a crime scene.

L.A. budget gap could hit $1 billion - (www.latimes.com) City already faces $427-million shortfall, which could more than double due to pension fund problems. Los Angeles could face nearly a $1-billion shortfall by 2010 because of a mammoth bailout needed for the city's employee pension funds, which have seen investments tank in the spiraling national recession, according to a city budget report released Friday. The grim forecast of a $983-million budget gap came as Mayor Antonio Villaraigosa already was considering widespread city layoffs and deep cuts to services because of the worsening financial crisis. The mayor is also exploring whether to privatize the Los Angeles Zoo and leasing city parking garages and meters, which could raise hundreds of millions of dollars. The total budget this year is $7 billion. "The deficit and the economy are the biggest challenges we face right now," Villaraigosa told a roundtable of Latino journalists at City Hall on Friday. "This is going to be the most serious effort to reduce the size of government . . . because we have no other options." Villaraigosa said city officials are negotiating with employees' unions to work out a plan that would allow for early retirements and layoffs. The city's top budget analyst, interim City Administrative Officer Raymond P. Ciranna, informed the mayor and City Council that Los Angeles faces a $427-million budget shortfall in 2009-10, driven primarily by declining tax revenue and increases in employee pay and benefits.

The Crisis of Credit Visualized: The Short and Simple Story of the Credit Crisis - (www.vimeo.com) Good video/animation representation of the credit crisis. The goal of giving form to a complex situation like the credit crisis is to quickly supply the essence of the situation to those unfamiliar and uninitiated. This project was completed as part of my thesis work in the Media Design Program, a graduate studio at the Art Center College of Design in Pasadena, California.

Ukraine Teeters as Citizens Blame Banks and Government - (www.nytimes.com) Steel and chemical factories, once the muscle of Ukraine’s economy, are dismissing thousands of workers. Cities have had days without heat or water because they cannot pay their bills, and Kiev’s subway service is being threatened. Lines are sprouting at banks, the currency is wilting and even a government default seems possible. Ukraine, once considered a worldwide symbol of an emerging, free-market democracy that had cast off authoritarianism, is teetering. And its predicament poses a real threat for other European economies and former Soviet republics. The sudden, violent protests that have erupted elsewhere in Eastern Europe seem imminent here now, too. Across Kiev last week, people spoke of rising anger about the crisis and resentment toward a government that they said was more preoccupied with squabbling than with rallying the country. The sign held by Vasily Kirilyuk, an unemployed plumber camped out with other antigovernment demonstrators here in the past week, summed up the pervasive frustration: “Get rid of them all,” it said. Mr. Kirilyuk did not hesitate to take that further. “There will be a revolt,” he said. “And people will come because they are just fed up.” Mr. Kirilyuk, 29, was standing in the same central square where throngs in 2004 carried out the Orange Revolution, a seminal event that brought to power a pro-Western government in Ukraine. He said he was a fervent supporter then of the protesters, but now he and a few dozen others who have set up tents here are demanding that the heroes of that revolution step down. It is not hard to understand why world leaders are increasingly worried about the discontent and the financial crisis in Ukraine, which has 46 million people and a highly strategic location. A small country like Latvia or Iceland is one thing, but a collapse in Ukraine could wreck what little investor confidence is left in Eastern Europe, whose formerly robust economies are being badly strained.

Growing Economic Crisis Threatens the Idea of One Europe - (www.nytimes.com) PARIS — The leaders of the European Union gathered Sunday in Brussels in an emergency summit meeting that seemed to highlight the very worries it was designed to calm: that the world economic crisis has unleashed forces threatening to split Europe into rival camps. An urgent call from Hungary for a large bailout for newer, Eastern members was bluntly rejected by Europe’s strongest economy, Germany, and received little support from other countries. Chancellor Angela Merkel of Germany, facing federal elections in September, said countries must be dealt with on a case-by-case basis. “Saying that the situation is the same for all Central and Eastern European states, I don’t see that,” Mrs. Merkel told reporters. She spoke after Prime Minister Ferenc Gyurcsany of Hungary warned, “We should not allow that a new Iron Curtain should be set up and divide Europe.”

Memory drive maker Spansion in bankruptcy - (www.latimes.com) Flash memory drive maker Spansion Inc. said Sunday that it was seeking bankruptcy protection. The Sunnyvale, Calif., company said it planned to reorganize under Chapter 11 bankruptcy as it tried to restructure $625 million in senior secured debt. Spansion said it had enough cash on hand to pay expenses and remain operational during the restructuring. Spansion's memory drives are used in digital cameras and other electronic devices. The company, founded in 1993, was a joint venture of chip maker Advanced Micro Devices Inc. and Fujitsu Ltd.

FDIC: $19 billion now backs over $4.8 trillion - (www.ml-implode.com) ``FDIC argues that bank failures will only cost the DIF $65 billion over the next five years. In reality, bank failures have cost us far more than that already. TARP and the Fed’s various lending arrangements are backdoor methods meant to rescue banks that would otherwise have to be rescued by FDIC via the front door.''

Democrat Rep. Henry Waxman: 'Oversight of the Internet is One of His Top Priorities' - (www.freerepublic.com) The American Spectator's Prowler column published today has a disturbing report on the plans by the Democratic Chairman of the House Energy and Commerce Committee Henry Waxman to regulate political speech on the Internet. In addition to details of methods Waxman is considering to rein in conservative talk radio, The Prowler reports on Waxman's desire to use the power of the federal government to investigate amd control political content on the Internet. The article quotes an unnamed committee staffer as saying of Waxman's power grab: "Does one heavily trafficked Internet site present one side of an issue and not link to sites that present alternative views? These are some of the questions the chairman is thinking about right now, and we are going to have an FCC that will finally have the people in place to answer them." "Internet radio is becoming a big deal, and we're seeing that some web sites are able to control traffic and information, while other sites that may be of interest or use to citizens get limited traffic because of the way the people search and look for information. We're at very early stages on this, but the chairman has made it clear that oversight of the Internet is one of his top priorities." "This isn't just about Limbaugh or a local radio host most of us haven't heard about. The FCC and state and local governments also have oversight over the Internet lines and the cable and telecom companies that operate them. We want to get alternative views on radio and TV, but we also want to makes sure those alternative views are read, heard and seen online, which is becoming increasingly video and audio driven. Thanks to the stimulus package, we've established that broadband networks -- the Internet -- are critical, national infrastructure. We think that gives us an opening to look at what runs over that critical infrastructure." The article reports that Waxman intends to work with Democratic Party President Barack Hussein Obama's nominee to be chairman of the Federal Communications Commission, Julius Genachowski, who is awaiting confirmation by the Democrat controlled Senate, to investigate and regulate free speech on the Internet.

California unemployment rate reaches 10.1% - (www.latimes.com) Lackluster spending on clothes, cars, legal services and most everything else has left California's economy listless, just about guaranteeing that the state's 10.1% unemployment in January will march upward until at least the end of the year, economists predicted. The Golden State lost 79,300 payroll jobs in January, pushing the monthly unemployment rate to its highest level since June 1983, when the country was starting to recover from a deep recession. Job losses in January escalated across all industries -- including, notably, motion picture and sound recording -- with the state's unemployment rate jumping 1.4 percentage points from a revised 8.7% for December. Unfortunately, California still is falling into what appears to be a crippling downturn, said Howard Roth, chief economist at the state Department of Finance. "There's very little demand out there," he said. "Certainly consumers are depressed, and businesses aren't going to buy as long as consumers aren't buying."

Boomer wealth is evaporating - (money.cnn.com) Many of those nearing retirement will have very little to live on thanks to an erosion of home equity. What a turnaround for the American Dream! According to a report released Wednesday, the real estate market bust and stock market declines have carved a huge chunk out of the assets of baby boomers. So much home equity has been lost that 30% of boomers, aged 45 to 54, are underwater in their homes, according to "The Wealth of the Baby Boom Cohorts After the Collapse of the Housing Bubble. " The report, released by D.C.-based think tank the Center for Economic and Policy Research, also found that 18% of boomers aged 55 to 64 would owe money at close if they sold their homes. The CEPR also found that people who were renting homes in 2004 will have more wealth in 2009 than those who were owners. That's true for all five wealth groups the study analyzed, from the poorest to the wealthiest. "The collapse of the housing bubble, which led to the current recession, has already destroyed almost $6 trillion dollars in housing wealth for homeowners," said report co-author Dean Baker. "This reality is compounded by the recent collapse of the stock market. Many baby boomers will only have Social Security and Medicare to rely on in their retirement."

Apartment Buyers Abandoning 6-Figure Deposits - (www.nytimes.com) THE real estate market in Manhattan has become so unnerving to buyers that some are forfeiting six-figure deposits rather than close on deals they have made. At 304 Spring Street, a sleek condominium building in SoHo with stunning Hudson River views, the buyer for the duplex penthouse recently decided he would not go through with the deal and walked away from a $780,000 deposit. At 1120 Park Avenue, a classic prewar co-op filled with multimillion-dollar apartments, it appears that a buyer forfeited a deposit of as much as $1.1 million.




OTHER STORIES:

Govt. Should Recognize Insolvency of Financials - (www.cnbc.com)
Asian Markets Tumble Sharply, Greenback Rises - (www.cnbc.com)
HSBC Set to Unveil $18 Billion Rights Issue, Profit Dip - (www.cnbc.com)
Asian and European Leaders Reject Protectionism - (www.cnbc.com)
Downsized Executives Forced To Take 'Survival' Jobs - (www.cnbc.com)
Sony Shares Fall, Stringer Takes Control - (www.cnbc.com)
Is It Time for a Makeover of Dow Industrial Average? - (www.cnbc.com)

Regulators in Nevada, Illinois Close Banks as Recession Deepens - (www.bloomberg.com)
Stanford Financial Accused of a Long-Running Scheme - (www.nytimes.com)
FDIC raising fees on banks, adds emergency fee - (finance.yahoo.com)
Wall St dumps film deals on Hollywood investors - (www.reuters.com)
Wen warns economic crisis spreading in China - (news.yahoo.com/s/ap)
Hungary warns of new economic 'Iron Curtain' - (news.yahoo.com/s/ap)
China’s Wen Sees Some Sign of Recovery After Stimulus - (www.bloomberg.com)
Ireland’s Cowen Plans Radical Overhaul of Banking Regulation - (www.bloomberg.com)
Buffett Says Economy Will Be ‘In Shambles’ for 2009 - (www.bloomberg.com)
Fed Officials Weighing ‘Exit Strategy’ for End of Recession - (www.bloomberg.com)
Sharper Downturn Clouds Obama Spending Plans - (www.nytimes.com)

Obama's budget: huge ambitions, huge obstacles - (news.yahoo.com/s/ap)
Berkshire Profit Plunges 96% on Stock Market Bets - (www.bloomberg.com)
AIG May Get $30 Billion in Additional U.S. Capital - (www.bloomberg.com)
AIG Rescue Talks Heat Up As Record Loss Looms - (www.cnbc.com)
BofA carries loans $44 billion above market value - (www.reuters.com)
Latest Citigroup Rescue May Not Be Its Last - (www.nytimes.com)
Propping Up a House of Cards - (www.nytimes.com)
Under Weight of Its Mistakes, Newspaper Industry Staggers - (www.washingtonpost.com)
Ripples From Peanut Scandal Affect Companies Big and Small - (www.washingtonpost.com)
Guess What Got Lost in the Loan Pool? - (www.nytimes.com)
In Letter, Warren Buffett Concedes a Tough Year - (www.nytimes.com)
Buffett Accepts Blame and Faults Others - (www.nytimes.com)